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Australian Aid: partnerships for a global future: address to the Australian Council for Overseas Aid Annual Council meeting, Canberra



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Canberra, 29 August 1998 (Check Against Delivery)

EMBARGOED UNTIL 3PM 29 AUGUST

Australian Aid: Partnerships fo r a Global Future

Speech by the Hon Alexander Downer MP, Minister for Foreign Affairs, Address to the Australian Council for Overseas Aid Annual Council Meeting, Canberra, Saturday 29 August 1998.

Introduction

Sir Ronald Wilson, Janet Hunt, Ladies and Gentlemen: I am very pleased to have the opportunity to speak to you at this important annual conference. I know your conference is considering the issue of “NGOs in a global future” and I will address this issue in my speech today. However, I would like to start by making a few remarks about the relationship between the Government’s aid program and NGOs.

Relationship between the aid program and NGOs

This Government has placed a strong emphasis in its new aid policy on the principle o f partnership. We work with developing countries but as well with a range o f international agencies, with development banks and also importantly with NGOs.

The Government has taken a positive approach to the role o f NGOs in the Australian aid program and indeed values the partnership with them as an expression o f community interest in, and support for, overseas development. NGOs have a unique role in providing views on the direction and management o f the official aid program and in promoting community

awareness about development issues.

As promised in my parliamentary statement in November, we are undertaking consultation on preparing a policy statement on the relationship between the official development program and NGOs. A draft policy plan will be presented to the AusAID-NGO Consultations to be held here in two days’ time.

I am also delighted that the Government’s collaboration with NGOs through ACFOA in organising the recent community survey of attitudes to aid produced such a positive outcome.

In Adelaide, earlier this month Janet Hunt and I jointly announced the finding that 84 per cent o f Australians support overseas aid. 78 per cent of Australians either approved o f the amount the Government spends on foreign aid or believe it should spend more. Over half considered

our aid should be given for moral reasons - because there were people in need, because there was a humanitarian imperative or because we in Australia were in a position to help.

These results support this Government’s belief that the aid program, by addressing the needs o f the w orld’s most disadvantaged, is a clear statement o f Australian values. I am, as a great supporter o f the aid program, personally gratified by this survey’s findings.

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While knowledge about how our aid is delivered and what it achieves is perhaps still limited in the community, it is clear that the public sentiment supports the aid program as an appropriate and important function o f government.

I strongly believe that the aid program, if well directed and effectively run can - and does - make a significant difference to people’s lives. There is good news to tell and this message is one we have to work harder at. The aid budget this year was - 1 think a great outcome. Australia’s aid budget is well above the OECD average and is the highest above the average that it has been since 1985 -86.

In addition, there have been major achievements and important new initiatives undertaken by the Government.

Bougainville: Promotion o f Peace

One area o f success is Bougainville, where this Government has been totally committed to supporting the peace process. Our aid program has been a key element in our support for the PNG Government’s efforts to achieve a lasting peace on the island. We have supported the

peace talks and the participation o f Australian civilians in the Truce and Peace Monitoring Groups. One o f our current projects is delivering construction materials to enable community rebuilding o f schools, health posts, roads and bridges - an immediate peace dividend.

Restoring civilian authority is critical to sustained peace and an Australian civilian police training project has recently trained a night police patrol comprised of civilians, Bougainville Revolutionary Army and resistance combatants in conflict resolution, communication and mediation skills.

Last month I announced a further project to distribute urgently needed clothing; to install water supply and sanitation works; to train small holders in cocoa rehabilitation and to establish adult literacy projects. This project will be managed by the Adventist Development Relief Agency, which has been involved in Bougainville for a number o f years.

The Government has also provided very significant assistance to the Red Cross in its work in Bougainville, For example in 1997 the Government contributed $4 million to the International Federation o f the Red Cross’s Appeal for Bougainville. In addition $2.3 million was provided to the 1998 Appeal. The Government has funded over 90 per cent o f these Red Cross appeals.

In view o f the importance o f aid to the peace process, last August I committed $ 100 million over five years for reconstruction and rehabilitation on Bougainville.

