Prior to the integration of Ausaid and DFAT in November 2014, I had been on the periphery of aid policy issues for some 35 years.
Like many on the periphery, I had strong views.
I was a sceptic about the historical record of development assistance.
Indeed I had some sympathy for the view that aid was, for the most part, an area of policy failure paved with the best of intentions.
These days I do not have the luxury of armchair pontification.
The more I have been involved in aid policy as head of the Department responsible for its delivery, the more nuance has crept into my views.
The balance sheet today looks less stark.
The policy challenges are genuinely complex.
It is still my view that the most important ingredients of economic success for poor countries are good policies and good leadership.
No aid program can compensate for their absence.
But well thought through aid programs certainly can contribute to their presence.
Today I want to focus on three things.
First, I want to address three conceptual issues which are central to our aid program.
I want to address the link between private sector led economic growth and poverty reduction.
I want to explore the links between security and development.
And I want to say something about the anatomy of that difficult task of state-building.
Second, I want to talk about how we are addressing these concepts in the very different contexts of Asia, the Pacific and globally.
Finally, I want to say something about innovation and why we want it to have a more prominent place in our aid policy thinking.
Economic growth, the nature of that growth and poverty reduction
Let me start by exploring the links between private sector-led economic growth and poverty alleviation.
This is important because too often the debate about growth and poverty reduction turns into an either/or choice between poverty and growth.
This is a false dichotomy.
Generating growth in developing countries is always a balancing act between supporting overall economic development and supporting the poor to participate in that development.
That’s why in Australia’s aid program there continues to be considerable investment in human and social development, in social protection, in women’s empowerment and in disability inclusive development.
The empirical evidence on the centrality of economic development as a driver for poverty reduction is clear.
China is the obvious example.
More comprehensively, a 2013 World Bank analysis of growth and income changes across 118 countries over four decades shows that incomes of the bottom two quintiles in the population grew at about the same rate as the average annual incomes.
The report found that economic growth lifts people out of poverty and leads to shared prosperity on average.
It also helps to explain how the rapid growth in the developing world in recent decades has led to such dramatic poverty reduction.
What is also becoming clearer is that poverty in a country acts as a handbrake on growth.
In an American Economic Review article from a few years ago, Georgetown University Professor of Economics Martin Ravallion, found that poorer countries experience lower rates of economic growth.
In other words: poor countries grow slower.
Part of the solution comes with an emerging middle class.
A larger middle class makes growth more poverty-reducing – the handicaps faced by poor countries in their efforts to become less poor are very difficult to overcome.
Part of the population is caught in a poverty trap and doesn’t have the basic capabilities to respond to the opportunities that economic growth presents.
Finally, there is growing acceptance that countries with less inequality experience faster and more durable growth.
There is a clear consensus that sustainable job growth can only be delivered by a larger private sector.
There is also an emerging consensus on the importance of focusing on women’s empowerment and supporting women’s engagement in the economy and society.
It generates more growth — and growth that is more poverty reducing and more sustainable.
Recent McKinsey analysis suggests that if every country were to advance gender equality as well as its best performing neighbour, global GDP would increase by around $12 trillion or 11 percent over the next decade.
Indeed, the very first line of the McKinsey report sets out exactly what’s at stake:
‘Gender inequality is not only a pressing moral and social issue but also a critical economic challenge. If women – who account for half the world’s population – do not achieve their full economic potential, the global economy will suffer.’
Importantly, supporting economic development involves much more than development assistance alone.
The Howard Government decision in 2003 to remove tariffs and quotas from imports from Least Developed Countries has seen imports from those countries grow at an average rate of 16 percent per year over the past decade.
In 2015, Australia’s two-way merchandise trade with countries with which Australia has an ongoing bilateral development partnership was valued at about $33 billion – more than ten times the value of the development assistance.
The Government’s economic diplomacy agenda recognises that the deployment of our foreign policy, trade and development instruments in an integrated manner delivers a better overall result.
Aid-for-trade investments without focusing on stronger market access make little sense.
Abd Al Gader could barely walk when he arrived at a refugee camp in Jordan fleeing the war in Syria. After receiving treatment for TB, the 12-year-old is strong enough to play football and attend one of the camp’s schools.
Abd Al Gader, a 12-year-old with big, dark eyes, could barely walk when he arrived at the Zaatari refugee camp in the Jordanian desert after escaping the war in Syria. Suffering from tuberculosis and having run out of medicine, Abd Al Gader fled with his family from their farm east of Damascus with the few belongings they could carry and embarked on a dangerous journey towards safety.
