Actual education or phantom aid?

Earlier this month, I blogged about the pitiful level of Foreign Aid in the latest budget. I noted that the Australian government gives only .34% GNI as Foreign Aid, despite making international commitments to increase this to .7% GNI.

Investigative journalists at the Sydney Morning Herald have revealed that even this low level of aid is fudged. In a series of articles, Phantom Aid, they reveal that more than $600 million of Australia's foreign aid over the past two years never went overseas but was swallowed up in the coffers of a small Federal Government agency in Pitt Street, Sydney.

Examples of questionable aid identified by the Herald include:

• A $27,758 payment AusAID made to the Australian law firm Sparke Helmore for legal assistance during the Cole inquiry into legal breaches of the UN oil-for-food program has been counted as foreign aid.
• Another $81,993 described as foreign aid to Afghanistan between 2002 and 2004 was an Immigration Department assistance package for temporary protection visa holders in Australia.
• Half a million dollars of last financial year's $23.4 million in aid for Nauru was to be spent on co-ordinating aid, while $1.3 million went on "logistics", providing housing, transport and other costs for Australian officials.

The following graph shows how countries rank on on their Commitment to Development.


The amount Australia contributes in Aid (the dark blue bit of each bar) is tiny, but this new information uncovered by the Herald, suggests that Australian Foreign Aid is even smaller, because the figures have been padded. The Government says that it is following the rules about what can be counted. I guess they are proud of being so mean-spirited.

One of the great things about the School of St Jude is that there is no hint of mean-spiritedness about it. The School is founded on generosity and care for others. It aims to provide actual education for bright children from the poorest families in one of the world's poorest countries. These children will benefit from the bricks and mortar school that is being built and run with your real help.

Foreign Aid in the Budget

Last night's budget allocation of $3.2 billion for overseas aid - or 0.3% of Gross National Income (GNI) - keeps them on track to being at the tail end of OECD countries. Nothing inspiring about this insipid performance.

They are proud to inch towards the goal of $4 billion by 2010 – that will be .34% of GNI.

While welcoming the undertaking, non-government aid bodies noted that a majority of other donor nations had agreed to move to 0.5 per cent of GNI by 2010. And Scandinavian countries already give .7% or more of GNI in overseas aid.

Here's the longer view of Australia's official aid, from Ben's blog.

In this bonanza budget, where the government had the problem of too much money and nowhere to put it (see Ross Gittins comments), there was plenty of scope to live up to the nine values that the government requires to be taught in schools, starting with 'Care and Compassion' and 'Integrity'. Instead, they have fallen short on both.

In 2000 the PM signed on to the Millennium Declaration in 2000, agreeing that,

We will spare no effort to free our fellow men, women and children from the abject and dehumanising conditions of extreme poverty, to which more than a billion of them are currently subjected.

I guess that the PM and I differ on the meaning of 'spare no effort'. As our government is doing so little, it is up to us to do it ourselves.



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Foreign Aid

Economies are complex open systems which have so many intersecting elements that they are hard to predict, never mind control. One result is that things that work on the small scale may fail dismally on the large scale. Aid that works on the small scale, with one family, one school, or one village may fail on a larger scale.

An example can illustrate this principle. Agricultural aid can help a village to grow a surplus for sale and allow subsistence farmers climb out of exteme poverty. But if local roads are not car-worthy, then the surplus food can reach only the most local markets where the combined surplus of all the local farmers pushes prices down and leaves farmers in the situation of getting no additional income for their extra output, despite the additional input costs of fertiliser and seed required to get the extra productivity.

If agricultural aid is scaled up beyond the village to a district, it only worsens the market conditions.

So, what is the solution when aid fails like this? Do we blame the recipient country? This is exactly what happens when poor countries are labeled 'basket cases'. The better response is to try to see more clearly the range of factors that are operating in the complex open system of world economies and to see what other interventions may be needed.

Mostly, I feel that the complexity of economic systems is beyond my understanding and there are so many conflicting points of view. So it is easy for me to help a good project at the individual level because the benefits are clear. The children who get an excellent education at the School of St Jude are likely to benefit no matter what else is going on in the economy. If I buy a chicken or a goat for a poor family, there will be a direct benefit for the family.

Australians are the second-highest private donors in the world, giving 0.8% of national income to help other countries (and that is before the boosting effect of the tsunami where Australians showed outstanding generosity). Helping others is one of Australia's core values. Internationally, Australians are recognised for their national volunteer organisations and private philanthropy.

But individual philanthropy can go only so far. Poor countries need systemic support to help them work towards good governance and better infrastructure. This kind of help needs to be given on the scale of country to country. This is where the commitments made by developed countries to contribute 0.7% GDP to foreign aid targeted at ending extreme poverty are critical.

The target of 0.7% is not onerous, it is very doable – in fact the Scandinavian countries already give more than this. The Australian government has signed treaties committing to 0.7% but falls way short. In fact, Australia is fourth-last in the ranking of 22 OECD countries and gives only 0.25% GDP as foreign aid. Recent announcements to increase foreign aid by 50% will lift it to 0.36% -- about half the agreed amount. What a pity that our Government does not reflect the Australian ethos of helping others in its actions!

What can I do to encourage my country to honour its promises in this important area? One thing I plan to do is start writing to politicians. I encourage you to do the same. Many voices can make a difference.

Here are some sites with more information about the Australian Government's record on foreign aid.

The Age, April 2006.
Aid Watch
Global Issues

To end extreme poverty, we need to work at both the personal level where individuals help individuals and the systemic level where nations help nations. Do your bit to encourage your government to help in ways that count!