Episode 91      22 min 24 sec
Within Our Reach: Tim Costello on International Aid

World Vision Australia chief Tim Costello tells us how international aid efforts have succeeded, where they've got to improve, and why aid cynics have got it wrong. With host Jennifer Cook.

"The Millennium Development Goals were a stunning global achievement. They were the first time that poverty was put within a human rights framework. And the fact that people did not have access to food and medicine and clean water was seen as a fundamental human right." -- Tim Costello




           



Tim Costello
Tim Costello

As CEO of World Vision Australia, Tim Costello leads an organisation of about 560 staff, with an annual income of about $350 million, and 400,000 children overseas sponsored by Australians. Tim has long been the voice of social conscience for many Australians, having led debates on issues such as gambling, urban poverty, homelessness, reconciliation and substance abuse.

Tim studied law and education at Monash University, followed by theology at the International Baptist Seminary Rueschlikon in Switzerland, and a Master’s in Theology at the Melbourne College of Divinity. He has been a Baptist Minister in St Kilda, and in the city at Collins St Baptist Church. Tim continued to serving the local community by successfully running for Mayor of St Kilda in 1993, ending with the State Government's disbanding of councils shortly afterwards. He founded Urban Seed, a not-for-profit Christian outreach service for the urban poor.

In July 2004, Tim was named Victorian of the Year 2004. In June 2005, he was made an Officer of the Order of Australia (AO).
Tim is currently Chairman of the National Australia Bank's community advisory council, a member of the Alcohol Education and Rehabilitation Foundation, and Chairman of the Community Council for Australia, a peak body for the Not For Profit sector.

Credits

Host: Jennifer Cook
Producers: Kelvin Param, Eric van Bemmel
Series Creators: Eric van Bemmel and Kelvin Param
Audio Engineer: Ben Loveridge
Voiceover: Nerissa Hannink

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Within Our Reach: Tim Costello on International Aid

VOICEOVER
Welcome to Up Close, the research, opinion and analysis podcast from the University of Melbourne, Australia.

JENNIFER COOK
Hello, I’m Jennifer Cook.  Thanks for joining us.  Today in our second of two episodes on aid efforts to alleviate poverty, we’re speaking about that trait that many say defines us as human beings, our ability to feel compassion and to help those in need.  We’re focusing on humanitarian aid and asking the question, “How effective is it?”  With us to discuss this complex and controversial topic is Tim Costello, the CEO of World Vision Australia since 2004, and a man recognised as one of the country’s leading voices on issues of social justice.  Prior to joining World Vision Australia, Tim was a Baptist minister and he studied law.  He’s also led campaigns tackling gambling, homelessness, reconciliation and substance abuse.  Tim was in Melbourne to speak at the 2010 One Just World Forum organised by World Vision Australia, the University of Melbourne and AusAID.  Tim, thank you so much for your time today.

TIM COSTELLO
A pleasure.

JENNIFER COOK
Look, let me begin by saying some figures – 1.4 billion people living in extreme poverty, 27,000 children a day dying of preventable causes such as hunger, measles, malaria and diarrhoea.  When you’re faced with such overwhelming numbers as that, what I’d like to ask you to talk to us about is just how effective are aid organisations, what can we expect them to realistically achieve and what do you think is beyond their reach.

TIM COSTELLO
It’s very important to keep hope alive by keeping perspective.  The truth is that 25 years ago it was 60,000 kids dying each day.  Down to 27,000 is still iniquitous and, you know, assaults the moral imagination of any human.  You know that a parent who can’t provide enough food or medicine that’s timely for a child feels a terrible failure as a parent, and suffering is no less if you’re a poor parent than if you’re an affluent western parent, suffering is just as intense.  But from 60,000 kids a day dying of preventable disease down to 27,000 – in fact, I think the figure might be closer to 25,000 – UNICEF’s latest figures – is progress.  And it’s a testimony to a range of things including aid and its effectiveness.  And when you feel overwhelmed with those figures, at least, the perspective says it’s not just romantic soft in the head Irish musicians who speak about making poverty history - the Bonos and the Bob Geldofs, and you forgive them because they are Irish and they are musicians – that Make Poverty History goal is actually showing some march toward progress – 60,000 to 27, in fact, 25,000 kids a day.  And it is within our reach to say that no child should die because of preventable disease.  That’s what keeps me going.

JENNIFER COOK
It reminds me of the millennium development goals, that summit by leaders of world’s nations in New York in 2000 where they made these targets to be reached by 2015, which is not so far away now.  And one of those was reducing by half the proportion of world’s people in extreme poverty.  Another, reducing by half the proportion of people who suffer from hunger, and reducing by two thirds the mortality rate of children under the age of five.  So you’re saying we’re making steps towards that?

