The much-talked about aid for trade approach in Australia’s official development assistance policy has been given a new spotlight with the parliament’s decision to hold an inquiry on the potential role of business in Asia-Pacific’s development progress.
The inquiry, announced by the newly-instituted foreign affairs and aid group of the parliament’s Joint Standing Committee on Foreign Affairs, Defense and Trade, hopes to come up with a set of guidelines on how to fully engage the private sector in pushing for development goals in the region.
Sub-committee chairperson Sharman Stone highlighted that elevating private sector engagement, along with traditional funding pattern, is like hitting two birds with one stone — or a “win-win situation”.
“Successful economic development resulting in more prosperous private sectors across the region not only helps meet our social responsibility obligations, but also provides expanding markets for Australian businesses — a win-win situation,” she said in a statement, adding that “lifting people out of poverty and giving them hope of a self-sufficient and sustainable future may be better achieved by using new combinations of traditional aid and private sector engagement.”
Aid for trade has been a staple development discussion over the past years since its introduction in 2005 by the World Trade Organization and the OECD. But it gained much more traction — especially in Asia-Pacific — when Australian foreign minister Julie Bishop repeatedly confirmed in 2013 the government’s intention to apply the approach in the hopes of making Australian aid more effective, efficient, and more aligned to foreign and trade policy.
‘Welcome’ development
The move to hold an inquiry is a “welcome” development, according to the local development community.
The Australian Council for International Development, the top association of local NGOs, emphasized that getting everyone — private sector, civil society and the government — on board is essential.
“With around $2 billion people living on less than $1.25 a day, there is a massive need for more resources to tackle poverty and inequality,” Marc Purcell, ACFID executive director, told Devex. “When business, civil society and governments work together, impressive gains can be made.”
World Vision head of government relations Andrew Johnson added: “We are pleased with the opportunity this inquiry will provide to receive expert inputs to these issues and foster public and parliamentary understanding of them.”
The inquiry announcement may calm the nerves of several NGOs following their initial worry over the last few months regarding the approach, arguing that commercial interests may overshadow any humanitarian underpinnings of development — but this is just a drop in the bucket.
ActionAid’s Mark Chenery previously told Devex that aid for trade is a “simplistic solution that doesn’t necessarily change the lives of the poorest people” given the argument that developing countries don’t necessarily have the trade infrastructure and skills capability to sustain such economic activities.
This is why Purcell underlined that the effectiveness of this approach will (only) be effective if development assistance is “targeted at the poorest 40 percent of developing country populations” and not just a select few.
Among the issues that will be discussed in the planned inquiry include the government’s support for private sector development, ways to address trade barriers including policy constraints, and steps to improve public-private partnership schemes, among others.
Focus on women
Aside from highlighting the role of the private sector, the parliament also announced last week an inquiry focusing on improving human rights coverage and protection for women and girls in the region.
Following Bishop’s insistence on laying down foundations for a more vibrant gender equality situation and women’s protection in Asia-Pacific, the inquiry will highlight discussions on addressing impediments on women’s development to make them a more active participant in the region’s development progress.
This move also got the nod of the local NGO community.
Purcell explained that “ensuring women and girls can access their full rights and can participate equally in society is key to successful development” given the present situation where women are still not adequately covered by basic services including education and health.
The ACFID chief added that the inquiry can help “shed light on new and proven ways to reverse [this] trend,” while World Vision’s Johnson added that Bishop “has a particularly strong commitment to increasing the focus on the Australian aid program on the women’s leadership and empowerment and tackling the issues of gender based violence. [We] welcome this focus.”
Public submissions on the inquiry on women and girls will be until May 22, while submissions on the role of the private sector will be until May 8 after which public hearings will commence to finalize discussion points.
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About the author
Lean Alfred Santos@DevexLeanAS
Lean Alfred Santos is a former Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. He previously covered Philippine and international business and economic news, sports and politics.
