The kind of boomerang aid described by Bernard Keane (Who profits from our foreign aid?) is common practice for much Western government aid to the undeveloped world, most obviously and obscenely in the case of the US, whose aid is largely tied to US companies and US products.
Among a long list of notorious practices would be the Bush-era aid linked to anti-abortion laws in the recipient country and USAID to Israel, which is mostly manifested in armaments purchases. Iraq is another obvious abuse and misuse of aid, which, at its peak, accounted for the majority of the USAID budget supporting a barely credible litany of incompetence, waste and corruption in rebuilding educational and medical facilities and water infrastructure. Such projects usually excluded non-American bidders and sometimes used a no-bid mechanism. In Agfhanistan at least 40% of aid is returned to the donor via outsourcing to companies and consultancies from the donor country.
Beyond the Halliburtons (a commonality in many of the cases referenced above) there are ostensible charities, indirectly supported by US funds, such as CARE whose modus operandus was revealed to be that
“… the United States government buys the goods from American agribusinesses, ships them overseas, mostly on American-flagged carriers, and then donates them to the aid groups as an indirect form of financing. The groups sell the products on the market in poor countries and use the money to finance their antipoverty programs”.
Note the double dose of subsidy to American farmers — most of the surplus food was heavily subsidised in the first place — and a double or triple whammy in denying market access for undeveloped countries’ agriculture, often the only tradeable commodity they could use to haul themselves out of poverty.
Clearly the US employs USAID for dual purposes of foreign policy and aid/development but with the latter of distinctly secondary political weighting. Worse perhaps than the waste and faux aid, is the reputational and institutional damage done in recipient countries, and in turn, in citizens in Western donor countries who can be forgiven for “compassion fatigue”, if for the wrong reasons. (But we should not tar with the same brush some prominent and successful NGOs such as Oxfam, World Vision and Médecins Sans Frontières who do honourable service around the globe.)
The US may be one of the worst culprits of aid abuse but it is not the only one.
It is timely to discuss the failure of aid to East Timor. Over years of UN supervision, billions of dollars were spent. Some of this dosh was used to keep the “in country” staff, i.e. prosperous Westerners, in the style of life they expect, and some of this trickled down to the locals via the service industry such as home-keeping, cooking, nannies/amahs, etc. When the UN pulled out of East Timor in 2005, the withdrawal of this low-level income was keenly felt, especially as there was nothing to replace it and much of the work was by women (and thus the earnings were mostly retained for family support).
But these types of transient low income service jobs are hardly what is meant by “commercial opportunities, skills formation and capacity building”. As to all those things which East Timor, one of the poorest and least developed countries in the world, needed and still needs: roads, bridges, clean water, power, sewers and perhaps most important of all, schools and teacher training? Almost zip. Billions of dollars over many years and a truly shocking record of lack of achievement in these basics. The Wikipedia version is a whitewash: “From 2002 to 2005, an international program led by the United Nations, manned by civilian advisers, 5000 peacekeepers (8000 at peak) and 1300 police officers, substantially reconstructed the infrastructure.” Some cynics might say that Australia doesn’t do infrastructure so it was no surprise.
Also no surprise that more unrest and violence broke out in 2006, destroying what little infrastructure the country had. Australia should be ashamed of its lead role in the UN operation and the post-UN history, notwithstanding the culpability of Timor Leste’s own leadership and Portugal’s historic neo-feudal rule. Even our role in what one hopes may be their financial saviour, the offshore oil and gas projects, is dominated by self-interest and greed. Only international pressure finally shamed Australia into agreeing to a 50:50 share of royalties in place of the previous usurious 80:20 split (in Australia’s favour) that had been extracted/imposed during Timor’s weakest period. (So much for the Australian notion of a fair go!)
So, to the issue of a potential regional refugee processing centre in East Timor. Put to one side all the contentious questions of the likelihood, appropriateness or effectiveness of the idea. It is feasible that such a centre could be a job generator for the Timorese who have crippling levels of unemployment and poverty, notwithstanding several problems inherent in the concept. One dangerous anomaly is that the refugees may well end up living in better conditions than most Timorese, which would be difficult to avoid.
But with some imagination — and a lot more actual implementation than shown in the UN days — it could be co-ordinated with reconstruction of one of our closest neighbours in dire need of poverty alleviation and stabilisation. No doubt some such schemes involving various promises of linked development aid are being proffered to the Timor government. On the other hand our track record, in Timor itself, and other regional neighbours, is not convincingly positive and would require us abandoning the US model of foreign aid we have been using in PNG. One could go further and say that the notion is patronising and offensive given that Australia, without the bounty of natural resources, would indeed be the poor white trash of Asia-Pacific.
On Monday the Timor parliament voted against adopting Australia’s concept but the government and its PM and President have yet to decide whether to rescue or turn back the sinking vessel of Australian refugee policy currently drowning from impoverished lack of credibility and humanity.
Dr Michael R. James is an Australian research scientist and writer.
