To stay relevant into the future, Australia’s Overseas Development Assistance (ODA) program needs to become customer focused, faster, leaner, greener, more transparent, more effective and productive, more socially and culturally inclusive, more open to ideas from new voices from diasporas and evidence based sources, more open to collaboration and co-investment and better positioned for collective impact in a multipolar and interdependent world.
A number of trends and factors have caused a significant change in Australia’s ODA strategic and operational environment since the last aid review in 1996.
The domestic social and political environment in Australia is more conducive to increasing the level of aid from 0.34% of GDP to 0.7 % of GDP. Australian tax payers expect a greater return on social, economic and environmental investment from the ODA budget. Australian society and policy makers recognise that peace, stability, economic growth and more effective development outcomes can be achieved through innovation and collaboration between government, the corporate sector, the not for profit sector, the ODA sector as well as diaspora communities.
The international strategic environment is rapidly changing. The world’s population is increasing in low to medium income countries, placing pressure on them and on the developed world to find innovative solutions to pressing unmet human needs including sustainable development.
Global warming, and the disasters that are linked to it, is posing major problems not only in the third world but also in the developed world as seen by the recent floods in Australia, Brazil, Sri Lanka and the Philippines.
The ability of countries such as China, India, Brazil, Russia and others to lift millions of people out of poverty through economic growth, industry policy reform, organisational, community, institutional and system innovation demonstrates that ODA is just one of many strategies for addressing the poverty and the Millennium Development challenges and that the ODA must be better focused and more strategic.
The Brookings Institution report "Poverty in Numbers: The Changing State of Global Poverty from 2005 - 2015" shows that in this period nearly half a billion people escaped extreme hardship and the total number of extreme poor fell from 1.37 billion to 878 million. Never in history have so many million people been lifted out of poverty in such a short time. It is predicted that by 2015 the number will fall to 600 million. The emerging markets in Asia are recording the greatest success with China and India accounting for two-thirds of the global reduction from 2005 to 2015. Over this period, Asia’s share of poverty is expected to fall from two thirds to one third, while Africa’s share is expected to increase to 60%.
According to experts (Chandy & Gertz 2011), economic growth lies at the heart of poverty reduction. As economic growth took off in the new millennium, characterised by emerging markets, a massive drop in poverty was achieved. Australia can achieve the biggest impact in terms of accelerated poverty reduction by investing and co-investing in sustainable economic growth in the poorest countries in our region, in Africa and elsewhere.
China has emerged as a major donor in the Asia Pacific and Africa. China should be seen and engaged as a potential partner for co-investment in ODA rather than viewed as challenging Australia’s influence in the region. Similarly, the EU, which has the world’s biggest development budget and aid delivery capacity must be partnered with for better outcomes.
The technological revolution especially the internet, mobile phones and other forms of communication are connecting poor and remote communities to global knowledge, institutions and global markets.
The volume of rigorous and relevant research on development strategies and effectiveness has grown exponentially in the last two decades forcing donors and recipients to abandon out-dated development strategies in favour of evidence based high-impact development models and relationships.
In this context, AusAid and its stakeholders have an opportunity to rethink their theories of change and business models in order to deliver new and improved value from Australia’s investment in the ODA program. The independent review is an ideal time to closely examine the types of strategies, capabilities and budgets that are required for greater impact. Australia can show leadership by contributing research and narrative on how to solve global challenges in a multi-polar and interdependent world in the face of the arrival of emerging markets and the shift of power away from the West.
It is also a time to think about the workforce challenge at AusAid and how the organisation can better connect with business, industry, not-for-profits and diasporas. Research from the Society for Knowledge Economics shows that government departments should adopt policies and practices that build leadership, culture and management capabilities across all workplaces as a means of lifting productivity.