Benevolent idealism ignores the political realism

WESTERN progressives' penchant for self-destruction has been challenged by the Abbott government's approach to international relations.

In response to Julie Bishop's decision to restructure foreign aid as economic development, sections of the bureaucratic, academic and media Left held her responsible for future deaths of children in foreign lands.

Newsreels of famine-starved children and sanguineous citadels of genocide so shock our human empathy that to question foreign aid seems callous. The issue is not our good human instinct to help each other when we fall, but belief that foreign aid achieves this end.

The 2013 OECD Development Aid at a Glance report exposes the real face of foreign aid. The top 10 donors of official development assistance are liberal democratic states. Eighty per cent of top foreign aid recipients are politically illiberal, ranging from totalitarian to tribal states.

The most generous foreign aid donors are also the world's most honest countries. Transparency International's corruption index rates states' political and economic accountability on a sliding scale of 1 (most corrupt) to 100 (most honest). The top 10 foreign aid providers score an average of 77. The 10 most voracious foreign aid takers score an average 21 for political accountability, counting them among the world's most dishonest governments.

Despite widespread corruption among foreign aid recipients, few have been blacklisted for embezzling funds. Financing foreign aid in corrupt regimes corrodes development and democracy. Yet the West continues to do it, unwilling to temper dreams of benevolent liberal idealism with political realism. The OECD reports that in 2011 only 3 per cent of Australia's official development assistance was allocated to food aid. Basic health aid comprised 2.6 per cent of its contribution.

Perhaps the former Labor government preferred investment in education, given its empirical relationship to better health, lower infant morality and human rights? No, basic education accounted for 3 per cent of our official foreign aid budget. The largest allocations were to the categories of "government and civil society" (20 per cent) and multi-sector work (17 per cent). Under Labor, Australia's foreign aid regime was a categorical feast of social engineering.

The reality that we have been duped about what foreign aid is and does pales in comparison to realising the OECD's machinations. When Bishop announced the integration of AusAID into the Department of Foreign Affairs and Trade, critics claimed Australia's failure to meet the OECD 0.7 per cent target would cost lives. The OECD directive that 0.7 per cent of member states' gross national income should be allocated to foreign aid is grossly fallacious on two counts.

The first is that OECD member states are, by default, the world's wealthiest nations with disposable income to spare. The second is that GNI constitutes a balanced measure of national wealth. GNI presents a myopic view of national economic health by omitting comprehensive debt data. A more holistic measure of national economic health is net debt to gross domestic product. The net debt to GDP ratio is less commonly used because the world's illiberal consensus refuses to provide reliable data on debt. And for good reason.

GNI is advantageous to corrupt regimes, enabling them to falsely deflate national income by siphoning profit through back channels while denying external checks on fiscal transparency. The OECD's foreign aid architecture permits corrupt regimes to cry poor as they pull upon the purse of honest states.

The IMF and CIA produce annual data on national wealth that includes limited debt to GDP data. The 2012 World Factbook reveals that the OECD's most generous foreign aid donors now count among the world's most economically fragile nations.

The OECD's top five donor nations are the United States, Britain, Germany, France and Japan. Their average debt is 110 per cent of GDP. The average debt of the top five recipients - Afghanistan, Congo, Ethiopia, Vietnam and Pakistan - is 44 per cent of GDP.

Economic reality eludes foreign aid bureaucrats. OECD Development Assistance Committee chairman Eric Solheim responded to the GFC's devastating impact on the US and Europe by lecturing them that, "Maintaining aid levels is not impossible even in today's fiscal climate." Not impossible, but certainly ill-advised.

The struggle of our fellow citizens in Spain, Greece, Italy and Ireland doesn't make night-time news like hunger in Africa or civil war in the Middle East. But one in five of these Europeans is living below the poverty line. Spain and Greece have 25 per cent unemployment and the average debt of the four countries is 125 per cent of GDP. It is a strange condition of the 21st century that having white skin redacts human sympathy.

Despite being among the most generous foreign aid donors of the past 40 years, Europeans are receiving no reciprocal compassion from the UN and OECD regime.

Bishop's decision to transform foreign aid into economic development should be lauded as progressive. Classified as other than official development assistance, economic aid is the dominant form used by climbing superpowers such as China to boost capital investment via foreign infrastructure development. And the locals, far from being offended, often prefer China's low-interest loans to Western aid handouts.

The Abbott government is not isolationist in its approach to international relations. It is simply taking the long view, aware that we cannot leave a legacy of humanitarianism for future generations unless we first sustain liberal democracy in the present.

Jennifer Oriel is a Melbourne writer.