“Australia should be ashamed of its lead role in the UN operation and the post-UN history, notwithstanding the culpability of Timor Leste’s own leadership and Portugal’s historic neo-feudal rule.”
There speaks an academic who has no clue on what happened during the Interfet operation, or chooses to ignore it because it doesn’t fit his narrative.
Australian and other troops and police died trying to ensure the safety and freedom of the East Timorese. If they had not, and their governments had not had the initial courage to send them there, East Timor would have been a blood-soaked charnel house on a par with places like Rwanda.
The fact that there is an independent East Timor / Timor Leste is because the people of that country voted for independence and other nations, most particularly Australia, supported them in dealing with the consequences of that action.
@MICHAEL JAMES at 3:20 pm
I didn’t mention it because a) it was diversion from the topic and b) would require a lot more space. No one has slighted the military’s function in suppressing complete chaos but the history behind the causes of that chaos are another matter. And the withdrawal of the UN in 2005 effectively caused an economic downturn and almost certainly was the central factor in the 2006 troubles. Who can blame them? Billions of aid (and UN officials and plenty of Australians among them, living like colonial overlords driving around in their SUVs) and billions in oil money but still nothing visible to alleviate the terrible poverty? No doubt you favour the George Bush model: bomb them back to the dark ages then be very casual about rebuilding what you destroyed, all the while lauding the bravery of our troops blah, blah. If you actually listen to the armed forces involved in these places they will concur that what is really needed is basic infrastructure which is why our army is building schools in Afghanistan.
The focus of this series of articles in Crikey is the delivery of aid. It is awful and Australia’s role in this context–to obviate the need for the intervention by our armed forces–is lousy.
Michael R. James.
@ Michael R J:
Thanks. You beat me to it. Nothing like a one-eyed right wing militarist to step off with the right foot in the wrong direction.
Yes, Australian forces paid a price in Timor Leste. And bloody well they did their jobs, too. The odds against such a speedy and relatively bloodless end to the aggression were stacked against them.
What is at issue here is not the troops’ involvement in quelling the fighting, but the delivery of aid, reconstruction and government to the fledgling country. Australia could have done so much more and so much better. Through my involvement in Rotary Australia World Community Services I know how difficult it is to transport materials to TL and how difficult it can be operating in this country.
The Timorese will need assistance for many years to come, if not from Australia, then where can they turn?
(Follows is a re-post of a comment in Crikey DM of 15 July; I am posting it here for completeness and will follow up with a comment.)
Caring about the world
Peter Leahy, Principal Executive International Programs, from CARE Australia writes: Re. “We have a shameful record when it comes to Timor aid” (Tuesday, item 10). Dr Michael R. James associates CARE with the practice of selling discounted food aid and heavily subsidised American farm products in African countries. However, the New York Times article he links to clearly shows that CARE in fact raised concerns about this practice in 2007 and had phased out open-market monetisation in Africa by 2009. The quote from the linked article in the piece also discusses this but is quoted out of context in Dr James’s article.
CARE is a global, not for profit and non-governmental organisation that depends on the generosity and trust of the public to carry out its work with the most vulnerable communities throughout the world.
CARE supports food security strategies that incorporate three core considerations: efficiency, flexibility and gender equity, critical issues that imported food aid often does not support. CARE’s concerns regarding the potential humanitarian harm the practice could cause in Africa led to the organisation turning down US$45 million a year in funding, beginning in 2007.
Wherever CARE works, our sole concern is for the humanitarian needs of the people who we work with and accountability to our donors, who as a charity, CARE cannot operate without.
I acknowledge that Peter Leahy is essentially correct in his comment. Perhaps I too have a “shameful record” if I admit I knew. Perhaps I should have added an asterisked note (though they usually get nixed by the ed.) or avoided naming the charity since I did not wish to cause any undue reputational damage. I hope readers (all two of them by the look of it!) would have read my link to the NYT–and there is considerably more discussion for/against in the piece.
The first para of the NYT article:
“CARE, one of the world’s biggest charities, is walking away from some $45 million a year in federal financing, saying American food aid is not only plagued with inefficiencies, but also may hurt some of the very poor people it aims to help……The charity says it will phase out its use of the practice by 2009. ”
and:
“Neither the Bush administration nor members of Congress are looking to undo the practice, which has gone on for more than a decade. In fact, some of the nonprofit groups say it has worked well and are pressing for sharp increases in the amount of American food shipped for sale and distribution to support development programs…..(But…) Former President Jimmy Carter, whose Atlanta-based Carter Center uses private money to help African farmers be more productive, said in an interview that it was a flawed system that had survived partly because the charities that received money from it defended it.”
CARE may well deserve kudos for reforming its ways–though in the way of a reformed alcoholic, it doesn’t undo all the damage they have created in their previous life. As he says himself CARE’s “sole concern is for the humanitarian needs of the people who we work with and accountability to our donors”….well, since 2007/2009. What about the decade of the kind of aid they abandoned? And obviously this was the main point of writing about it. Other charity operators continue to do what CARE stopped doing in 2007? The USAID strategy is very clever and must make it very difficult for NGOs to resist.