All posts by Sam Porter

Open submission to the AusAid review

I’m keeping this article deliberately short. Why? ‘Cos your going to write it for me. You say lazy, I say creative.

I’ll start you off with some quick context. As some of you may know, AusAid, is currently conducting an enquiry into its $4.3 Billion per year aid program. The enquiry is taking public submissions. I was struck the other day when a group of the most highly intelligent people I know expressed reservation about writing a submission to the AusAid enquiry. Why the fear? It is a public enquiry after all and the people that have contributed to this fantastic site, through articles, comments and opinions are as well placed as anyone to have their say into how our aid money is spent.

So it gots me thinking. How can I convince people that writing a submission is not an insurmountable task? Well we can do as we used to in school. We can write a submission together. Good ol’-fashioned teamwork. I’ll start us off by proposing a series of questions that stay within the enquiry’s terms of reference. Check them out yourselves if your keen. I invite all of you – all of the 10,000 people who have read articles on this site since it was founded – to comment and debate below.

  • At present, the official objective of Australia’s aid program is to ‘assist developing countries to reduce poverty and achieve sustainable development, in line with Australia’s national interests. Is this fair? Should our aid money be used to further our strategic commercial and geopolitical goals? Or should it be used purely to alleviate poverty in our neighbouring developing countries? Discuss.
  • OK, so your answer for the previous question might influence this one. OK, so if you said “yes” to purely alleviating poverty, then what about programs such as AYAD or VIDA? Should these be cancelled?
  • Lets say you said no to the first question above. Lets say instead we use aid purely to alleviate poverty. So how do we allocate aid funds? According to MDG criteria? Should Least Developed Countries be allocated the most money?
  • Previously on this site we’ve discussed AusAid’s largest ever investment, a $222 million package to construct secondary schools in Indonesia. So, allocating aid dollars purely on MDG or HDI rankings would be putting a stop to programs such as this one. Thoughts? Should middle income countries be receiving any of our aid money?

OK, so that should get us started. As the debate progresses, feel free to pose your own questions or queries.

Where is your aid money going?

In 2010-2011 the Australian Government will spend $4.3 billion on foreign aid. Aid spending is often seen as a selfless and philanthropic exercise for the benefit of people in less wealthy countries. In reality, aid is often driven by Australia’s national strategic and commercial interests.

Not all aid money is poverty-focused

Australia follows the OECD guidelines for defi ning Official Development Assistance (ODA) – another term for aid.[1] This loose set of guidelines allows donors like Australia to artificially inflate the amount of aid they give by including expenditure that is not aimed at alleviating poverty. In recent years Australian aid figures have been inflated by the inclusion of spending on:

  • controlling ‘irregular’ immigration and upgrading of detention facilities in Indonesia[2];
  • training Burmese intelligence officers and counter-terrorism workshops[3];
  • cancellation of debt, which is contrary to international agreements[4].

These seeming irregularities in the spending of aid money flow directly from the overaching objective of Australia’s aid program, which is “to assist developing countries reduce poverty and achieve sustainable development, in line with national interest.”

The reality of Australian aid

The amount of aid that the Australian Government gives is low by international standards, as demonstrated by the following graph.

Concerns have been raised not only over the amount of aid Australia gives, but also the quality and effectiveness of aid. In particular, concerns have been raised about:

  • the corporatisation of aid, that results in aid money going into the pockets of Australian companies, consultants and advisers instead of the people who need it most;
  • unfair conditions on aid money that privilege Australian companies and national priorities at
  • the expense of local self-determination;
  • aid facilitating a trade liberalisation agenda often at the expense of local livelihoods;
  • securitisation of aid, which has seen increased Australian police presence in the Pacific in the name of good governance. This has been motivated by Australia’s national security interests rather than the relief of poverty.

 

Key issues with Australian aid

Tied Aid

International research has shown that the tying of aid is costlier and less effective than untied aid.[5] The tying of aid is a practice which privileges Australian companies and national priorities in the aid program. Aid is tied in three ways:

1. Nationally-tied – aid money is provided on the condition that the receiving country buys goods and services from the donor country;

2. Project or program-tied – aid which must be spent on specific projects or sectoral programs determined by Australia; or

3. Performance or condition-tied – aid tied to particular performance outcomes or conditions. While in 2006 Australia officially untied its aid program from national procurement (nationally-tied aid), the informal tying of aid continues with Australian companies receiving the majority of aid contracts.

While in 2006 Australia officially untied its aid program from national procurement (nationally-tied aid), the informal tying of aid continues with Australian companies receiving the majority of aid contracts.

