Governance transitions of East Timor, Afghanistan and Iraq - Australia's contribution.
Melbourne JD Guest Lecture Series (University of Melbourne)
22 October 2003

It is a pleasure to speak with you today on Australian contribution to the promotion of democracy and good governance around the world - and particularly in East Timor, Afghanistan and Iraq.

I am continually heartened by the interest and involvement of the Australian legal fraternity in the promotion of democracy, freedom, and the rule of law outside our own national borders - and it is important that this focus remains on promoting those ideals internationally.

Our national commitment to those principles is respected and admired. Support for the growth of democracy and the development of good governance is vital in those often contentious actions after which reconstruction and support are the only way forward.

Of course those "on the side" of freedom and democracy must be reminded to observe international law. A recent example that comes to mind is that of your university's own Professor Gillian Triggs whose expert international law opinions have been of great assistance to those of us arguing for better treatment by the U.S. of alleged Taliban fighter David Hicks, who is currently in detention in Guantanamo Bay.

The horrific attacks on the United States in 2001 and in Bali in 2002 have had sweeping political, social, economic, and military consequences. These bear directly on the fate of freedom and democracy in the world. In the course of the "war against terror", we will do grave damage to our cause if we ignore or demean the fundamental principles for which we stand. Tragedies such as Bali are important spurs for Australia to encourage us to redouble our efforts to assist in promoting higher standards in democracy, improving governance, and in raising the standard of living in nations like Indonesia.

Democracy

In the past quarter century, and especially in the past decade, democracy and freedom have spread globally to an unprecedented degree. More countries have democratic forms of government than ever before in the history of the world. And no form of government other than democracy has any broad legitimacy and appeal.

It is worth visiting the website for Freedom House (http://www.freedomhouse.org/research/freeworld/2003/charts.pdf). It ranks countries according to levels of democracy and also shows global trend data on the degree of democracy enjoyed worldwide. What is interesting to note from the charts is that the number of electoral democracies grew rapidly until about ten years ago, when that trend flattened out.

In their most recent edition of the survey (2003), Freedom House report that, despite events since September 11, 2001, the world is continuing to become more free according to their survey. Since 1993, they rate the number of free countries as rising from 75 to 89, the number of partly free falling from 73 to 55, and the number not free rising from 38 to 48. The proportion of the world's population living in 'not free' countries has not changed much since the 1980s, but the proportion living in free countries has risen significantly, from around 35% in 1993 to 44% in 2003 (though most of this rise is due to the inclusion of India in the 'free' category since 1998).

Twelve years after the fall of the Berlin Wall, important gains for democracy continue to be registered. In the past few years these have included: " The integration of Central Europe's consolidating democracies into the economic and security communities of the democratic West. " The deepening of democracy in Korea and Taiwan with the victories of long-time opposition parties in those countries. " The transition to democracy, or some sort of pluralistic regime, in Indonesia, and the granting of an independence ballot in East Timor; and " The liberation of Afghanistan and Iraq.

Despite these advances, there is an underlying cynicism in many countries that have moved recently to democratic systems.

In the past decade, many transitional structures have slipped below the threshold of democracy. A growing number of countries are "pseudo democracies". Superficially, they have democratic constitutions, regular multiparty elections, parliaments with opposition, and independent courts. However, in these cases, state power is highly concentrated and used undemocratically to maintain the incumbents' grip on power.

The irreducible condition for a minimal democracy - free, fair, and meaningful elections - no longer holds in these countries. In much of Africa, political transitions have stalled at this point. The most significant regression has been in Russia and Ukraine, where power-aggrandizing presidents have crushed the independent media, intimidated opposition, and sponsored electoral fraud to the point where it is not longer possible to defeat them in national elections.

The global state of democracy is thus quite mixed. In the Baltics and Central Europe, democracy has been consolidated. However, in most of the rest of the world, even in such relatively rich nations as Korea and Taiwan, democracy is struggling through troubled times. These troubles should not cause despair or resignation on our part, but they do generate a powerful case against complacency or self-congratulation.

Yet periods of danger also present moments of opportunity. Even as we wage a global war against terrorism, we have an opportunity - and indeed an imperative - to help steer swing states toward more effective, accountable, responsive, legitimate, and humane governance. I would say perhaps because of the so called "war on terror", this need is even more pressing. I have chosen to speak about East Timor, Iraq and Afghanistan not simply because their moves toward potentially becoming strong democracies are recent events, but because they are three of Australia's primary aid recipients.

