The kind of boomerang aid described by Bernard Keane (Who profits from our foreign aid?) is common practice for much Western government aid to the undeveloped world, most obviously and obscenely in the case of the US, whose aid is largely tied to US companies and US products.

Among a long list of notorious practices would be the Bush-era aid linked to anti-abortion laws in the recipient country and USAID to Israel, which is mostly manifested in armaments purchases. Iraq is another obvious abuse and misuse of aid, which, at its peak, accounted for the majority of the USAID budget supporting a barely credible litany of incompetence, waste and corruption in rebuilding educational and medical facilities and water infrastructure. Such projects usually excluded non-American bidders and sometimes used a no-bid mechanism. In Agfhanistan at least 40% of aid is returned to the donor via outsourcing to companies and consultancies from the donor country.

Beyond the Halliburtons (a commonality in many of the cases referenced above) there are ostensible charities, indirectly supported by US funds, such as CARE whose modus operandus was revealed to be that

“… the United States government buys the goods from American agribusinesses, ships them overseas, mostly on American-flagged carriers, and then donates them to the aid groups as an indirect form of financing. The groups sell the products on the market in poor countries and use the money to finance their antipoverty programs”.

Note the double dose of subsidy to American farmers — most of the surplus food was heavily subsidised in the first place — and a double or triple whammy in denying market access for undeveloped countries’ agriculture, often the only tradeable commodity they could use to haul themselves out of poverty.

Clearly the US employs USAID for dual purposes of foreign policy and aid/development but with the latter of distinctly secondary political weighting. Worse perhaps than the waste and faux aid, is the reputational and institutional damage done in recipient countries, and in turn, in citizens in Western donor countries who can be forgiven for “compassion fatigue”, if for the wrong reasons.  (But we should not tar with the same brush some prominent and successful NGOs such as Oxfam, World Vision and Médecins Sans Frontières who do honourable service around the globe.)

The US may be one of the worst culprits of aid abuse but it is not the only one.

It is timely to discuss the failure of aid to East Timor.  Over years of UN supervision, billions of dollars were spent.  Some of this dosh was used to keep the “in country” staff, i.e. prosperous Westerners, in the style of life they expect, and some of this trickled down to the locals via the service industry such as home-keeping, cooking, nannies/amahs, etc.  When the UN pulled out of East Timor in 2005, the withdrawal of this low-level income was keenly felt, especially as there was nothing to replace it and much of the work was by women (and thus the earnings were mostly retained for family support).

But these types of transient low income service jobs are hardly what is meant by “commercial opportunities, skills formation and capacity building”.  As to all those things which East Timor, one of the poorest and least developed countries in the world, needed and still needs: roads, bridges, clean water, power, sewers and perhaps most important of all, schools and teacher training?  Almost zip.  Billions of dollars over many years and a truly shocking record of lack of achievement in these basics. The Wikipedia  version is a whitewash: “From 2002 to 2005, an international program led by the United Nations, manned by civilian advisers, 5000 peacekeepers (8000 at peak) and 1300 police officers, substantially reconstructed the infrastructure.” Some cynics might say that Australia doesn’t do infrastructure so it was no surprise.

Also no surprise that more unrest and violence broke out in 2006, destroying what little infrastructure the country had. Australia should be ashamed of its lead role in the UN operation and the post-UN history, notwithstanding the culpability of Timor Leste’s own leadership and Portugal’s historic neo-feudal rule.  Even our role in what one hopes may be their financial saviour, the offshore oil and gas projects, is dominated by self-interest and greed. Only international pressure finally shamed Australia into agreeing to a 50:50 share of royalties in place of the previous usurious 80:20 split (in Australia’s favour) that had been extracted/imposed during Timor’s weakest period. (So much for the Australian notion of a fair go!)

So, to the issue of a potential regional refugee processing centre in East Timor.  Put to one side all the contentious questions of the likelihood, appropriateness or effectiveness of the idea. It is feasible that such a centre could be a job generator for the Timorese who have crippling levels of unemployment and poverty, notwithstanding several problems inherent in the concept. One dangerous anomaly is that the refugees may well end up living in better conditions than most Timorese, which would be difficult to avoid.

But with some imagination — and a lot more actual implementation than shown in the UN days — it could be co-ordinated with reconstruction of one of our closest neighbours in dire need of poverty alleviation and stabilisation. No doubt some such schemes involving various promises of linked development aid are being proffered to the Timor government. On the other hand our track record, in Timor itself, and other regional neighbours, is not convincingly positive and would require us abandoning the US model of foreign aid we have been using in PNG.  One could go further and say that the notion is patronising and offensive given that Australia, without the bounty of natural resources, would indeed be the poor white trash of Asia-Pacific.

On Monday the Timor parliament voted against adopting Australia’s concept but the government and its PM and President have yet to decide whether to rescue or turn back the sinking vessel of Australian refugee policy currently drowning from impoverished lack of credibility and humanity.

Dr Michael R. James is an Australian research scientist and writer.