Australia tightens conditions for overseas aid

Australia announced Wednesday it would place greater restrictions on foreign aid to recipient countries, with a larger role for the private sector and increased scrutiny of women`s rights.

AFP| Last Updated: Jun 18, 2014, 17:18 PM IST

Sydney: Australia announced Wednesday it would place greater restrictions on foreign aid to recipient countries, with a larger role for the private sector and increased scrutiny of women`s rights.

Foreign Minister Julie Bishop said an annual budget of Aus$5 billion (US$4.8 billion) to countries such as Indonesia and Papua New Guinea would focus on "aid for trade", decreasing the budget for a more traditional one-way corridor of donations.

"We want to be economic partners, we want to move away from the old stereotype of aid donor/aid recipient, and work in partnership with countries, particularly in the Pacific," Bishop told the Australian Broadcasting Corporation.

At least 20 per cent of Australia`s annual aid spend by 2020 will be in the form of "aid for trade", by which projects directly linked to exports receive funding, from 12.5 per cent currently, according to a foreign ministry report.

"We will work with countries to ensure that they understand what is required and they understand the concept of mutual obligation," she said, referring to the introduction of so-called "performance benchmarks" to assess whether spending was meeting targets.

Where value-for-money targets were not met, investments that did not show improvements within a year would be cancelled, according to the report.

Bishop, who became the nation`s top diplomat with the election of conservative Prime Minister Tony Abbott in September, said the reshaping was also aimed at encouraging private partnerships in aid programmes.

"We can`t keep doing what we`ve always done and expect a better outcome; we`re not getting the outcomes we should expect from the billions and billions we invest in aid," Bishop said.

The new conditions would vary country-to-country, she added, and would ensure aid spending was accountable to taxpayers and "inform future funding decisions."

The government`s budget unveiled in May froze foreign aid at its 2013/14 level of US$4.8 billion for the next two years, ahead of a planned cut in 2017/18.

More than 90 percent of funding will be focused on Australia`s regional neighbours, Bishop said.

Aid will focus on six areas -- infrastructure and trade; agriculture, fisheries and water management; governance; education and health; humanitarian assistance; and the empowerment of women and girls.

One precondition would be that at all aid investments must assess gender issues, with at least 80 percent focused on support and empowerment of women.

Papua New Guinea, which will receive more than US$467 million from Australia this fiscal year, has a very poor record on violence against women according to rights groups.

Australia also provides assistance to nations in Africa, Latin America, the Middle East and the Caribbean.