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Bishop's aid crusade must heed the poor


Timorese women surround bag of grainSometimes an unexpected coincidence occurs, such as Pope Francis and Foreign Minister Julie Bishop both speaking — with passion, and within days of each other this week — about how to address poverty in the world's poorest countries.

At a conference in Rome on so-called 'Impact Investing' to promote economic and social change in poor countries, Francis called for actions which are designed to have a positive impact on people's lives and which promote an economy of inclusion, rather than exclusion of the marginalised.

The Pope urged investment from wealthy countries like Australia into organisations and companies that are likely to achieve positive and measureable impacts on poor communities and the environment.

On the following day in Canberra, Bishop launched her new Australian aid and development policy and performance framework. Its main thrust is to 'leverage private sector investment and domestic finance' in promoting economic growth and reducing poverty.

Bishop rightly pointed out that Australia's aid program can make a significant difference by creating opportunities for poor people to develop and use their skills and to get productive work. There are undoubtedly more innovative ways in which this objective can be pursued by both government, the churches and the broader NGO sector in coming years.

However, in shifting the basis of Australia's official aid program towards private sector investment, we need to tune in to the clear and recent messages from the International Monetary Fund (IMF), World Bank and Organisation for Economic Cooperation and Development. All favour maximising the role of local private sector entrepreneurs, but also insist that social inclusion, justice and fairness must be central to aid planning.

In simple terms, the 1960s trickle-down theory of economic development is rejected by these institutions, all of which give emphasis to enabling the participation of poor and marginalised communities in planning aid work. In March this year in Sydney, IMF Managing Director, Christine Lagarde, explained why we need to adopt a thoughtful policy balance in promoting economic growth:

Today, we are more keenly aware of the damage done by inequality. A severely skewed income distribution harms the pace and sustainability of growth over the longer term. It leads to an economy of exclusion, and a wasteland of discarded potential.

It is a great reflection on Australia's successive governments since Robert Menzies that our official aid program has achieved a balance in its program design, as recommended by Lagarde. This has certainly won Australia plaudits over those decades, including a glowing OECD peer review report only 12 months ago.

As Bishop launched a framework of new performance benchmarks, not unlike that of former Foreign Minister Alexander Downer in 1997, it was interesting to consider the balance between national interest and poverty reduction through the aid program.

Her desire to improve accountability and transparency in this program is to be commended, as is her recognition that the nature of Australia's strategic relationships with PNG, Indonesia, Timor Leste and Solomon Islands mean that we will not withdraw support from them even where we have significant concerns about high level governance and other matters in those countries.

In the midst of the increased focus on accountability, Francis spoke about ensuring that the voices of the poor and marginalised are heard. I hope that the new accountability framework ensures that such voices are central to our performance measurement of our own Australian aid program interventions.

Paul O'CallaghanPaul O'Callaghan is Caritas Australia CEO and a former Executive Director of the Australian Council for International Development.

In 2013, Caritas promoted local entrepreneurship through savings programs, enabling 7500 people in one Malawi community to save over $US150,000 and kickstarting many small businesses. It has also assisted farming communities in Timor Leste to expand their family incomes through improved farming methods and seed varieties (see main image).

Topic tags: Paul O'Callaghan, Julie Bishop, Foreign Aid



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Existing comments

Strewth !!!! It is now midday and not a single comment on this good and informative article. Looks like Bishop's efforts have taken the rug out from under the social justice bleeding hearts' feet. Must be heart wrenching for some.

John Frawley | 20 June 2014  

Fix corrupt governments and educate medieval dispositions towards power and authority and you've gone a long way towards healing economic and social disadvantage without any other intervention. The world's poor are, for the most part, perfectly capable of taking care of themselves given a culture of justice and opportunity. They are often smart, industrious, entrepreneurial and brave but held in poverty by governments who won't provide the basic services and ensure the basic freedoms necessary from within which they can thrive. Fix the top and the rest is perfectly capable of taking care of itself. How can Australia best contribute to the creation of more just societies? Do these policies truly represent the best we can do?

trustthem | 20 June 2014  

A large proportion of aid in recent years has gone into peace keeping such as in East Timor and Solomon Islands where around $2 Billion has been spent since the troubles. The warring groups were disarmed but there is little to show besides, The time is right for poverty alleviation but it should be recognised that the rapid growth of poverty in all our neighbouring countries is connected with the very high birth rate. The "subsistence affluence" of the past is disappearing as population pressure pushes young people into urban centres where there is promise of excitement but little work. The sort of investment Pope Francis and Julie Bishop speak of would at best create small service enterprises in tourism but little in the way of exportable commodities. Experience in countries like Costa Rica shows that poverty alleviation is linked to a lowered birth rate, perhaps down to half the present level in PNG, Philippines and Solomons. Aid money will fall on barren soil, so to speak, without a population policy founded on sound family planning advice and assistance. This challenges long held resistance by the Catholic Church, but is there any alternative way to avoid increasing poverty and misery?

Mike Foale | 20 June 2014  

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