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Australia's overseas aid program: the role of the private sector.

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Australia's overseas aid program - The role of the private sector  

The Honourable Kathy Sullivan MP Parliamentary Secretary to Minister for Foreign Affairs  

Cairns, 11 May 1998



The importance of the aid program  

The new aid program: Better Aid for a Better Future  

Six key principles for Australian aid  

Private Sector Role in Aid  

Australian identity in the aid program  



Ladies and gentlemen, welcome and thank you for coming along this morning. I am delighted that I could join you here in Cairns to officially open what I am sure will be an informative and interesting seminar on the role of the private sector in Australia's aid program.

I should like to congratulate the Cairns International Trade Centre for organising this seminar today. I am confident that, as business leaders here in Cairns, you will be interested in the exciting opportunities which exist for Australian businesses - both small and large - to become involved in our overseas aid program.

First, I want to give you some idea of what development co-operation is all about.

As the Parliamentary Secretary to the Minister for Foreign Affairs, I oversee Australia's official aid program, which is administered by the Australian Agency for International Development - AusAID. I am not new to this program. During my 24 years in Parliament I have taken a keen interest in aid on my numerous visits to developing countries.

On all my visits to our aid projects in those countries, I have always felt proud of being Australian - I am delighted to now be playing an active part in the delivery of that aid. I have seen people living in the most terrible poverty, yet still able to preserve their dignity and to remain committed to improving their lives. I have also seen Australian development successes in those same countries, and they have convinced me that our aid can make a difference.

In all our dealings, we work in partnership with the country and people concerned, in a uniquely Australian way. On a recent visit to one of the countries which receives a substantial amount of our aid, a Government Minister spontaneously said to me - "We like Australian aid. You don't make us feel like beggars, and you don't push us around".

I believe that is what all Australians would want to have said about our activities in this area. It made me feel glad to be Australian, and it is a statement of which all Australians should be proud.

The importance of the aid program

People sometimes ask why Australia gives aid to poor countries. The reason is simple: we want to help developing countries overcome poverty.

1.3 billion people - or one quarter of the world's population - live in absolute poverty. That's a staggering - and sobering - statistic. This means one quarter of the world does not have access to many of the things most Australians enjoy: good health care and education, clean water, decent shelter and adequate food.

Many are uprooted by violent conflicts or natural disasters.

People in developing countries often lack the right to vote and to hold governments accountable for their actions.

Many of these basic amenities and rights - that we often take for granted in our lucky country - are denied to a vast number of people throughout the world. A disproportionate number of these people are women and children. Millions of children, in particular, have no hope of a decent life - that is a tragedy of vast proportions.

It sounds daunting, doesn't it? However, I firmly believe that Australia's current aid contribution of $1.4 billion a year makes a difference - a big difference.

Let me look briefly at Papua New Guinea, by way of example. PNG is the largest recipient of Australian aid and will be the main topic of today's seminar. Rightly so, given Cairns' proximity to PNG.

As you know, our neighbour has recently suffered its worst drought in 100 years. Australia responded immediately to a PNG government request for help. We launched our largest ever humanitarian relief operation. Over and above our annual pledge, we committed $30 million to PNG drought relief. In a combined effort, AusAID, the Australian Defence Forces and non-government organisations were able to get food into the most remote parts of the country and to 60,000 people who most needed it.

Thankfully, this rapid response averted a major tragedy. Now that rain has fallen, we are focusing on a huge rehabilitation effort - mindful, however, that the El Nino effect is yet to subside.

Both the PNG Government and AusAID are determined to discoura ge dependency on aid. So together we have looked at ways to get people growing their own food again as quickly as possible.

Such initiatives are a major part of Australia's $1.2 million post-drought rehabilitation program. AusAID is providing approximately 400 tonnes of plants and seeds of fast-growing food crops, which should significantly boost local replanting efforts.

The impact of the drought has highlighted the reliance on rainfall for water, particularly in rural Papua New Guinea. Had other sources been available - such as wells or irrigation - the drought would not have affected so many people so quickly.

