AUSTRALIA’S APPROACH to aid in the Pacific has again come under the spotlight.

As the largest single spender in Melanesia and Polynesia, its aid program is often the most visible. Although decreasing, until recently almost half the Australian aid budget was spent on ‘technical assistance’, sparking a wave of criticism.

Media scrutiny has revealed excessive pay packets for Australian advisors. Little wonder questions of ‘boomerang aid’ abound, and that Australian aid is viewed more cynically than other donors.

This is unfortunate because Australian aid has been effective in many instances and generous when the need for urgent humanitarian assistance is required.

A recent Lowy Institute poll showed that ‘improving Australia’s relationships with its immediate neighbours in the Pacific’ is seen as the highest polling foreign policy goal after protecting Australia’s economy, security and borders. It even ranks above ‘helping countries reduce poverty’ and ‘climate change’.

What do we mean by aid? Most people equate aid with charity. In reality it is far more complex than that. Many aid programs are more about political and economic self interest.

Some argue that the term aid should be used only in relation to direct, immediate humanitarian relief in the aftermath of a national disaster. In this way the humanitarian aspect can be better distinguished from support in the form of policy, capacity building or long term training.

Let’s address the main messages from the review of the Australian aid program in PNG.

The status quo is not an option

There is increasing dissatisfaction with aid programs in both donor and recipient countries, and a growing body of evidence suggests the need for substantial change.

As the authors of the PNG report found, there is ‘an appetite for change and a hunger for fresh ideas and approaches’. Managers of aid programs have, for too long, been too risk averse, with little room for failure allowed in an industry that should seek and celebrate innovation.

Bring the aid program into line with new realities

The world has changed dramatically since many Pacific island countries gained independence 30-40 years ago. There is little to suggest that the aid relationship has adapted to the shifting landscape. As the authors of the PNG report note:

When Australian aid to PNG began 35 years ago, it exceeded PNG’s own revenue, and equalled PNG‐Australia trade. Today it is one‐tenth of government revenue, and one‐tenth of bilateral trade. The aid program is yet to adjust to and reflect these new realities.

Build on success

As one person advised the authors of the PNG review: ‘Get back to focusing on success. Where things are functioning, provide resources’.

With an emphasis on the ‘intangibles’ of good governance, financial advice and technical training, critics argue aid programs have done little to change the political culture of the Pacific, which allows large budgets to be swallowed by urban elites in capital cities.

Decades on, there is little to see of substantial aid projects in rural and remote communities, abandoned by their own central government and donor nations.

This provides ammunition to the critics who argue that aid is not only ineffective, but even counter-productive and should be totally scrapped. A recent paper by the Institute of Development Studies, drawing on a five year research program, concludes:

There is mounting evidence that many reforms to improve governance by strengthening formal, rules-based institutions have had limited impact.

Building on success does not simply mean rolling out a public relations offensive, or adopting a cookie cutter approach to project delivery. It’s about understanding the social and political landscape and recognising what works in that local context.

Common purpose is key

In summing up, the authors of the PNG review note that ‘while increased reporting and better dialogue will help, ultimately there has to be a meeting of minds, based on the resolution of long‐standing disagreements, the recognition of shared interests across a wide range of issues, and the forging of common expectations for the aid program’.

We need to avoid easy notions that suggest either all aid is good or all aid is bad. It is clearly a multifaceted bundle of tools that is more often than not positive, especially if it is targeted at grassroots lives as much as a nation’s elite.

Well-directed aid, development support and foreign policy has the ability to transform lives – and relations between nations - for the better.

Source: ‘Aid, Trade, Charade?’, Discussion Paper 14, Pacific Institute of Public Policy, June 2010