Aid Review: Narrow the geographic focus

20 January 2011

by Stephen Grenville AO, consultant on financial sector issues in East Asia and Visiting Fellow at the Lowy Institute for International Policy

There are so many issues, it’s hard to know where to start. But one old chestnut that needs revisiting is the geographical spread of AusAID’s activities.

The geographical distribution is a reflection of the myriad (often conflicting) pressures every aid program faces. To placate those who want to do something about poverty wherever they see it, AusAID’s funds are widely spread, including to the high-visibility poverty cases in Africa. This wide dispersal may also reflect the pleadings of our diplomatic representatives in these countries as they try to bolster the relevance of their positions. A much more important factor currently driving this scatter-gun distribution is our effort to win a UN Security Council seat. The FIFA bid should remind us how futile these things can be.

The case for narrowing the geographic distribution is strong. There are plenty of poor people in the countries closer to us, which (incidentally but additionally), have more strategic importance. Almost half the Indonesian population lives on less than two dollars a day. If we think that AusAID can shore up and reform failing governments, there are enough of those in the Pacific. Thus there is plenty to do close to home.

But the most powerful argument is about administering the program. Sure, aid funds are in short supply. The greater shortage, however, is effective and expert administration. Effective implementation requires detailed knowledge of the recipient country and a sharply focused experience of what can and can’t be done with foreign aid. New Zealand’s special interest in the Pacific demonstrates how geographic focus allows the accumulation of deep expertise.

All this was said a long time ago.


Here is a quote from Bob McMullan, formerly Parliamentary Secretary for International Development, at a conference at Deakin University in 1989:

"... the foreign affairs argument ... will inevitably influence the regional focus of our aid contribution. This regional focus is also influenced by efficiency criteria, ie. Australia can more efficiently manage an aid program in its region than one spread thinly around the world. Furthermore, seen in the context of international aid volumes, Australia can make a substantial contribution in our region whereas we make only a minor increment to a major concern when we spread ourselves to remote countries where the need may be greater. It is the not unfamiliar distinction between talking about important things and doing something important.  Australia talking about the poverty in Mali will make us all feel better. Spreading our aid budget so thinly that we wish to make a contribution in Mali as well as Vanuatu; in Haiti was well as Indonesia, will simply mean that the impact of our aid on the poverty of individuals around the world will be the less because we are spreading our managerial and our financial resources too thinly."



1/21/2011 6:15:42 PM #
There have been some queries about the quote from Bob McMullan above, the exact reference is below and we are doing our best to track down an electronic copy of the speech for readers who are interested.

Bob McMullan, 'Building political support for aid', Chapter 6 in J.V. Remenyi (ed.), A poverty focus for Australian aid, Papers published at a national symposium, School of Sciences, Deakin University, October 1989, published by The Australian Development Studies Network, Canberra, pp. 82-89
tim oconnor
tim oconnor
1/24/2011 11:40:50 PM #
Thanks for the contribution Stephen though I am still not convinced that the case for narrowing the geographic focus is as 'strong' as you suggest.

Allocating more funds to a country like Indonesia is not without merit considering the development challenges there. The development needs of countries even closer to home are also pressing. Yet the real focus should be not on where we spend our aid money but upon how effectively it is allocated. Firstly, for our aid to be effective, it needs to be meeting a development need and secondly it needs to be delivered in a manner which will deliver a sustainable outcome.

I dont believe any of your arguements necessarily ensure these objectives will be bettered by your suggested approach. Particualrly considering the increasing aid commitments our Government has agreed to, there are real capacity and effective resource utilisation issues at stake if we narrow the pool of countries we engage as development partners.

Concentrating more of our aid on fewer countries runs the risk of creating dependency of course - yet it also endangers the independent voice of governments who become reliant on the aid dollars to meet basic needs. This risk in our immediate region where we have a lot of small island states with similarly small economies is particularly great.

Secondly the majority of AusAIDs engagement in the sphere beyond our regional one is done primarily through multi-lats and INGOs. (yes i have worked for both categories  but just as your work is  focused on East Asia i hope you dont see this as a conflict). INGOs like Caritas, Oxfam, World Vision etc have enormous coverage, capacity and local expertise outside our region and are well placed, and in my overall experience doing very well in improving development outcomes with Australian aid dollars. Simialrly the extensive work and impact of organisations such as UNICEF, WFP, the Global Fund etc suggests too that they are utilising our aid in the main very effectively beyond our region.

Thirdly our engagement in the broader global development challenges signifies to the world our interests go beyond mere national ones. The fact is we need more committed donors in our neighbourhood to keep us on our toes both from policy and practice perspectives -  and to shoulder some of the heavy burden we carry across the pacific. Spending our aid dollars beyond our regional national interest objectives may encourage more donors to follow our lead and this can only be a good thing for the people and the governments of many pacific countries.

Australia is a global middle power and our aid program should reflect this standing. To restrict our aid to oue own backyard smacks of the bad old days when national interest overrode a focus on alleviating poverty.

Tim O'Connor
1/26/2011 3:37:43 AM #
Geographic focus or national interest?

Geographic focus or national interest?