Comments

That's what happens where you hold two portfolios--Minister for Foreign Affairs and Minister for Development. You tend to remember that foreign strategic policy comes first.

Ben, An interesting post. I don't however agree with the assertion that this is proof of shifting norms underpinning aid. Most serious development professionals including AusAID practitioners have long advocated for greater use of the aid program to stimulate and support initiatives such as labor mobility, access to markets and trade deregulation, not as you say just simply 'provide aid'. However those who push the Japan style approach to Aid are also the same who support protectionist and nationalistic approaches to trade and labor issues. For the government to get serious on this issue it would need to implement its election promises on aid for trade and labor mobility as a start.

Hi James, Check out the <a href="https://devpolicy.org/rising-aid-dependency-in-the-pacific-20130917/" rel="nofollow">second part</a> of this blog series where I discuss aid dependency, which includes the graphs you suggest. Regards, Jonathan

Thanks Jane. I agree 100%. Like you say, our government has clearly signalled this change, so the development community’s responsibility is to “contribute to the thinking about how aid will mesh with Bishop’s ‘economic diplomacy first’ agenda” while still generating development outcomes. The Coalition did raise a couple of ideas in their 2013 Election Policy. They promised to build on an earlier commitment to the OECD ‘Aid for Trade’ initiative and to examine the Pacific Island guest worker program. But right now most of these these ideas (including the few I suggested) are largely in thought-bubble form and not practically thought through for application in our context. Given that, I think your suggestion of having broader discussions is a great idea.

The graphs should have aid as percentage of GDP rather than just raw figures to make more sense in terms of relative volume of aid per country.

Hi Ben, Thanks for this thought provoking blog. I was not inspired by your proposition that it is more likely that Australia’s aid program will come to resemble Japan’s than vice versa! A depressing thought. The opportunity, however, is to contribute to the thinking about how aid will mesh with Bishop’s ‘economic diplomacy first’ agenda. You suggest that the better approach is to use the aid program to promote an open trading system and help developing countries to effectively tap into it. Good work to start getting some concrete options on the table. In relation to the G20, I fully endorse your proposition that Bishop should choose an issue to champion and integrate this with an Australian aid initiative to establish Australia’s thought leadership in this area through the G20. While, we all mourn the passing of AusAID - the government has signalled the change - and our challenge as a development community is to help the government shape the change to contribute to the thinking about how aid will mesh with Bishop’s ‘economic diplomacy first’ agenda. Maybe the Development Policy Centre can convene a forum, virtual or otherwise to solicit bold ideas on this topic?

I think thats a brilliant move by Hon Mp Richard Maru. For a long time Papua New Guineans have been taken for a joy ride by Multi National Corps and other Foreign entities.

Thank you for a good article. I would like to point out a couple of other factors that should be considered in this discussion: 1. The 'Gershon Review' into ICT resourcing and expenditure hit AusAID harder than most, with the ICT resource pool at AusAID moving from predominantly contractor-based to predominantly Australian Public Service-based. It would be interesting to know the exact numbers, but there could be around 50 staff who were contractors in 2007 and not counted in the official staffing numbers, but were counted in 2012 as APS staff. 2. Changes in accounting policy at AusAID in 2010 meant that a large number of staff and contractors who were previously funded from the aid budget were transfered to the departmental budget. Have a look at the increase in AusAID's departmental appropriation around 2011: that matches the high levels of growth in official staff numbers in your article. The staffing at AusAID has certainly grown, mostly due to expansion into Africa and South America, but not to the extent reported in The Australian. Your analysis of staffing from previous years seems more accurate, but needs to consider the changes in accounting policy and treatment of contractors under the Gershon review. Once these factors are considered, I think you might be looking at real staffing growth of closer to 20% to cover a real budget growth of around 35%.

Robin As always I enjoy the quality of the content of your writings. I reflect most deeply on your closing statement of hope that "DFAT is devising strategies for keeping AusAID’s most experienced, knowledgeable and capable staff in the organisation and in development policy and management roles." This is obviously important. Probably fundamental and crucial moving forward. But I suggest we cannot, on a human level, ignore that this must be a terribly unsettling time for people who are employees of the public service with families, commitments etc. I accept change; in fact it is often healthy. Equally I care about the dignity of people and hope the change that seems likely remembers people are not just payroll numbers. M

It is also instructive to look at the role that the previous government was willing for AusAID to play in aid policy development and aid delivery globally. As an insider I found the level of resources dedicated to engagement with other donors beyond simple country program harmonization, for example, to be quite astonishing. High level consultations with all and sundry, MoUs left and right, speeches, press releases, briefs and international travel - all with questionable impact on poverty and negligible return for taxpayers. To this day I'm not sure whether this was driven by ministerial imperative, genuine aspirations to global leadership, or just some bureaucratic empire building vanity project. In any case, it will be interesting to see whether this type of business remains a consideration in the staffing profile of the new DFAT.