This ongoing and major program o f assistance in Bougainville is one Australians can be proud of. It is a program that incorporates many forms o f partnership and it is also an excellent example o f what we can achieve through our aid program.

I am therefore pleased today to launch a new brochure entitled “Australian Aid to Bougainville”. This brochure describes the peace process and activities taken by the key

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parties and the role o f the reconstruction and rehabilitation program. It will be a useful addition to our efforts to communicate to the Australian community the accomplishments o f our aid and the benefits Australia gains from it.

Youth Ambassadors fo r Development

Two days ago I launched the Australian Youth Ambassadors for Development Scheme, which will involve both young people and the broader Australian community, including the private sector. Through this scheme, Australian youth will be given an opportunity to make a positive contribution to development by sharing their skill and expertise. I am confident that this scheme will have a tremendous impact on the promotion of understanding and goodwill between Australian youth and the people o f the Asia-Pacific region.

The benefits clearly also accrue to Australia. The Youth Ambassadors Program will form lasting networks between individuals, business, educational and community organisations across the region. An alumni association, with an annual national conference, will bring

together hundreds o f Australian Youth Ambassadors and their partner organisations, all with a commitment to an understanding o f the Asia-Pacific region. Not surprisingly, the reception given to the scheme has been highly positive.

Certificates fo r A id Volunteers

I believe that initiatives which promote people-to-people exchange and relationships across the region have played a major part in the development o f Australian diversity and tolerance. Our commitment to personal engagement is something I barely need to mention to this audience. Programs such as those o f the Overseas Service Bureau and the Paulian Association have involved over 5000 qualified Australians since their beginnings in the 1960s.

This Government has also been pleased to honour the tremendous contribution made by Australians who have served overseas as volunteers, devoting their time and expertise to improving the lives o f people in developing countries. These dedicated individuals are part o f the human face o f Australia’s overseas aid program. Their invaluable contribution is now being formally recognised through a program o f certificate awards ceremonies. To date there

have been three - in Sydney, the Gold Coast and Ipswich. More are planned, including for Melbourne and Adelaide, in the near future.

Centre fo r Democratic Institutions

As many o f you will know, another important initiative o f which I am particularly proud is the establishment o f the Centre for Democratic Institutions. Based at the Australian National University, the Centre is now set up and has its director in place. The Centre will conduct its first course — for Melanesian Ombudsmen - in November.

The Centre is aimed at promoting democracy, human rights and effective governance in developing countries, particularly in the Asia-Pacific region. The establishment o f the CDI fulfils my promise at the last election to assist developing countries to strengthen democracy and provide effective governance.

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The Centre’s work will involve the institutions of Australia’s civil society. Its short intensive training programs will include areas such as electoral, parliamentary, and judicial procedures. This is matched by a greater focus more generally on governance within the aid program.

A id Advisory Council

One further initiative, the Aid Advisory Council will, I believe, make a major contribution to the process o f aid policy development.

The Aid Advisory Council is comprised of distinguished and highly qualified Australians with diverse backgrounds and wide experience of life. Working in the business world, academic life and community agencies, the Council’s members advise me on a wide range of issues affecting Australia's aid program.

The Council includes Janet Hunt as Executive Director o f ACFOA, and key community representatives including Charles Tapp, Gaye Phillips, Margaret Conley, Archbishop Ian George and Jim Carlton.

We have had the first meeting, which I found both informative and stimulating. I believe the Council as a whole sees a real and useful opportunity to consider major policy issues, as we have decided to meet three times a year instead of twice a year as initially planned.

Globalisation

I wish now to turn to the issue o f globalisation, which is the topic for your conference. It is clear that in development, as in so many other areas, we are looking at a global future. Globalisation is creating enormous opportunities and challenges for Australia and our neighbours in the Asia Pacific region.

The global economy is emerging at an unprecedented pace - reflected in a massive increase in international financial flows and foreign direct investment; rapid growth o f international trade; and the increased international movement o f information and labour.

Globalisation means that no nation can remain an island in the world economy. Very large potential benefits can be gained by those countries, which can make the global economy work for their national interests. East Asian growth and development has been fuelled substantially by these very factors. Recent developments in our region, however, prove that achieving such growth is not necessarily an easy process nor one that is assured.