The promotion of good governance and human rights are key objectives of Australia's aid programmes to East Timor, Afghanistan and Iraq. Australia has a responsibility in the rebuilding of all three nations as we took part in operations that set the foundations of their new styles of statehood.

And one can say these objectives are in part stronger, because of terrorism.

The only effective and long term defence from terror is to isolate the terrorists from the much larger society around them. And that requires reforms that give societies progress, justice, and a stake in the system of globalization. The principal breeding grounds for terrorism are oppressive, corrupt, and/or failing states.

I will turn now to what Australia is doing through our aid programme to assist these three countries.

East Timor

Given East Timor's size there is little Australia will achieve economically through our engagement. That's not to say a sense of our own national interest is not at play…

As a recent Australian Strategic Policy Institute paper on the troubled Solomon Islands noted - and the same can be said around the region - state failure is a concern because weak states present opportunities for international criminals to use these nations as staging points for illegal activity, or worse, terrorism.

From a purely altruistic standpoint also, East Timor deserves our strongest support because we are its closest western neighbour and other potential aid donors are often more focused on their own regions to be highly engaged with East Timor.

Australia has focused on building the capacity of the public administration in East Timor; promoting effective and sustainable economic governance; strengthening civil society; and, more recently, providing assistance for the development of an effective national police force. This represents approximately 64 % of Australia's estimated $33.6 million country programme expenditure to East Timor in 2002/03.

Australia's expenditure on governance and human rights includes our contribution to the World Bank managed Transitional Support Programme, which amounts to $24m over three years from 2002/03 to 2004/05. Australia is a key contributor to the Transitional Support Programme and an active participant in its review missions. Through the Transitional Support Programme donors are assisting East Timor to meet its budget financing gap until oil and gas revenues come on stream.

The release of funding tranches is dependent on performance against agreed benchmarks in areas such as power, public expenditure policy and law and justice - and that is a theme I will return to in a moment after reviewing our assistance to all three countries.

The capacity development needs of the East Timorese public administration are significant. The Government of East Timor has identified capacity building at the government level as crucial for East Timor's development. The Australia-East Timor Capacity Building Facility is a flexible mechanism through which Australia supports a range of capacity building activities across the public administration.

The recently mobilized Fisheries Management Capacity Building Project will assist staff in the Ministry of Agriculture, Forestry and Fisheries (MAFF) in developing policies and regulations for the sustainable management of East Timor's coastal fisheries. As Ambassador Jorge Teme told the Australia-East Timor parliamentary friendship group last week, East Timor's fishing industry is quite traditional but as the nation develops, the nation will earn more from fishing further off shore. It is vital that their valuable natural resource that fishing represents is not plundered and limited over the longer term.

Developing skills in economic governance is a high priority for capacity building. The transparent and accountable management of public funds is critical for East Timor's future development prospects given the potential magnitude of Timor Sea revenues and the extent of Australia's current support for East Timor's recurrent budget.

Australia has been providing advisers to the revenue and budget units of the Ministry of Planning and Finance since early 2000. In July 2003 a new two-year project commenced focusing on provision of operational support and training .

The maintenance of law and order will be critical for East Timor's stability and prosperity, particularly in the period following the departure of the international peacekeeping force.

In August 2003, Australia announced a major new Police Development Programme designed to build an effective, professional and accountable police force and support related institutions of law and justice

With interim assistance already being delivered, the long-term programme is expected to mobilise in early 2004. Australia will provide $40 million over 4.5 years for the programme. The United Kingdom has also agreed to provide additional funding for the programme in 2003/04.

The programme will be jointly delivered by AusAID and the Australian Federal Police (AFP). AusAID will provide training and expertise in policy development, planning and resource management to support the East Timorese Police Services (PNTL) headquarters capacity. AusAID will also provide complementary assistance to other sector agencies or key governance institutions such as the "Office of the Provedor" (which is a three pronged organisation which acts as their ombudsman, human rights institute and an inspector general's anti corruption investigatory body). The AFP will focus on providing training at the Police Training College in Dili and on the job coaching in the field.

The programme design draws on the findings of a Joint Assessment Mission on policing capacity conducted by the government of East Timor, the UN and donor countries in November 2002, in which Australia participated actively. The Mission found that capacity in the areas of planning, budgeting and resource management was limited, and that a lack of policy development and planning had inhibited the development and inculcation of standard operating procedures. Basic recruit and field training were also found to be in need of improvement.