Abd Al Gader’s cough worsened as the family trekked for days, sleeping in the open during cold, February nights and enduring shelling and thieves, before finally reaching the border. “We lost our crops and our house was destroyed,” said the boy’s father, Awash. “I feared for his life. That is when I decided we had to leave.”
In Zaatari, the family settled into a tentAbd Al Gader resumed his TB treatment at the camp’s clinic. Today, cured of the disease, he is strong enough to play football with his friends in a dusty pitch and to attend one of the camp’s schools.
In cooperation with local and international partners, the Global Fund is supporting the provision of essential TB prevention, diagnosis and treatment services to Syrian refugees in Lebanon and Jordan. The assistance comes from the Global Fund’s Emergency Fund, a special initiative to provide quick, flexible access to funds to respond to HIV, TB and malaria in acute emergency situations.
Tuberculosis, a highly infectious disease spread from person to person through the air, can move quickly in close quarters like a crowded refugee camp. Stopping TB is necessary, not only to protect refugees immediately at risk, and also to free up critical resources within refugee settings to treat basic illnesses, which are chronic in emergency situations like the Syria crisis. Since the outbreak of the conflict, more than 4 million Syrians have sought shelter in neighboring countries, mostly in overcrowded camps like Zaatari and in informal settlements with no or limited access to health services. Infectious diseases such as TB are increasing the burden on already overstretched public health systems.
“To defeat these diseases we must follow the people wherever they are, regardless of their status, circumstance, or ethnic and religious background,” said Mark Dybul, Executive Director of the Global Fund. “Partnerships like this give us the flexibility to respond quickly and better serve the people in need.”
Global Fund grants in the region are funding interventions that include TB diagnostics and treatment, screening of refugees upon arrival, strengthening referral services, training of health workers and raising awareness of the disease. The International Organization for Migration is implementing the programs in collaboration with WHO and the National Tuberculosis Programs of Jordan and Lebanon.
Since the program started, there have been more than 400 confirmed cases of TB in Jordan and Lebanon and four cases of multidrug-resistant TB in Jordan (according to 2014 data, the latest available), and the success rate of TB treatment among Syrian refugees is 90 percent. The Global Fund is extending emergency interventions in Lebanon and Jordan, and providing funding for TB services for Syrian refugees in Iraq.
The Zaatari camp now houses 79,000 refugees. Like most refugees, Abd Al Gader’s family first moved into tents, later replaced by prefabricated shelters. The father has built a kitchen and bathrooms, but dreams of returning to Syria one day. Abd Al Gader’s cough is now gone, but needs to pause to catch his breath when he plays football. When asked what he wants to do when he grows up, his eyes light up: “I want to be a football player for Barcelona FC.” He pauses, then adds: “Or maybe an architect and rebuild Syria.”
The Global Fund is evolving towards more differentiation and tailored partnerships. In the Middle East, a new initiative aims to increase coverage of HIV, TB and malaria care for people affected by conflict.
Differentiated approaches are required to increase the impact of health investments, particularly in settings that face special challenges, such as armed conflict or an influx of refugees. To improve efficiency and offer more flexible and simplified responses, the Global Fund is launching an initiative in the Middle East that will use one integrated grant management platform. The Global Fund currently has separate grants through country allocations in Syria, Iraq, Palestine and Yemen, and provides emergency funding to support TB care among Syrian refugees in Jordan and Lebanon. By managing all grants through one system to be managed by a qualified international organization with experience on the ground, the Middle East HIV, TB and Malaria Response aims to increase coverage of HIV, TB and malaria services and reach key and vulnerable populations.
Preventable diseases like HIV, TB and malaria strain health systems that are already overburdened, leaving fewer resources to provide basic health services or prepare for emerging health threats. In refugee situations, stopping diseases from spreading not only protects already weakened refugees from falling ill, it frees up critical resources to treat other illnesses or provide other health services – care that is desperately needed for families who have lost everything, and for communities that may be struggling to host them.
Mark Dybul, Executive Director of the Global Fund, said the Middle East initiative marks a fundamental shift from the way the Global Fund has managed grants in the past.
“To reach the people we need to reach and have more impact, the Global Fund needs to change the way we engage in challenging operating environments,” Dybul told a recent meeting of donors, technical partners, government representatives and civil society organizations in Amman, Jordan. “Tailored approaches are the future of the Global Fund.”
