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Mr Bruce Davis, AusAID Director General
2005-06 was a momentous year for the Australian aid program. In September 2005, the Prime Minister announced the government's intention to approximately double the aid budget to around $4 billion by 2010. The announcement was subject to three critical conditions: the effectiveness of the application of additional resources, reduced corruption, and improved governance in partner countries. Responding to this announcement was an overriding priority for AusAID during the year.
The Prime Minister's announcement was made against the backdrop of ongoing progress made in lifting people out of poverty, particularly in Asia. Threats to development in the region, however, remain and are in some cases intensifying. Events in countries close to Australia are a reminder of the dangers of stalled growth, weak governance and political and social instability.
Key areas of focus for the agency during 2005-06 included:
Internally, AusAID has undertaken a substantial and ongoing program of reform to deliver more effectively on government priorities. A new business plan was launched during 2005-06 and a new program management system, AidWorks, was implemented. Accountability and effectiveness have been reinforced as key agency priorities.
In March 2005, the Minister for Foreign Affairs announced his intention to present a White Paper on the Australian aid program in early 2006. The development of the White Paper, already a major priority for the agency, was given added impetus by the Prime Minister's September 2005 announcement. The White Paper's development was a major undertaking involving external experts and other government agency representatives in a comprehensive analysis of development challenges and opportunities in Australia's region. Extensive domestic consultations were held throughout the White Paper's development - through public meetings, targeted seminars, roundtables and submissions. The best of international experience was also drawn upon through consultations with key multilateral agencies including the World Bank, Asian Development Bank and United Nations agencies, as well as other bilateral donors.
Launched in April 2006, Australian aid: promoting growth and stability responds to the Prime Minister's announcement, providing a strategic framework to guide the direction of the aid program over the next 10 years (see figure 1).
The White Paper sets out a series of organising themes and effectiveness strategies for Australian aid and outlines a range of initiatives to give effect to government policy. At the time of the launch, the government announced the first of these initiatives which involves a major expansion of scholarship programs.
Another key analytical document prepared during the year was the Pacific 2020 report, launched by the Minister for Foreign Affairs in May 2006. Pacific 2020 is not an Australian Government policy document. Instead, it seeks to promote discussion and provide practical policy options to meet the challenges facing the Pacific region in nine critical growth areas:
Developed through a process of extensive consultation with over 200 stakeholders drawn from Pacific island governments, the private sector and civil society, Pacific 2020 has initiated a regional debate on the reforms needed to achieve growth in the Pacific.
FIGURE 1: STRATEGIC FRAMEWORK FOR AUSTRALIA'S OVERSEAS AID PROGRAM
AusAID's substantial policy output during 2005-06 was mirrored by a parallel program of corporate reform. The 2006-2010 Agency Business Plan was launched on the same day as the White Paper and maps the substantial changes required for the agency to deliver a more effective and significantly scaled-up aid program. Developed in close consultation with AusAID staff, the plan identifies four key performance areas for the agency:
The demands of White Paper implementation required substantial structural change to the agency during the year. A corporate reform project was created to drive the agenda outlined in the business plan. The project's work program included streamlining business processes, improving people management and analysing international experiences of scaling-up amongst other donors. Following the model used successfully in relation to HIV/AIDS, a series of thematic taskforces were also created to drive the development of White Paper initiatives in health, education, infrastructure and environment.
The creation of the Office of Development Effectiveness was a key initiative of the White Paper and is a marker of the government's commitment to aid effectiveness and transparency. The office is a small, high profile organisation charged with monitoring the quality and evaluating the impact of Australia's aid program. The office is headed by a senior executive officer, operates under a clearly delineated budget and reports directly to the Director General. The office's work is guided by the Development Effectiveness Steering Committee, comprising deputy secretaries of key Australian Government departments. This is an indication not only of the centrality of the aid program to the government's agenda in the region, but also the importance of continuing efforts to improve aid effectiveness.
Delivery
AusAID's approach to aid delivery is evolving rapidly to reflect the government's commitment to increased aid effectiveness. Australia has long had a strong record on policy coherence, and whole-of-government approaches to aid delivery are now well established. Building on this strong foundation, AusAID is increasingly seeking partnerships outside of government to enhance responses to the complex challenges facing the region.
