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Aid review: So much cash, so little time

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COMMENTS

22 November 2010 09:26

Kevin Rudd promises a 'root and branch' examination of Australian international aid. In reality, it looks more like a chance for a quick prune ahead of another big growth spurt. Credit the Foreign Minister for asking some important policy questions in the terms of reference. It is just the scope for answers that seems limited.

The quality of the people appointed to the Hollway review is high, but their numbers small, and the timeline extremely tight. The inquiry is announced in mid-November and told to report by April. Deduct a few weeks for Christmas and that is a chance to shake the tree and lop a few branches. No regal-tempo royal commission here. This is a bureaucratic rush to the deadline. The inquiry will have the chance for just a few big thoughts.

AusAID will have its wish list. The challenge for the inquiry team will be which bits of the AusAID dream to dash and where it can add some fresh daubs of colour. The Foreign Minister has given the committee plenty of room to roam while sharply curtailing its time.

The first point raised in setting out the scope of the inquiry is about 'the appropriate geographic focus of the program, taking into account partner country absorptive capacities'.

Interesting first question. The 'absorptive capacity' criteria suggests the South Pacific will continue to do very well out of Oz aid but, apart from PNG, the growth in spending on the Islands may not match the rampant growth forecast for the aid budget.

Australia's immediate geography has always trumped most other cards in running aid. The bilateral cash goes to the South Pacific and Southeast Asia. The regionalist habit of mind dominated the previous aid review, the Simons Inquiry, 15 years ago. Bet that Hollway will come to broadly the same conclusions.

But making geography the first point for consideration means the inquiry can at least pause to ponder. Aid policy has its own version of the perpetual Australian military and strategic debate: global/imperial versus national/regional. In the aid version, it is global/multilateral versus regional/bilateral. Australia's aid program sprang into life the moment Papua New Guinea became independent, so the regionalist school has always dominated.

The US alliance can pose more important global demands in the strategic debate than the World Bank and the multilateral universe have been able to impose on Australian aid. Yet, this time, there are some practical reasons why the multilateral side should get more of a look in, even if the regional/bilateral side is again the overall winner. A bit of global cover is needed to justify more attention to Africa. Surely, some important principle is in play, not just The Kevin's need to prospect for votes in the quest for a UN Security Council seat.

A significant reason for Australia to embrace a more multilateral vision for its aid is the deeply practical issue of spending all that money. We are zooming beyond $4.3 billion towards $8.6 billion by 2015. Assume a continued strong performance by the Oz economy and we are closer to a $9 billion than an $8 billion annual spend.

Shovelling the cash through the bilateral/regional window is an intricate and demanding task for AusAID, especially in helping the South Pacific. As noted, the ability of recipient countries to actually use the do-good dollars — their 'absorptive capacities' – is the proviso added to the geography question. The limited ability of the South Pacific to use aid dollars is one reason why the final years of the Howard Government saw an historic cross-over moment: for the first time, Australia spent more on aid to Southeast Asia than to the Islands.

Giving aid money to multilateral institutions greatly simplifies the bureaucratic load. It is not quite tick-and-flick but it is certainly a lighter administrative burden than running bilateral aid. Dispatching large dollops of dollars overseas for other agencies to do good deeds is about as efficient as it gets. Aid objectives met, money fully accounted for, yet hardly an Australian bureaucrat involved. Efficiency, indeed.

Giving money to NGOs has some of the same attraction, but questions of accountability and actual results can demand a large corps of AusAID controllers. Much easier in Senate Estimates to hand off responsibility to the World Bank than to account for the suddenly newsworthy actions of a small NGO in an obscure place.

Photo by Flickr user John Kenzer, used under a Creative Commons license.

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