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Mutual trust: an alternative to mutual obligation in overseas
aid
 Minh
Nguyen (Uniya)
March 2006
Executive summary
Released in December 2005, AusAID’s interim White Paper on
Australia’s aid program recommends that future aid payments
and allocations be regularly reviewed and made conditional on a
recipient country’s performance against certain agreed targets.
The report suggests that aid be used to reward countries that show
reductions in corruption or improvements in business friendliness.
As the Federal Government considers the recommendations of the
report in light of its new commitment to increase Australia’s
aid budget, there will be temptation for it to “[make] operational
the idea of ‘mutual obligation’” for major aid
recipients. It is an idea that will resonate with a government which
has shown it is unafraid to use financial means to socially engineer
Australia’s poor.
In the domestic context, the government’s attempt to impose
conditions and performance targets on the long-term unemployed and
other income support recipients, including single mothers, the disabled
and even indigenous communities, under the idea of mutual obligation
has seen radical changes in social policy.
The seductive nature of this principle is understandable but flawed.
The evidence suggests that such a shift toward performance-based
and contractual forms of aid delivery will not necessarily bring
about similar outcomes to welfare reforms in Australia. Applying
the ‘mutual obligation’ philosophy to Australia’s
aid policy by demanding recipient behavioural change is no answer
to the complex development problems faced by many nations in the
region.
The downside to lavishing more attention on the policy weaknesses
of poor states, through ideas such as mutual obligation, is that
equally critical questions about Australia’s own policies
and performance in this area are often ignored. Such is the current
practice that allows aid money to ‘boomerang’ back to
Australia’s shores through payments to Australian companies
often for overpriced and inappropriate goods and services that have
few benefits. Such is also the policy that insists on putting conditions
on aid that go beyond basic fiduciary accountability and that work
to undermine real ownership of the development process.
This paper suggests that an alternative to a ‘mutual obligation’
policy based on paternalism and self-interest is a policy of mutual
trust based on a fairer balance of the legitimate interests of Australia
and its aid recipients. It suggests a system that places greater
emphasis, responsibility and accountability on Australia also to
deliver better poverty-reduction outcomes for the region.
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Mutual trust: an alternative to mutual obligation in overseas aid
Also by the same author:
Mutual obligation and Catholic
values 5/4/06
Franchising 'mutual
obligation' 5/4/06
 Return
to:
Joint research: the Mutual
obligation franchise
Minh Nguyen is the Research Officer at Uniya. This paper is part
of a joint research project of Uniya and the Jesuit Social Services.
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