In an era of globalisation, the gap between rich and poor is growing. Mass poverty is still one of the most important economic and social problems. To reduce the existing inequalities, economic assistance of the richer countries is needed. This procedure is often part of the foreign policy of a country’s government and is called foreign aid or also official development assistance (ODA). It comes in a variety of forms like grants, loans, export credits or technical and military assistance and can be used for a variety of purposes.
In June 1992, the world’s richest countries, including Australia, recognized at the Earth Summit in Rio that “poverty alleviation was crucial to global sustainable development” and therefore “reaffirmed their commitment to the United Nations (UN) [aid] target of 0.7 per cent Gross National Product (GNP)”.
While the world’s richest countries steadily increase their wealth, aid to developing countries however declines. In 2000, the average of given aid was at about 0.24 per cent GNP whereat only Denmark, the Netherlands, Norway and Sweden met the UN target. One of the reasons for this development is certainly the fact that aid is rather used for economic purposes than devoted to the ethical and selfless commitment for direct poverty reduction in countries which need the money most. This fact and the incorrect allocation may be the reason that over the past fifty years the sum of $1 trillion in aid given to poor countries has mostly failed.
The purpose of this essay is to demonstrate the difference between what is actually happening and what, in my opinion, should be happening concerning Australia’s response to foreign aid. As said, Australia’s aid budget is not meeting the UN target. From a moral point of view, the country’s government therefore should spend a higher amount for development purposes, reallocate the distribution of aid and follow a framework of ethical principles. I will fortify this thesis with an overview of the countries past and actual approaches to development assistance programs, which are mainly shaped by a realistic mentality and therefore are seen as controversial. I will further focus on the countries biggest moral dilemma, the fact of the inseparability of human rights and economic interest which has essential influence on their distribution of aid. This is also connected to controversial debates raised in the national and international context, which will be evaluated under an ethical point of view.
Table of Contents
Introduction
Critical evaluation of Australia’s response to foreign aid
Conclusion
References
Introduction
Introduction
In an era of globalisation, the gap between rich and poor is growing. Mass poverty is still one of the most important economic and social problems. To reduce the existing inequalities, economic assistance of the richer countries is needed. This procedure is often part of the foreign policy of a country’s government and is called foreign aid or also official development assistance (ODA). It comes in a variety of forms like grants, loans, export credits or technical and military assistance and can be used for a variety of purposes.
In June 1992, the world’s richest countries, including Australia, recognized at the Earth Summit in Rio that “poverty alleviation was crucial to global sustainable development” and therefore “reaffirmed their commitment to the United Nations (UN) [aid] target of 0.7 per cent Gross National Product (GNP)”[1]. While the world’s richest countries steadily increase their wealth, aid to developing countries however declines. In 2000, the average of given aid was at about 0.24 per cent GNP whereat only Denmark, the Netherlands, Norway and Sweden met the UN target. One of the reasons for this development is certainly the fact that aid is rather used for economic purposes than devoted to the ethical and selfless commitment for direct poverty reduction in countries which need the money most. This fact and the incorrect allocation may be the reason that over the past fifty years the sum of $1 trillion in aid given to poor countries has mostly failed.[2]
The purpose of this essay is to demonstrate the difference between what is actually happening and what, in my opinion, should be happening concerning Australia’s response to foreign aid. As said, Australia’s aid budget is not meeting the UN target. From a moral point of view, the country’s government therefore should spend a higher amount for development purposes, reallocate the distribution of aid and follow a framework of ethical principles. I will fortify this thesis with an overview of the countries past and actual approaches to development assistance programs, which are mainly shaped by a realistic mentality and therefore are seen as controversial. I will further focus on the countries biggest moral dilemma, the fact of the inseparability of human rights and economic interest which has essential influence on their distribution of aid. This is also connected to controversial debates raised in the national and international context, which will be evaluated under an ethical point of view.
Critical evaluation of Australia’s response to foreign aid
Australia’s aid program has, due to various influencing factors, undergone different changes in the last fifty years in the administration, its focus, the recipients and the type of aid provided. Due to the geographical proximity to the Asian region, their foreign aid program is, as will be shown in the following exposition, mainly influenced by political decisions regarding their neighbours.
The Australian Government began with aid activities before World War II by supporting Papua New Guinea (PNG) with grants. According to Cowie (1987), their interest was mainly strategic, as they wanted to ensure that “no alien power could use the island as a base from which to threaten Australia”[3]. After World War II, Australia felt endangered by the fact that colonial powers in Asia disappeared and newly independent and politically unstable States emerged. In addition, China developed more power under a Communist government and Japan was, although disarmed at this time, furthermore considered dangerous with its expansionistic attitudes. This increased the country’s awareness of possible problems in that region which could affect Australia’s welfare. Therefore, they concentrated on stabilising the economy of new Asian nations through aid programs with focus on the survival of democracy, as one assumed that “unstable economic conditions would breed communism, which would in turn produce armed aggression”[4].
In 1950, the seven Foreign Ministers of the Commonwealth launched the Colombo Plan to help the low-income members of the British Commonwealth in Asia (India, Pakistan and Ceylon). They initially agreed in their plan that “wealthier nations of the world had a moral and humanitarian obligation to assist their less fortunate neighbours”. But considering the sphere of those times, there is little doubt that most of the supporters (which includes Australia) saw the plan as a means of countering communism and ensuring economic stability and peace in the region and not as a moral and humanitarian obligation. From the technical side, the Colombo Plan as a multilateral agency system gives bilateral assistance, meaning on a government-to-government basis at request of the recipient country. In 1951, the membership of the former seven countries expanded to twenty-four independent south or south-east-Asian nations to be helped. Aid became thereby no longer tied to member countries of the British Commonwealth. Australia played a big part in the plan and is directing – despite of tensions - most of its aid to Indonesia, which thereby became the second largest recipient of aid (apart from its aid to PNG) in the 1960’s until today.[5]
[...]
[1] ICVA, “The reality of aid – and independent review of international aid”, 1993, p.vi.
[2] Kegley & Wittkopf, “World Politics. Trend and Transformation”, 2001, pp.162-163.
[3] Cowie, “Asia and Australia in World affairs”, 1987, p.259.
[4] Cowie, “Asia and Australia in World Affairs”, 1987, p.228.
[5] Cowie, “Asia and Australia in World Affairs”, 1987, pp.271-272.
- Quote paper
- Gisela Schneider (Author), 2002, Critically explore Australia's response to foreign aid, Munich, GRIN Verlag, https://www.grin.com/document/14897
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