Australia's leadership role in combating the spread of HIV/AIDS in the Asia-Pacific region was strengthened this year through two innovative public-private partnerships. Recognising the role Australian businesses can play in the fight against HIV/AIDS, AusAID worked with the corporate sector to establish in February 2006 the Asia-Pacific Business Coalition on HIV/AIDS, chaired by Ms Margaret Jackson AC, the Chair of the board of Qantas. Also in February, Mr Downer and former President of the United States, Mr Bill Clinton, signed a partnership agreement under which the Australian Government will work with the Clinton Foundation to support the scaling-up of treatment and care for people living with HIV and AIDS in the Asia-Pacific region.
Aid delivery mechanisms are evolving rapidly as the devolution of staff and decision making-authority to partner countries continues. New modes of delivery require a greater level of policy engagement with partner governments and a greater level of direct operational management of programs by AusAID staff. The profile of the agency is changing as AusAID deploys growing numbers of staff overseas, often in non-traditional roles that see them engaged directly in program implementation. This process has required ongoing change to the way in which the agency accesses technical expertise. AusAID's expert advisory capacity continues to grow, including through the deployment of specialised sectoral advisers at posts. This increases AusAID's capacity to respond to local priorities and needs - a crucial element of the approach to improving aid effectiveness.
Management systems
The increase in AusAID's field-based resources, and the growing complexity of program implementation, have required ongoing investment in aid management systems. In December 2005, the agency launched a new activity management and financial system, AidWorks. The development and launch of AidWorks was a major exercise involving the training of all AusAID staff and the migration of significant amounts of data to the new system. One of the great benefits of AidWorks is its internet-based operating environment, which provides an integrated approach to budget and financial control and program implementation and monitoring.
While policy development, corporate reform and changes to aid delivery and management systems occurred at a rapid pace during the year, AusAID faced the parallel challenge of implementing its largest ever program - the $1 billion Australia Indonesia Partnership for Reconstruction and Development (AIPRD). By 30 June 2006, the full $1 billion AIPRD commitment had been allocated - a significant and noteworthy achievement. Key achievements during the year included:
Beyond these individual achievements, it is clear that AIPRD continues to strengthen engagement between Australia and Indonesia. It is doing this through high level dialogue on Indonesia's development challenges and practical cooperation between an increasing number of government organisations in both countries.
Regional threats to development and stability are growing and the aid program undertook substantial work in response to transboundary challenges during 2005-06. In November 2005, the Prime Minister announced a commitment of $100 million over four years to address avian influenza and other emerging infectious diseases in East Asia.
A strategy was developed to guide the implementation of this initiative and the aid program is making a significant contribution to helping countries in East Asia reduce or better manage the risk of avian influenza. A range of anti-people trafficking activities, including a three-year, $12 million initiative on regional cooperation to prevent people trafficking, have reduced the impunity of trafficking offenders and secured justice for victims.
Under the Illicit Drugs Initiative announced by the Prime Minister, nine projects were selected to strengthen regional responses to the adverse development impacts of illicit drugs and increase Australia's efforts to combat the production, trade and use of illicit drugs in South-East Asia.
Regional solutions to the challenges faced by the Pacific hold significant promise and Australia has advocated in recent years for integration and pooled governance solutions in the region. The Australia-Pacific Technical College, announced by the Prime Minister in October 2005, aims to increase the number of skilled Pacific island graduates and improve their employment prospects in domestic and international markets. Phase 1 of a study into the college was completed in April 2006, envisaging a college comprising a number of schools, with training centres spread throughout the region. Phase 2 of the study is currently underway and will involve a detailed design of the college's schools, and establishing the location of training sites, training partners, student numbers, governance arrangements and costs.
AusAID continues to take a lead role in response to the challenges faced by fragile states, both domestically and internationally. AusAID's Fragile States Unit, which includes representatives of the Treasury, Australian Federal Police and the Department of Defence, as well as external advisors, has supported a deeper understanding and analysis across government of the issues facing countries struggling to realise key development outcomes. The unit's work is leading to stronger policy coherence in fragile states and innovative programs to improve the impact of Australia's aid support to the region.
AusAID also continued to play a key role in the Fragile States Group of the OECD Development Assistance Committee in 2005-06, placing Australia at the centre of international efforts to improve donor effectiveness in fragile countries. Australia and France co-chaired a major study on policy coherence through whole-of-government engagement in fragile states. Together with New Zealand, Australia also commenced a pilot of principles of Good International Engagement in Fragile States in Solomon Islands. Australia's support to security reform in the region has informed the development of an international Framework for Implementation of Security System Reform.
