It’s great to see the debate on the Aid Review and the future of Australia’s overseas aid program and The Lowy Institute’s focus on this important area. It is also encouraging to see the considerable improvements that have been made to AusAID’s program in recent years.

For many of us who have worked for years to make a better and bigger aid program, the commitment to lift aid to 0.5% of national income offers great hope to help build a better world. The extra $4 billion dollars each year may be a relatively small amount in a global economy of $60 trillion, but if applied well it can make a very positive difference to tens of millions of people’s lives each year.

However, there are considerable risks that we won’t make maximum use of these additional funds. Given the history of the Australian aid program I think there are big dangers that:

• Much of the extra money will not reach the poor, but will go to Western firms, consultants and well paid Australian military, police and academic employees;
• It will add to the burden on developing country governments by failing to be sufficiently coordinated with other donors and harmonised with developing country systems;
• It will damage the culture and communities of some countries by promoting inappropriate economic development models;
• It will fail because of short-term and poorly informed strategies;
• It will not provide a sustainable benefit for the poor because it fails to sufficiently include them in program planning, implementation and review;
• It will focus too much on broad-based economic growth (which we don’t really know how to assist), while failing to ensure that essential services are provided for the poor.

Given these risks, World Vision has proposed in our final submission to the Aid Review five critical steps to maximise the benefits of Australia’s increased investment:

1. Increase openness and transparency of the aid program

Allow Australian civil society a real-time picture (as some other donors do) of where and how money is allocated in order to open up the program to greater constestability. The data is there it just needs to be made available. Also allow developing country civil society and target communities to be much more involved in the planning, implementation and evaluation of Australia’s aid programs to ensure that our efforts are well informed by local knowledge and really do focus on the greatest priorities of poor people.

2. Make access to essential services the foundation of the Australian aid program

The MDGs focus on the essentials and so should the Australian aid program. The Government has driven a much stronger focus on the MDGs in recent years and there has been a welcome increase in funding for the essential services of basic education, health, food and sanitation. This strategy needs to be extended further as the needs are still great (for example 8 million child deaths each year) and our contribution is still too small.

In contrast to interventions that seek to increase economic growth, aid has been proven to be effective at helping to provide essential services for the poor – better food and nutrition (MDG1), improved education (MDG 2), improved health and hygiene (MDGs 4,5,6,7). Measures of these successes include significantly decreased maternal and child deaths, millions more children in school, cuts in new HIV infections and AIDS and decreased malaria deaths. In each of these areas the major constraint is not lack of knowledge but lack of money. The additional funds available to AusAID could save at least 500,000 lives a year if applied through existing proven strategies that have an average cost of around A$2,300 per life saved.

Assistance to provide essential services is amongst the most reliable and cost-effective of aid interventions and should be the foundation of our aid program covering around half or more of our expenditure. As the UK Government has done, we should be framing our core aid goals in terms of concrete and achievable outcomes such as the number of lives saved, the number of children given access to school, the number of people with toilets.

At least then in 2015 Australia will be able to clearly point to the benefits of the program – something which has not been so easy to date. If we fail to provide these basics, Australians will be rightly asking what is the point of an aid program.

3. Focus on the poorest and weakest

This means allocating our resources more in line with need and less in line with geographic distance from Australia. Australia’s first responsibility is to our closest neighbours, however that is not where our responsibilities end.

We need to guard against giving too much support to neighbours that already receive high or very high levels of per capita aid (i.e. the Pacific receives US$184 per capita on average in total aid) and giving too little to others that may have much bigger problems (India gets US$2 and Indonesia $5 per capita from all donor nations).

We can have an aid program that focuses mostly on our region while at the same time also assisting those most in need. Providing much more finance through effective multilateral agencies (at least 30% of our ODA to multilateral core contributions, and more in partnership arrangements) is a requirement to efficiently achieve this and also necessary if we are to further improve coordination and harmonisation of aid.

Focusing on the poorest within countries is also essential – our other key recommendations to provide essential services and to increase accountability to communities will help to ensure this.

4. Increase accountability to communities and partner countries

As several ODE reports (the Office of Development Effectiveness monitors the quality and evaluates the impact of the Australian aid program) have pointed out, AusAID needs to broaden its notion of risk management and focus on the risks for the poor as much as on fiduciary risk to the Australian Government. Accountability has to be to poor communities, partner governments and the Australian Government. Accountability to poor communities will involve much more active communication with communities and civil society in partner countries – something with which Australian NGOs can help.