TIM COSTELLO
Yeah.  No, we’re making progress.  The thing to remember is that the millennium development goals were a stunning global achievement.  They were the first time that poverty was put within a human rights framework, and the fact that people did not have access to food and medicine and clean water was seen as a fundamental human right that 198 nations in the world signed up to.  Now, if you know anything about the discussion about human rights, you know that it is flawed with fundamentally different philosophical views.  Western human rights are seen to be individualistic.  Often Eastern are seen to be more collectivists and communal.  You can never agree on the sources, the framework of human rights.  What was great about the millennium development goals is they were so concrete – we will halve by 2015 the number of hungry children, of poor people.  It was so concrete that everyone signed up.  Having said that, we are off track to achieve those goals.  Though we’re making progress, the ambitious goals of halving the number of hungry set back with the global financial crisis, et cetera, has knocked us off track, set back with some of the rich countries not stepping up and keeping their promises about aid.  We shouldn’t underestimate how significant a global consensus about dealing with poverty this was.
JENNIFER COOK
So you may be lost in the woods for a little while but it’s still shining like a beacon up there, you can still see it?

TIM COSTELLO
Yeah.  And for most of us who are managers – and I’ve got 700 staff out at World Vision – there’s really two things about management, two tricks that I’ve learnt.  Set a goal and measure how you’re going.  People, actually, then know the way, know what’s expected, and that’s what the world did around poverty.  So I think we have a rallying point that’s important.

JENNIFER COOK
Give us an idea, if you could Tim, about how an organisation like World Vision Australia, in regards to disaster relief, like the devastating Asia tsunami of 2004 where World Vision Australia raised 100 million as well as ongoing aid – tell us a bit about the operations of that, the bones, the machinations.

TIM COSTELLO
Well, World Vision is a federation of 19 income raising officers around the world, European, American, Canadian and Australian, and working in over 100 countries.  In some of the countries where the tsunami hit, Indonesia and Thailand, they aren’t just field or poor developing countries, World Vision there raises dollars from their own middle class, and significant dollars.  What we income raising officers call “the field”, of course, is a domestic national program and the responsibility of national local governments.  So in the tsunami those governments, unlike in Haiti, weren’t taken out of action, they responded.  World Vision responded both in country and with income raised from our partnership around the world.  And we said right up front that we were going to spend only 20 to 30 per cent on the emergency effort.  The pressure immediately is, we gave you money, spend it, why haven’t you done something.  Imagine what it was like in tsunami areas where all titles were destroyed, where you literally had to find surviving elders to pace out where they thought people’s boundaries were.  To slap up a house and say donors want it done quick, would only be to set up communities for a fracture and jealousy and fights.  So, we said we’re going to spend this amount in the first six months on the emergency effort, and that’s literally getting clean water, getting security tents, shelter.  And then the rest of the work, which took the next three years for us of spending our money, was doing careful community consultative rebuilding.  So, the community that first said, “I don’t know if I want to build back near the ocean, it snatched away my loved ones, give me time, let me think about where I want to live.”
“I was a fisherman but do I trust the sea, I’ve lost confidence in my own livelihood.”
Those issues take time if people, communities are indeed to own them and determine their own future.  These are really huge questions and speed of spending will often get in the way of that after the emergency phase is over.

JENNIFER COOK
This is Up Close coming to you from the University of Melbourne, Australia.  I’m Jennifer Cook and our guest today is Tim Costello, the CEO of World Vision Australia.  Tim, what about the criticism that a lot of international aid ends up lining the pockets of the dictators?  Surely when you’re sitting back here in a country like Australia you hear those kinds of things, you’re justified in thinking why throw good money after bad.

TIM COSTELLO
Yeah.  Let’s distinguish two things.  Firstly, a lot of the dictators were propped up in cold war times in a contest between the Soviet Union and America, for influence, strategic, geopolitical, even though donor governments knew a lot of the money was being haemorrhaging into corruption.  They had other geopolitical cold war aims.  Second thing, for NGOs like World Vision and many other not-for-profits, our monies don’t go to government, our monies are audited by, in our case, Price Waterhouse Coopers.  Local communities that we work with set the goals.  We say we’re going to be there 15 years and then we’re leaving. Why?  Because we don’t want to create dependency, we can’t live the lives of communities for them.  And therefore the auditing and transparency around how those donor monies are used, owned, tracked, followed, is not simply handing it over to a government, which then haemorrhages.  Even so, what we can say about aid is certainly aid has filtered into the pockets of dictators.  And we know that even where there’s a leakage of say 20 per cent, 80 per cent got through.  The importance is to actually recognise that because there’s corruption it doesn’t mean nothing actually helped desperately poor people. And that’s unacceptable, twenty per cent leaking, anything leaking’s unacceptable.  But secondly, we know that if aid goes to those countries whose policies and fight against corruption is much more rigorous, it has a far greater impact.  So aid that would go to the “Ethiopias” and other African countries whose economic policies are greater, six billion dollars of aid will save 25 million people.  If it goes to, as it does, to the Nigerias or the Zambias, six billion dollars will still save about seven million lives instead of 25 million lives.  The loss isn’t acceptable but people think – you say corruption, then there hasn’t been any good done.

