BY SEAN HEALY
Australia's aid contribution to poor countries is among the most miserly of any industrialised nation, according to a new report from the Organisation for Economic Cooperation and Development.
The OECD report, released on February 15, reveals that Australia's overseas aid budget is the sixth lowest among industrialised countries. It was also one of only five countries whose aid had fallen between 1998 and 1999.
The report states that the Australian government allocates the equivalent of 0.26% of gross domestic product to aid, a figure far below the United Nations' suggested level of 0.7%. Only Britain and Spain (0.23%), Greece and Italy (0.15%) and the United States (0.1%) ranked lower.
Australia's aid contribution fell by 1.5% in real terms in 1998-99, according to the report, while most other rich countries' aid budgets rose by an average of 5.6%.
Melanie Gillbank of Aidwatch, a non-government organisation which monitors Australia's "development dollar", told Green Left Weekly that she wasn't surprised by the report. "It's a pretty sad state of affairs when the United Nations recommends a figure for aid and rich countries don't meet it."
Gillbank says, however, that the raw amount of aid is not as important as what the aid is directed towards. If the aid budget was increased, but the direction of aid wasn't altered, poor countries would be no better off.
Fifteen percent of Australia's aid budget goes to what Canberra calls "good governance" programs, Gillbank said, which focus on such things as public sector management and legal systems.
"Australia is basically promoting structural adjustment programs through this 'good governance' expenditure", Gillbank stated, "forcing countries to liberalise their trade, liberalise their economies and let Australian businesses in. The government sees aid as being about promoting the 'national interest'."
The decline in aid contributions is closely tied to the general decline in government expenditure on domestic social programs, such as welfare, she said.
"What's happening nationally is happening to aid budgets: the government is commercialising aid, just like it's commercialising welfare", Gillbank commented. "It is encouraging the corporate world into doing what governments would have done in the past".
The OECD report bears that out. Launching the report in Paris, the chairperson of the OECD's development assistance committee, Jean-Claude Faum, said the US$56.4 billion spent each year in official development aid was less than a quarter of total resource flows and was dwarfed by private funds, including foreign direct investment, equity flows, bank loans and bond issuances, which are growing while official development aid is shrinking.