Corporatisation of Aid

Private companies play a significant role in delivering Australian aid. A 2009 report by the Australian National Audit Office notes that 20 of Australia’s largest managing contractors “were together responsible for delivering 70 per cent of Australia’s bilateral aid program expenditure.”[6] This kind of ‘aid’ – money paid to private companies out of the aid budget that gets returned to Australia as profit – is called ‘boomerang’ aid. It bypasses the people that need it most and instead funds Australian companies, consultants, advisers and goods and services. Such arrangements reduce the transparency and accountability of the Australian aid program as many of the contracts are covered by commercial-in-confidence agreements.

Technical Assistance

Technical Assistance (TA) funding often goes to experts (usually from Australia) to assist people in developing countries develop skills in particular areas – known as ‘capacity building’. This includes research, advisory and consultancy services. TA accounts for 40-50% of the Australian foreign aid budget, twice the average of other OECD countries. Internationally, TA has been a source of considerable criticism due to its high cost and lack of effectiveness in developing capacity.[7]

A review commissioned by the governments of Australia and Papua New Guinea (PNG) highlights the ineffectiveness of TA, noting that “[t]he emphasis on technical assistance for capacity building and the lack of much to show for it is at the heart of the political difficulties the Australian aid program to PNG is facing.”[8] Furthermore, Australia’s emphasis on TA has diverted funds away from the delivery of essential services. As then Prime Minister Kevin Rudd, said in 2009, “too much [aid] money has been consumed by consultants and not enough money was actually delivered to essential assistance in teaching, in infrastructure, in health services on the ground, in the villages.”[9]

AusAid has recently announced changes to the aid program to both PNG and East Timor, with over one third of advisor positions in each nation to be phased out over the next two years.

‘Aiding’ Climate Change

Unchecked global warming is already having a devastating impact. It is felt most harshly by the poor worldwide, and not least in the Pacific Islands. Yet Australia’s additional climate aid is zero.

The $160 million to be spent on climate aid during 2010-11 is from previously announced commitments. Australia double-counts this money as both United Nations Framework Convention on Climate Change (UNFCCC) financing and as ODA, breaking UN requirements that climate finance be additional to ODA. The World Bank estimates that at least US $70 billion is needed annually to help developing countries adapt to the effects of climate change.[10] Australia’s current contribution of $160 million is 0.002% of the amount World Bank says is needed.

Not only is climate aid inadequate and in breach of UN commitments, but a large proportion is being misspent. $200 million of Australia’s climate aid is funding a government campaign for the recognition of forest carbon credits at the UN, as a way of off setting Australian emissions. The money is being spent on ‘Reduced Emissions from Deforestation and Forest Degradation’ (REDD) in Indonesia and PNG, to demonstrate the off sets are viable. Many NGOs and indigenous people’s organisations argue REDD off set schemes are ineffective in reducing overall emissions, undermine the livelihood of subsistence farmers and displace forest-dwelling indigenous peoples.[11]

Want to know more?

Visit Where is your aid money going?, AID/WATCH’s online guide to Australian aid. The guide reveals the complex web of Australian government aid spending, giving you information on where your aid money goes and tools for action.

If you are in Sydney and want to learn more about this topic, come to the launch of Where is your aid money going? on Tuesday the 16th of November at the Darlington Centre, Sydney Uni, from 6pm. Speakers include:

  • Alex Oates, Policy Advisor, Australian Council for International Development (ACFID)
  • Lee Rhiannon: Greens Senator-elect & co-founder of AID/WATCH
  • Teguh Surya: Campaigns Director at WALHI, the largest and oldest environmental advocacy group in Indonesia
  • Muliadi: Secretary General of ARPAG, a 7000-strong collective of peasants, fisherfolks, rattan handcrafters and rubber collectors, who live adjacent to the Australian Government-funded REDD project in Indonesia

 

If you are not in Sydney, check out AID/WATCH’s website for more details on how you can become involved in campaigning for change in Australia’s aid policies and practices.

This article was authored by a team of activists and campaigners at AID/WATCH, including Claire Parfitt, Gary Lee and Nishan Disanayake.


[1] Organisation for Economic Cooperation and Development (2008) Is it ODA? Fact Sheet http://www.oecd.org/dataoecd/21/21/34086975.pdf

[2] Australian Government, Budget 2010-2011, Budget Paper No. 2, Immigration and Citizenship. http://www.budget.gov.au/2010-11/content/bp2/html/bp2_expense-15.htm

[3] Goodman, J. (2007) The Australian aid program: Aiding the Burmese Intelligence systems. AID/WATCH, Sydney.

