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Foreign Minister discusses Live8; aid to Africa; Egyptian diplomat kidnapped in Iraq; and collapse of one of the Twelve Apostles.

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E and OE

4 July 2005


Minister for Foreign Affairs

3LO Interview

JON FAINE - PRESENTER: Alexander Downer is Australia’s Foreign Minister. I don’t know if he watched the concert last night, broadcast from London and nine other capital cities around the world with an estimated television audience of three billion people.

Mr Downer, good morning.


FAINE: Did you catch any of the concert?

DOWNER: I caught some of it. I came back on a plane from Brisbane and when I got home I watched - I suppose that was about nine-thirty, nine forty-five Adelaide time - I watched it up until Wimbledon started. Yeah, no, I was very impressed.

FAINE: Were you moved?

DOWNER: Well, it was an enormous spectacle and I mean obviously there was vast support for the very simple proposition. Well, I would have thought there’d be pretty much unanimous support for the proposition around the world, that it would be good if we could just end poverty, just like that, of course.

FAINE: But then there’s a bit more of a message to this, and a little more purpose to it than something as simplistic as you’ve just described.

DOWNER: Well, there are of course arguments, as you could imagine, about specifically how to do this. I mean, I don’t, I think first of all it’s important to understand, whatever you think of the G8 governments -

and people probably like some of them and don’t like some of them, but whatever you think of them - they obviously are all committed to getting rid of poverty, including in Africa.

But then there are arguments about how you do it, whether debt forgiveness itself, without any conditions, is going to be a good idea. If there are to be conditions, what sort of conditions. What is the role of aid, is aid going to be the right thing to give to a country like Zimbabwe, for example, given the state of its government. So there are a lot of issues here. All of …

FAINE: Can we work through those issues?


FAINE: What does the Australian Government think?

DOWNER: Well, we certainly supported what’s sometimes called the HIPC initiative. That’s an initiative to cancel the debt, including the debt owed to international financial institutions of what are called heavily

indebted poor countries, countries which have a particularly critical situation, but countries which have agreed to meet certain conditions.

I mean, there’s no point, for example, in just cancelling the debt of countries if it just amounts to a budgetary boost to an appalling government. So, they’ve got to meet certain conditions so that the extra money they get goes into health and education and so on. So, we’ve supported that, we supported the cancellation of those debts for eighteen countries which was announced recently by the G8.

FAINE: Under the leadership of Tony Blair. But do we support going further? Do we have suggestions to make, even though we don’t have a seat at the G8 table?

DOWNER: We don’t have suggestions to make in terms of further cancelling debt, except to say this: that cancelling debt should be conditional, not unconditional.

There is no point in just cancelling, say, Zimbabwe’s debt, and putting money into the pocket of President Mugabe and his regime. It

is wise to cancel the debts, on the other hand, of a country like, well, say, Ethiopia, which has agreed to meet certain conditions of so-called good governance, of making sure the government runs properly. So I do support that.

But I mean, the point I make is the point about good governance. If the country is well run, then giving that country assistance is likely to be very effective assistance. If the country is corrupt and badly run, it’s a waste of money.

FAINE: Is the Australian Government planning to in any way change its policies in relation to assistance and aid to Africa because of the current focus?

DOWNER: Well, we have slightly changed our policies in the sense that there has been an increase in our aid budget to Africa, and this year we’ll be spending about seventy-seven million dollars on aid to Africa, but look …

FAINE: So we spend less than Bill Gates.

DOWNER: Well, that’s right. Bill Gates is the world’s very richest man. I’m grateful to Bill

Gates for making a contribution, but I’d be grateful if he made a contribution in Asia as well.

Two-thirds of global poverty is in Asia and, you know, that’s our part of the world. Our aid budget predominantly is directed towards the South Pacific and South-East Asia, not so much Africa. I mean, for the European Union, Africa is a particular focus of their aid. But Africa, sub-Saharan Africa gets around, don’t hold me to this, but about thirty-five to forty per cent of all global aid, yet two thirds of global poverty is in East Asia. So it makes sense for a country like Australia to focus on Asia and the Pacific.

FAINE: So should the debt-forgiveness policies being applied to Africa be extended to Asia?

DOWNER: Or, and the Pacific. Well, of course they could if it made any sense. You know, in other words, if in going down the path of cancelling those debts that was going to make a substantial difference to those countries. The problem in Africa is that those countries are, a lot, not all African countries. They vary, of course, but some of the African

countries are particularly heavily indebted and carry much more of a burden of debt than many countries in Asia.

See, of course in Asia you’ve got countries which have focused very much on improving the quality of governance and not all of them but many of them, and you’re seeing them achieve quite good rates of economic growth. In Africa, you’ve seen, actually, I think you’d find, in an overall sense, a real per capita decline in living standards in sub-Saharan Africa since the 1960s. That’s a pretty bad statistic.

FAINE: Alexander Downer, the reality though is, surely, that debt allows control for a lot of Western countries to lend money to indebted Third World nations also then allows you to exercise some control, or certainly exert significant influence over how that country’s affairs are run. And it allows entry, then, also, for some of your own corporations. Isn’t that part of the debt equation?

DOWNER: No, that’s fairly fanciful way of looking at it, if I may say so. I mean, obviously, if you go out and borrow money the

lender is going to lay down some conditions, because if they’re going to lend you money they want at least the - they would at least hope that the loan would be serviced.

But, by the way, a lot of this debt is not the debt, not debt owed to governments or to corporations or commercial banks. A lot of this debt that’s been spoken about is debt owed to organisations like the African Development Bank, the International Monetary Fund, the World Bank, and so on, what are known as international financial institutions.

