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Effective aid more than extra dollars

By Jamie Isbister - posted Tuesday, 19 June 2007

Tsunamis, earthquakes, poverty, drought, starvation, corruption. These are the times when aid is usually in the news. Recently, however, the Australian media has posed questions about what is the real purpose of Aid? International development agencies such as Caritas Australia strongly believe that Aid is, and should only be, about the alleviation of poverty. There is a danger of headlines such as “Phantom Aid” or stories about “misuse of aid funds” feeding a perception that aid is often wasted.

The recent increase in the Australian Government’s aid budget and a plan to reach the pledge of $4 billion by 2010 is welcome news and suggests an increased engagement from the Australian Government. But the truth is alleviating poverty is much more than just shovelling aid money into developing countries.

Poverty alleviation may sound simple - just ensure as much money as possible gets to a poor country: however, it is important not to create a dependency on aid funds; that efforts bring long term gains rather than quick fixes; and the whole community benefits, not just a select few. And this can be challenging.


To truly overcome poverty we need to manage not just the acute situations, such as times of drought or other disasters, but we also need to challenge the structures that keep people impoverished.

For example in Papua New Guinea, the lack of roads inhibits people getting their goods to market. In parts of Africa, HIV has created a generation of children growing up without parents. In Bangladesh poor nutrition and healthcare mean the average life expectancy is just 61-years-old.

To effectively tackle these problems we need all actors involved: communities, governments, development and local non-government organisations, and multilateral donors.

Better roads in PNG can only be built with the involvement of skilled engineers and then we need people trained to maintain them. The response to populations affected by HIV must be, in the first instance, medical. But we then need counselling and support structures for those affected and for their families, and we need public health and education campaigns to mitigate its spread. In Bangladesh, in the last decade, training farmers to grow more versatile and appropriate crops, assistance with nutrition and healthcare and more resources for the health system have already increased life expectancy.

We know aid can work. HIV infections in Uganda have decreased from 15 per cent of the population in the 1990’s to 5 per cent today. Child mortality has halved globally since the 1960s. Malnutrition around the world has decreased dramatically over the last decade. Just a few of the statistics indicating many, many thousands of lives have been saved.

No one group can lay claim to the successes attributed in these figures. Many have played their part. We have learnt a lot of lessons along the way - the primary one being that we need to clearly focus on alleviating poverty.


Much discussion about aid in recent years has focused on how much of our aid dollar actually gets to the people who are on the ground in the countries in need. NGOs have a good record on this front. Caritas Australia, for example, through a strong focus on delivering through local organisations is able to keep costs low. In the last ten years we have been able to restrict expenditure on fundraising and administration expenses to less than 10 per cent of our total income.

The quality of the aid we give is crucial. Under the Suharto regime in Indonesia and with Marcos in the Philippines, we saw huge aid allocations with small overhead costs from organisations like the World Bank. But there was little reduction in poverty - except for those close to the respective governments.

Organisations involved in development must be accountable to those who support them with their donations but equally accountable to communities on the ground in the countries in which they work.

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About the Author

Jamie Isbister is the Head of International Programs at Caritas Australia.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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