Australia’s Budget 2012-13: Foreign Aid

May 11, 2012 | Sharyn Mittelman

Australia’s Budget 2012-13: Foreign Aid

The Australian Budget was announced on May 8, and in order to bring the budget into surplus the Government decided to delay its promise to raise foreign aid spending to 0.5 per cent of gross national income (GNI) by 2015/16, pushing this goal back until 2016-2017. This saved it $3 billion over the next four years.

Despite headlines claiming that there were ‘cuts’ to foreign aid, aid will actually increase by more than $300 million to about $5.15 billion in 2012/13, but the percentage of gross national income (GNI) was maintained at 0.35 per cent.

The Greens criticised the Government’s decision to delay its promise, saying that it compromises Australia’s reputation and its bid for a seat at the UN Security Council. However, Foreign Minister Bob Carr defended the move on Lateline stating:

“…Now this is a big, generous aid budget. Because of the economic circumstances in Australia, we’re unable to spend money that’s not there. We’re going to get to that great goal of 0.5 per cent going to aid out of gross national expenditure a year later than we originally planned. Now that’s not a bad thing. That doesn’t embarrass me and it shouldn’t embarrass any Australian.”

Foreign aid should reflect Australia’s national interest. And it appears that the focus of this year’s budget is mostly right, with 70 percent of foreign aid being allocated to Australia’s neighbours in Asia and the Pacific, which the Government considers the highest priority region.

Other interesting points to note regarding the foreign aid budget include:

  • The twelve largest bilateral aid recipients in the region are: Indonesia, Papua New Guinea, Solomon Islands, Afghanistan, Vietnam, the Philippines, Bangladesh, East Timor, Pakistan, Cambodia, Burma and Vanuatu.
  • Thirty percent of aid will be through partnerships with multilateral organisations. These are the World Bank Group, Asian Development Bank, World Food Programme and the United Nations Children’s Fund.
  • $154 million will be devoted to expanding ties with six UN agencies – UNICEF, UN Women, the UN Development Program, World Health Organisation, UN Population fund and UN AIDS.
  • Over the next four years Australia anticipates increasing assistance to Africa and the Middle East from an estimated $465 million in 2012-2013 to an indicative level of $625 million in 2015-1016.
  • The Government will continue to invest in Afghanistan and support the capacity of the Afghan Government to deliver basic services.
  • Ten percent of the budget would be delivered through partnerships with non-government organisations.
  • The Government has prepared budget strategy which forecasts aid allocation based on four criteria – poverty, national interest, the capacity to make a difference and the scale and effectiveness of the current system.

The case for improving aid effectiveness in the Palestinian Territories

Improving aid effectiveness and transparency to strengthen Australia’s national interests is vital. In this regard, AusAID partnerships with NGOs in the Palestinian Territories (through the Australian Middle East NGO Cooperation Agreement, Phase 2) have recently come under heavy criticism.

For example, Communications Director at NGO Monitor Jason Edelstein pointed out in the Australian, that AusAID is funding NGOs such as APHEDA and Care Australia that in turn use that money to fund the Ma’an Development Centre – an organisation that actively advocates for and provides materials in support of Boycotts, Divestment and Sanctions (BDS) against Israel. Edelstein writes that the stated goals of NGOs in promoting peace, do not always reflect their actual activities, for example regarding APHEDA he writes:

“As NGO Monitor has shown, APHEDA, for example, engages in activities that fuel the conflict and do not promote humanitarian objectives. APHEDA campaigns for a one-sided and immoral arms embargo that would impair Israeli defence against terror attacks, uses demonising ‘apartheid’ language, endorses the so-called Palestinian ‘right of return’ and partners with organisations promoting BDS and ‘lawfare’ tactics. Its Middle East tours have served as the basis for promoting BDS campaigns in Australia.”

Edelstein has also written an article in Jwire, criticising AusAID and World Vision for funding the Palestinian Union of Agricultural Work Committees (UAWC), which supports BDS and which the Israel Law Centre claims is an agency of the Popular Front for the Liberation of Palestine – a terrorist organisation (see previous AIJAC blog post). AusAID is currently investigating the allegations.

Edelstein points out that the UAWC contributed to the campaign for British food retailer Co-operative Group to boycott Israeli companies. He wrote:

“…Certainly the UAWC support of this boycott, which could affect £350,000 in annual trade with Israel, is entirely contradictory to Australian government policy…

In this instance, the UK Co-op is ending purchases from four Israeli companies, Agrexco, Arava Export Growers, Adafresh and Mehadrin, that actually help Palestinian businessmen and women export their goods and make a profit. This boycott directly hurts their businesses and the Palestinian economy – the clearest example of the counterproductive and immoral nature of the global campaign to boycott Israel, whose leaders seek to delegitimize Israel and the Jewish people’s right to self-determination…

Given the lack of transparency regarding the money provided to UAWC, Australian taxpayers were most likely unaware of this exploitation. Unfortunately, this example of government-provided funding to political advocacy NGOs that work against official policies is not unique.”

Prominent Australian journalist Greg Sheridan has also commented on the allegations about misuse of funding by AusAID regarding UAWC’s terrorist links. He writes:

“Australian taxpayers should not be forced to fund organisations with links to terrorists. This is the case with aid to at least one Palestinian group. It’s not against the law, but it’s wrong. It’s morally and politically objectionable. It ought to stop…

In the Palestinian territories, it can be difficult to work effectively on the ground and not rub shoulders with people who have terrorist associations. But the answer is not to co-operate with organisations linked to terrorist outfits that espouse violence and hatred, as does the PFLP. Specific renunciation of such attitudes must be a prerequisite to receiving Australian aid.

