Last November the Federal Government announced a long overdue, independent review of it’s aid program; the first in over a decade. The Independent Review on Aid Effectiveness (Review) comes at a critical juncture. The aid budget has more than doubled since 2005 and will double again over the next five years to hit an estimated $8-9 billion by 2015. The Review provides an opportunity to ensure that this enlarged aid program is managed well and to decide where the growth will go.
Over the summer, a small team consisting of myself, Peter Willis, Jo Mitchell and Nicolle Ruppell brainstormed and put together a submission to the Review’s panel on behalf of Oaktree. In it we submitted, amongst other things, that:
- Government projections to increase Australia’s foreign aid budget to the promised 0.5% of GNI by 2015 need to be accompanied with an evenly weighted timeline;
- The Government should separate its commitment to climate financing from the existing commitment to increase ODA to 0.5% of GNI by 2015;
- Consideration should be given to the creation of an “Australia Fund”, an innovative financing mechanism designed to accelerate progress on achieving education for all in our immediate region;
- A greater portion of the aid budget should be given to effective multilateral organisations like the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria as well as non-government organisations;
- Consideration should be given to the benefits of separating AusAID from the Department of Foreign Affairs and placing a Minister in charge of International Development; and
- Consideration should be given to the role that a number of mechanisms, such as parliamentary committees, can play in ensuring accountability of AusAID.
Of course, just because the Review has asked for our view does not mean that all our Christmas’ have come at once. They haven’t. We still do not know how many of our ideas the Review team will adopt until they publish their recommendations in April. Then there remains the challenge of actually getting Government to implement such recommendations. Regardless of the outcome though, the Review has put the spotlight on an area deserving much attention, and is in that sense at least a step in the right direction.
To find out more information about the Independent Review on Aid Effectiveness visit it’s official website at: www.aidreview.gov.au
What do you think?
- Do you agree with all of the recommendations Oaktree proposes in it’s submission to the Review Panel? If not, why?
- What changes do you believe are needed in order to enhance the effectiveness and delivery of Australia’s aid program?
- What potential do you think the Independent Review on Aid Effectiveness has to bring about such changes?
hey Michael,
What kind of difference would an ‘australia fund’ make. I don’t really get it. Please explain what about this fund would make it soo innovative?
cheers
Jim
Hi Jim
Many thanks for your question.
To provide some context, the idea behind the Australia Fund came from the recognition, both within Australia and internationally, that in order to advance progress on MDG2 (universal primary education), a public-private partnership body like the Global Fund to fight HIV/AIDS, TB and Malaria, could be useful for testing innovative financing mechanisms. The Global Fund, for example, can raise funds from private donors. This is crucial in a climate of global economic uncertainty, in which we may have seen a stalling of rising aid budgets (Aus. and UK being an exception here) and an awareness that we may need to seek funds from elsewhere.
The closest thing we currently have globally to a Global Fund on Education is the Education For All Fast Track Initiative (EFA-FTI), of which Australia currently serves on the board of. The problem with the EFA-FTI is that it suffers from a number of obstacles, such as its lack of independence from the World Bank, which prevent it from adopting financing mechanisms that would allow it to raise funds from private donors.
One solution is to transform the EFA-FTI into a Global Fund on Education. Note that Barack Obama had an election pledge to create such a fund in his 2008 election platform. A number of political hurdles stand in the way of pushing this however. Results is one of the organisations that has done a lot of campaigning in this area and I encourage you to check their US website for details on what a fund could look like.
We proposed the Australia Fund as a second best solution that Australia could adopt given that education is the flagship sector of the Australian Aid Program. By creating a smaller scale public-private partnership, the Australia Fund (or call it what you will!) could on the one hand ease the pressure on AusAid while at the same time test-run innovative financing mechanisms that currently are not available to the EFA-FTI. It it works, such a fund could act as a catalyst and role model for the rest of the world on providing much needed resources on education.
Hope this addresses your question!
Michael
ausaid doesnt seem to deal very well with the amount of money it already has. How could/should ausaid work on its capacity and effectiveness in order to actually spend the additional amounts which it will receive should oaktrees suggestions be actioned?
thanks
Aiden
Hi Aiden
Thanks for the question.
There certainly are many legitimate concerns about the way in which AusAid manages the aid program. One of the most controversial issues is the amount spent on technical advisors (although it is worth noting that Kevin Rudd has commented on the need to reduce this amount). At the same time as pointing out areas that need improvement however, we should also acknowledge the good work that AusAid does do in many developing countries around the world.
What should AusAid do in order to improve its effectiveness as the aid budget increases? Hopefully it will implement some of the suggestions outlined in our submission for a start. Beyond that increasing parliamentary accountability over AusAid is also important. When Peter and I met with MPs in Canberra late last year, many commented that they had little oppourtunity to examine and scrutinise AusAid’s activities. Often foreign aid is bundled together with other important issues and so recieves little attention. Some even suggested that a parliamentary committee on foreign aid should be set up to plug this apparent accountability void (hence its inclusion in our submission!).
