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Australian aid gets lost in the marketplace for corporate interests

AID/WATCH has released their report card on how Australia’s overseas aid program has fared under the Turnbull-Abbott government.

James Goodman, Chair of Australia’s overseas aid watchdog noted, “The last three years have seen an unprecedented deconstruction of the aid program with the placing of Australia’s national and economic interest front and centre.”

Shamefully for Australia Mr Goodman is right.

Overseas aid has barely been mentioned in this federal election. The AID/WATCH report reveals why the Coalition would prefer to keep this important issue away from public scrutiny.

In 2011 Labor and the Coalition voted in the Senate for a Greens motion to increase overseas aid to 0.5% of GNI by 2015. Since then, not only have both major parties walked away from that commitment, but our aid budget has been stripped to the bone. The 2017-18 budget allocates a measly 0.23% of GNI for overseas aid – our aid commitments have not been this low since funding records began over 50 years ago.

The problem is not just to do with the slashing of the aid budget. The growing problem is that under the Liberal-National government aid money is increasingly being used to assist Australian companies to expand their operations into low income countries.

This shift in the main purpose of our overseas aid is dangerously reminiscent of the ‘boomerang aid’ programs of the 1990s. At that time aid programs were held up to little scrutiny and were legally required to give preferential treatment to Australian companies before all else.

A stand out example of this form of so-called aid was the Piparwar open-pit coalmine in Bihar, India’s poorest state. White Industries Limited, an Australian manufacturing company, received $61.5 million from Australia’s overseas aid budget for this coalmine. At the time it was Australia’s largest aid project. On top of this AUSTRADE contributed $145 million. 

I was working with AID/WATCH in the 1990s and the Pipawar project was one of the key reasons we established this organisation. Working with Indian organisations and Australian NGOs we exposed this gross misuse of Australian aid.

The then Labor government refused to release an environmental impact statement on the mine. In time it became apparent why. The mine caused deforestation, cut off fresh local water supplies for local communities and displaced thousands from the agricultural land that they relied on for income and food. When local villagers protested the lack of jobs that the mine provided, they were shot by private security forces. These were the dark days of boomerang aid.

While we had very little success in winning justice for the communities displaced and exploited by the White Industries project, an officer with AIDAB (the forerunner of AusAID) did privately explain that the project had become such a source of embarrassment for the government that it was a critical factor in the government revising the objectives of Australia’s overseas aid.

In 2001, the Development Assistance Committee, a subcommittee of the OECD, agreed to virtually untie all aid to the Least Developed Countries. In Australia AusAID was no longer required to offer aid contracts to Australian companies. Between 2005 and 2010 the proportion of the aid budget used to fund Australian consultants fell from 41 per cent to 20 per cent.

Twenty years later the Turnbull government is turning the clock back on how Australia’s overseas aid programs operate. In 2013 the Coalition government decreed that Australia’s aid system needed to be brought into line with our broader ‘national interests’. Alleviating poverty is once again a secondary consideration.

Trickle-down economics and ‘economic diplomacy’ are the two major objectives underpinning the Liberal-Nationals approach to overseas aid. Both are destructive for communities and the environment in developing countries and damaging to Australia’s relationships with these nations.

Aid for trade is a manipulative tool that serves the interests of rich mineral extractors. As such the autonomy, cultures and the human rights of Australia’s poorest neighbours suffer as our aid programs are used to ensure that a nation’s extractable wealth delivers profits to some of the world’s richest mining companies.

The PACER-Plus trade deal currently being negotiated is the latest example where Australian aid could be misused. Draft chapters of this trade agreement leaked last year reveal that our government has made incredibly weak voluntary aid commitments while demanding increased market access for Australian companies.

AID/WATCH’s report card identifies not just many of these problems but how the government shuts down the release of information on the shift in the very nature of Australian aid. The report states, "There is now almost no public information on projects financed by Australian aid and their outcomes. Just one in five freedom of information requests are granted in full and a quarter are outright refused."

The Greens are strongly opposed to this form of aid delivery. Our approach to aid can be summarised as a rights-based, community first, social and environmental justice approach.

We strongly agree with AID/WATCH’s conclusion that we need "a new aid agenda founded on global justice and climate justice to address the pressing problems of growing inequality and climate change. Aid is for partnership, not for market ideology, and for real development, not for narrow Australian interests and profits”.


* Lee Rhiannon was co-founder of AID/WATCH in 1993 and a Director of the organisation from 1993-96. Today she is the Greens spokesperson on overseas aid and development and a Senator for NSW.

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