- Title
ESTIMATES COMMITTEE B
04/09/1991
DEPARTMENT OF FOREIGN AFFAIRS AND TRADE
Program 5-AID
Subprogram 5.2-Global programs
- Database
Estimates Committees
- Date
04-09-1991
- Source
SENATE
- Committee Name
ESTIMATES COMMITTEE B
- Place
- Department
DEPARTMENT OF FOREIGN AFFAIRS AND TRADE
- Page
88
- Status
Proof
- Program
Program 5-AID
- Questioner
SENATOR HILL
SENATOR SCHACHT
CHAIRMAN
- Reference
- Responder
MR HOLLOWAY
SENATOR GARETH EVANS
MR CASSON
MR STENSHOLT
MR PROCTOR
MR INGEVICS
- Sub program
Subprogram 5.2-Global programs
- System Id
committees/estimate/ecomd910904a_ecb.out/0036
-
ESTIMATES COMMITTEE B
(SENATE-Wednesday, 4 September 1991)- Start of Business
- CHAIRMAN
-
DEPARTMENT OF FOREIGN AFFAIRS AND TRADE
-
MR BUCKLEY
SENATOR MACGIBBON
SENATOR GARETH EVANS
MR RUSSELL
SENATOR HILL
MR FORRESTER
MR BARRATT
CHAIRMAN - Program 1-BILATERAL RELATIONS
- Program 2-TRADE RELATIONS AND ECONOMIC ISSUES
- Program 3-GLOBAL ISSUES
- Program 4-PUBLIC AFFAIRS
- Program 5-AID
- Program 6-CORPORATE AND PUBLIC SERVICES
- Program 7-AUSTRALIAN SECRET INTELLIGENCE SERVICE
-
MR BUCKLEY
SENATOR HILL -Can you get for me, please, an up-to-date schedule of our commitments to the Asian Development Fund and to the IDA under the various replenishments including, as much as you are able to say, when you expect the draw downs to be made on the forward commitments that you have made.
MR HOLLOWAY -We could table that now.
SENATOR GARETH EVANS -There is a document that we can table which lays out those draw down schedules.
SENATOR HILL -Obviously, anticipation.
This goes right up to the year 2000. Have all these sums on this schedule been already committed?
MR HOLLOWAY -Yes, that is right.
MR CASSON -The figures up to and including 1992-93 are actual commitments. Thereafter we have made some assumptions about the sizes of particular replenishment negotiations.
SENATOR HILL -I am surprised to hear that, because I thought some of the earlier commitments went well beyond 1992-93.
MR CASSON -Yes, that is quite correct. What I am saying is that under the line that says ADF in this table, there will be replenishments of the ADF which have already been committed and for which draw downs will probably go through until 1997-98 and probably 1998-99. But starting in about 1993-94 there will be new replenishments coming on board and we have had to make assumptions about those replenishments. So there are both actual commitments and assumptions about future dispersements in this table.
SENATOR HILL -Can I ask you for a similar table that includes only actual commitments?
MR CASSON -Yes, we will have to provide them.
SENATOR SCHACHT -I have a question concerning replenishments to the multilateral banks. We put money into the Asian Development Bank and the World Bank in replenishments and yet we find that those banks, under the influence of American policy, refuse to provide loan money to Vietnam. Have we suggested to those banks that as that is contrary to our position-since we believe they should be able to provide loans-that we may have to review our involvement if this sort of veto from the Americans or blackballing or whatever you want to call it, continues? I understand it is led by the Americans. Have we said it could affect our contributions?
SENATOR GARETH EVANS -We have not made that suggestion to any of the banks at this stage and I do not propose to in the present environment which gives plenty of grounds for optimism that this problem will not continue for much longer.
SENATOR SCHACHT -On the question of the Asian Development Bank, yesterday I was able to meet the Chairman of the Asian Development Bank on his visit to Australia. The question that was raised there by members of the Australian Parliament at the meeting concerned the fact that Australia provides around 7 per cent of the capital of the Asian Development Bank through replenishments and so on and yet when you look at the figures in their own report, Australian businesses are only getting between 1.5 and at best 2 per cent of the business of the bank. I notice on page 171 it says:
Australia has been active in promoting World Bank and ADB knowledge of Australian capabilities
AIDAB published a brochure ``Multilateral Development Banks'' which provided information to the Australian business community on provision of services to the World Bank and ADB.
Is there evidence that we are getting skun because of other interests in the bank preventing Australian businesses from getting a proportionate share of the contracts, or is it because you have not been successful in convincing Australian businesses to take up the opportunities that are there with the Asian Development Bank?
MR CASSON -The Department of Foreign Affairs is currently undertaking a study on this very matter and the portfolio will be in a very much better position in a few weeks time to give you a lot of detail and reasoning. But I can say that the evidence that has been given to the team, which you will notice has been formed to look at the effectiveness of the multilateral banks program, does suggest that while Australian consultants have been relatively successful under the banks procurement policies, the people who are looking for the big money, the big contractors, are much less successful. And the reason why they are less successful is because their rate of application is much lower than for comparable countries.
SENATOR SCHACHT -Is there a suggestion that the Japanese have been more successful because of their position of influence in the bank?
MR CASSON -No, I think the reason is that they are much more up front in being able to talk to the bank. They just have greater resources. They send teams across to the banks to talk to them at the very early stages.
SENATOR SCHACHT -Are they teams of government people or private sector people bidding for the contracts?
MR CASSON -Both.