Cheers
Michael
aid for those being impacted by climate change is still ‘foreign aid’ why should it be a seperate department?
regards
dave. m
Hi David.
Thanks for this very important question. Peter and I get asked this one a lot
A couple of thoughts here:
Australia is obliged to provide new and additional money to finance climate commitments under the Copenhagen Accord (2009) and the United Nations Framework Convention on Climate Change (1992). This is additional to the amount required by Australia under the MDGs (that being 0.7% of GNI by 2015 – Australia is currently committed to 0.5%).
Double counting climate finance as part of the commitment to increase aid to 0.5% of GNI (as the Government is currently at risk of doing) will have serious impacts on both the poverty reduction capacity of the Australian aid program and on the ongoing international climate negotiations.
Diverting a portion of the aid budget to climate finance will decrease aid flows to sectors such as education and health, limiting the capacity for Australia to do its fair share to meet the Millennium Development Goals.
In response to your question, it is important to clarify that we are not advocating for a new department to be created or that climate finance is not a form of foreign aid. It is. What we are asking for is additional funding beyond 0.5 (or 0.7 should we ever get there!) to meet our obligations under the Copenhagen Accord. Moreover, if climate finance were to be separated in the Federal Budget, it is still perfectly reasonable for both climate finance and the money committed to as part of the 0.5% by 2015 spending increase to be administered through AusAID.
Hope this clarifies things!
Michael
Further suggestion for the submission:
Need transparency in the review and selection process for agencies that our Foreign Aid is supporting.
Suggested consideration for existing submission:
Be careful with the “Australia Fund” suggestion. That could be taken as a “Rebuild Queensland fund”. Distinction must be made otherwise we could have the same issue occurring as with the Climate Change Abatement fund.
Further Questions:
Is the AusAID budget breakdown available?
Is the Oaktree budget (and donation sources) available?
Following on from “Further suggestions”, Is the Oaktree selection criteria for their projects available for view?
Thankyou.
Hi Olivia,
Here is the ausaid budget for 2010-2011.
http://www.ausaid.gov.au/budget/budget10/default.cfm
I’m also a little apprehensive about the ‘australia fund’ idea
cheers
MC
Hi Margie
Are you apprehensive about the concept of the ‘Australia Fund’ or just the name of such a fund?
Michael
Just the name.
Oaktree chooses its projects and does everything development oriented according to this ‘development philosophy’
I think its a pretty good way of doing things
http://theoaktree.org/overseas-projects/project-philosophy/
Hi Oliver
Many thanks for your thoughts. I agree re: the need for greater transparency.
Thanks for your feedback around the name of the ‘Australia Fund.’ We came up with the idea before the Qld floods, but I agree that it might be wise to change the name of the proposed fund in light of recent events!
I think Margie and Billy have addressed your other questions below?
Cheers
Michael
Hi Michael,
Thanks for putting up this blog – it is really informative.
I’m just wondering about this bit
‘Consideration should be given to the role that a number of mechanisms, such as parliamentary committees, can play in ensuring accountability of AusAID.’
Don’t we have yearly reviews and agreements like the paris declaration to ensure that ausaid remain accountable?
thanks for your time
Anna
ps. nice photo
Hi Anna
Thanks for your question.
The first thing I will mention is that the Paris Declaration is an international agreement to which our government is a signatory to. It provides the global standards on aid effectiveness that governments should adhere to in structuring their aid programs.
In terms of making sure AusAid actually adopts such standards, it is the role of such mechanisms as yearly reviews to hold it accountable. Many commentators agree however that these mechanisms are not enough. They either need to be expanded in scope or need to be complimented by other mechanisms. This is where a parliamentary committee specifically devoted to oversight of our Aid program could play a key role!
Hope this answers your question.
Michael
Ps. Yeah, I think MC did a great job with picking out the photo
Hi Michael
I notice that there is a suggestion to increase funding to NGOs. Could you explain a bit about why the proportion of Aus Aids budget to NGOs should increase?
Sure, no problem.
We take the view that greater funding should be given to effective, non-profit, non-government organisations, thereby simultaneously reducing the large percentage of funding provided for development to corporate contractors. Not-for-profit NGO‟s often have better connections with local communities and are more effective in reaching the most marginalised people in society.
According to the 2010-11 AusAID Budget, only 2.5% of the $4.3 billion of aid funding will be given to NGOs and community organisations. In line with ACFID recommendations, at least 10% of ODA should be channelled through effective NGOs as these have high levels of Australian public support.
Hope this answers your question!
Michael
Hi Michael,
I’ve been reading about Aid work from dembisa moyo and william easterly, as well as apposing thoughts from Jeffry Sachs. I’m just wondering what your opinion is, do you think AusAid stands up to those critics? Is AusAid effective?
