Aid effectiveness concerns hit the mark. So what now?

In a week of controversy surrounding Australia’s aid contribution, Oaktree CEO Tom O’Connor writes:

USS Kearsarge Personnel Conduct Medical Assessment in Haiti | Photo by Flickr user DVIDSHUB

Commentators such as Steve Lewis have finally hit the mark when it comes to foreign aid. Going beyond the sensationalism and drama of aid consultants who are paid more than the Prime Minister, he argues “We should pause and consider a new Foreign Aid blueprint”.

He raises crucial questions Australians need to be asking their government: has Australian aid reached those most in need? Has it helped to save lives? Will it make a difference in the longer term?

In short, how do we make Australian aid the most effective in the world?

These questions are brought clearly into focus when considering the bipartisan commitment to increasing foreign aid to a 9 billion budget by 2015. This commitment is by no means new. Kevin Rudd announced the commitment in Opposition in 2007, and was matched by both Malcolm Turnbull and recently Tony Abbott. Thus far, however, the increase has not been linked to comprehensive review of AusAID’s capacity to deliver the money.

It has become increasingly clear that such a review needs to be a priority. An internal audit conducted in December last year found that “AusAID faces considerable management challenges amidst ongoing program growth”. Furthermore, commentators this week have rightly highlighted problems with the transparency and accountability in the way in which AusAID allocates contracts for its programs. Unaddressed, these weakness will be exacerbated by aid increases over the coming years.

Amidst all this doom and gloom, there is a danger that we lose sight of the unique opportunity we have to create an effective aid program. It is sometimes convenient to forget that when aid is delivered effectively it saves lives.

Globally, extreme poverty has been cut in half over the last 20 years. In 1990, 42% of the world’s population lived in extreme poverty; today, that’s down to around 21%. In terms of maternal health, a recent study showed that the number of women dying from pregnancy-related caused has dropped by more than 35% in the past 30 years. This dropped from more than half a million deaths annually in 1980 to 343,000 deaths annually in 2008. And due to simple immunisations that have been delivered on larger and larger scales over the past decade, we are saving 12,000 children every day from premature death.

Closer to home, Australian’s own aid effort, administered and delivered by AusAID, has eradicated polio in the Pacific region. As Australians, we should be proud of our record, whilst recognising a strong impetus for continued improvement.

The question is, so what next? If we are to have a real debate about the effectiveness of Australian aid, which reforms are going to make the biggest difference?

The debate thus far has shown that it is easy to misdiagnose symptoms as root causes.  Highly paid technical consultants and scholarships to buy support for a UN Security Council seat will make headlines, but they are simply examples of a broader malaise.

There are actually two root problems that need to be solved to make Australian aid effective: a chronic lack of political oversight and lack of transparency.

The truth is that Australia lacks the basic foundation stone of a modern, effective aid program: a Minister for International Aid and Development, and a proper Department for International Aid and Development. We need to recognise that aid and development is more than just a small cog in the machinery of foreign policy: it is an integral component of our international engagement. These reforms would ensure that the aid program is given the level of priority, and thus the public scrutiny and accountability, which it needs to succeed.

We must continue to make AusAID more open and transparent. The newly-established Office of Development Effectiveness (ODE), only the second of its kind in the world, is a good first step. The fledging ODE must be protected and nurtured by both sides of politics to ensure that it grows into a strong institution that survives the vicissitudes of three-year election cycles. Further steps toward transparency must be taken, however. Consistent experience by journalists and NGOs has proved AusAID to be extremely opaque and averse to releasing information about its projects and programs.

More than anything else, the call for increased effectiveness in the way the government spends its foreign aid represents an opportunity. Heading into a Federal Election, this is an opportunity for both major parties to show leadership on aid effectiveness and take the right steps to make Australian aid the most effective in the world.