AusAID has therefore sponsored two water experts to provide coordination in the water sector. The eventual aim is to muster resources to identify and implement appropriate water solutions. When completed, these projects will provide more secure access to water for many villages in rural areas. Our aim is to see more crops grown and health and hygiene improve. Women - whose traditional role is to fetch water - will especially benefit from having water sources closer to home.

The new aid program: Better Aid for a Better Future

My appointment last year coincided with a significant milestone - the Howard Government's announcement of a new agenda for our aid program. This followed the first major review of Australia's aid program in 13 years.

In a statement to Parliament before Christmas, the Foreign Minister announced the new objective of the aid program:

"To advance Australia's national interest by assisting developing countries to reduce poverty and achieve sustainable development".

Mr Downer's statement set out clear development priorities for our aid program. The statement is best summarised by its title: Better Aid for a Better Future. We have co pies of the statement for you here today.

Six key principles for Australian aid

In setting the objective of the Australian aid program, the Government has also established six principles to guide its operation and future development:

First, our aid will be focused on partnerships. This means that the aid program will be planned and implemented in partnership with developing countries. This will ensure that it remains focused on meeting their priority needs.

Second, we shall respond to urgent needs and development trends. The aid program will continue to provide rapid relief to victims of natural disasters and emergencies, taking into account changing circumstances in developing countries. A good example of changing conditions is the role of financial markets and private enterprise in economic development.

Third, the aid program will focus on providing practical assistance. This means the program will be realistic in assessing what can and cannot be achieved.

Fourth, there will be greater targeting. Australia's aid program will not attempt to be all things to all people. Clear priorities have been identified and our efforts will be assessed against these priorities.

Fifth, the aid program will be outward looking, open to new ideas and approaches and seeking to draw on the best ideas in Australia and overseas.

Finally, our aid program will maintain its Australian identity - as it is a reflection of Australian values - and of your values - and a projection of these values abroad.

Private Sector Role in Aid

It is well-recognised that the private sector has a valuable role to play in international development. This role involves improving competitive forces which should, in turn, produce better growth and more jobs. It also involves divesting governments of activities which can be better conducted by the private sector.

Many developing countries also now recognise the need to privatise and to improve the efficiency of their public sectors in order to create the conditions essential for a vigorous private sector.

In the context of Australia's bilateral program with Papua New Guinea, I should like to give you some practical examples of what we are doing to promote the development of the private sector.

At the institutional level, AusAID is funding a number of activ ities which promote the rule of law and its enforcement. For example, the Minister last month announced that Australia has committed $250,000 to a Civilian Policing Project in the Arawa region on Bougainville. The project will provide training for Auxiliary Police to allow the restoration of effective civilian policing and help people resume their normal lives. It will deliver a very tangible dividend from the peace process to the people of Bougainville.

I am sure you can all appreciate that long-term stability is essential for future investment and business confidence and growth.

Many of the activities which Australia funds in the infrastructure and education sectors, also contribute to private sector development. This is achieved through the active participation of the PNG firms in the delivery of goods and services.

This involvement strengthens the skills and expertise of the PNG workforce. Consequently, business is encouraged, broader economic growth is promoted and - hopefully - income distribution becomes more equitable.

I believe there are ample opportunities for strong and mutually beneficial partnerships to be established between various sectors of the Australian and Papua New Guinean communities: for instance between businesses, NGOs, universities and TAFE colleges.

Effective partnerships are the key focus of an AusAID initiative I would briefly like to discuss with you. The Private Sector Linkages Program - or PSLP - was developed in response to the high priority placed on private sector development by many developing countries. It has been designed to operate as a partnership between a business entity in a developing country and an Australian business, who share the goal of funding a developmentally worthwhile project in a developing country.

The PSLP promotes sustainable development by harnessing the expertise and capacity of Australian enterprises to work with counterpart organisations in the developing country.

