AUS: New AusAid pilot project for commerical businesses
Updated
In a major change in direction, Australia's aid organisation "AusAid" has decided to help develop commerical businesses in the Pacific. The new pilot project is called the "Enterprise Challenge Fund". Based on a British project of the same name, it will provide grants of between 100-thousand and one-point-five-million dollars, to assist businesses to open new markets and resolve issues like compliance and transport. To be eligible, the businesses must have already committed significant funding and be able to show that their project is of benefit to local communities.
Presenter: Campbell Cooney
Speakers: John Hardin, Director "Enterprise Challenge Fund"
HARDIN: In many ways, these projects will be providing a market for small micro-enterprises, a market for people, it might be for copper, it could be spices, it could be for some other product that they have, but they currently don't have a steady reliable market for it.
COONEY: Is this for Australian businesses only?
HARDIN: No, any company can apply. We would expect that there would be a lot of companies in Papua New Guinea, Fiji, Vanuatu and the Solomons who would apply. It can be eligible for Australian companies. The company could be a US company.
COONEY: By my understanding of it John, this is a major change in funding activities for Ausaid. They've mostly focused on areas which are not profit driven, which is a major change to what they are doing with this fund. Would that be a fair way of looking at?
HARDIN: Yes, it is. It is a major change. It is something that is consistent with the white paper that was released some time ago on Australia's aid program. It's looking at using the private sector to actually generate incomes, to generate business opportunities, to promote livelihood opportunities for people in the Pacific and South East Asia.
COONEY: The countries that you have identified there are major aid recipients of Australia. Are they approachable? Have they been acceptable to this idea?
HARDIN: Yes, we have had a very, very strong positive response from the private sector, saying this is something that is long overdue, this is something that is badly needed. There's a number of very good potential projects in our individual countries, that need this external assistance.
COONEY: Pilot program 20 million dollars if it proves successful, will it be rolled out further, will there be more money forthcoming for it?
HARDIN: I can't speak for Ausaid obviously, but I am very confident that if this project is successful, and I have every belief that it will be successful. Yes, additional funding would be available.
COONEY: So what gives you that confidence, John?
HARDIN: Because it is a new project that I believe from my over 20 years of experience in trying to build up businesses in the Pacific Islands in particular. I believe that this is going to demonstrate that if you have profitable business that's making money out of a project and it's also benefiting people, they will continue to operate that project and continue to benefit people, because they're making money. Whereas in the past, money has been allocated to NGO's and other organisations for often very worthwhile projects. But when the funding dries up, often the project stops. What we're doing here is giving a commercial venture a leg up, an assistance to overcome an external obstacle. We're helping to share the risk, so that the business will continue to operate and continue to provide those benefits to people.
COONEY: What safeguards are going to be put in place to ensure that it doesn't get stuffed around, that money doesn't get syphoned off and that is is used properly? Because this is often a complaint about aid projects and aid funding that it doesn't get used where it was supposed to be used?
HARDIN: Yes, there is absolutely no government involvement in this project in any of the countries. Ausaid have the right to sit on the assessment panel, but the assessment panel is made up of independent people, with both private sector and development experience in the region. They will vet each project very carefully. We have a fund where we can allocate specialists to assess the viability of the project and we will monitor and evaluate these individual business projects very carefully. That's not to say that some may not fail. I mean by their very nature, most of these projects that we'll be supporting are risky projects and some may fail.