Until its departure, the United Nations Mission of Support in East Timor (UNMISET), through the UN Police Force (UNPOL), has responsibility for developing a capable national police force. Australia, along with other donors, continues to maintain pressure on the UN to improve its performance in capacity development and focus its attention on this aspect of its mandate in the time remaining to it.

Australia has provided technical advice to the PNTL to assist in the development of the PNTL budget and annual workplan. In addition, AusAID is currently providing a long-term Institutional Strengthening Adviser and a Civilian Law Enforcement Adviser.

Good governance is also dependent on an effective and capable civil society to facilitate demand for greater accountability and effectiveness in the management of resources and delivery of services.

The Australian Government's NGO Capacity Building Scheme aims to build the capacity of East Timorese NGOs and community based organisations. It encourages strong partnerships between Australian and East Timorese organisations and has a particular emphasis on supporting activities focused on strengthening human rights in East Timor and good governance.

Through the East Timor Community Assistance Scheme, Australia provides community-level assistance that has benefited at least 20,000 people to date in the areas of water supply and sanitation, education, agriculture and social infrastructure.

Australia also provides support to East Timorese NGOs through the Human Rights Small Grants Scheme and the AusAID-NGO Cooperation Programme

Iraq

Australia also making a strong and effective contribution to the humanitarian and reconstruction needs of the Iraqi people, and has committed more than $100 million in assistance since February this year. Of this commitment, $55 million is focussed on meeting immediate humanitarian needs and $45 million will support key reconstruction priorities where Australia has particular expertise, including agriculture and food security, water and sanitation and economic policy.

Australia is supporting governance in Iraq through the placement of highly qualified Australian personnel in key reconstruction planning roles within the Coalition Provisional Authority (CPA). Australia's advisory team in the CPA has made major contributions to agriculture, economics and finance, water and sanitation, oil policy and donor coordination planning and management.

Australian agricultural advisers have assisted in the establishment of an Iraqi Management Committee to progress reconstruction planning while ensuring Iraqi ownership of the reconstruction of the agriculture sector. Australian funding has also been provided to rehabilitate Ministry of Agriculture buildings, infrastructure and equipment and 13,000 Ministry staff have returned to work and received salaries. Australia is also providing support for the Ministry of Trade, including technical advice and rehabilitation of Ministry buildings.

Australian economic advisers have contributed to the development of currency arrangements, a salary structure for public servants, preparation of the 2004 Iraqi budget and assistance with longer term economic planning.

Australian water and sanitation advisers have facilitated the re-establishment of the Ministry of Public Works and preparation of strategic plans and budgets.

An Australian expert has worked with Iraqi counterparts on rehabilitation of the oil sector, including supply of essential products such as LPG and benzene.

The protection and promotion of human rights have been an important focus in delivering our humanitarian assistance in Iraq, which has focused on delivery of essential services.

Australia is supporting human rights in Iraq through allocations totalling $38 million to the UN Flash Appeal for Iraq and associated activities. Support to UNICEF, the International Committee of the Red Cross (ICRC), CARE Australia and World Vision Australia is assisting with the provision of fresh water and sanitation programmes and vital repairs to water and sewerage treatment facilities. Further contributions to UNICEF, ICRC, the World Health Organisation (WHO) and Save the Children Australia are supporting disease prevention and treatment programmes, the provision of medical supplies to hospitals across Iraq, efforts to address malnutrition and the provision of child protection services. Australia is also providing support to the World Programme (WFP) to assist in food distribution and to the UN Mine Action Programme to help clear Iraq of mines and unexploded ordinance.

The cost of satisfying current demand for electricity in Iraq is $2bn. The cost of repairing and improving Iraqi oil facilities are between $5bn and $10bn. Upgrading Iraqi infrastructure will cost between $16bn and $30bn. As in East Timor, Iraq cannot simply cover these costs through oil revenue - over the next couple of years it will rely on overseas aid until its oil extraction systems are rebuilt.

The priorities in Iraq are: after order; the creation of a system of justice, courts police and a legal system. The 25 member Governing Council of Iraq are drawn from all ethnic groups, with a Shi'a majority but with Kurd, Sunni and Assyrian representation. The council is working well considering the traditional ethnic rivalries. While there are strong arguments for withdrawing from Iraq as soon as possible, the Coalition Provisional Authority which is ultimately responsible for Iraq as military victors, have a duty to remain there and not leave until Iraq is stable and is functioning properly - otherwise it will feed into the hatred focused on the West and could ultimately prove a greater threat to international security than the Hussein regime ever was.