JENNIFER COOK
Another criticism you can often get of aid organisations or NGOs is that, “Gee, the money I give is going to keeping the office clean, or it’s going to, you know, sending the mail out.”
I was quite interested in Peter Singer’s book The Life You Can Save.  He was saying there needs to be a greater understanding within the community that money does need to be spent preferably on the right experts finding out the right information at the right time and place.  Is that a frustration for you as CEO of World Vision?

TIM COSTELLO
Yeah.  Look, Peter Singer’s absolutely right.  And you’ll find all the serious non-government organisations are exactly on that page.  We publish an aid effectiveness report where we don’t talk just about our successes, to say to the donors, come on, you’re money’s used well.  We publish our failures.  We talk about where we got it wrong, where the community didn’t actually step up.  Because transparency is your currency of trust.  So we’re very, very committed to being open book about that.  But there’s also a catch here.  The catch is people will often casually, maybe glibly say, “I work out which aid organisation has the lowest overheads and I give my money to them ‘cause that must, ipso facto, be the best.”  
You just need to think about that.  If my wife was ill and I started ringing around medical practices to get her help, my first question wouldn’t be, what’s your overheads in this medical practice.  It would be, what’s the survival rate of patients with this illness.  I don’t mind paying more if it’s effective.  So efficiency, which is the overheads question, is important and every organisation certainly – in World Vision’s case we are very harsh on ourselves to keep efficient, overheads down.  But almost more important is effectiveness – have you done the proper design of a development project that’s going to last for 15 years, are you doing regular evaluation, are you finding out if it’s working and publishing if it’s not, so your donors can actually see.  Effectiveness becomes more than simply the lowest overheads, it really becomes transparency and quality in what you’re trying to do.  And a final comment – you know, a lot of the people who criticise you about your overheads, I say to them, tell me a business that is running its business on overheads – in our case overheads and marketing are 18 cents in the dollar, overheads around about eight or nine cents – tell me a business that’s running on overheads that low. Because not-for-profits are asked every single day, what are your overheads?  Of all groups, we are the ones most under pressure to make sure that we’re being lean and effective in those areas.

JENNIFER COOK
This is Up Close coming to you from the University of Melbourne, Australia.  I’m Jennifer Cook and our guest today is Tim Costello, the CEO of World Vision Australia.  We’re speaking about humanitarian aid and the art of compassion, I’d say, Tim.

TIM COSTELLO
Yes.

JENNIFER COOK
Now, Dambisa Moyo wrote in her book Dead Aid – she made a call saying it’s time for countries such as the US and Australia to consider a new model of helping those countries in need of aid – very simplistic overview of her argument.  Throwing money at them for 40, 50 years isn’t working, what’s wrong with trying to innovate the model.  She is a big proponent of microfinance, which is going in, like Muhammad Yunus’ Grameen Bank, and giving loans to villages.  Do you support that?

TIM COSTELLO
Well yes, I do, but the thesis itself, in my view, is rather simplistic.  I’ve read the book Dead Aid.  There’s no-one actually setting up the straw men that I think she sets up, that it’s either aid or trade.  We all believe it’s aid and trade.  It’s a bit like the Pritikin Diet where you say protein, cut out the carbohydrates and then – you actually need protein and carbohydrates.  What aid does, and I can talk ad infinitum about our own experiences on the ground, is actually deal with giving people access to markets and protection and skills, and importantly the foundation of a house.  The foundation is health, clean water, education.  Those things don’t show up in economic GDP statistics.  And when they’ve got the foundations, the microfinance, which World Vision does – Vision Fund is 180 million US rolling microfinance - Muhammad Yunus’ model is fantastic – all of those things are important but they’re not a magic bullet if you don’t have health, if you don’t have education, if you don’t have clean water, if you don’t have food security because you’ve tried different varieties of seed to get better crops because crops are failing.  So it’s aid and trade, not the straw man that – let’s kick the ladder of aid away, which effectively is what she argues because we spend a lot of money and they’re still poor.  You need an aid and trade agenda.

