Aussies invent ‘boomerang aid’

WHEN Australian Foreign Minister Bob Carr last week moved quickly to limit criticism of China’s aid policy in the Pacific, he inadvertently put the spotlight on the motivation behind Australia’s own foreign aid programme.
With China’s Pacific aid programme estimated at US$200 million (K398 million) a year compared to Australia’s annual A$1.2 billion (K2.43 billion) to the region any criticism that our northern neighbour was peddling self-interest smacked of double standards. Carr urged calm, calling on the region to learn to live with Beijing.
While he was successful in deflecting public comments about China’s Pacific plans, concerns remain about the secrecy and self-interest that motivates the actions of this rising superpower in its own backyard.
Although many in the aid industry see Australia’s overseas development assistance as superior to China’s in terms of delivery and outcomes closer analysis suggests that the clean-up of our annual multi-billion foreign aid programme in recent years still has a long way to go.
Twenty years ago Australia’s aid programme faced similar criticism to what is being levelled at China today.
Foreign aid projects in the early 1990s were legally required to give preferential treatment to Australian
companies and operated with a minimal level of transparency.
One of the scandals that dogged Australian aid in the 1990s illustrated the then poor standards in our overseas development assistance programme.
White Industries Ltd received massive aid and trade handouts for the Piparwar coal mine in India’s poorest state, Bihar.
This now-discredited project is not that dissimilar to some of China’s owned and operated overseas coal mine projects.
At the time the Piparwar open-pit coalmine was Australia’s largest ever aid project, with A$61.5 million (K124.8 million) contributed by Aus­AID’s predecessor AIDAB and A$145.1 million (K294.4 million) from AUSTRADE.
Of this, A$150 million (K304 million) was designated for boosting the private profits of an Australian corporation.
This project reflected poorly on Australia’s aid programme, not just because our aid money was going to an Australian company to operate a coalmine.
The Australian government was very secretive about the Piparwar coalmine and when they refused to release the project’s environmental impact statement, the Australian group AID/WATCH released its own report that found the mine cut off fresh local water supplies, caused widespread deforestation and posed a safety risk due to the proximity of the local village to the coal pit.
Following a long campaign against such projects which were dubbed “boomerang aid”, Australia’s aid programme was officially untied in 2006, meaning AusAID is no longer required to award aid contracts to Australian companies.
There has also been a decline in the use of Australian consultants providing technical assistance on Australian funded aid projects.
Their proportion of the aid budget fell from 41% in 2005-06 to 21% in 2010.
Yet, despite the successes of the aid justice movement on paper, have these changes made a big difference in practice and is Australia’s aid programme superior to that of China?
AusAID’s web-based transparency and implementation of most of the Aid Effectiveness Review are
significant improvements.
However, the government’s insistence that our overseas development programme must be in line with “national interests” prevents the full realisation of an aid programme that no longer exploits people and promotes environmental and social justice.
Although a Piparwar coalmine style project would never be funded under our current aid programme, the Australian mining industry is doing very well out of the Australia aid dollar and the “national interest” test.
The A$127 million (K257.7 million) Mining for Development Initiative, announced by Prime Minister Julia Gillard last year, aims to promote “sustainable mining” in Africa and other developing countries.
This new aid programme provides mining scholarships to Australian universities, hosts study tours for mining executives and government officials to visit Australia, and implements a marketing strategy which links overseas mining to Australian companies.
With 230 Australian companies currently involved in over 650 mining projects worth over A$50 billion (K101.4 billion) across 42 African countries, AusAID’s role in promoting mining in Africa continues to blur the boundaries between community development and private profit.
It is questionable how much of an improvement the Mining for Development Initiative is compared with the Piparwar coalmine in terms of meeting poverty reduction and other aims of the Millennium Development Goals.
Maybe there is more chance of ensuring China’s aid programmes meet the needs of communities and the environment is if Australia changes its ways and leads by example. – newmatilda
lLee Rhiannon is Australian Greens senator for New South Wales. She was a NSW state MP for 11 years. For four decades, she worked in the social justice and environment movements and was a founding member and former director of AID/WATCH and the Coalition for Gun Control.