As part of greater community accountability, gender equity must be given much greater focus – AusAID needs to lift its efforts for women even further and make sure that women not only benefit from the aid program but also are equal partners in shaping it. The aid program needs to actively support the needs and rights of women, and mechanisms need to be established within AusAID to ensure near-equal gender representation in planning, implementation and review of the program. The development discourse is currently dominated by male economists despite 70% of the poor being women.

5. Ensure coherence of development policy and greater international leadership by Australia

Aid is not the only way that Australia can support international development. To maximise Australia’s effectiveness as a development player it is critical to increase the coherence of government policy and to ensure whole of government support for development. The position of developing countries and their fortunes are shaped by a wide range of international arrangements in the areas of trade, environment and finance.

Australia is an influential middle-level power with significant respect from other nations and is a member of several important international bodies such as the G20, APEC, the Commonwealth and the East Asia Summit. We are also one of the leading donors to the Asia-Pacific. Australia is in a powerful position to promote greater international action on development and to encourage more effective coordinated action to reduce poverty and assist developing countries.

Important actions could include: encouraging full funding by all donor countries for effective multilateral aid bodies; supporting greater action to reduce international corruption and illicit financial flows; ensuring that intellectual property laws do not damage growth prospects for developing countries; providing opportunities for seasonal workers to work in Australia; making better use of Australia’s research infrastructure to address developing country needs.

There is a big risk that come 2015 we will look back and wonder just where all that extra money went. However, if the Australian Government and AusAID take these five steps then we will be able to say that Australian aid has made a large difference and that millions of people’s lives have been saved and improved by our efforts.

Garth Luke is a senior researcher for World Vision Australia

First published on the Lowy Interpreter

Welcome increase for the world’s poor but poverty priorities slipping back

The 2010 budget includes a much needed increase to Australia’s overseas aid program, with the extra half a billion dollars for 2010/2011 creating the potential to make a difference in the lives of millions.

You can read the full response here, or read ACFID’s full budget analysis here.

Last night’s budget announcement saw a much needed increase to Australia’s overseas aid program; the extra half a billion dollars for 2010/2011 has the potential to make a difference in the lives of millions, Make Poverty History said today.

However, campaigners and aid groups are concerned that new money is not targeting the most urgent priorities of saving the lives of mothers and children under five, and helping the poor cope with climate change.

Closer analysis of where the aid budget is being spent shows no new money for climate change in this financial year and a decrease in the proportion of Australia’s aid going to health initiatives. It is widely accepted that the health-related Millennium Development Goals (MDGs) are the ones furthest off target in most countries around the world.

In addition, climate change is already threatening progress in the fight against poverty on a global level. Therefore, money must not be diverted from existing aid projects for climate financing because it will endanger the progress made in tackling the Millennium Development Goals.

“The world’s poorest people should never have to choose between saving mothers during pregnancy and childbirth or helping their communities cope with climate change,” says Tim Costello, co-chair of the Make Poverty History campaign and CEO of World Vision.

“Poor communities need to be resourced to tackle all the threats that prevent them from moving out of poverty. Climate change is already having a significant impact on water and food security in poor countries, and this will only increase as climate change worsens.”

Over 1000 Make Poverty History supporters arrive in Canberra today by the busload after having travelled through towns across Australia raising awareness about global poverty. Now their message will be directed at Parliamentarians as they respond to this week’s budget announcements.

Australians are passionate about our country being a good and responsible global citizen. Campaigners will be meeting with 143 MPs over breakfast tomorrow to discuss how the Australian Government can deliver its fair share through more aid, better quality aid programs and to protect the poor from the impacts of climate change.

Make Poverty History co-chair and Oxfam Australia’s Executive Director Andrew Hewett said: “We know aid works – it has seen more children go to school in Africa, equipped people in the Pacific to grow more food to feed their families, and helped keep the health system in the Solomon Islands running.”

In the lead-up to the federal election later this year, the Make Poverty History coalition of over 60 NGOs is organising Town Hall forums, 5th Birthday Parties and hundreds of meetings with MPs as the movement calling for action against poverty swells.

Make Poverty History calls on the government to make a timetabled commitment to the international standard of 0.7%GNI for overseas aid and supports innovative financing initiatives like the Robin Hood Tax, a tiny tax on financial institutions that would provide billions to tackle global poverty and climate change.

With 1.4 billion people still in extreme poverty and just five years to go to achieve the Millennium Development Goals by 2015, Australia has a long way to go to do its fair share. Every minute will count to save the lives of the poor.

For media interviews, contact Ariani Soejoeti on 0448 684 033.