Australia Ahead of the Curve Blog Series #7: The Future of Australian Aid and the Humanitarian Perspective

Stephen McDonald & Sarah Ireland

16 Oct, 2016 | Humanitarian Response

This post forms part of ACFID’s blog series on Australia Ahead of the Curve: An agenda for international development to 2025. Views contained in this series are those of the authors and do not necessarily reflect the views of ACFID or its members.

To learn more about this series, read the introductory blog post. To view other submissions and find out how you can contribute your ideas on the future of development, visit our page on the ACFID website.

 

It’s 2025 and change in the Asia Pacific region has happened at a rate the world has never seen: Over the past two decades there has been an explosion in the working age population, a rise of the middle class, growing inequality, increasing urban populations, and rising security challenges both intra- and inter-State. The widespread penetration of technologies to even the poorest communities has resulted in an increase in access to tools and information supporting education, healthcare, livelihoods, banking and insurance with largely positive results. On the other hand, the real effects of climate change through rising sea levels and an increase in the intensity and frequency of extreme weather events has seen mass displacement, millions of children out of school, and many people losing livelihoods and sinking deeper into debt and poverty. At the same time a burgeoning private sector and increase in small- to medium-sized enterprises, as well as the decline of European and North American influence has reshaped and refocussed Australian aid in ways not envisaged in 2015.

Donors and aid organisations seeing the changing landscape have eventually started to change themselves, shifting from development focussed activities in all but the very poorest of countries, but recognising the need to work more on protecting the development gains made through greater investment in humanitarian response, climate change adaptation and risk reduction activities. International NGOs have finally learned to let go, realising that exerting influence and supporting local collaboration is much more effective than controlling resources. In an effort to reduce cost, improve value for money and ensure their ongoing relevance, most Australian agencies - and their federated families - have moved to shared services providers in the Philippines and India, and now draw the vast majority of their international technical teams from service hubs around the region, employing local rather than international staff.

In 2013, the Government of the day significantly reduced Australia’s aid budget as part of its broader budget-saving measures. By 2016, these cuts led to an all-time low for Australia when it came to its aid generosity as measured by a proportion of Gross National Income (GNI). While subsequent changes of Government resulted in increases in the aid budget, the overall spend on foreign aid never returned previous levels.

These cuts meant that the Australian Aid Programme was unable to keep pace with the emerging trends and threats that came between 2015 and 2025, even when the aid budget began to catch-up. The early gains that would have been made through thoughtful investment in those years were diminished or lost due to the size of the cuts made. As a result Australia’s influence in the global aid and development debate gradually diminished, which in turn meant that the usually pragmatic and innovative thinking that came from the Australians was lost in the reforms lead by the United States and the Northern Europeans. At the same time, China, Japan and India strengthened their position in the Asia-Pacific region by investing substantially in aid and development programmes with not just their near neighbours, but also in the Pacific Island Nations.

However, by 2025 some progress has been made, with bipartisan and legislative commitment to meet the 0.5% of GNI target by 2025 and 0.7% by 2030 in line with UN recommendations. One benefit of the narrowing of focus of Australia’s aid investment is that it has become more agile and innovative; although it has struggled to make this scalable until more recent years as the aid budget was gradually restored.

In 2025 the Australian Government, aid agencies and the private sector have been working more closely together with regional and global partners on addressing some of the most vexing humanitarian challenges, from capability through to response and recovery deficiencies – and as a result the aid budget is starting to reflect what aid agencies have known for some time – which is that humanitarian work makes up to 40% of overall aid and development expenditure.

This funding is also being increasingly localised, with at least 30% now being provided directly to local organisations who have undergone a regional level vetting and assurance process to ensure that they are able to cope with the project management, compliance, and financial demands of handling greater income flows. Australian NGOs have also realised that they need to reflect this approach, whilst at the same time providing reassurance to the public that their funds are going to be spent appropriately and are well managed.

However, this has, over the course of the last ten years, and with increasing use of private sector resources in humanitarian assistance, posed a challenge to humanitarian ethics and principles. Humanitarian agencies are having their values challenged not just by the involvement of the private sector, but also by their own ‘corporatisation’ which has continued apace over the last decade. The competition for funding will force many humanitarian actors to ‘relax’ their attitudes towards the principles of independence and neutrality, having no choice but to accept funds from the relative newcomers to humanitarian action such as China, India and global corporations who seek to integrate their foreign policy or organisational objectives into humanitarian action, and increasingly start to define the humanitarian response in their own terms. This has resulted in internal tensions growing as demand for humanitarian assistance increases. This puts pressure on traditional actors to adapt to this new way of working, while at the same time trying to ensure that humanitarian action is primarily based on need and those most vulnerable are still being prioritised for support regardless of external influences.

A prosperous and stable region

An increase in well-managed foreign aid allows Australia to address the root causes of regional challenges such as poverty, disease, migration, terrorism and climate change. Addressing these issues is the right thing to do and firmly in Australia’s own national interest. Additionally, it provides stability to poorer countries and a degree of consistency to those relying on Australian aid to deliver programs. By putting in place independent evaluations and consistent monitoring of aid spending Australia can also focus on ensuring the quality and impact of aid, ensuring that those most deprived and marginalised are the key beneficiaries of this aid package. Such a focus empowers marginalised communities and prioritises sustainable and long-term outcomes that are essential to ensuring a stable region which continues to grow economically and peacefully. Australia needs to make sure that despite the reduction in the aid budget our capacity to provide comprehensive, long-term reconstruction and development assistance following disasters does not negate the positive impact produced by previous goodwill built by a strong aid program in the Asia Pacific region.

It's 2025, and the landscape for delivery and effectiveness of aid in Asia Pacific has changed, with several trends emerging even back in 2015. Both the Australian Government and aid agencies must re-look at how the sector operates with new and influential stakeholders such as the private sector, philanthropists and diaspora communities, how we ensure local actors are being empowered to respond directly in their own markets, and how the humanitarian ethics and principles that define our sector are not compromised in a way that impacts our ability to effectively reach those most in need. The decisions of the first two decades of the 21st century have huge ramifications for those living in Asia-Pacific and beyond. Both the Australian Government and Australian humanitarian agencies need to adapt to these emerging trends, with one eye on maintaining humanitarian effectiveness in this future landscape and the other on ensuring our work and our relationships with other stakeholders are still in line with our values and principles as humanitarian actors.

This post has been adapted from a submission to Australia Ahead of the Curve: An agenda for international development to 2025. The full submission is available here.

  • Stephen McDonald & Sarah Ireland
    Stephen McDonald & Sarah Ireland

    Stephen McDonald is a Director at the Centre for Humanitarian Leadership, and a humanitarian practitioner with over a decade of experience in both conflict and disaster settings.

    Sarah Ireland is a Lecturer at the Centre for Humanitarian Leadership, as well as a Humanitarian Advocacy and Policy Adviser at Save the Children.

    For more information about the Centre for Humanitarian Leadership visit: centreforhumanitarianleadership.org


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