It is, in any event, foolish for Australia to be making this effort. The Rudd and Gillard governments have doubled Australian aid to the Palestinian territories, and Palestinians in nearby areas, to $70m annually. There is more than a whiff of this being an effort, hopefully forlorn, to placate the Arab vote in the run-up to our ill advised effort to secure a nonpermanent seat on the UN Security Council.”

Meanwhile, the US is demonstrating the ways in which it uses foreign aid to supports its objectives in the Middle East. A Congressional subcommittee has approved a foreign aid budget tightening control over money to Egypt and the Palestinians. The Jerusalem Post reported:

“The House foreign operations appropriations subcommittee passed by voice vote the $40.1 billion foreign operations budget for 2013, which includes funding the $3.1billion US commitment to Israeli military assistance as part of the 10-year Memorandum of Understanding between the two countries.

However, the legislation cut funding for UNESCO, after the UN body voted to recognize Palestine as a member state. The Obama administration has been seeking a way to restore funding to the organization, though the law in its current format prohibits American contributions to any UN group that unilaterally recognizes the Palestinians.

The bill, which should be voted on by the entire appropriations committee next week, also maintains $1.3b. in military aid to Egypt as an ongoing commitment stemming from the Camp David Accords. But following the Egyptian revolution and questions about its new government that will take power, Congress imposed more conditions on the military aid and $250m. in economic assistance.

Should Egypt break its treaty with Israel, as some emerging political voices have threatened, the assistance would automatically be cut. In addition, the US secretary of state would need to certify that upcoming elections are free and policies respecting civil rights are being implemented….

Congress has also been upset by the detention of American pro-democracy NGO workers in Egypt, and has threatened aid to Egypt on this account as well.

The Palestinians would see their funding withheld if they made any agreement with Hamas and did not actively work to end incitement, a tightening of the current language ruling out aid under a unity government between Fatah and Hamas…”

In contrast to the US, in September last year, the Australian Government entered into a five-year partnership agreement with the Palestinian Authority (PA), under which Australia will provide up to $120 million in support of the PA across the next five years.

The deal does not appear to contemplate the implications of a Fatah-Hamas unity government – something under repeated Palestinian contemplation and which has profound implications for the extent to which the Palestinian Authority will be able to contribute to the purpose for which it was established – enabling a two-state peace agreement.

Australia also continues to fund the United Nations Relief and Works Agency (UNRWA) (Australia is among the ten largest donors to UNRWA) and many commentators consider UNRWA to be an organisation that helps perpetuate the Israel-Palestinian conflict (see previous AIJAC article and this new piece by American writer Cliff May). UNRWA has an annual budget of approximately US$1 billion – it is the largest service provider to Palestinians.

Australia established a partnership agreement with UNRWA and will provide $18 million in core contributions over three years from 2010. Over 20 per cent of these funds are linked to performance measures. Australia provided $14.5 million to UNRWA in 2010-11, comprising $11.5 million in voluntary core contributions and $3 million in non-core funding.

Mudar Zahran, a Palestinian writer and academic from Jordan who now resides in the UK as a political refugee, discussed the shortcomings of UNRWA in a piece published by the Gatestone Institute:

“Since its establishment, the United Nations Relief and Works Agency [UNRWA] has received billions in international aid, including more than $4 billion dollars of US taxpayers’ money. While UNRWA’s mission is to “relieve” and “support” the Palestinians, it has been doing exactly the opposite. It has been keeping Palestinians in pens as refugees and obstructing them from integrating and from normalizing their lives, all while UNRWA seems to be funnelling international aid money to whitewashing the terrorist organization Hamas, promoting the illegal Turkish flotilla which included members of Turkey’s terrorist group the IHH, and which tried to break Israel’s protection of its borders from having more weapons brought in that would be turned against it; to misrepresenting and politicizing the situation in Gaza, and to supporting the terrorist group , Hamas. One has to wonder if UNRWA is not actually an obstacle to peace in the Middle East… UNRWA is not there to settle the refugees, it is there not to settle the refugees.”

Zahran notes that many Palestinians are also concerned by UNRWA‘s corruption:

“In March 2011, the Palestinian Human Rights Foundation condemned the UNRWA for what it called ‘disregard for the lives of Palestinian refugees in Lebanon.’ This charge surfaced after a Palestinian boy died ‘at the door of a hospital’ after being denied admission after UNRWA’s refusal to pay for his medication.

A few months later, in June, 2011, Palestinian refugees in Southern Lebanon burned the UN flag in front of UNRWA’s headquarters to protest of what they described as ‘UNRWA’s corrupt practices;’ they waved banners reading: ‘No to UNRWA’s corrupt policy.’ and ‘People want medical care and medication,’ as Munir Maqdah, the Fatah military commander in the Ain al-Hilweh refugee camp, told the Lebanese newspaper, The Daily Star, that UNRWA had brought 43 ‘foreign’ staff to Lebanon “with a mission that does not serve the Palestinian people.”

In light of the concerns about UNRWA it is surprising and concerning that the Australian Multilateral Assessment report in March 2012 in its review of UNRWA graded the organisation as ‘strong’ in its “alignment with Australia’s aid priorities and national interests.”

Foreign aid is an important tool in promoting Australia’s national interests – surely peace and stability in Israel/Palestinian territories is in Australia’s interest, and therefore the Australian Government should be very careful to fund only organisations that promote a genuine agenda for peace and reconciliation.

Sharyn Mittelman


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