Joining the ranks of new world order on aid

THE changes to AusAID form part of a broader picture - one that is seeing rival models for development competing around the world.

AUSTRALIA's aid industry has been plunged into confusion over recent weeks. But the changes to AusAID form part of a broader picture - one that is seeing rival models for development and for the delivery of aid competing around the world.

This is happening in part because of the considerable size of the sector. The eight Millennium Goals adopted by national leaders via the UN in 2000 - which range from halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education, all before 2016 - galvanised government commitments to the aid sector, boosting massively its spend.

Successes have been claimed already. For instance, by 2010, extreme poverty - defined as the share of people in developing countries living on less than $US1.25 ($1.32) a day - had been cut by half, from 43 per cent in 1990, when the clock measuring the goals started ticking, to about 21 per cent in 2010.

But no one can tell how significant the aid sector's role in this achievement has been.

Some commentators claim the shift has been principally because of the scaling down of wars, and the opening up of economies to global trade and investment, with Chinese economic engagement playing a principal part in boosting the growth that provides jobs.

Hence, in part, the strength of the debate about where aid should now be aimed, worldwide - and about appropriate levels of spending. The model of East Asian developmental success, principally through economic growth, has become inescapable.

Is that, rather than larger sums of official aid, the true way to make poverty history?

Australia's official aid spend has more than tripled since 2000, when the Millennium Goals were launched, to $5.66 billion this financial year, although the new government has announced it will cut this by about 12 per cent, by $656 million. This will still leave aid spending at about five times the total budget for diplomacy.

Besides the scale-down in spending, AusAID will also be reintegrated into the Department of Foreign Affairs and Trade, from which it emerged as a standalone agency three years ago, as it became one of the five or six biggest-spending parts of government.

When it pulled away from DFAT, another level of senior management was added and Peter Baxter, as director general, became in effect its chief executive - a position from which he has now stood aside, his deputy Ewen McDonald temporarily taking over.

The blog of the Development Policy Centre at the Australian National University ran just two months ago a commentary from Joel Egin, senior lecturer in international public health at Sydney University, in which he said: "Australia has been following the UK's lead in scaling up its aid program while most other donors cut back.

"But the similarities go much deeper", with a close collaboration having emerged from a partnership agreement with Britain's powerful, wealthy and virtually autonomous Department for International Development, "that highlighted working together across such areas as the Millennium Goals, climate change, delegated partnerships and aid effectiveness."

The blog was headlined: "The DFID-isation of AusAid".

Today, however, the models have changed. They have become New Zealand and Canada. After John Key became Prime Minister in New Zealand, his government integrated its aid body into its Foreign Ministry in 2010, reforming the non-government organisation-focused aid establishment put in place by Labour prime minister Helen Clark, who went on to head the UN Development Program.

Canada followed suit three months ago. In Europe, Holland, Denmark, Finland and Norway have done the same.

This new model of aid program sits closely alongside diplomatic aims, which - consonant with the new paradigm of development through economic growth - would be delivered in a Team Oz-type environment.

This is distinct from the model that set aid bureaucrats further apart, in a framework in which they found reference points more among other aid administrations such as DFID.

However, such semi-independent aid bureaucracies - AusAID employs more than 2500 people - are susceptible to being enlisted for political goals, especially when they appear to be aligned with those of the agency, such as in support of a bigger role at the UN.

Stephanie Copus-Campbell, executive director of the Harold Mitchell Foundation and former head of AusAID's program in PNG, noted that "it has been in these years, when AusAID has been most independent" in theory, "that it has been subject to most political interference", with the UN Security Council seat campaign driving the extension of aid globally, into Africa and the Caribbean.

The aid program, Ms Copus-Campbell said, "has always been about Australia's national interest" - which has been defined as "alleviating poverty and achieving sustainable development in our region".

She expected these goals to continue to take priority, but added that she would watch whether the government would resist linking aid more closely to trade - a connection previous foreign minister Alexander Downer had unwound.

The global rethinking on the role of aid is only just starting - and Australia has now joined up as a participant.