2006-07 will be another year of significant activity for the agency as the major initiatives arising from the White Paper are developed and put into the first phases of implementation. With the policy framework provided by the White Paper and the potential for increased resources in implementation, we are presented with a tremendous opportunity to contribute to poverty reduction and sustainable development in the region. We look forward to this opportunity, with a core focus on effectiveness and delivering results.
The objective of Australia's overseas aid program is to assist developing countries to reduce poverty and achieve sustainable development, in line with Australia's national interest.
AusAID advises the government on development policy and manages Australian development cooperation programs that are focused on accelerating economic growth, fostering functioning and effective states, investing in people and promoting regional stability and cooperation, particularly in our region. In this way, AusAID contributes to the formulation and implementation of Australia's broader foreign policy framework.
In pursuing this role, AusAID draws upon lessons learned from three decades of official development cooperation and its:
In recent years development issues have become increasingly interlinked with broader Australian regional and international policy priorities. These include regional security, trade, economic integration, the transboundary threats posed by HIV/AIDS and other communicable diseases, illicit drugs and organised crime. In this context it is essential that the full capabilities of the Australian Government are brought to bear on these challenges.
The aid program contributes to an integrated whole-of-government approach to addressing our region's development challenges. While AusAID continues to coordinate Australia's international development efforts, the agency recognises that other government departments and agencies have unique skills and capabilities that complement and support aid initiatives. AusAID works proactively with a range of government partners, has established close strategic and operational relationships with them, and is drawing upon their skills and expertise to tackle shared objectives in a direct, practical way.
AusAID is an administratively autonomous agency within the Foreign Affairs and Trade portfolio. The Director General reports directly to the Minister for Foreign Affairs on all aspects of aid policy and operations. The Director General is responsible to the Secretary of the Department of Foreign Affairs and Trade for the administration of the agency and is a member of the department's executive. The Director General is responsible for the agency's financial and personnel management.
Figure 2 shows AusAID's organisational structure.
A deputy director general was seconded to the Department of Foreign Affairs and Trade to lead the Australia-Indonesia Partnership for Reconstruction and Development (AIPRD) Secretariat in January 2005 and rejoined the agency in March 2006.
Following the launch of the Australian Government's White Paper on the overseas aid program Australian aid: promoting growth and stability in April 2006, the Office of Development Effectiveness (ODE) was established. The purpose of the office is to monitor the quality and assess the impact of Australia's aid program.
A number of taskforces have also been established to deliver White Paper initiatives. They cover HIV/AIDS, health and population, education and scholarships, rural development and the environment, and infrastructure.
As part of Australia's leadership role in HIV/AIDS, a deputy director general was appointed Ambassador for HIV/AIDS in May 2006.
In early 2006 the corporate reform project was established. It is a time specific project that supports the identification, development and implementation of critical institutional reforms to ensure AusAID has the right people, business processes and systems in place to meet the significant challenges and opportunities posed by the White Paper and scaling up of aid volume.
FIGURE 2: AUSAID ORGANISATIONAL CHART AT 30 JUNE 2006
AusAID's outcomes and outputs framework is shown in figure 3. Appendix B provides the resources summary for the agency's outcomes.
The agency's two outcomes are:
Outcome 1 - Australia's national interest advanced by assistance to developing countries to reduce poverty and achieve sustainable development.
Outcome 2 - Australia's national interest advanced by implementing a partnership between Australia and Indonesia for reconstruction and development.
AusAID's administered items contribute to these outcomes, as do the three agency outputs: policy, program management and AIPRD management.
Administered items - those revenues, expenses, assets and liabilities managed by AusAID on behalf of the government - represent the bulk of the aid program (about 97 per cent of the aid program budget).
In 2005-06, five guiding themes continued to shape Australia's efforts to assist partner countries to reduce poverty and achieve sustainable development consistent with core national interest issues:
The agency's three outputs represent the services purchased by the government from the agency to achieve the outcomes of its aid program.
As part of the Australian Government's White Paper on the overseas aid program, the organising themes for the aid program have been revised for future years as follows:
FIGURE 3: AUSAID OUTCOMES AND OUTPUTS FRAMEWORK 2005-06
Text description FIGURE 3: AUSAID OUTCOMES AND OUTPUTS FRAMEWORK 2005-06
AusAID supported a World Food Program school feeding program at Nyajezi Primary School in Nyanga, Zimbabwe. School feeding programs encourage higher enrolment and pupil retention levels
AusAID supports the Kien Kleang National Rehabilitation Centre in Cambodia, which provides a base for training and coaching people with disabilities - the majority of whom lost limbs to landmines Photo: AusAID