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Australian Journal of International Affairs

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Introduction: neoliberalism and its discontents in Australian Aid Policy Andrew Rosser

To cite this Article Rosser, Andrew(2008) 'Introduction: neoliberalism and its discontents in Australian Aid Policy',

Australian Journal of International Affairs, 62: 3, 315 — 318 To link to this Article: DOI: 10.1080/10357710802286775 URL: http://dx.doi.org/10.1080/10357710802286775

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Australian Journal of International Affairs Vol. 62, No. 3, pp. 315318, September 2008

Introduction: neoliberalism and its discontents in Australian Aid Policy

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ANDREW ROSSER1 Neo-liberalism has been a key influence on Australian aid policy since the late 1970s (Lim 1985; Higgott 1986; Kilby 1996, 2007). As Harvey (2005: 3) has observed, neo-liberals seek to ‘maximis[e] the reach and frequency of market transactions, and . . . .to bring all human action into the domain of the market.’ To this end, they have promoted the policies of the so-called ‘Washington consensus’: fiscal discipline, tax reform, trade liberalisation, foreign direct investment liberalisation, deregulation, interest rate liberalisation, privatisation, exchange rate liberalisation, and secure property rights. Since the mid-1990s, the neo-liberal agenda has shifted slightly as it has become increasingly concerned with promoting ‘good governance’ and enhancing the role of civil society in the development process, a shift that has given rise to what is often referred to as the ‘post-Washington consensus’ (PWC). Importantly, this shift has been made in a way that has preserved a central role for market forces in the development process, with the purpose of good governance and civil society activities being to create the political and social conditions necessary for market-oriented economic reform (Jayasuriya and Rosser 2001). The principles of neo-liberalism have been reflected in many major policy documents associated with the Australian aid program, particularly the reports of the Jackson Committee, which reviewed the Australian aid program in the early 1980s (Jackson 1984), and the Simons Committee, which carried out a similar review in 1996 (Simons 1997); various ministerial statements on the Australian aid program (e.g. Bilney 1993; Downer 2002); and the 2006 White Paper on the Australian aid program (AusAID 2006). They have also been reflected in various subsidiary policy documents such as Department of Foreign Affairs and Trade and Australian Agency for International Development (AusAID) (2001); AusAID’s sectoral policies in areas such as governance, gender, land, and security; and many of AusAID’s country strategies. The Rudd Labor government has indicated that it will give greater emphasis in its aid policies to the United Nations’ Millennium Development Goals than the previous government and increase investments in health, education and environmental activities in developing countries (Kerr 2008; McMullan 2008). But its approach so far has been broadly consistent with the PWC. The purpose of this special section is to explore the way in which neo-liberal ideas have influenced Australian aid policy and the consequences this has had in terms of its ability to promote poverty reduction and sustainable development ISSN 1035-7718 print/ISSN 1465-332X online/08/030315-04 # 2008 Australian Institute of International Affairs DOI: 10.1080/10357710802286775


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in developing countries. Recent academic commentary on Australian aid policy has focused on overall program-level policy documents, most notably the 2006 White Paper (Kilby 2007; Carroll and Hameiri 2007). Here, by contrast, we focus on the way in which neo-liberal ideas have informed policy in particular sectors: gender (Kilby and Olivieri), migration (Kilby), land (Hutchison), and security and governance (Hameiri). At the same time, we also examine the political dynamics of Australian aid policy-making with my paper being the main contribution in this respect. The purpose of my paper is to identify the political and social conditions that have contributed to neo-liberalism’s dominant influence on Australian aid policy and likely future trajectories in terms of its influence. More broadly, we hope that our analyses will encourage the new government to pursue a more critical approach to neo-liberal ideas as it formulates a new direction for the country’s aid program. The papers in this special section suggest that neo-liberal ideas have constrained the effectiveness of Australian aid policy in several ways. Kilby and Olivieri suggest that such ideas have undermined the aid program’s ability to address the gender dimensions of poverty by producing a primary concern in AusAID’s gender policies with the way in which women serve the local and global economies rather than how social relationships and cultural attitudes serve to marginalise women. An effective strategy for reducing poverty, they argue, needs to take into account these sources of inequality. Hutchison suggests that neoliberal ideas have undermined the ability of the Australian aid program to promote the rights and capabilities of the poor in relation to land. While AusAID’s joint work with the World Bank on land administration and land titling in countries such as the Philippines has conferred the right to transfer land titles on many poor people, she suggests that it has failed to enhance their rights to land use or sustainable livelihoods. Kilby argues that neoliberal ideas have constrained the effectiveness of the Australian aid program in relation to migration issues by failing to engage with the issue of the rights of migrant workers. Finally, Hameiri argues that neoliberal ideas have undermined the Australian government’s attempts to rebuild so-called ‘failed states’ by focusing such attempts on the creation of governance structures that serve the needs of the market economy rather than a ‘sustainable political accommodation’ between competing local and international political actors. In the absence of such a political accommodation, he suggests, the government’s approach to state-building has amounted to little more than risk-management aimed at putting out security-related ‘spot-fires’ where these occur rather than a long-term development program. The papers vary in the extent to which they propose an alternative way forward for Australian aid policy. Kilby, Olivieri and Hutchison suggest that the Australian government needs to give greater consideration to the human rights of poor people in developing countries and be more open to the use of targeted state interventions to reduce poverty. Hameiri does not recommend an alternative approach to state-building, reflecting his focus on the broader

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structural and ideological constraints to effective state-building. Indeed, his analysis suggests that these constraints may be so powerful as to more or less eliminate scope for the pursuit of an alternative path. I also see limited scope for the emergence of an alternative path because the structural and institutional context within which aid policy in Australia is formulated remains unchanged despite the election of a new government. Kilby and Olivieri suggest that the change of government presents an opportunity for a new direction in aid policy. For the sake of the poor people who are served by Australia’s aid program, we should hope that it seizes this opportunity.

Note 1.

I wish to thank Jane Hutchison and Patrick Kilby for their comments on earlier drafts of this paper. The usual caveat applies.

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McMullan, Bob, 2008. ‘Health in Australia’s aid program: issues, challenges, what Australia is doing’, Speech at the Alfred Medical Research and Education Precinct, World Health Day Symposium, 7 April, Bhttp://www.ausaid.gov.au/media/release.cfm?BC Speech&ID 405_2975_8127_7413_1659. Robison, Richard, 2004. ‘Neoliberalism and the future world,’ Critical Asian Studies, 36(3): 40523. Simons, Paul, 1997. One clear objective: poverty reduction through sustainable development: Report of the Committee of Review (Canberra: AusAID).