Australian aid: in the national interest

Trevor Flugge, the wheat farmer from Western Australia who recently appeared on the front of a national newspaper smiling, shirtless, sweating and aiming a handgun at the camera, may not be the first person you would associate with Australian aid. Mr Flugge was the face of the Australian aid program in Iraq from April 28, 2003 where he received a seemingly open ended AusAID contract to the value of $679,345.70 (Australian Government Contract number 1109570).

Representing Australian taxpayers, Mr Flugge’s position with AusAID was to provide high-level advice on agriculture reforms and food security issues to the Iraqi Ministry of Agriculture. A former director of the Australian Wheat Board, and later the privatised AWB, Trevor Flugge had considerable experience as a grain trader but the appointment was criticised due to his lack of specialist expertise in the provision of agricultural development.

The criticism related to the Australian Government putting the interests of Australian business, in this case wheat farmers, before the development needs of the people of Iraq. If Mr Flugge’s job was to ensure the growth of Australian wheat exports to Iraq, then his mission was certainly successful. In 2002, prior to the appointment of Mr Flugge, Australia exported 1.03 million tonnes of wheat to Iraq. By 2005 this figure had grown by over 50 per cent to 1.55 million tonnes, ensuring Iraq remained one of the Australian wheat industries most crucial export destinations.

While the interests of Australian wheat farmers were well served, it seems the people of Iraq have not fared 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 per cent 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”.

The ethics of using the aid program for such narrow domestic interests appears difficult to reconcile. 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 the very narrow defining of the “national interest” term which is being translated into practice as “commercial interest” and “strategic interest”. And 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?

From altruism to governance

Education, health and infrastructure are the traditional staples of aid delivery, yet in the Australian aid program over the past five years a revolution has unfurled. No longer are these the mainstays of Australian aid, instead “good governance” is the new aid mantra and as a concept it looms as ubiquitous as the cane toad.

When the Howard Government was elected and the current Foreign Minister, Alexander Downer, installed, the figure set aside for “governance” programs in first aid budget was $68 million. By the 2001 budget this figure had leapt to $295 million or 17 per cent 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 per cent) health (12 per cent) and infrastructure (7 per cent) is now less than the total that is dedicated to governance programs (36 per cent).

Australian good governance?

Although there appears no clear definition from AusAID or the government about what “governance” specifically is 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 the aid program. For instance, funding that once went to educating police or bureaucrats now is considered “governance” money. Thus the massive increase to this sector perhaps tells more about the whims of aid policy than it reflects the practice. One area though that has benefited enormously from the focus on governance has been the funding to “Other Government Departments” (OGD) through the aid program. Funding to the departments of the Attorney General, Defence, Treasury and Immigration for instance, labelled as OGD, has risen from $151 million in 2000 to over $563 million this financial year.

Much of this money has gone to the aforementioned departments for the regional Assistance Mission to the Solomon Islands (RAMSI) and the failed PNG Enhanced Co-operation Program (ECP). It is certainly difficult to argue with programs that are aimed at improving financial management, strengthening law and justice, developing civil society and strengthening political systems.

Yet the ECP, imposed by Australia on PNG (the threat of cutting Australian aid dollars if the program was not implemented), was found by the PNG courts to be unconstitutional. This put Australia in the tricky position of imposing a Good Governance Program that was found to be acting outside the constitution of a sovereign country - some might say an exercise in “bad governance”.

Whilst the RAMSI project in the Solomon’s has been successful in bringing peace in the short term, the longer term sustainability of that peace and the path to a resolution to the more intractable problem of ethnic tensions, appears some way off. It is therefore questionable if Australian bureaucrats from treasury, the federal police or the legal fraternity are best placed to deal with the complex nature of aid delivery. Development is a field that requires a significant quantity of skills and tools that may not be present in the armoury of an official trained and equipped to deal with the day-to-day dealings of an Australian government department.