Afghanistan

Australian aid to Afghanistan has been primarily humanitarian in nature with the underlying objective of building a stable and secure Afghanistan.

Assistance has targeted priority needs including: medical assistance, mine action, food security, basic education, and assistance for displaced and returning Afghans. Assistance has also been provided for drug control, technical assistance in banking/ finance and strengthening civil society.

Australia does not specifically fund human rights programmes but the activities we have funded with UNHRC and UNICEF have human rights components. Our contributions have included: assisting the organised return and repatriation of over 2 million Afghans through the provision of $17.3 million to UNHCR; and helping more than 3 million Afghani schoolchildren to attend school in 2002, 30% of whom were girls, by providing $7.1 million to UNICEF.

The Australian Government is also supporting Afghanistan to get back on its feet in a number of areas: Australia provided a $4 million contribution to the Afghanistan Reconstruction Trust Fund (ARTF) in June 2003, which clearly supports the National Development Budget and the efforts of the Interim Administration.Australia also provided $500,000 through the Asian Development Bank (ADB) and the UNDP to assist in the development of the banking and finance sector. Our assistance to the ADB specifically funded an Australian technical adviser to the Afghan Minister for Finance.

The stabilisation of the security situation in Afghanistan remains of the highest priority for donors and the Afghan Interim Authority. Between July 2001 and June 2003 Australia disbursed over $60 million in assistance to Afghanistan. This represents Australia's third largest contribution to a single humanitarian effort, exceeded only by East Timor and Iraq. Assistance estimated at $23.8 million will be provided in 2003-2004.

Australian aid is delivered primarily through multilateral agencies and major international NGO's. These organisations have considerable expertise working in conflict areas and are the most effective means of delivery in Afghanistan. It has also included assistance to build the capacity of local NGOs, working in partnership with Australian NGOs.

Australian aid - promoting good governance

As I mentioned earlier in reviewing Australia's assistance to East Timor, our government believes in using the "carrot" of aid to encourage progress toward and commitment to better governance. And now as we focus on Afghanistan and Iraq which are less progressed on the path to democratic security than East Timor, with timely international support these countries have the potential to become models for democratic progress in the Middle East region.

Aid donor countries are well placed to make a difference in places like Afghanistan and Iraq, but by comparison our chances for influencing existing dictatorships are more limited.

The key problem with backsliding and pseudodemocratic regimes is the lack of political will to install or maintain a genuine democracy. Ruling elites do not want to surrender power and the enormous wealth and privileges it confers. No amount of political assistance to strengthen institutions of governance and civil society is going to fundamentally advance democracy if political elites are not willing to respect its rules and constraints.

In much of the contested world, rulers do not value democracy over their own power and privilege, and civil societies are in themselves too weak or too oppressed to force them either to respect democracy or to surrender power. Only principled, potent, and predictable international pressure can tip the balance. This requires political conditions for aid and debt relief, standards for governance that people in these societies will welcome and support.

To illustrate this one can look at the real progress being made with Iraq's interim governing council that will be drafting a democratic constitution over the next 6 months in the lead up to an election.

"Debt relief for democracy" bargaining, and development assistance for good governance are ways to anchor and strengthen new democracies. It is potentially a very useful strategy to employ internationally, however I stress that there is not a great deal of scope for Australia to influence countries to democratise through this strategy, largely because bilateral debt owed to Australia by Heavily Indebted Poor Countries (HIPCs) is minimal. It is minimal because Australia currently gives aid to poor countries through grants, rather than loans.

The Australian Government supports debt relief for the world's poorest countries that suffer from the burden of unsustainable debt. We consider that the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, developed by donors and the World Bank and IMF, is one way of effectively addressing the unsustainable debt burdens of these countries.

Australia strongly supports the framework's requirement for countries to prepare comprehensive, locally-owned poverty reduction strategies. This works to ensure that the proceeds of debt relief are directed towards basic health, education and poverty reduction programmes, and not lost to corruption or military spending.

Australia has committed $A77 million to the multilateral component of the enhanced Heavily Indebted Poor Countries Initiative (HIPC) to help finance debt forgiveness by the World Bank and the International Monetary Fund. In addition to this, Australia has pledged 100 per cent bilateral debt forgiveness to countries that qualify for debt relief under the enhanced HIPC Initiative.