[4] United Nations (2003) Monterrey Consensus of the International Conference on Financing for Development, p10. http://www.un.org/esa/ff d/monterrey/MonterreyConsensus.pdf

[5] See for example, Clay, E. J., B. Riley and I. Urey (2005), The Development Eff ectiveness of Food Aid: Does Tying Matter? OECD, Paris; OECD DAC (2005). Final Report of the OECD Development Assistance Committee Development Partnership Forum on Improving Donor Eff ectiveness in Combating Corruption, 9–10 December; United Nations (2005) Human Development Report: International Cooperation at a Crossroads: Aid, Trade and Security in an Unequal World (New York).

[6] Australian National Audit Offi ce (2009) AusAID’s Management of the Expanding Australian Aid Program, ANAO Audit Report No. 15 2009-10, p.87.

[7] ActionAid (2006) Real Aid 2: Making Technical Assistance Work. http://www.actionaid.org.uk/doc_lib/real_aid2.pdf

[8] Review of the PNG-Australia Development Cooperation Treaty (1999), 19 April 2010, p 26. http://www.ausaid.gov.au/publications/pdf/PNGAustralianAidReview.pdf

[9] Tougher audit for Australian aid to PNG, ABC Radio, PM, 28 April 2009, http://www.abc.net.au/pm/content/2008/s2555219.html

[10] World Bank (2010) The Economics of Adaptation to Climate Change, A Synthesis Report, Final Consultation Draft (August), World Bank, Washington, p 10. http://siteresources.worldbank.org/EXTCC/Resources/EACC_FinalSynthesisReport0803_2010.pdf

[11] Goodman, J. and Roberts, E. (2010) Australian REDD Aid to Indonesia – Ineff ective and Unjust. In Reality of Aid 2010, Aid and Development Eff ectiveness: Towards Human Rights, Social Justice and Democracy, Reality of Aid, Manila, pp 53-60. http://www.realityofaid.org/roa-reports/index/secid/375/part/1

The push for land reform in PNG and Melanesia

Across PNG and Melanesia, systems of land ownership are vastly different from the private property system that underpins Australian economic and social structures.* The majority of land in the region is not owned by individuals, instead being held by groups, families and communities. This system is commonly referred to as customary tenure. Land is not necessarily seen as an asset nor can it be valued according to Western economic and financial principles.

Joel Simo from the Vanuatu Cultural Centre writes that:

“Land is not seen as a mere commodity that can be used and then dispensed with when it is no longer needed. Not only do Melanesian beliefs affirm the sanctity of land, but they also totally contradict the imported notion of “ownership” of land. Land is held rather than owned by the people, who are entrusted by their society to be the custodians of the land in the interests of their children and future generations.”[1]

These systems can be difficult for an outsider, such as myself, to understand. In fact, it runs against almost everything that our increasingly individualistic society holds dear. No one person owns it? So how do you sell it? If it has no monetary value, what value does it have? The shift in thinking necessary to imagine how such a system would work seems like an impossible task.[2] By the same token, for the approximately 80% of Papua New Guineans who subsist on the produce of such land, our concepts of land as an asset, to be bought, sold and leveraged, could seem somewhat strange.

Echoing comments seen elsewhere on this site, foreign aid is more often than not, extremely damaging to the very communities that it is supposed to “help”. For many in Melanesia and PNG, taking land away from customary tenure is the antithesis of development. Yet, despite this, AusAid in tandem with the World Bank and Asian Development Bank continue to push for the reform of land systems across the region.

So, if civil society and the peoples of Melanesia and PNG are against the push for land reform, we need to ask who is driving this agenda and why? Campaign groups such as Aid/Watch, Bismarck Ramu Group and the Vanuatu Cultural Centre have identified several themes in the land reform agenda that go some way to answering these questions.

Values: AusAid policy is informed by certain values inherent to Australian society  – individual ownership, aspiration to wealth and economic growth being just a few. Despite rhetoric to the contrary, policy is directed almost unilaterally towards a system of land ownership that mimics as closely as possible our own economic and land titling system. This ignores alternative approaches to development and assume a set of values and aspirations not necessarily present in other countries.

Economic growth: Despite the valiant attempts of Messrs Stiglitz and Sen to move measures of well being beyond economic growth, it hasn’t yet taken hold in the thought processes of small minded bureaucrats in Canberra. Growth is still king and GDP is the crown. GDP is made up of certain activities – in many countries across the region, these activities – including mining & export oriented agriculture – account for only a small proportion of total economic activity. Informal trading of goods & services and small scale agriculture do not register on national accounts. Large mining projects do. It doesn’t take an ADB economist to work out why then certain economic activities are encouraged over others. Better GDP performance has a whole range of implications – better standing in international debt markets, more likely repayment of ADB, World Bank and rich donor country loans, decreased credit risk for exporters and foreign investors just to name a few. Unfortunately, what GDP growth typically doesn’t achieve in PNG and Melanesia is to trickle down the benefits to the ordinary folk at the bottom of the pile. In PNG for example, it has been demonstrated that building small side roads off the main highway network will allow farmers to bring their produce to market more easily, sustaining local development. Despite this, donor funds and loans are consistently earmarked for national highway projects that benefit large scale agriculture & mining ventures.