Now, of course, they have wanted their money back when they’ve lent money, although often at very concessional terms. They want those loans to be serviced. Otherwise these institutions would go broke. But I mean, and, certainly, these institutions believe that those countries would be better off if they adopted the liberal market model. No question of that. I passionately believe that. If they don’t, if they adopt a socialist model, well, their economies won’t flourish.

FAINE: Even if that seems to be something that’s more in keeping with their own agrarian

traditions, their own cultural traditions? It may well be entirely appropriate.

DOWNER: Well, that, of course, is where you come up against the clash of economic modernisation and traditional culture. I mean, in some cases, let me put it to you this way: one of the biggest issues is the issue of private property ownership and land ownership. Now, in some countries that isn’t the cultural norm, to have the concept of private property ownership; the cultural norm is collective property ownership.

It is very hard to escape from poverty if you don’t have a system of private property ownership and the opportunity to accumulate capital and reinvest capital. If you just run a subsistence economy, it’s very hard to escape poverty. And that, I mean, that is a very, very big issue in the development debate. And it’s true it’s not …


DOWNER: … you know, none of us would feel it’s right to demand a country change the fundamentals of its culture, and …

FAINE: But likewise in the trade debate …

Eighteen minutes to nine, we have a number of listeners who want to join in, and we’ll take your calls in just a second, 1300 222 774 is the number, 1300 222 774 ABC Melbourne, Alexander Downer, Australia’s Foreign Minister joins me.

When you talk about trade barriers, we have to bring this into the equation, too, don’t we, Foreign Minister, because, for instance, we grow cotton in Australia. In the context of the environmental debate it often comes up as a topic, as does rice growing and yet we have certain trade arrangements. Rice is a staple crop and an export crop for a lot of those impoverished Asian countries you were talking about. Cotton is an export crop for a lot of the impoverished African countries you’re talking about. And yet the price for some of those, as export goods, is controlled by the sorts of trade barriers that Australia is still negotiating.

It would make sense for us to drop trade barriers on goods that would help the

economies in some of these impoverished countries, wouldn’t …

DOWNER: Definitely. I mean, that is an enormous issue. We passionately believe that, that to get rid of those trade barriers above all is going to help developing countries.

You consider the amount of money that the European Union and the United States - particularly them, to some extent Japan - that they spend subsidising their farmers it is massively more than the total amount of global aid that is provided by developed countries to developing countries. If those subsidies were taken away, and if much better access to European, American and Japanese markets was granted by those countries, well then that would make a difference, of course.

One of the effects would be that it would encourage investment in agriculture in developing countries, and that obviously would have a big impact on their living standards, quite apart from them having better markets. Now, with that …

FAINE: So you can’t talk about one without

the other, is also what you’re then saying, is that right?

DOWNER: That’s right. You can’t, no. And it’s not as though … to be fair, I mean, it’s not as though these issues aren’t being addressed; they’re just not being addressed very successfully. I mean, there’s what’s called the WTO Doha round of trade negotiations, which your listeners have probably heard of. And we hope that there’ll be real progress to achieve those things in the Doha round.

But it’s very difficult. I mean, the European Union is very, very reluctantly removing some of the barriers to the European market for developing countries in the area of agriculture, because the politics of farmers in the European Union is very sensitive.

FAINE: We’ll get to callers in just a moment. Before I let you go, though, Foreign Minister, the Egyptian Ambassador to Iraq has apparently been kidnapped, a gentleman by the name of Ihab al-Sharif has gone missing in Baghdad, and this is raising serious concerns; it’s a completely new development and an upgrading in … and an escalation in tensions in

Baghdad. Given the experience that you and your colleagues gathered in the successful efforts to free Douglas Wood in Baghdad, is there any insight you can offer into this latest development?

DOWNER: Well, my sense, look, you know, I heard this on the news and I have no other information about the kidnapping, but my sense is that the kidnapping of the Egyptian Ambassador is likely to be highly political. That is, it would be almost certainly Saddam Hussein loyalists, his former Special Republican Guard or intelligence people who will have done it for political reasons. With Douglas Wood, in Douglas Wood’s case, he was essentially kidnapped in order to try to make money.

FAINE: And so, you don’t see any parallels here at all?

DOWNER: Well, I think the Egyptian Government wouldn’t be well served if it changed its policies in relation to the recognition of the democratic government of Iraq in order to get him released, because otherwise, that will encourage the kidnapping

of further citizens of countries that recognise the democratic government in Iraq. But I don’t expect the Egyptian Government would do that.

FAINE: Alexander Downer, thank you. We have, of course, in Victoria have celebrated the Twelve Apostles for a long time. We’re going to ask our listeners to try and solve the riddle of what you call Twelve Apostles when there’s only eight of them left. I don’t know if you have a contribution to make to kick off this little expedition this morning.



DOWNER: Well, I just saw it in the newspaper this morning. I assume it’s just erosion isn’t it? I mean, I don’t have any real contribution to make, except I’ve visited the Twelve Apostles and I had a look at them, and look at the photographs this morning. I was, sort of …

FAINE: We thought, with eight apostles and the G8 summit, we could name each one after a leader. We could have Bush, we could have

Blair, we could have Putin, we could call them after each of the leaders of the G8.

DOWNER: Indeed, you could.

FAINE: Sadly, I’m afraid, there’s no room for a Downer apostle.

DOWNER: No, I don’t think Downers make great apostles.

FAINE: Thank you for your time. Foreign Minister for Australia Alexander Downer joining us.

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