U.S. President Donald Trump’s inauguration speech sounded uncannily familiar to many in Australia’s international NGO community. The United States, he said, had “spent trillions of dollars overseas while America's infrastructure has fallen into disrepair and decay.”
Just a few years ago, Prime Minister Tony Abbott’s government sent similar messages — and followed through with cuts to the aid program totalling $11 billion Australian dollars ($8.3 billion). “We can't continue to fund a massive increase in foreign aid at the expense of investment in the Australian economy,” former Treasurer Joe Hockey told media in 2013.
Trump’s administration is already promising to curb some government spending and following his inauguration, the U.S. Agency for International Development should be preparing for the worst. The aid agency may face a similar fate as Australia’s aid program, with changes to programs, purpose and budget.
For the development sector working with USAID, looking to Australia can provide insights into how to plan and prepare for the changes ahead.
1. Budget cuts mean all programs will be under review.
When budgets are cut as dramatically as they were in Australia, every office and agency will be expected to find cost savings. Budget cuts put all programs under the threat of cancellation — even if they are mid-program.
When cuts occur, partners including NGOs will suffer at least to some extent. World Vision, for example, saw 12 projects in 10 countries closed early, with a further 10 reduced in 2015 due to budget cuts, Tim Costello, the organization’s former CEO, told Devex. Among the projects cut were those that reduced “diarrheal and pneumonia infections in children, the two biggest causes of child deaths, and have made inroads into the high levels of domestic violence in our region,” he said. After losing funding, some of the most vulnerable people lost access to much-needed services.
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2. Foreign aid becomes a diplomatic tool.
In Australia, the merger of AusAID into the Department of Foreign Affairs and Trade strongly tied aid to Australia’s foreign policy, diplomatic relations and trade. Some analysts have hinted that a similar path could follow in the U.S., with USAID folded into the Department of State.
While there are arguably some benefits to linking programs — for example, avoiding duplication and increasing awareness about aid programs among the public sector — DFAT insiders have told Devex they believe it can also lead to misuse of the aid program. For example, Australia’s aid and diplomatic staff were encouraged to mount an expensive global charm offensive to ensure UNESCO would not declare the Great Barrier Reef endangered in 2015.
Focusing on aid as part of an overall foreign program makes aid less about doing good in developing countries and more about national interests.
3. Expertise and knowledge could disappear.
The dramatic changes to Australia’s aid program led to a significant loss of knowledge and expertise, as staff were downsized or resigned out of frustration. Some civil servants in the United States are already grappling with whether to serve under the administration; still others fear job cuts.
For the development sector, human capital losses make the aid program harder to work with. NGOs may lose long-trusted connections and remaining staff may be stretched to the limit.
Today, DFAT still suffers from high demand and lack of expertise and capacity within its aid program. This has resulted in a strategy of outsourcing much of the aid administration to cope with the losses.
4. Aid will take a regional refocus.
The changing focus of Australia’s aid program also meant a reduction in its geographic footprint. Citing the need to improve regional stability and security, Australia’s neighbors became the focus. Funding for programs in Africa, the Caribbean and Latin America was reduced or vanished entirely as the focus turned to the Indo-Pacific.
While Trump may not reduce the U.S. footprint as dramatically, his administration could refocus the aid program to support countries that are strategic or military partners. Countries outside of that scope would either need to bring something new to the table or risk a loss of funding.
5. Aid for trade will move up the priority list.
The “us before them” doctrine of Abbott’s foreign policy put aid for trade at the front and center of Australia’s aid program. Trump could follow. Creating stronger trading partners was an important part of the agenda to put Australia’s national interests first.
NGOs working with USAID should expect aid for trade programs to increase in priority. Still, some existing programs could likely be tweaked or rebranded accordingly to fit that rubric, said Chey Scovell, CEO of the Manufacturers Council Papua New Guinea, at the Trade Facilitation Reform: A Business and Government Partnership conference, hosted by DFAT in December 2016.
6. Expect less transparency.
Australia’s NGOs have been critical of the aid program under DFAT for its lack of transparency. Recent research conducted by the Development Policy Centre showed that transparency has declined alarmingly since 2013, with some program countries having no documentation available at the time of research.
Trump has not shown himself willing to open his decisions or record to transparency. Lack of information on how money is expected, as well as why countries or programs are prioritized, could be an unfortunate outcome of the new administration.
How to prepare
The one thing that should be expected is change. Preparing now will help NGOs currently receiving funding or partnering with USAID for the long road ahead. From the experiences of Australia, Devex has three tips for how to be ahead of the game.
1. Demonstrate how a program benefits Trump’s priorities.
Explaining the benefits of programs in terms of the Trump administration’s priorities in foreign policy is an important first step. These may include showing cost-saving measures, implementing aid for trade strategies, or boosting foreign relations that clearly benefit the U.S.
Climate programs, for example, will be under threat. But focusing on the cost-saving measures from risk reduction and resilience may help limit the damage to some programs. Building stronger communities reduces the costs of disaster recovery in the long term.
Similarly, many aid programs can demonstrate their utility in aid for trade. The development sector understands the importance of maternal and child health care in reducing deaths, for example; in the Trump era, they may need to emphasize the bottom line. Healthy women and children are more able to join the workforce and build small businesses.
Programs that facilitate ties to friendly foreign governments are also likely to be prioritized. Not all bridges will be burned by Trump.
2. Programs should be sustainable.
Aid programs supported by the new administration will need to show self-sustainability beyond the period of funding to demonstrate value for money. NGOs will need to think of programs as business proposals, looking at how they will function beyond the funding cycle. Asking for further funding is not part of a business plan the new government will want to see. Instead, NGOs could think about bringing in private sector partners, preferably U.S.-based companies, to ensure long-term support and build local capacity. For ongoing programs, this sustainable logic will be very important to demonstrate the effort is worth seeing through.
New programs could be expected to show “quick wins.” Longer-term initiatives may need to seek alternate sources of funding.
3. Prepare for the worst and hope for the best.
NGOs working with USAID should be considering the worst-case scenario: If government funding disappears, how can programs be restructured to support the needs of developing communities? The plan B needs to be serious and ready to implement to ensure outcomes can still be achieved.
In Australia, the aid program is still emerging from its dark period. The cuts are over, with slight increases predicted in the coming budgets to maintain aid spending at a rate of 0.8 percent of the total national budget. But the new Prime Minister Malcolm Turnbull has largely maintained the aid policies of his predecessor. Through it all, NGOs have remained a committed force respected by the public, government and the developing communities they support.