AusAID-DFAT merger: Lessons for a better aid program

CANBERRA — Five years on from the merger of AusAID and the Department of Foreign Affairs and Trade, the results are mixed — but there has been a general recognition that the changing world in which humanitarian and development programs work require a different model than that of the past. “They have made good progress, but now it is closing that fairly significant gap between an ambitious vision, an agenda, and a means to realize it,” said Richard Moore, a principal strategist with consulting company Positive Influence, who launched his independent review of the AusAID-DFAT merger in February at the Australasian Aid Conference. With the upcoming Australian federal election to be decided on May 18, it is an increasingly important document to help understand the challenges within DFAT to help build a better aid program. Moore interviewed 75 stakeholders directly, including current and former DFAT staff from a variety of sections and levels within the organization. This was complemented with roundtables with senior DFAT staff for additional corporate insight. “AusAID served us reasonably well at the time, but it is a different world we are going to be dealing with over the next five to 10 years and beyond. The question now is how we better gear for that.” --— Richard Moore, principal strategist, Positive Influence The loss of expertise caused by the merger, he found, had a marked impact on the capability of Australian aid that is seeing more of the program outsourced. And the response from staff to the merger was very varied — with leadership, capability, and vision playing an important role in the integration being perceived a success or failure. DFAT’s reaction to the review In conducting the study, Moore said DFAT wanted to control some of the conversation, limiting the insights he could generate. “I wanted to talk more formally to the most senior people,” Moore told Devex. However, DFAT decided that it would be better to talk to him in a managed way and organized a more formal roundtable with senior staff. “The department felt the timing of this was problematic — [there were] new ministers, big and demanding processes were underway and we were moving into an election environment.” It was the one-on-ones that were the most useful to Moore, providing emerging patterns in operational challenges, and an underlying sense of discrepancy. “It was tricky,” Moore said, “and I wondered what was going on because depending on who I talked to, I would get different stories.” He found that areas that had been prioritized from a corporate perspective tended to work better. They were better resourced with better leadership and direction. “Where there has been good leadership, remaining expertise, and a bit of vision, there has been successes,” Moore said. “In other places, it has been mixed.” Loss of capability The aid resourcing challenge within DFAT was an important part of Moore’s review and criticism of integration. “Leaving aside the ODA [official development assistance] budget in program terms, the department — including diplomacy and development — is just not adequately resourced,” Moore said. “It is having to constantly pull resources out of other areas that were under-resourced to begin with. And we need to be upfront about this and look at how it needs to be addressed.” Shedding staff throughout the Australian public service was a cost-cutting measure introduced by the coalition government, with staff paid to resign. The problem with this, Moore explained, was that people who go first are the ones that typically feel that they have a good chance of getting another position. “They paid some of the best people to leave — which is bizarre to me,” he said. The resulting loss of capability and development expertise within DFAT has seen a move toward increased multilateral spending. “Historically, it was 30 percent-ish and Australia was low compared to other donors,” Moore said. “But it’s crept up, and this has been driven by the lack of capacity to design and manage bilateral activities. We have had to resort to other options.” With Australia’s aid program focused on the Indo-Pacific region, Moore questioned whether this was delivering benefits for the intended geographic region and risked created less transparency in the aid program. There is a transition, he believed, to bring some capability in-house. But according to him, DFAT is not structurally ready to support rigorous development programming. No returning to the past An important outcome of the report was a recognition that the integration was here to stay. “There weren’t a great deal of people … saying ‘we have to recreate something that looks like AusAid’ – even those who were thinking it was a superior model would recognize the world has changed,” Moore explained. “AusAID served us reasonably well at the time, but it is a different world we are going to be dealing with over the next five to 10 years and beyond. The question now is how we better gear for that.” Getting the policy side of the merger right is important, Moore believes. But he thinks there should be a conversation about alternatives, other ideas, and models that can cater for development of the future. And this is something Moore is urging DFAT and its leaders to consider beyond May 18. “I think it will be healthy if there is a change of government and they want to do deep thinking to take time and get it right,” he said. “But … it starts with development expertise within the department, but needs to go beyond that to get it right.” Looking to the future Moore believes rebuilding development and humanitarian capability within DFAT is important — as is carefully evaluating objectives for the regions being supported and thinking beyond just aid. “We need to deepen our relationships with neighbors and ... to be across things that are important to them,” he said. “We need the capability to do that. Something more substantial is needed than simply moving in a new direction — something more comprehensive.” Moore added that the vision of DFAT’s secretary outlined in speeches set a good path for Australian aid of the future. But action is needed. “The vision hasn’t been taken on by the whole departments and it’s not lived and promoted in a way that is carried through,” Moore said. “That is the remaining business that I think DFAT will need to do in the next period.”