Australia looks forward to have stronger bonding with the private sector in the delivery of foreign aid.
A government inquiry completes its final public hearing which deals over the significance of the private sector in promoting economic growth and decreasing poverty in the Indo-Pacific region.
The inquiry got proposals from 152 government agencies, businesses, nongovernmental organizations, education institutes and individuals in the beginning in February 2014.
On the same day, innovationXchange, a new unit within the Department of Foreign Affairs and Trade was hurled with the object of increasing groundbreaking and more effective and competent ways of delivering Australia’s foreign aid program.
Australian Foreign Minister Julie Bishop launches innovationXchange in the Department of Foreign Affairs and Trade’s premises in Barton, Canberra.
“The government will invest over 90 percent of our country and regional program funding in our region. We will harness the private sector in those countries, so that Australia’s aid program promotes the major driver of poverty reduction — economic growth,” Bishop said.
The inquiry and establishment of innovation Xchange both show a greater desire for the Australian government to strengthen ties with the private sector in delivering aid.
In referring the analysis to parliament, Bishop suggested that the committee focus on the “possible return of investment to Australia of private sector partnerships and specific financial instruments.”
Being one of those who presented evidence to the inquiry, Accenture discoursed about the connection between commercial and social objectives driving large businesses and their role in growing developing nations.
The Global Fund gave evidence as well, providing information on partnerships with BHP Billiton, Chevron, the Bill & Melinda Gates Foundation and more to create economic growth and help in the fight against AIDS, tuberculosis and malaria.
For the development sector, the government’s direction is welcome, especially its “strong emphasis” on the private sector’s role in general and on the push for inclusive business in particular.
Mark Ingram, CEO of Business for Millennium Development, told “We believe the inquiry is going to help to normalize the idea that the private sector can be considered a genuine and credible partner in development.”
He also said “Ultimately this will be of benefit to the government; NGOs and the private sector as they consider the opportunities for partnership that exist.”
According to Marc Purcell, executive director of the Australian Council for International Development it will help to cut down the aid budget and staff has also pleaded the government to look toward the private sector for assistance.
The parliamentary inquiry and announcement of innovationXchange are part of the “live debate” currently occurring on foreign aid.
“It is not surprising that this government is pushing toward this model,” Purcell expressed to Devex. “It is part of the world view on economic growth and private sector needing to drive it. What we are seeing mirrors what has occurred in other countries, such as Canada and the U.K., in recent years — the move from aid to trade.”
InnovationXchange is a 140 million Australian dollar ($108.7 million) project that looks for innovative ideas from individuals and organizations on how to deliver development solutions to the Pacific in a low-priced, quicker and more operative manner.
The innovative facility will contribute AU$20 million to a $100 million Data for Health partnership with Bloomberg Philanthropies, which intends to build the capacity of governments in developing countries to collect health information quickly and efficiently.
Another AU$20 million will be directed to the SEED Pacific Initiative, which aims to broker and support partnerships between global businesses and local organizations in the Pacific.
The unit will be backed by a 14-member International Reference Group, which includes Michael Bloomberg from Bloomberg Philanthropies and Sally Osberg from the Skoll Foundation.
NGOs, according to the chief executive, will have important knowledge to contribute to the program through their innovative ways of engaging with local communities, minority groups and forming local partnerships for economic development.
“We certainly need to look at innovation in this sector and encourage greater engagement with private industry,” Dunn stressed, but also noting that while this is an innovation that needs to happen “it should not be a replacement for proper funding. The sector still needs a sustainable funding stream from the government.”
In addition to grants, DFAT currently occupies with the private sector by contracting out the management and delivery of aid programs.
Contracts published in the Australian government tender site since Jan. 1 reveal almost $AU400 million in work targeting foreign global and regional aid projects. Indonesia has benefited from contracts worth $AU263 million, followed by Cambodia ($AU51 million) and global programs ($AU31 million).
For the foreign minister, the future of public-private partnerships will ensure the aid program increases the economy and capability of developing nations, an notion that is strongly supported by the development sector.
“We believe that inclusive business provides a meaningful way for DFAT to engage the private sector to deliver development outcomes,” Ingram said. “This harnessing of private sector partners has the potential to solve entrenched development problems that governments, civil society and INGOs cannot solve on their own.”
“I don’t know if this is business the government can engineer,” Purcell said. “Public servants and the government are not necessarily good at picking winners in this space.”
In the time being, the Australian government’s purposes seem clear with the partnerships formed as part of innovationXchange in addition to a recent proclamation of the partnership with ANZ to enhance economic growth in the Pacific — the way forward for foreign aid is in partnership with the private sector.