Of the 42 countries identified for possible debt relief under HIPC, two with debts to Australia have qualified for relief. There are no other countries that are regarded as having an unsustainable debt burden and outstanding liabilities to Australia. Nicaragua qualified for debt relief in December 2000, and Australia no longer expects repayment of Nicaragua's debt, totalling $6.3 million. Ethiopia qualified for debt relief in November 2001 and is no longer expected to make repayments to Australia on its debt of A$11.5 million.

It makes no sense to write off the debts of highly indebted poor countries governed by oppressive, corrupt elites who cannot be checked or removed by democratic means. To relieve unconditionally these debts, largely accumulated through corruption and bad governance, is to invite continuing venality and waste.

Relief must provide hard incentives for reform. Debt relief should be conditioned on a free press, free associations, free and fair elections, and credible institutions to control corruption, including an independent commission for that purpose and an independent judiciary.

I would propose something like a system whereby commitment to these institutions should be locked into place by suspending debt service payments of a qualifying country and retiring its debt at a certain rate each year the country adheres to the political conditions.

Political assistance is a multi-faceted, long-term challenge. The most fundamental obstacle to economic development is not scarcity of resources, it is corrupt, unaccountable, lawless governance. If we want to promote economic development, we must do more to help build the institutions of good governance in both the state and civil society.

Directing official assistance on good governance would enable us to do more for recipient countries in two respects. First, state-to-state assistance would be delivered to those countries that are serious about reform, and thus about development - there would be more for them. Second, only with this "tough love" approach that sets clear standards and demands accountability can we justify a larger overall investment in aid to the Australian people.

Of course our commitment to basic humanitarian aid should not be affected by such an approach. Demining activities in Afghanistan during the Taliban regime and provision of medical supplies and food for Iraq during the UN blockade were vitally important components of the Australian aid programme for many years.

Democratic development is not going to be accomplished in a piecemeal fashion or in a few years. Action is needed on a number of fronts simultaneously. People must be educated to know their rights and responsibilities as democratic citizens, and mobilized to exercise them. All kinds of grassroots civic organizations must be fostered and empowered.

That is a major focus of the Human Rights and Good Governance Education Inquiry being run by the Australian Parliament's Human Rights Committee, of which I am chair.

Independent media - not only newspapers and television, but crucially in poor countries, radio stations - must be established and fortified. At the same time, the input, output, and accountability structures of the state and political system must be developed: parties, legislatures, local governments, a professional bureaucracy, and independent structures to administer justice and elections, control corruption, audit public accounts, and respond to citizen complaints.

In many Arab countries, democratization, to be sustainable, must be part of a comprehensive project to construct a more efficient, open, accountable, law-based, legitimate - and hence fundamentally stronger - state. In a programme of gradual democratization from above, the timing of elections is crucial. But here again we confront the painful dilemma that rulers in a position to negotiate reform typically lack the political will or skill to undertake it.

We must be clear, consistent, and credible in articulating democratic principles and values, even as we pursue other interests. Nothing is more damaging to the democratic prospect than to treat and honour as democracies regimes that are manifestly no such thing. Such hypocrisy only entrenches pseudodemocracy as a legitimate regime form.

And yet, clearly, we have other interests than the promotion of democracy. We have engaged with PNG for example, no matter what concerns we have about how "democratic" their government is in reality.

But there is a lesson to be learned from Australia's long experience in dealing with dictatorships - one that I have learned through my participation in the the Australia-China Human Rights dialogue process. That is: we can pursue multiple tracks of interest at once. We can raise issues of human rights and democracy while we also deal on matters of strategic interest like pressuring North Korea on weapons of mass destruction, and pursue trade deals as we have, for example by securing a recent gas contract.

We can bargain, we can persuade, and even publicly, we can respectfully speak out for principle. Most of all, what we must not do is to degrade the currency of democracy by honouring undemocratic regimes with the label "democratic".

Even when we pursue harder interests, let us preserve our credibility as a leading nation committed to democracy and human rights as fundamental goals. That credibility - that devotion to principle - is one of our most precious assets in the long and difficult struggle ahead. It is what has made us a target, but it is also what will enable us to prevail.

And we will, I am sure, continue to reap the fruits of the investments we are making in East Timor, Iraq and Afghanistan.

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