Thanks!
Hi Zoe
It is great that you have taken the time to read beyond Dembisa Moyo and Bill Easterly (you might want to subscribe to his Aid Watch blog in particular – google it!). Both provide good insights into the often asked question “does aid actually make a difference?” It should be noted that Easterly in particular is not opposed to the concept of foreign aid per se, as is often commonly assumed, rather he believes that we can do it better. For a discussion on Moyo’s work, see this blog here: http://peopleanddevelopment.weblogs.anu.edu.au/2009/03/30/dambisa-moyo-dead-aid/. Personally, I prefer Easterly’s work over Moyo’s.
As to whether AusAid is effective or not, I dont think you can give a black and white answer. Certainly, it can do a lot better and there are legitimate concerns about its effectiveness (hence the need for the Aid Review in the first place!). But at the same time it would be wrong to say that its work has not also had a positive impact in many developing communities. Ultimately the challenge may lie in taking what we know works and applying that elsewhere.
Cheers
Michael
Thanks Margie. Agreed that the name might have to re-visited in future proposals.
how can ausaid do ‘consultancy’ better? it seems to spend an aweful lot on sending people over to recipient countries. Is this what Australian civilian corps is about – its a bit confusing?\
and what do oaktree think about this australian civilian corps thing?
cheers
BOB
Ps. I forgot to add to my previous response below that there is a distinction between development technical assistance on ongoing development projects (where our concerns lie) and the Australian Civilian Corps. The corps were basically set up in 2009 to deal with disaster and humanitarian relief following natural disasters (which seem to be on the increase in recent years).
As an organisation that does not ‘do’ disaster and humanitarian relief, Oaktree does not have a specific policy on the Australian Civilian Corps, although as with all development projects, it is important that it is rolled out in an effective and transparent manner.
Hi Michael,
From looking at the ausaid website it looks like ausaid funds some of australias dealings with asylum seekers/refugees. Is this the case? How does this work – isnt it pretty odd that ausaid gives funds to unhcr but the department of immigration also detains people for arbitrary lengths of time ?
And what would be Oaktrees position on asylum seekers / refugees?
Hi Alice
Many thanks for this question. This is an area of policy I am not so familiar with, and it is also an area in which Oaktree does not have a specific position other than to say that effective aid and development work may reduce conflict or help countries adapt to climate change, which in the long-term might reduce the need for people to seek asylum in the first place (keen to hear your thoughts on this!).
From my understanding, AusAid provides funding to UNHCR for refugees predominately in the Asia Pacific possibly in a bid to reduce the need for them to undertake potentially dangerous journeys to Australia. The work of the Department of Immigration that you refer to has a different focus. It is focused on processing people’s claims for refugee status once they arrive in Australia (or Australian waters).
Hope that clarifies things!
Michael
Hi Michael,
It says in your blog that about 10 years ago ausaid did another independant review – after that review to what extent did ausaid take on board the given suggestions? how much did it change?
thanks
ANT
Hi Anthony
The blog referred to is the Simons Review, which was commissioned in 1996. A summary from ANU’s Development Policy Centre blog can be found here: http://devpolicy.org/simons-revie/
As is always the case with reviews, and as I make the point in my blog, all they can do is make recommendations. There is no enforcement mechanism. This is why it is crucial that pressure is sustained on government even after the Review publishes its recommendations.
In the case of the Simons Review, some things were taken onboard, some werent. For example, the Simons Review suggested that Australia’s Aid program should have ‘a single and unambiguous objective.’ This being poverty reduction through sustainable development. A glance at the AusAid website shows that this was not adopted. The emphasis on ‘national interest’ remains. Ultimately though of the 79 recommendations contained in the Simons Rview, the then Government of the day accepted, albeit some only partially, 64 of these, noted another six for further consideration and rejected nine.
Hope this addresses your question!
Michael
Some aid and development specialists have suggested that a ‘payment by results’ or ‘cash on delivery’ based approach to giving aid is a good idea – so it gives incentives to recipient governments on for example every child who finishes primary school
for money given by ausaid directly to governments – could this be an approach which oaktree would get behind?
I really worry that lots of money given directly to governments is not getting to the people who need it. corruption seems to be sucha big issue at the moment – look at all the stuff going on in libya their government clearly doesnt care about its people – theyre bombing them.
thanks
(sorry about the rant)
Marina!
Hi Bob
Thanks for your question. When it comes to technical advisors, put simply, we need more locals and less expats. Not only is this less costly, but it also raises the capacity of those in the country where the aid is being spent. Kevin Rudd has made a speech and issued several statements that address this issue. You should be able to find them through his website.
Another way is to rely more on NGOS that have a history of working in a particular country. Often these NGOs are far more effective and economically efficient than costly technical advisors. In line with ACFID’s recommendations, Oaktree calls for funding to NGOs to be increased to 10% of the aid budget.
Thanks
Michael