Ben’s Blog

OK, so the aid budget has increased since last year’s budget (by 5.6% in real terms). And  it seems like there are quite a handful of small things, as well as a few medium-sized ones, to be happy with in this moderately expanded budget.

First off, the budget statement is framed with a very welcome recognition of the way in which the global economic downturn will affect poorer countries (who have largely been ignored in media coverage about the issue – I mean they’re always poor, right? A global recession can’t make any difference to them…)

The global recession will generate enormous difficulties for developing country governments. While needing to help newly vulnerable populations, they will have less tax and other revenue to fund crisis responses and to maintain basic services such as health and education. This place a special responsibility on donor government to support developing country counterparts to generate employment and help limit the scale of the human impacts.

To this end, there are very welcome increases in investment in basic services, such as:

• basic education (increased roughly 46% on last year)
• water and sanitation (up 278% on last year)
• rural development (up 77% on last year)
• health (increased around 38% on last year)

The increase for maternal and child health (according to the estimates of the inestimable Garth Luke, now a senior researcher at World Vision) is very substantial, and will rise to $370 million from last year’s budgeted $260 million. Campaigners active in the MakePovertyHistory and Micah Challenge campaigns should be pleased, because maternal and child health in our region was one of the key issues they focused on.

There’s also some new $$ for economic infrastructure development – particularly rural electrification, roads and labour-intensive public works to help tackle unemployment. After long periods of neglect by all donors, not just Australia, rural development and agriculture is also starting to get renewed attention, particularly in light of the crisis in staple food prices of the last two years. For its part Australia puts up around $230 million for rural development (up 77% from around $170 million last year) focusing on agricultural productivity, the strengthening of markets, and support for poor farmers and communities.

A quick sample of the sectoral breakdown of aid budgets over the last decade shows a hopeful trend, I think.

As you can see, from around 2002/03 Australian aid (under Howard and Downer) went on a bit of a governance binge. Law and order programs, placement of Australians in senior positions in Pacific Island bureaucracies, capacity building of government institutions, were the flavour of the day (actually, of most of the decade). These programs have their place, but in 2005/06 these programs accounted for more than one-third of Australian aid. More Australian aid money was being spent on governance programs than on health and education combined. So it’s good to see that health and education now seem to be getting some sustained attention.

However, greater investments are going to be needed if Australia is to make a substantial contribution to stemming the wave of poverty and hunger that is likely to hit the poor over the next few years. The budget statement itself acknowledges that, according to a World Bank study, up to 90 million extra people worldwide (including 62 million people in our neighbourhood) will live in extreme income poverty this year because of the global recession.

A small aside on the right to food, and the livelihoods of poor, small-scale farmers – it’s worth checking out this statement made to the UN General Assembly by Olivier de Schutter, the Special Rapportuer on the Right to Food.

He notes that,

Since hunger is not the result of too little food being produced, but rather of marginalization and disempowerment of the poorest, who lack the purchasing power they need to procure the food that is available, guaranteeing such a protection should be a top priority.

He argues that prioritising the hungry and those vulnerable to food shortages should be the highest priority for policy makers. The priorities he outlines in this short speech are well worth keeping in mind as Australia’s aid program begins to scale up (though maybe slowly) its investment in rural development and agriculture.

The last observation I have is another small encouragement. When Rudd first announced his policy of lifting aid to 0.5% GNI by 2015 in a speech to the Lowy Institute he was very careful, as I noted at the time, to rule out budget support as a way of delivering aid through Pacific Partnerships, preferring instead Australian-directed and delivered projects. However, this budget statement seems to point in the opposite direction:

Working in partnerships means that increasingly Australia will work through, rather than alongside, different countries’ own systems of government and service delivery.

This is a good thing.

The last thing we need is the Australian Government behaving like an NGO, setting up and running an ever-increasing multitude of projects*. Working through countries’ own health, education and general budget processes and systems is much more efficient than a Government trying to micro-manage too many projects, it ensures better coordination of donor and recipient country development goals, and can lead to greater effectiveness and development of recipient country’s own systems. See here for an exploration of this kind of budget support.

*I’m not saying that Governments can’t run projects, and I’m certainly not saying that NGOs shouldn’t. Just that they have different capacities, functions and niches and they should make the most of those.

This entry was posted on Wednesday, May 13th, 2009 at 8:33 am and is filed under Aid, Back-Talk, Campaigning, Climate Change, Development, Politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.