Corporates must play a greater role in aid program

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Corporates must play a greater role in aid program

Author: Martin Thomas, Habitat for Humanity Australia CEO

The Federal Government has been criticised for its deep cuts to the foreign aid budget. Yet there is one aspect of the program’s overhaul that should be lauded and which could significantly increase the scale and impact Australia has in the Asia Pacific region.

This change is the move to encourage the private sector to play a greater role in the delivery of Australia’s foreign aid projects.

While the aid budget ($5 billion) appears significant, some $7.6 billion has been cut from the forward estimates over five years. For Habitat for Humanity Australia these cuts are troubling.Yet there is also now a unique opportunity for Australian private companies to take up the slack and contribute in a way that could turn out to be very effective.

It comes as a new report by Habitat for Humanity Asia Pacific finds corporations could fill a growing gap in government funding, by forming public, private partnerships to build new affordable housing stock and to create new financial mechanisms for the poor.  The report warns the rapid growth of cities across Asia is causing a shelter crisis with an unmet demand of 20,000 housing units a day.

The philosophy behind the Australian Government’s changes is fairly straight forward, namely that the aid money provided by taxpayers should connect more directly with the private sector here in Australia and in the countries being assisted. In the long term, these new connections will encourage further economic growth in developing nations through new trade opportunities and valuable business connections.

Of course, it will be a slow process but if the changes are successful – and we believe they will be – this new approach has the potential to add scale, impact and efficiency to how we deliver aid and in the process, boost trade opportunities on both sides.

We are not talking here about private sector donations substituting projects that provide life-saving emergency aid.

Targeted, non-market interventions need to continue, but there are many advantages to opening the way for more Australian companies to forge partnerships to deliver aid and boost development.

Perhaps one of the easiest first steps is demonstrated by the partnership Habitat has forged with Boral, where the company will provide  products, technology and expertise, where possible, to build houses for some of the poorest people in Asia.

The partnership works because we each start at a common point: we are both in the business of building houses.

In the case of Habitat, we improve housing for a family somewhere in the world every four minutes, with support from governments globally, private corporations and from the general public. In Boral’s case, every second home or commercial building that is built in Australia is likely to incorporate some form of Boral products, and across most of Asia around 40% of plasterboard is manufactured by Boral with the company’s products changing construction methods and the way people live.

The impact of a house goes beyond the obvious tangible benefit of a roof over a person’s head. It reduces disease, increases the chance of education and provides, in short, the foundations for a much healthier and more productive life.

As part of our partnership, we are working together to build or renovate disaster resilient houses and  water and sanitation facilities in Quang Nam Province in Vietnam, a poor coastal region often affected by extreme weather events, such as typhoons and flooding.  This work will provide shelter and clean water facilities that can withstand future natural disasters.

In Indonesia we are working together on an urban slum upgrade project in Jogyakarta, again focusing on building disaster resilience within the community.While helping prevent disasters is smarter than repeatedly responding to and recovering from them, Boral is also lending its support to Habitat when disaster strikes.Australian donor-funded houses, including funding from Boral, were among the very first permanent houses to be completed, after Typhoon Haiyan devastated the Philippines.

While the area is still devastated, these disaster-resilient homes stand as both a symbol of hope for those affected and an example of the real difference

Australian companies and individuals can make to help those in critical need.

Partnering with a not-for-profit organisation like Habitat for Humanity – or one of the many other organisations doing terrific work in the area – is undoubtedly the easiest and most effective way for Australian companies to contribute.

Like many other Australian and regional companies, Boral had no option but to become much leaner and smarter in recent years to survive the global financial crisis, adapting quickly to the new realities of the marketplace and the increasing competitive forces from some of our neighbours. It is that ability to adapt and to do more with less that drives some of the work Habitat for Humanity and Boral are undertaking in Vietnam, Indonesia and the Philippines, making a difference to families one house at a time.

And that is why the commitment by Canberra to involve the private sector in delivering foreign aid has the potential to make a significant impact.

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