However, in the midst o f difficult financial times for East Asia, we should not forget how large the development progress has been. Between 1975 and 1995 the incidence o f absolute poverty fell in East Asian developing countries by two thirds - from 60 percent o f the population to 20 per cent. The number of people in poverty fell by half - from 720 million to

345 million.

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This success is not just a matter o f statistics. It translates into significant improvements in standards o f living such as life expectancy, infant mortality and school enrolments. The challenge is now to preserve and continue such advances in the face of financial downturn, as well as the attendant challenges such as environmental impact.

Impact o f East Asian Crisis

The East Asian financial crisis has brought home to us the challenges associated with open trade and investment regimes. The financial and corporate sectors of some regional economies failed to keep pace with the spectacular inflow o f capital and resources, and broader institutional arrangements were clearly not appropriate for achieving sustainable development.

The role o f government in positioning countries to participate advantageously in the global economy is therefore crucial. It is important to avoid the common mis-perception that trade liberalisation and globalisation mean that governments have a declining role. On the contrary - they may have to change their role - but they do have the important task o f regulation and establishing the general set o f institutional arrangements within which the private sector operates.

The social consequences of the financial problems in East Asia are, as we are seeing, dramatic. The effects o f the drought associated with El Nino have exacerbated this. Few countries in the region are unaffected by the crisis. In Indonesia poverty is increasing, with the 80 million people now in absolute poverty and this number likely to rise to nearly 96 million by the end o f this year. The long-term effects of these changes are likely to be just as

serious as the immediate impacts.

The increase in poverty and other economic and social impacts are likely to have broader flow-on effects. One example is that the World Bank estimates that 20 per cent o f poorer children in Indonesia are at risk o f leaving school early. Such a drop in education numbers would represents a significant setback to economic development and to one o f Indonesia’s proudest development achievements. It also makes children more vulnerable to various types o f exploitation.

Compared with Indonesia and Thailand, the economic impact of the crisis has been less severe in other countries, in South East Asia, South Asia and the Pacific. However, these countries are experiencing increased poverty and slower growth, as a result variously o f a decline in demand for exports and dwindling foreign direct investment from Asian countries.

The key to the region’s recovery - short and long term- lies in domestic economic reform, continued trade liberalisation, and improved governance leading to renewed investment in the region. This is the clear lesson from the Latin American crises of the 1980s and the Mexican Crisis o f 1994-95. Putting their financial and broader economic sectors on a sounder footing

will hasten return to economic growth.

These assessments have guided our responses. They underscore the importance we place on the implementation o f appropriate programs agreed between these countries and the IMF,

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something I devoted considerable time and effort to helping achieve, and on our direct aid assistance.

Australia’s Response

Australia has contributed to the three IMF-coordinated packages for Indonesia, Thailand and Korea. We are the only country apart from Japan to do so. This is not part of the Australian aid program, despite some common misconceptions in this regard.

What is being done through the aid program is to help moderate the social impact o f the crisis and to improve the ability o f key institutions to cope.

At the recent Consultative Group M eeting on Indonesia, Australia pledged $120 million in aid for this financial year. This is one third higher than last year’s budgeted figure. Our specific humanitarian assistance includes food aid, emergency medical supplies, drought relief, agricultural rehabilitation and employment generation activities.

Australia’s broader bilateral aid program is now focusing more attention on aspects of financial and legal governance. W e are for example providing technical assistance in the area o f bankruptcy system reform and the Reserve Bank o f Australia is providing technical advice to help the Bank o f Indonesia manage Indonesia’s floating exchange rate

Australia has been engaged for some time providing assistance to indigenous organisations supportive o f civil society and human rights, through the Human Rights Fund.

Komnas Ham, Indonesia’s Human Rights Commission, is one o f those organisations. We are currently working to improve the capacity o f Komnas Ham to protect and promote human rights through a three-year institutional strengthening program.

The most notable change since the installation of the new Indonesian government is greater freedom o f expression in Indonesia, including in East Timor, where there has been significant movement in recent months.