Joseph Serutoke, the Global Fund’s Regional Manager for Middle East and North Africa, said the new approach fits the needs and challenges of the region. Advantages of bringing the grants together include increasing efficiency through consolidated reporting, a more integrated approach, and supporting stronger regional partnerships that can deliver in hard to reach areas. Because of conflict these countries face constantly shifting needs, limited capacity and severe constraints to provide essential services. In Yemen, Iraq and Syria, most of the health facilities have been destroyed. Health infrastructure in countries hosting displaced populations is overstretched. As part of the new approach, typical Global Fund procedures and in-country coordinating measures will be adapted to meet the individual situation of each country. “The whole idea of this grant is to be agile and to adjust to the changing situation in the countries we serve,” Serutoke said.
The Global Fund is calling for proposals from qualified international organizations to assume the role of Principal Recipient. The grant is expected to start in July and will have a duration of two years, with the possibility of an extension.
The Global Fund is putting a stronger focus on challenging operating environments with the aim of increasing coverage and reaching key and vulnerable populations affected by HIV, TB and malaria.
Challenging operating environments, which may experience disease outbreaks, natural disasters, armed conflicts and weak governance, has been identified as an important priority for the Global Fund. Challenging operating environments account for a third of the global disease burden for HIV, TB and malaria, and for a third of Global Fund investments.
By Jane Andrews
I arrived at the Johns Hopkins University campus with a sense of déjà vu; it was my first visit to my alma mater in years. I had travelled to Baltimore for a meeting about the licensing of sutezolid, a much-awaited drug candidate for treatment of Mycobacterium tuberculosis. The research faculty, technology transfer officers, university administration, and advocates at the meeting felt the weight of the responsibility. We knew that licensing a tuberculosis drug candidate could be a historic event. Frustratingly, in the past 40 years the world has added only two new drugs to the arsenal against tuberculosis, the second most deadly infectious disease on the planet. The statistics are infuriating: more than 9 million people developed tuberculosis in 2013, and an estimated 44% of those in countries such as the Philippines, Thailand, and South Korea have resistance to at least one of the second-line agents for tuberculosis treatment.
Horrifically, only one of two people treated for multidrug resistant (MDR) tuberculosis are cured, and the toxic 2-year treatment regimen involves thousands of pills and hundreds of injections. For extensively drug resistant tuberculosis (XDR-TB) the cure rate drops to 20%. With new agents like sutezolid being used in combination with other drugs, we might be on the brink of being able to save more lives with less toxicity. Sutezolid, originally U-100480, began development alongside linezolid in 1996. Even then it showed favourable pharmacokinetic properties, efficacy against drug-resistant strains of tuberculosis, and low toxicity in rat models. After lying undeveloped for several years in the hands of Pfizer and others, there is a new window of opportunity for the drug. Sequella, a pharmaceutical corporation, acquired the licence for the development and commercialisation of sutezolid from Pfizer in 2011. However, Johns Hopkins University still owns some key pieces of the intellectual property.
GENEVA – As part of a new framework for procuring health products in the most cost-effective and sustainable way, the Global Fund has reached an agreement to purchase insecticide-treated mosquito nets that prevent malaria with projected savings of US$93 million over two years.
By achieving sharply lower prices for nets – a 38 percent reduction from 2013 – the agreement serves the Global Fund’s goal of accelerating progress against malaria, a preventable disease that most seriously affects young children and pregnant women. Building on the Global Fund’s large-scale purchasing power, the framework improves the supply of an important tool to fight the epidemic.
The Global Fund projects US$350 million in mosquito net purchases over the next two years through its Pooled Procurement Mechanism. A tender process has selected 10 suppliers and includes volume commitments from the Global Fund and performance contracts from the suppliers.
The agreement creates a level of certainty for suppliers, allowing them greater visibility and planning time to manufacture and deliver nets. That facilitates lower prices, and yields significant savings for the Global Fund partnership. The US$93 million in projected savings is equivalent to about 40 million additional nets.
“The money saved here can buy more nets,” said Christopher Game, Chief Procurement Officer at the Global Fund. “We worked closely with partners to strike the balance between achieving cost savings, promoting sustainable supply, and recognizing manufacturer investment in the development of new products to fight malaria.”
A previous Global Fund procurement tender for insecticide-treated mosquito nets was concluded in late 2013 and implemented over 2014-2015. That agreement saw the successful purchase of 170 million nets at a stable price, with a major improvement in delivery times.
The agreement is geared to purchase nets from multiple suppliers, reducing risk and encouraging local production, which reduces transport costs. About one-fifth of the nets to be procured will be manufactured in Africa. For the first time, the nets will be color-coded, allowing their durability to be tested at six-month intervals. The data collected from this research creates the possibility for future product innovation.