When Foreign Minister Julie Bishop announced a new aid paradigm in June 2014, the intention was to help Australia’s international development cooperation become more “responsible, affordable and sustainable.” This drive for self-sufficiency was guided by additional budget cuts to Australian foreign aid, which was capped at 5 billion Australian dollars ($3.75 billion) per year.
The government introduced performance benchmarks to strengthen the assessment of contractors, NGOs and multilateral organizations that deliver Australian aid. Under this scheme, projects that fail to meet expected outcomes are terminated if they are unable to improve within a year, placing additional pressure on contractors, who have long felt the squeeze brought on by former Prime Minister Tony Abbott's budget constraints.
According to a Devex analysis of Australian government data, the percentage of Australian foreign aid spent on private contractors has declined from 41 percent in 2005-06 to 21 percent in 2013-14. During that same period, the percentage of Australian ODA channeled through multilateral organizations and NGOs increased significantly.
Patricia Sarmenta is a development analyst at Devex’ surveys and advisory services team. She contributes to custom research projects and surveys commissioned by leading companies and development institutions. Patricia has a master’s degree in anthropology from the University of the Philippines, as well as degrees in sociology, global politics and cultural heritage from Ateneo de Manila University.
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