To date, the PSLP has funded more than 180 activities valued at $17.7 million.

A recent review concluded that these have resulted in significant development benefits in areas such as employment, technology transfer, training, improved management, health and the environment.

Countries participating in the PSLP in 1997-98 include the Philippines, South Africa, Zimbabwe and Fiji. In fact, several years ago a North Queensland company helped establish a manufacturing business in Fiji and provided roof trusses for houses being constructed for the local Housing Authority. As part of this activity, local people were trained to operate the plant.

Papua New Guinea is a recent addition to the PSLP. The modalities for its operations are currently being negotiated with Papua New Guinea.

I note that during this morning's program you will hear a presentation by the PNG Investment Promotion Authority. I hope today's exchange of information and ideas leads to some mutually beneficial partnerships.

The aid program's support for private sector development extends well beyond PSLP. At present, it is responding to the long-term effects of the Asian economic crisis through assistance to improve financial regulation, the better to manage and plan economic policy, and to prioritise public sector investment. It is also working with governments and local communities in the region to minimise the severe impact of the crisis on the poor.

Australian identity in the aid program

The Australian aid program is a reflection of the values shared by the Australian community.

They are values characterised by altruism, generosity and concern for other people's welfare, including those who live beyond our borders. This is by no means a recent phenomenon. Australia has a longstanding record of assisting our developing country neighbours.

Since the Second World War, successive Australian Governments have involved us as a nation in emergency situations, reconstruction and sustainable development efforts.

The Commonwealth Government works with a wide range of Australians with expertise in development including NGOs, universities, research institutions, government agencies and the private sector. My recent visit to Asia - my first as a Parliamentary Secretar y but only the most recent of many as a Member of Parliament - has underscored my long-held conviction that one of the most important ways countries can help each other is by their people getting to know one another.

Our aid program fosters a remarkable range of people-to-people contact. Everywhere I have been in the region, I have met Australians working hard to impart their knowledge and skills and, at the same time, learning to appreciate the richness and vitality of Asian cultures.

I have also met many officials who have studied in Australia. They value not only the Australian qualifications they received, but also the friendships they formed, and of they admire the open, frank way in which Australians approach life.

On my most recent visit earlier this year, it was also a great pleasure to have talks with former Asian parliamentary colleagues whom I had got to know over the years through my involvement in international parliamentary conferences, and who are now - with some help from Australia - devoting their energies to improving their country's legal and human rights institutions.

It is important that we maintain an Australian identity in our program and, with our much-celebrated practical approach, an amazing cross-section of the Australian community is making a difference in developing countries.

I would like to encourage all of you to seriously consider how you might also become involved. AusAID officers later this morning will be able to go into greater detail about the various opportunities available to you, with particular reference to Papua New Guinea.


Ladies and Gentlemen, this morning I have highlighted some of the key aspects of Australia's aid program and spoken briefly about the importance of private sector involvement.

Reducing poverty and encouraging sustainable development are at the heart of all our overseas aid efforts. In pursuing these objectives, we demonstrate our generosity to millions of people overseas. We give them a message of hope for their future and for that of their children.

But giving aid is not only about our good intentions and moral obligations to help the disadvantaged. Aid can also advance our national interest. By assisting to improve the quality of life and the living standards of the people in our region, we improve the prospects for regional stability, trade, investment and a greater number of jobs.

Poverty reduction and sustainable development will also help to meet our environmental and security interests.

Australians have a well-deserved international reputation for delivering aid well. We have a 'can-do' attitude and a basic egalitarian approach to people which works really well in aid delivery. I can assure you that Australia's efforts in helping the needy are widely recognised by those who benefit from our aid program.

The genuine gratitude of recipient governments and people I have met on visits to a wide variety of projects in our region is very encouraging. People we have helped spontaneously express their gratitude to all Australians. I hope you will help me to spread that message to your community.

Together we can all be proud of the role that Australia's aid efforts play in improving the lot of many disadvantaged people, both in our immediate neighbourhood and further afield.