Foreign (i.e. Australian) companies: Reforming customary tenure systems to allow and encourage individual ownership has obvious benefits for large corporations who want access to land for development. You guessed it, the large mining, agricultural & real estate companies that are using the land reform process to acquire large chunks of land aren’t locally owned and managed. BHP, Rio Tinto, Xstrata – household Australian names. In Vanuatu, it is the same people who collect your rent in Sydney – LJ Hooker & First National – who are buying up big, using land to build luxury developments that exclude 99% of the population.

Private sector aid delivery: Australia uses an unusually high proportion of private companies to deliver its’ aid program. The Australian National Audit Office found in November 2009 that 70% of Australia’s bilateral program expenditure was delivered by Australia’s largest managing contractors.[3] Not only is the private sector a costly vehicle through which to develop aid, in addition, there is a very real conflict of interest “as many contractors have a wide portfolio of development and commercial interests and are potential beneficiaries of easier access to land.”[4] Coffey International, Land Equity and GHD are corporate entities with a clear aim to extract profit from their activities. This aim clearly compromises their attempt to be an ethical deliverer of aid. It should be noted that GRM, a company until recently owned by the Packer family, received over $1 Billion in AusAid contracts between 2001 and 2010.[5]

We can see clearly that peoples of PNG and Melanesia have stood up against proposed land reforms. We can see clearly that AusAid’s agenda is informed by western values, national interest and a corporatised aid industry. Aid and development should be guided first and foremost by the needs of communities, promoting local ownership and sustainability. However, too often the development agenda is hijacked by the themes outlined in this article, particularly an inability to see beyond western development models that consider economic growth as the holy grail. This type of thinking has informed the large scale sell offs of land in Kenya, Madagascar and Ethiopia to foreign agricultural interests, jeapordising local food security. Similarly, the REDD agenda promoted by AusAid in Indonesia seeks to gain cheap carbon credits for Australia on a macro scale whilst ignoring local needs and wants. In each instance, a combination of government, development institutions and commerical interests place corporate profits and the ensuing economic ‘growth’ above the ability of local communities to determine their own deveopment futures. [E2]


[1] See his article in http://www.aidwatch.org.au/sites/aidwatch.org.au/files/Land%20report%20April2010%20for%20web.pdf

[2] This analysis excludes Aborigonal concepts of land and community that have been present on the Australian continent for thousands of years. In addition, it excludes those in Australian society who could conceive of communal ownership. The thrust of the article is to lay bare the stark contrast between the predominant property systems present in Australia on one side and PNG/Melanesia on the other.

[3] ACFID review of AusAID budget

[4] See Daley, 2010 available here: http://www.aidwatch.org.au/sites/aidwatch.org.au/files/Land%20report%20April2010%20for%20web.pdf

[5] “Who profits from our foreign aid, the untold story of GRM International” http://www.crikey.com.au/2010/07/12/who-profits-from-our-foreign-aid-the-untold-story-of-grm-international/

*Australia, for the most part, operates a land system known as Torrens Title. See this link for more details.


Sustainable development in the Australian policy context: a contest of values.

We all know that sustainable development is a contestable concept. The origins of this contest go right back to the original Brundtland Report and subsequent Rio Earth Summit, which gave the world a supposedly ‘credible’ new vision of a development ‘pathway’ that could be both socially and ecologically sustainable.[1] This vision was not concrete – instead of a “detailed blueprint”, it offered guiding principles of continued growth, reductions in international inequality, precaution when dealing with ecological systems and preservation of resources for future generations.[2]

So, the authors of the vision gave us a purposefully broad concept that is understandably open to interpretation. What we need to do as aspiring development practitioners is to look beyond these interpretations and understand the value systems that drive these differences. In a policy context, understanding these values is crucial in order to understand what truly drives policy-making processes.