In response to the financial crisis, we are, o f course, also assisting other countries in the region. In Thailand, for instance, Australia has agreed to continue the aid program beyond 2000/2001, when it had been due to cease. Our new aid program is to focus on minimising the

negative impacts o f the crisis, particularly on the poor and disadvantaged, as well as on improving governance, notably rehabilitation of the banking and finance system.

At the regional level, the financial crisis has created an important challenge for APEC. The aid program is therefore funding a comprehensive survey o f the worst affected APEC economies to identify their needs in financial sector reform and economic governance. The survey is also identifying capacities to assist in other countries and international economic and financial institutions.

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Redirection of Australia’s aid policy and program

Australia has been able to offer generous support to its neighbours in their time of need. This is not least because we ourselves are in such good shape, due to the Government’s responsible economic management.

In the same way, Australia’s aid response has been improved as a result of the redirection o f the aid program by this Government. I am pleased to be able to say here and to this audience, in particular, that I believe the aid program is now well on track to delivering the sort o f aid program Australians want.

The new policy directions were set out in my statement to Parliament last November. This included the Government’s response to the Simons Review, which I had instigated. Let me give you a few examples o f how these new directions are being implemented.

Objective

Central to this Government’s policy is the redirection o f our aid back to a single clear objective “to advance Australia’s national interest by assisting developing countries to reduce poverty and achieve sustainable development.” I believe this has provided us with clarity o f purpose. In a period, which has seen major new demands placed on our aid program, the objective has also been well received and is appropriate in terms of public

attitudes on aid.

Sectoral Expertise and Focus

Five sectoral groups, for health, rural development, gender and education, governance, and environment and infrastructure, have been established within AusAID. Contracted advisers for each group are being recruited to increase in-house expertise. Advisory groups, including community experts, are being established for key sectors. Revised sectoral policies are also being prepared. The Education and Training Policy has been in place since August 1996 and

a new Health policy is soon to be finalised. Reviews o f our assistance to rural development and the private sector are being undertaken.

In the end, it is the effectiveness o f our aid that is o f crucial importance for Australians. To improve and measure performance and to ensure our aid goes where it should and achieves its intended results, an Office o f Program Review and Evaluation has been established. In addition, a new sector-level Program Quality Committee, which includes an external member, regularly checks on aid activity outcomes.

I can now say that the aid program is on a sound basis to make the policy and program contributions that will meet the demands likely to be placed on Australia in the years ahead.

Aid is in Australia’s national interests

I believe that we will look back to this period as the time when the region, and Australia’s place in it, came o f age. We are helping recovery through our robust advocacy on the region’s

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behalf and through our timely and well-focussed assistance: Australia is proving itself a genuinely close partner and regional friend. This standing will support our own national interests - whether trade or security - with these important countries in the future. Both the Thai Deputy Prime Minister Supachai and Foreign Minister Surin, for example, have said that

Australia’s help in a time o f necessity would be well remembered. Australia has proven itself to be a reliable friend in good times and in bad.

While the situation in East Asia is currently serious, there is no doubt that recovery will occur. The economic and human fundamentals for growth and development remain in place.

However, we cannot be sanguine in this matter nor on our other global challenges. Across the whole of South and South East Asia, for instance, six million adults and children are living with HIV/AIDS, the majority o f whom are between 15 and 35.

The aid program is the most effective mechanism we have to help to combat this looming disaster. Australia has been instrumental in the development o f a broad regional strategy to educate, to control the disease and to care for those affected. I have recently announced an Australian contribution o f $5 million over three years to strengthen local NGO and

community organisations working on the disease.

Conclusion

Ladies and gentlemen, a great deal is at stake for many o f our development partners. Our interests are closely bound up with those o f our neighbours and trading partners and our contributions to their recovery and further development will affect our own welfare. Our responses in their time o f need will have an impact on their prospects for recovery and will determine how we are perceived for many years to come.

At this meeting you are considering how NGOs should best function in a globalised world. I would like to suggest a continuing focus on one of the key policy principles underlying Australia’s official aid program - partnerships. Substantive partnerships with the NGO community, with the organs o f civil society and with the broader Australian community are

already - and will remain - a key aspect o f our aid program.

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