JENNIFER COOK
It’s a really interesting point you make there, is this divide between the economic theory and people like yourself who are actually working within NGOs and humanitarian organisations.  And I’m wondering – you mention Muhammad Yunus and his book, Creating A World Without Poverty, where he says capitalism central premise of the solely profit focused individual that ignores religion, ethical, emotional, the political aspects of life – he wants us to capture the essence of humanity in economic theory.  Do you see him as a bridge, somewhere between the humanitarians and the economists?

TIM COSTELLO
Yeah.  Look, he’s exactly in the space that most aid organisations, certainly World Vision’s in.  And it’s about human development, not economic measures like GDP.  GDP – and you can look at China and India and look at their GDP and growth and say, there you go, they’re trading up, that’s fantastic.  It’s like flying in a plane at 50,000 feet.  All of the surface underneath looks rather the same until you come down and you actually see the variety and the difference.  So, Muhammad Yunus is spot on when he’s now saying, let’s take business principles and turn them into social businesses, business principles that solve social problems.

JENNIFER COOK
Expand a bit for me on this, this concept of social businesses.

TIM COSTELLO
It’s a recognition that it’s not simply the supply side.  So supply side, which we do and Muhammad Yunus’ Grameen Bank does, sets up loans and it gives you access to credit for a very good – when they have entrepreneurial skills, at repaying and getting business going.  Okay now, let’s look at the demand side.  What’s the level of government regulation that makes it hard to set up a business?  What’s stopping foreign investment here?  What are the world trade rules set up by rich countries that lock out our business from exporting because they massively subsidise first world agricultural products – Europe, Japan and America does – and other areas of their own protected industries, locking out all the poor have to sell, that they make?

JENNIFER COOK
That’s absolutely crippling.

TIM COSTELLO
It’s the great injustice, when you actually say well, Africa – look, they’re corrupt and they’re hopeless and it’s their own fault.  The rules against, not just Africa but the developing world – it started with the Uruguay Round that really massively disadvantaged them and haven’t been fixed up because the Doha Round, under the World Trade Organisation, has basically – it’s near death, it hasn’t kick started – fail to fix rules that favour the developed countries.

JENNIFER COOK
An example’s the cotton industry, isn’t it.

TIM COSTELLO
Cotton’s a huge example.  American consumers are paying more in subsidies to cotton farmers than the actual cotton crop they grow in America, because of key senate seats.  So those rules have to be reformed.  We in the west are advanced where we are because we had massive protectionism that allowed our infant industries to be nurtured and grow.  And then we want to deny the developing world any say in that, they must open up to our goods – and because we really write the rules, we have the money to almost dictate and buy the rules.  Most people don’t want aid.  I work for an aid agency – people actually want a chance.  Aid gives them the foundation, health and education, but they want a job, they want to be able to sell their goods, they want to be able to trade.

JENNIFER COOK
It reminds me of Peter Singer’s noting of the distant stranger, they’re able to do that within their own community, set up subsidies to protect their own because they’re not equating the person in Africa as having the same value as themselves.

TIM COSTELLO
Look, Peter Singer’s book, The Life You Can Save, I think, is beautiful because it’s so simple.  He really does two things.  He says all of us would act to save a life of someone who’s an immediate neighbour, all of us.  Why is there any ethical difference if you can save the life of someone who’s distant, a distant neighbour.  And then the second thing he does is he actually works out the cost of saving a life and he shows how it’s within the reach of every single one of us in our giving and what we can do by supporting aid and giving to the World Visions to save a life.  And I think when you distil that down, you cut through a whole lot of blurriness around patriotism and we only look after own, charity begins at home and then, strangely, ends at home.  So I think that’s what the power of that book is.

JENNIFER COOK
Thank you Tim Costello so much for your time today.

TIM COSTELLO
That’s a pleasure.

JENNIFER COOK
I’m Jennifer Cook and I’ve been speaking with the CEO of World Vision Australia, Tim Costello, about the complex and controversial issue of humanitarian aid, just who needs it, where’s it going and how much should we give.  Thank you, Tim.

TIM COSTELLO
Thank you.

JENNIFER COOK
You’ve been listening to Up Close.  Relevant links, a full transcript and more information on this episode can be found at our website at upclose.unimelb.edu.au.  We also invite you to leave your comments or feedback on this or any other episode of Up Close.  Simply click on the “Add New Comment” link at the bottom of the episode page.  Up Close is brought to you by Marketing & Communications of the University of Melbourne, Australia.  Our producers for this episode were Kelvin Param and Eric van Bemmel.  Audio engineering is by Ben Loveridge and Up Close is created by Eric van Bemmel and Kelvin Param.  I’m Jennifer Cook.  Until next time, goodbye.

VOICEOVER
You’ve been listening to Up Close.  For more information visit upclose.u-n-i-m-e-l-b.edu.au.  Copyright 2010, The University of Melbourne.


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