Emergency relief after disasters can save thousands, but only 7% of Australia’s overseas aid program is going to emergency relief, according to Professor Hugh White in an opinion piece in The Age yesterday. The vast bulk of the aid goes to projects which are intended to overcome long-term poverty. Australia’s aid budget is currently around $4 billion, and over the next four years it is scheduled to double to $8 billion.
Professor White makes two interesting observations: firstly, poverty is being overcome in a number of countries; and secondly, poverty is not being overcome by aid, it is being overcome by economic growth. Economic growth requires a confluence of social, political and technological factors, and it has to be home-grown. Well-meaning Westerners have been trying unsuccessfully to find out how to catalyse this process in poor countries.
So what should development aid in the future look like? There is a high risk in pointing a way forward because many who have in the past suggested the best way forward for aid have been proved wrong by poor results. Useful aid in the future will have to support rather than detract from the magic chemistry that causes the home-grown confluence of factors which leads to economic growth.