At the heart of the contest lies a polarising tension between proponents of economic growth and proponents of natural conservation. Proponents of growth have interpreted the ‘managerial exercise’ of sustainable development to mean incremental changes within existing societal structures. These changes use technology as the diffusing mechanism that will allow the seemingly incompatible goals of economic growth and resource conservation to be achieved. Proponents of natural conservation argue that sustainable development is impossible without radical changes to the structures of society and a shift in priorities from economic growth to ecological sustainability. [3]

These two viewpoints are informed in turn by two core values: the place of human beings in nature and the importance of economic growth. Anthropocentric values inform expectations of resource utilisation – sustainable development in this context is about sustaining the utility value of the environment at a constant level for the next generation. Of prime importance is the ability of both current and future generations to enjoy an increasing level of material affluence, as measured by economic growth. Biocentric values place humans as a single, equal, species, within a natural environment that is “fragile, integrated and in a certain sense unknowable”[4]. Individuals and groups with biocentric values understandably place less emphasis on economic growth.

The goal of economic growth is unequivocally accepted by all major political parties and institutions in Australia.[5] As such, any mainstream interpretation of sustainable development will necessarily focus on continued growth as a major element. This interpretation then necessarily excludes those who believe that economic growth cannot continue to be our fundamental objective as a society.

When setting policy – whether within Government, multilateral institutions or NGO’s – a crucial element is what is termed as problem-framing. In its simplest form, this process involves understanding the problem that the policy is aiming to address. A key part of this problem framing exercise is attempting to gain an understanding of the underlying values and knowledge that inform public opinion. [6] Looking at sustainable development in this context, we see that the political goal of continued economic growth is underpinned by societal goals of increasing ‘quality of life’ and rising material affluence. These goals are explicitly anthropocentric – as a society, the primary value is placed on human (our own and other humans) welfare. In this context, policy that currently endorses the incrementalism of the dominant interpretation of sustainable development would be politically appropriate.

Dominant conceptualisation of sustainable development

An original feature of sustainable development from the Rio Summit was the “deliberate attempt to transcend differences, construct shared understandings, and build a winning coalition for reform”.[7] This emphasis on a united front remains an integral part of the dominant paradigm of sustainable development and has been translated in a domestic context to widespread agreement between business, government and environmentalists about the concept.[8] This coming together is framed within existing societal structures of power, influence, institutions and politics. As such, the inherent biases in these structures have helped to re-interpret the meaning of sustainable development. Beder illustrates this point in noting that business groups in Australia “endorse sustainable development as long as it does not unduly interfere with business goals and practices”.[9] This mainstream meaning of sustainable development expresses the ideas of the ‘managerial exercise’ through the language and concepts of economics – the integration of the environment into the economic system is seen as the key factor in enabling efficient resource management.[10]

The discursive power of mainstream sustainable development language has an immediate effect on the exercise of problem-framing. If sustainability issues are framed within an economic context, solutions will necessarily be economically contextualised and market-driven. Both institutions and the media play a large role in disseminating these ideas. The marginalisation of alternative environmental views by moderate civil society participation in sustainable development[11] reinforces the dominant conceptualisation. Within this paradigm, only incremental reforms are possible, as the meaning of sustainable development is taken to be change within pre-existing societal structures. The difficulty in passing even shallow sustainability measures, such as the current emissions trading scheme, are much better understood when we consider this social context.

 

 

References

Beder, Sharon (1993) The Nature of Sustainable Development, Scribe Publications, Newham.

Beder, Sharon (2006) Environmental Principles and Policies, UNSW Press Limited, Sydney.

Dovers, Stephen (2005) Environment and Sustainability Policy: Creation Implementation Evaluation, The Federation Press, Sydney.

Harding, Ronnie (1998) Environmental Decision-making: the roles of scientists, engineers and the public, The Federation Press, Sydney.

Harding, Ronnie, Hendriks, Carolyn M and Mehreen Faruqi (2009) Environmental Decision-making: Exploring Complexity and Context, The Federation Press, Sydney.

Meadowcroft, James (2000) ‘Sustainable Development: A New(ish) Idea for a New Century’ in J Dryzek & D Schlosberg, Debating The Earth: The Environmental Politics Reader, Oxford University Press, Oxford, p267-284

WCED (1987) ‘From One Earth to One World: An Overview by the World Commission on Environment and Development’ in J Dryzek & D Schlosberg, Debating The Earth: The Environmental Politics Reader, Oxford University Press, Oxford, p259-266


[1]Meadowcroft, 2000: 267

[2] WCED, 1987: 259-265

[3] Beder, 2006: 31

[4] Harding, 1998: 70

[5] Beder, 1993: 12

[6] Dovers, 2005: 76).

[7] Meadowcroft, 2000: 267-268

[8] Beder, 1993: 6

[9] 1993: 280

[10] Beder, 1993: 9

[11] Beder, 1993: 286