Hi Grant, An understanding of history teaches us about the present - the table below is in the reference I cited - it helps understand the precedents of the "lost decade." Table 1: Key contextual factors which have shaped the health system Pre-Independence (Pre 1975) • Significant gains made in the health status of the population, with improvements directly attributed to the provision of health services (2). • Centralised organisation and administration of health services, with highly-defined vertical public health programmes designed and implemented with emphasis at the district level. • Highly centralised control ensured effective management of resources by a functioning bureaucracy that closely supported delivery and management of health services. • Provincial hospitals provided technical and logistical support whenever required. • Significant numbers of international contract officers in line management and service roles at national, provincial and district levels. Early 1980s • Australia provided direct budget support after Independence. • No bilateral donors in the health sector (only the Asian Development Bank (ADB) and the World Health Organisation (WHO); and ADB funds flowed through the government budget). • Coordinated process in place for planning the development budget, and clear separation of the recurrent and development budgets. • Organic Law on Provincial Government (OLPG) - Rural health services were transferred to provinces; hospital services were delegated to provinces. (See also Day in this volume). • National Department of Health (NDoH) left with no effective mechanism to maintain standards and ensure health policy implementation in hospitals and rural health services. • Provincial governments saw the decentralisation as a chance to ignore the NDoH. • Appointment of provincial health officers became politicised. • Mobility of the health workforce declined as staff became part of provincial establishments. • Functional roles and responsibilities were poorly defined; leading poor resource allocation, lack of coordination and inefficient management of health services, and the deterioration in quantity, quality and coverage of basic health services. • Wingti Government redirected resources to economic sectors, resulting in a progressive decline in the available resources for the operation of health services. Late 1980s • 1986 – Australia began discussions about moving from budget support to programmed aid. • PNG reacted by turning to other donors. In a very short period, the following donors became active in the health sector: United States Agency for International Development (USAID; Japan International Cooperation Agency (JICA); People Republic of China and the European Union (EU). The net effect of multiple bilateral donors created a huge management burden on the NDoH. Much of the funds were extra budgetary funds and not reflected in official budgets. • 1983–1988: real per capita expenditure for health fell by 9%. • Capital expenditure on hospitals fell from about 14% in 1978 to 4.5 % in 1987. • Projected a shortfall of K24.7 million in 1995 to grow to K40 million by the year 2000 (19). • Aid post orderlies became public servants. • Rural patrol allowances were more than doubled in a single decision, but were not budgeted for, with the effect that patrols were significantly reduced. 1990s • Major revenue shocks. • Bougainville crisis – Bougainville contributed approximately 16% of national revenue. • 1990 - 10% devaluation of kina. • 1994- further devaluation of 12 % and floating of kina resulting in further devaluation. • Progressive reduction in Australian budget support from 24% of total revenue in 1984. • Staffing shortfall estimated to be 1,440 nurses and 1,655 community health workers (3). • Public Hospitals Act (1994) makes hospitals quasi-statutory authorities, responsible to an independent board of management reporting to the national Minister for Health—largely causing hospitals to stop supporting the rural health care system. • Economic crisis point in 1994–1995, with several branches of government unable to meet debts or salary commitments. • Structural adjustment programme and a programme of microeconomic reforms including to reduce public servants— aid post orderlies, now public servants were shed in large numbers by provinces as part of the reforms. • By 1999, the Australian Agency for International Development (AusAID) had 16 separate projects and programmes operating in the health sector. • In 1999 the Secretary for Health reported he spent 70% of his time servicing donors. • In 1999, the NDoH requested that AusAID support a move towards a Sector Wide Approach (SWAp) in the health sector.

As Robin has pointed out the increase in staff numbers was necessary to effectively plan for and administer the planned increases in ODA to 0.5% of GNI. The 2013-14 budget identified that AusAID departmental costs would be $375m and use 6.6% of ODA (see Table 1 p11 AusAID budget papers). Applying this dollar amount of admin funding to the planned 0.5% level of ODA results in an admin to ODA ratio of 4.9%. The most recent OECD DAC statistics report that the (weighted) average level of administrative costs was 4.8% for all DAC donors (DAC Table 13: Comparison of flows by type in 2011)