Tim O'Connor and Kate Wheen
Trevor Flugge, the wheat farmer from WA who was recently splashed across the newspapers smiling, shirtless, sweating and aiming a handgun at the camera, may not be the first person you would associate with Australian aid. But Flugge was the face of the Australian aid program in Iraq from April 28, 2003, when he received an AusAID contract to the value of $679,345. Last week, PM Howard admitted this contract had blown out to $978,000.
Flugge's position with AusAID was to provide high-level advice on agriculture reforms and food security to the Iraqi Ministry of Agriculture. A former director of the Australian Wheat Board, and later the privatised AWB, Flugge had considerable experience as a grain trader.
Due to his lack of specialist expertise in agricultural development, AID/WATCH criticised his appointment, and the Howard government for putting the interests of Australian business, in this case wheat farmers, before the development needs of the people of Iraq. In 2002, prior to the appointment of Flugge, Australia exported 1.03 million tonnes of wheat to Iraq. By 2005, this figure had grown to 1.55 million tonnes.
While Flugge served the interests of Australian wheat farmers well, the people of Iraq did not fare so well. In August 2005, the World Food Program found, "In total, approximately 25 per cent of the Iraqi population is highly dependent on the Public Distribution System (PDS). Some 2.6 million people (11% of the population) are extremely poor and vulnerable to food insecurity. An additional 3.6 million people are highly likely to become food insecure if they are not provided with the PDS rations."
National interest?
The current objective of the aid program "to advance Australia's national interest through the alleviation of poverty and the promotion of sustainable development" appears to have fallen victim to a very narrow definition of the "national interest". Currently "commercial interest" and "strategic interest" far outweigh any concern for tackling poverty. This raises the question: are projects that do not have some commercial or strategic advantage to Australia not to be funded, regardless of the positive impact that they may induce?
Education, health and infrastructure are the traditional staples of aid delivery, yet these are no longer the mainstays of Australian aid. Instead "good governance" is the new aid mantra, and it spreads like the cane toad to our near neighbours.
When the John Howard government was elected and Alexander Downer installed as foreign minister, $68 million was set aside for "governance" programs in the aid budget. By the 2001 budget this had leapt to $295 million, or 17% of the total aid program, eclipsing the amount spent on health, infrastructure and rural development but still exceeded by the funding dedicated to basic education.
In the latest aid budget papers, the trend towards spending on governance leapt again and is estimated to surpass $1.1 billion this financial year. Funding to the combined sectors of education (14%) health (12%) and infrastructure (7%) is now less than the total that is dedicated to governance programs (36%).
Although there appears to be no clear AusAID or government definition of "governance", beyond "an essential foundation of the aid program", generally it is used as a catchall that has hoovered up funding to other less trendy parts of our aid delivery. For instance, funding that once went to educating police or bureaucrats is now considered "governance" money. Thus the massive increase to this sector tells more about the whims of aid policy than about funding practices.
Funding
However, one area that has benefited enormously from the focus on governance has been the aid funding to "other government departments". Funding to the departments of the Attorney General, defence, treasury and immigration, for instance, has risen from $151 million in 2000 to more than $563 million this financial year. Much of this money has gone to the Regional Assistance Mission to the Solomon Islands (RAMSI) and the failed PNG Enhanced Co-operation Program (ECP).
Yet the ECP, imposed under threat of Canberra cutting aid dollars to PNG, was found by the PNG courts to be unconstitutional. This put Australia in the tricky position of imposing a good governance program that was outside the constitution of a sovereign country — an exercise in "bad governance".
While the RAMSI project in the Solomons has brought a short-term peace, the longer-term sustainability of that peace and a resolution of the ethnic tensions appears some way off.
It is questionable whether Australian bureaucrats from treasury, the federal police or the law are best placed to deal with the complex nature of aid delivery. Development is a field that requires significant skills and tools that an official, trained for the day-to-day dealings of a government department, may not have.
Keen aid-watchers will be aware that a Downer-handpicked team is currently reviewing Australia's aid program and their findings will be the subject of an aid white paper due out this month.
The team includes several recipients of major aid contracts, and drastically changing the aid program would not be in their interests. As well, the public consultation process included just four public meetings in the major capital cities with no public submission process. By comparison, the recent defence white paper process included 28 public meetings and more than 1157 public submissions.
When questioned at one of the public meetings about the "national interest" subverting the altruistic goals of the aid program, MHR Bruce Billson stated that he did not know why the "national interest" clause had not been removed, as it had been in the UK and the majority of European aid programs. Unfortunately, this clause will not be reviewed in the white paper process as it was deemed to be outside the terms of reference.
Australia's ability to deliver good governance programs was thrown into more doubt by a recent report from the OECD. Examining anti-corruption measures, the OECD found that the Australian government did not condemn the payment of monies by an Australian company to expedite an outcome it desired and, further, that these payments were able to be written off as tax deductions. Australia's Attorney General denied this was a poor reflection on Australia and its laws.
Aid as restructuring
Leaving aside Canberra's suitability to impose good governance on aid recipients, there are serious concerns about the type of programs Australia is promoting. A key concern one for recipient countries is the type of economic restructuring Australia is promoting. "Australian aid assists developing countries to undertake structural reforms to encourage the private sector to flourish" typifies the Australian development dogma.
One controversial change Australia has pushed for, bilaterally and through the World Bank, has been the registration of customary land. A 2004 report from the Department of Foreign Affairs and Trade on the Solomon Islands stated that traditional lands need to be registered for that country to prosper.
While land titling is crucial to the fabric of Australian society, in the Solomons, PNG and many other aid recipient countries customary land ownership is part of a very different social and cultural legacy. The communal, village or tribal social system is embodied in the traditional and often complex system of land ownership. Land is often used, and therefore owned, by several people, families and/or groups for different purposes.
Unpicking this complex web is tricky and people are prepared to die fighting for their land. In PNG, a protest in 2000 about the World Bank's planned land registration project ended in the shooting deaths of four people. In countries like the Solomons or PNG, where there have been ongoing problems with government corruption and provision of services, establishing a secure, central land title registry is likely to face many problems.
Another example of good governance, the Australian way, is the push to downsize the public sector in PNG. In 2003, Downer encouraged PNG to downsize its defence force to less than 2000 personnel or risk losing $20 million in Australian aid. In a country of more than 5 million people, 2000 is just 0.04% of the population. Australia has more than six times that number, with 0.26% of the population in the army, navy and air force. This is somewhat strange given that PNG borders West Papua, and suffers continuing political controversies, but it suits Canberra do have an enfeebled defence force in our nearest neighbour.
Canberra's suitability to push the good governance agenda is dubious, even before we know the outcome of the AWB inquiry. Australia's aid delivery record is weighted in favour of delivering to its own commercial advantage and, more recently, to the political advantage of the federal government.
If Canberra wants to promote human security — not just its own security — we need to do away with the "national interest" blinkers and deliver aid that goes to poor people.
[Tim O'Connor and Kate Wheen work at AID/WATCH, an independent watchdog monitoring the community impacts of Australia's aid and trade polices.]
From 91×ÔÅÄÂÛ̳ Weekly, March 15, 2006.
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