The Simons Report 25 years later – a big mistake

That’s the problem with headlines. They can often be read in more than one way – and that’s my point. It’s not that the whole Simons report was a big mistake, but rather that summarizing it in the phrase “a clear objective” was a communication headache.

And a disclosure at the outset – I worked in the secretariat and wrote a fair report, so I’m not a neutral observer.

What seemed like a masterstroke at the time—bringing a fundamental question unambiguously to the fore—became an albatross when misread and misrepresented. This perhaps illuminates a second big lesson: don’t expect people to read a 350-page report. Almost no one did.

The Simons Report was commissioned by the new coalition government in 1996, to reset policy after 11 years of Hawke/Keating governments. Aid and development had become both visible and political by the mid-1990s, not least because Labor deliberately used development cooperation as part of an Asian integration strategy.

In practice, the Simons report offered more continuity than change, but the review process allowed for reassessment and a balance between the two. The new government was able to familiarize itself with development cooperation and see how it could advance its priorities before taking major decisions.

After a tussle between ministers, a three-person review team was selected, none of whom had direct, in-depth experience of official development cooperation programs, or diplomacy for that matter. This made the whole process much more difficult than it could have been.

So how was A clear objective to interpret badly? The subtitle was Poverty reduction through sustainable development. This was interpreted as a single goal of altruistic poverty reduction, through NGO-style grassroots poverty reduction projects.

In fact, the report strove to champion broad-based economic growth and development as the best poverty reduction strategy, and also the best way the program could deliver broader diplomatic, trade and security benefits.

He brought foreign policy to the fore by recognizing Australia’s enduring national interest in regional peace and stability, reaffirming the focus on the Pacific and South East Asia. On the Pacific, he briefly touched on labor mobility and new forms of political union as win-win solutions to sustainability and security issues, showing how time is needed for political ideas materialize.

But a lot of that got lost in… clear purpose.

Without a doubt, the 1984 Jackson Review was the most scholarly and influential look ever at Australia’s international development efforts. It took disjointed programs and policies and brought it all together into something cohesive, particularly built around country programming.

Jackson’s approach to Australia’s international development goals was to recognize humanitarian, diplomatic and commercial motivations from the outset, and in doing so try to balance and manage them.

What Simons concluded was that the “three-legged stool” formulation had broken down and secondary and indirect business benefits had become a significant driving and distorting factor in business choice. I stand by this analysis to this day.

Despite being an adviser to his Labor predecessor, Gordon Bilney, I credit Foreign Secretary Alexander Downer – who eventually agreed to untie Australian aid – with breaking that link, freeing the programs to become more strategic and impactful.

Nowhere has the trade driver been clearer or more controversial than in the case of the Development Import Finance Facility (DIFF). Both his supporters and his detractors have made themselves heard. There were arguments for and against, but these were amplified by politics, as Downer had gone to the election promising to abolish the program, and then made statements in parliament about the regional backlash that swirled. proven to be incorrect.

Concluding that the DIFF was too compromised to continue, the Simons report recommended exploring alternatives to Australian loan schemes, but this was not taken up. It is time to review perhaps, but in a transparent and rigorous way.

Debate resumes on the merits and drawbacks of Australia’s Pacific Infrastructure Facility and Australia’s creation of a Development Finance Institution. In this context, it would be useful to revisit the whole DIFF saga as calmly as possible.

Interestingly, some of the problems that have plagued DIFF have also emerged in more recent UK efforts to combine private and public finance for development purposes – the concentration of funding in a small number of affluent markets; doubts about whether development funds were ultimately additional or simply a substitute for private money; the distorting effects of trade subsidies; and the drawbacks of vendor-focused support.

The multilateral development banks have shown that these problems can be managed, but it is hard work. Institutions need to operate at scale, rely on world-class public and private sector expertise, and have purpose-built policies, systems and skills. At present, these preconditions are far from being met in Australia, so if we are ever to go down this path, serious institution building will be required.

The Simons Report came at a time, after the collapse of the Soviet Union, when Western triumphalism was building and the orthodoxy was for deregulation, privatization and unfettered trade and investment. We bought some of that, but with caution.

We advocated for states capable of providing essential services and regulating business. We have tempered the new government’s enthusiasm for private capital, showing its volatility and its concentration by country and by sector – judgments justified almost immediately by the Asian financial crisis. We said, 20 years before Glennie, that foreign direct investment was important, but it was no substitute for development cooperation.

Simons’ review focused on economics and governance which we could usefully return to today, but with more humility on exactly what works, where, when and why. After the global financial crisis and COVID-19, it is the right time for us to rethink the respective roles of the state, the private sector and civil society. This takes on added urgency given the systems struggle in which we find ourselves and the need to reinvigorate and relegitimize democratic governance.

The Simons report was released with ministerial praise, but some senior AusAID officials disdained it. It turned out that some of those who had previously wanted consistency and rigor thought they had had enough.

This blunted implementation of some of the report’s key recommendations. Despite this, most of its themes and orientations were eventually adopted – including the emphasis on more rigorous approaches to poverty reduction; stronger strategic planning; increased use of cost-benefit analysis; deployment of greater specialized expertise; and better evaluation. However, it took a long time before his calls for an independent evaluation office and an aid advisory council were introduced.

The Simons report didn’t do everything right, far from it – for example, it was weak on the environment, and I for one changed my mind after graduation – but the report did gave AusAID and the government a boost on some avenues that led to greater effectiveness.

The new Labor government that takes office this week will need some sort of process to get from where we are now to where we need to be. There’s a Grand Canyon to fill, and that’s unlikely to happen just through a press release and a ministerial statement.

More than 10 years have passed since the last Independent Review of Australian Development Co-operation (2011), with COVID-19 ending a 2019 attempt to reset the policy led by experts.

DFAT did a good job preparing quickly Recovery partnerships in 2020, but this COVID-19 policy is expiring and a longer-term strategic plan is needed to guide the package and articulate its link to Australian foreign policy priorities. This becomes all the more acute if the government does not embark on a UK-style integrated review.

Some sort of quick and transparent process involving both internal and external expertise to design a new strategic framework for Australian development co-operation could make a clear contribution.

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Amanda J. Marsh