SENATOR SCHACHT -I noticed recently that an advertisement appeared calling for nominations for the Asian Development Bank for the next term of Australia's permanent Director. I noticed for the first time that Treasury has deigned to allow people to apply for this job who are not just from the Reserve Bank, the Treasury and Foreign Affairs. Does this mean that we have finally got some chance of getting someone other than some banking charlie out of the international section of Treasury into that who will treat the bank as a development agency rather than as a retirement position in Manila?
SENATOR GARETH EVANS -Probably not, but we live in hope.
SENATOR SCHACHT -I notice that for the first time the Treasury has only two people out of four on the interviewing panel, so at least you might be able to get a draw this time, Minister, in the selection process.
CHAIRMAN -I am sure your comments will be taken into consideration. Are there any further questions on the document?
SENATOR GARETH EVANS -Your lobbying was never very successful with Mr Keating on this.
SENATOR SCHACHT -We got one up last time for the wrong bank.
CHAIRMAN -Are there any further questions on the document?
SENATOR HILL -What evaluations have there been of the effectiveness of our mixed credits provision?
MR STENSHOLT -Do you mean in respect to specific projects?
SENATOR HILL -In respect to overview, macro, plus specific products.
MR STENSHOLT -Mr Proctor can speak better than I can on the macro side. There have been a number of project based evaluations. There was one on sort of railways in Indonesia, purse seiners in the Solomon Islands and a cement factory in China. We are about to undertake an evaluation at the moment of steel bridges in Indonesia.
SENATOR HILL -Have all the project evaluations been made public
MR STENSHOLT -Those three that I have mentioned have been finished and they are public-copies are available.
SENATOR HILL -They are the only project evaluations that have been done, are they?
MR STENSHOLT -Of the mixed credits program, the DIFF program, yes.
SENATOR HILL -And from the macro point of view is there an overview of the scheme?
MR PROCTOR -The major review of DIFF, as you will recall, was in 1989 and it has been discussed at previous Senate hearings. We have continued to assess various aspects. For instance, at the moment we are surveying firms to get an idea of what spin-offs in trade terms they have achieved from participating in the scheme. And DIFF, of course, has been looked at in terms of the two country effectiveness reviews we were discussing earlier-the reviews of China and Indonesia that were being discussed.
SENATOR HILL -Who conducted the major review in 1989?
MR PROCTOR -That was an internal review and involved officers from AIDAB and the Department of Foreign Affairs and Trade. There was a consultant in the early stages, but effectively it was all done by public sector officials.
SENATOR HILL -What was the form of the review?
MR PROCTOR -A working party was established to look at the DIFF scheme as it was, the criteria, the support of projects, the demand for funding. It was asked to recommend what changes might be made to the scheme.
SENATOR HILL -So it made recommendations for the future. Did it review the effectiveness of the scheme to that date?
MR PROCTOR -It was primarily reviewing the demand for funding under the scheme and the sorts of projects that could be supported. It was not specifically reviewing the effectiveness of the scheme.
SENATOR HILL -So there have been no macro examinations of the effectiveness of our mixed credit funding support?
MR PROCTOR -That question is addressed in various ways. The effectiveness in terms of the development impact is being assessed through individual project evaluations. As mentioned to you, we are assessing the trade spin-offs from the scheme. Those probably are the two major areas of effectiveness that people would want to see studied in the DIFF program.
SENATOR HILL -The first one was, what, the project evaluation?
MR PROCTOR -Correct.
SENATOR HILL -And that is what we heard through the two country programs and the three particular projects that are being made public?
MR PROCTOR -That is correct.
SENATOR HILL -The second aspect is the trade spin-offs. Has that project been completed?
MR PROCTOR -No, it is under way at the moment. We have written to every firm that has received a DIFF grant and we are in the process of receiving their responses.
SENATOR HILL -So that is being done internally as well.
MR PROCTOR -That is correct.
SENATOR HILL -And was the report of 1989 made public?
MR PROCTOR -No, that was a review that went to Cabinet. The Minister announced the outcomes in a press statement on 12 September 1989. Can I just add that there is a major review of commercial aspects, particularly DIFF, scheduled for 1992 under our portfolio evaluation plan.
SENATOR GARETH EVANS -It was always anticipated that it would take some time to generate a sufficient body of experience and data before we could make a sensible evaluation of the trade generation aspects of this. That was the problem in 1989, it was too early to make any sort of sensible assessment and it is still pretty early to do that, given the relative youth of this particular program. I do not think you will get any really terribly sensible, meaningful results until the 1992 thing comes along. We may turn up something before then but I would not be too confident that it would be all that credible until we have a bit more experience under our belt.
SENATOR SCHACHT -On page 173, first of all, I think it ought to be placed on record that the contribution Australia has made in emergency relief to those countries has been very significant and I think has been very well placed. How much has been provided to humanitarian assistance, I think mainly medicine, for the students on the Burmese-Thai border? You can take it on notice. It is a small amount, is it not?
MR INGEVICS -Last year we provided a total amount of $100,000 for students and refugees on the Burma-Thailand border. That assistance was provided through three Australian non-government organisations which have their counterparts in Thailand.
SENATOR SCHACHT -That is for last year?
MR INGEVICS -Last year.
SENATOR SCHACHT -Is there anything proposed for this year? I do not think the students are going to be moving off the border, unfortunately, because of the situation inside Burma.
MR INGEVICS -Yes, we are expecting to provide some further funds this year.
SENATOR SCHACHT -Approximately the same amount as last year?
MR INGEVICS -Approximately the same. It could be slightly more.

