Speech: International Development Assistance

Senator RHIANNON: On another matter: overseas aid budgets, traditionally associated with poverty alleviation, are increasingly going to boost company profits. Examples from the British government's Department for International Development and the World Bank show that poor people in low-income countries run a poor second to powerful and well-connected companies. The following concerning examples of this massive misuse of aid money should serve as a reminder to the Minister for Foreign Affairs, Julie Bishop, to not allow Australian aid money to be misused for private wealth. The minister's planned launch of the government's private sector engagement plan for overseas aid, scheduled for the 31st of this month, should not be another handover of aid money to the private sector. The following examples of how DFID and the World Bank are using aid reveal a massive neoliberal experiment, where the only certain outcomes are high profits and run-down public services. This approach leads to greater inequality within low-income countries and between low-income countries and the developed nations.

Pearson PLC and other education companies, like Bridge International Academies, are receiving aid money to run schools across Africa. I quote:

The Omega Schools in Ghana operate on a "pay as you learn" system in which parents must pay approximately US$0.65 per day per child for school. This means low-income families in Ghana have to expend 25-40 per cent of their income on daily fees to send one child to an Omega School.
The Bridge schools in Kenya and the Omega schools in Ghana have a maximise-profits strategy that relies on using poorly trained teachers paid low wages:

Omega teachers earn roughly $3 a day, which is approximately 15-20 per cent of a teacher's earnings in the public sector in Ghana.
Leaders of education unions in Britain, the United States and South Africa have issued a warning about the very future of public education, in an open letter to John Fallon, the CEO of the Pearson board. They wrote:

... in an effort to expand and increase profits, Pearson PLC is turning its back on free public education for all. The company's activities around the world indicate its intention to commercialise and privatise education at all levels. From fuelling the obsessive testing regimes that are the backbone of the "test and punish" efforts in the global north, to supporting the predatory, "low-fee" for-profit private schools in the global south, Pearson's brand has become synonymous with profiteering and the destruction of public education.

While my comments tonight concern the misuse of aid money in the global south going to these companies, this is also relevant for developed nations as these private for-profit companies penetrate our education system more and more.

On top of that criticism of these programs, in May this year more than 100 international organisations, including 30 in Uganda and Kenya, released a statement to the World Bank expressing their concern over Bridge International Academies, which the NGO Global Justice Network says uses 'untrained low-paid teachers and aggressive marketing strategies to target poor households'. We are talking about poor communities in low-income countries who are being denied the free public education that their countries have been attempting to build up, and now overseas aid money is being allowed to come in and destroy this.

While the statement that I have just referred to is directed at the World Bank, which has invested $10 million in BIA, Britain's DFID is also involved. The DFID Impact Fund is a 13-year project worth $115 million. DFID describes this as its 'principal mechanism for leveraging private sector investment' in developing countries. This is where the trends in our own aid program become concerning, as there is increasing emphasis under the Abbott government on the aid program being primarily for Australia's national interest, which means corporate interests benefiting from aid programs. It would be a tragedy if we followed the path that the World Bank and the British aid programs are advocating.

DFID is expanding its involvement in privatised education programs in the Democratic Republic of Congo, Ethiopia, Mozambique, Tanzania and Nepal. Through its Girls' Education Challenge, DFID will spend $545 million from 2011 to 2017 on education projects managed by the multinational professional services network PricewaterhouseCoopers and is working with Coca-Cola to promote-and again I quote from its own material-'the economic empowerment of five million female entrepreneurs across the global Coca-Cola value chain'. This may be hard to imagine. You probably could not even dream about it, but it is happening. Coca-Cola are gaining aid money to run education programs in low-income countries.

DFID's assistance to private companies is not just in the education sector. The British company Agrica received $15 million in British aid money to assist to establish an industrial rice plantation in Tanzania. What happened when they went to set it up? A whole number of small-scale farmers were evicted from their land so that plantation could be set up-again, aid money destroying the livelihood of low-income people.

Then there is the energy sector. Since 2002, $215 million has been earmarked as aid money spent by DFID to support the privatisation of Nigeria's energy infrastructure. The project, called the Nigeria Infrastructure Advisory Facility, is implemented by Adam Smith International. Obviously that name would ring a bell for some. That is a consultancy firm set up by the free-market think tank the Adam Smith Institute. Since the handing over of licences to private companies, unions claim that 10,000 employees, or 25 per cent of the workforce, have lost their jobs without compensation. Meanwhile, there have been reports of increased blackouts, according to Social Action Nigeria, and most customers have faced a 50 per cent price rise. Again, this is aid money being used in low-income countries to boost the profits of very large companies to the detriment of local people. Poverty alleviation is being left behind as these aid programs are so fundamentally changed.

Then we have the area of health. DFID is pushing similar policies in relation to health care. In Rwanda, a new aid program called 'health posts' follows a public-private partnership model. The health posts operate as a franchise, with each health post being owned, operated and managed by a nurse as a small business. Often it is low-income or middle-income people who are set up as a nurse and given a little bit of money, but the bulk of the money goes to the company that sets up these programs. It is not dissimilar from how these education programs are operating in these low-income countries, where local people desperate for work often will take a wage way below what a health professional or an education professional would get in that country-and those wages are already low. They get caught up in a system where the bulk of the aid money is going into the profits of these large companies, a deeply tragic situation.

Minister Bishop would be betraying the trust of millions of Australians if she shifted our overseas aid program to this neoliberal model favoured by the British company and the World Bank. Around the world there is a growing movement of opposition to what is happening with our aid money and what is happening in allowing the penetration of for-profit companies into our education sector. Surely we should not allow this to happen in Australia.

Coming back to the aid budget: I find that, when I speak about aid, most people believe that something good is being done with that money. There is trust around our aid program, despite $11 billion being taken out of our aid program in the last two years. People still believe it is working in a good way in low-income countries, but we feel that we are on the cusp of going in the wrong direction. As I said, most Australians believe our overseas aid program works for poverty alleviation in low-income countries, and I would say to the minister and to the government that this trust must not be broken. We must do the right thing by our neighbours and by people in low-income countries. Our overseas aid program, which over the years has largely had a very fine history and fine association, should not be allowed to be misused in such an appalling way.

Senate adjourned at 22:35