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Australia’s Foreign Aid Dilemma

Australia’s Foreign Aid Dilemma

Book Review

This review is featured in Australian Foreign Affairs 4: Defending Australia. To read the full issue subscribe or buy the issue.

Australia’s Foreign Aid Dilemma: Humanitarian Aspirations Confront Democratic Legitimacy
Jack Corbett

One might expect that a country like Australia, almost unique in being rich but located in the midst of developing countries, would be at the forefront of international thinking about economic and social development. Oddly, the contrary is true, as Jack Corbett’s Australia’s Foreign Aid Dilemma reveals.

The text is an impressive annotated history, based on extensive research and dozens of interviews with ministers and senior officials. It makes clear that AusAID and its predecessors were international development organisations in name, but mere aid dispensers by reputation.

Aid in Australia, rather than being seen as integral to our national interests, has long been misdefined as charity. That blinds us to the opportunities it provides to build deep relationships and partnerships focused on problem solving. By dominating our international development efforts, aid has perversely helped to marginalise them.

Corbett’s central thesis is that the public disinterest in aid makes it particularly prone to the prejudices and preferences of senior bureaucrats and political leaders. He argues that attempts to manufacture legitimacy for aid have failed, leaving it caught between the humanitarian impulses of aid advocates and the lack of broader community and political support. However, this dilemma, which stems from a failure to grasp the tangible benefits to Australia of a successful aid program, is more imagined than real.

Humanitarian motivations are central to Western liberalism – part of who we think we are. They express our values and can burnish our international reputation. But they are not essential to an argument that Australia should run a large, active and expert international development program (“Defence establishment frowns on proposed Australian aid cuts”, read an Australian Financial Review headline earlier this year).

It is striking, reading Corbett’s work, to note the long but now lapsed small “l” liberal tradition that justified Australia contributing actively to the development of its neighbourhood. That historical bipartisan continuity is made stark by the lack of such a consensus today. It has been replaced by something much more short-sighted and transactional – the quest for instant visibility and the illusory purchase of goodwill.

For almost forty years it was a different story. Liberal and Labor ministers – and National Party leaders such as Tim Fischer – argued that development cooperation was the right thing to do and in Australia’s national interests. Spender’s post-colonial Colombo Plan outreach is well known; less so Peacock’s doomed support for the first dedicated Australian international development agency, and Street’s prescient arguments about growing global interdependence and the dangers of inequality. Today the government resiles from making a strong case for international cooperation, fearing popular antipathy, exacerbated by the ignorance its silence feeds.

In seeking to make sense of Australia’s development cooperation history, Australia’s Foreign Aid Dilemma starts adroitly with the most strategic turning point in this history: John Howard’s post-tsunami Indonesia scale-up. Howard saw the confluence of need and opportunity in a disaster on our doorstep that took hundreds of thousands of lives. He realised a token commitment would not register and instead reset the Indonesia relationship with a billion-dollar commitment. The scale of the subsequent investments – for example, working with local communities to rebuild 2500 schools – continued to attract the attention and respect of Indonesian ministers for years. The ensuing influence was immense. Our efforts created a level of trust that allowed Australia to work quietly in highly sensitive areas. This ranged from improving madrassa schooling that was susceptible to Saudi radicalism through to working on complex economic reforms and improving the quality and reach of the Indonesian president’s signature community development program.

The problem, as Corbett explains it, is that the program grew too big, and crowded out other important aspects of the relationship. In retrospect, not enough was done to join up our diplomatic and development efforts. However, the greater tragedy is that the rushed and unplanned manner of the DFAT–AusAID integration by the Abbott government in 2013, combined with rolling budget cuts, did not allow DFAT to fully appreciate the usefulness of what it had inherited, nor the prerequisites for success, many of which have eroded.

Today our neighbours still struggle with significant challenges and are at relatively early stages of economic and political development, but they are savvier than they used to be. They have better educated officials, quick access to the best global thinking on technical issues and a wider range of partners proffering assistance.

This is the other side of the struggle for influence. Our partners have changed. Papua New Guinea, for example, has made it clear that it is increasingly intolerant of the neo-colonial baggage it thinks we have not fully shed. This necessitates wholesale change in how we do business. Old approaches, riddled with condescension, based on “recipients” expressing gratitude for Australian-designed and -delivered aid, will fail. Aid never had that purchase and certainly does not now. Yet our leaders hanker for it, suggesting that without it we may as well not bother. The real payoff for us is not some obsequious recitation of thanks to us as a “donor”, but the opportunity to work closely with our neighbours on big things that matter to them and to us. Mutual satisfaction and influence will follow.

In Asia, too, we must think of development as the objective, and aid as a very useful set of tools to be combined with others. Our leaders see growth in the region and mistake it as an opportunity to step back rather than to engage differently. The Indonesian economy is getting close to ours in absolute size, but like most other ASEAN countries it has nominal per-capita income, less than a tenth of ours. Indonesia, already the biggest market for our wheat (followed by Vietnam, Malaysia and the Philippines) and a major destination for meat exports, could be a key source of Australian exports and jobs. Helping Indonesia’s middle class to grow and develop is something Paul Keating and Gareth Evans could easily sell to the public. Scott Morrison failed this test as treasurer, but may yet redeem himself as an internationalist prime minister.

In a supposed switch to “realpolitik”, there is now much talk in Canberra, Washington and elsewhere of challenging new development players on their own turf in the infrastructure wars. However, it is not obvious that our comparative advantage – nor our interests – lie in going head-to-head with China in a contest over “easy money” and prestige projects. The better, but harder, response may be to engage more deeply with our regional partners and multiply the value of that engagement. It is galling to say it, but New Zealand often does it better than us. Wellington works with the Pacific as an equal but does not condescendingly refer to it as its “sphere of influence” – or, worse still, its “backyard”.

Fortunately, DFAT’s recent Pacific Step Up policy has recognised that we need a change in overall relationships: political, diplomatic and economic. We can generate powerful incentives for cooperation by being the major metropolitan economy. We must consistently send our best diplomats (and have started doing so). We must listen to and act on Pacific concerns. We must be respectful. A blast of infrastructure aid will not in itself deliver this.

As our region undergoes rapid change, we will need to renovate our approach to aid and development. Rather than chasing immediate outcomes, or thinking we can buy the policies or influence we seek, we should work together as equals with our neighbours, pursuing shared interests. Then development cooperation could become central to our diplomacy and national efforts to achieve greater stability and closer ties in the Asia-Pacific.

Richard Moore

This is a book review from Australian Foreign Affairs 4: Defending Australia. To read the full issue subscribe or buy the issue.