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Is this the beginning of the end for aid?

Emmanuel Narokobi

Head Somare copped a lot of flack from his comments that ‘no one is starving in PNG’ on his last trip to Canberra. I assume everyone feels the same way about that topic, but on a different note I came across Keith Jackson’s comments on Somare’s speech that night on his intentions for a policy shift. And by that I mean a shift to begin an Aid Exit Strategy.

Is this pie in the sky stuff or can we really do this? I’m not an economist and I’m not in the Finance and Treasury Department, but my feelings are that I would love PNG to move in this direction. If this is indeed going to be policy, how soon can we expect the wheels to start turning?

So for us to phase out Aid, where will the money come from? The odd K700 million blow out reported in the 2008 Final Budget Outcome Report doesn’t give me too much confidence at the moment as to how the government will manage finances up to 2012. We also still need to get our LNG projects over the line before we start counting our Chickens.

I know I don’t think like this all the time, but when it comes to money, sometimes its better to be conservative about these things so that we are pleasantly surprised when all of it does work out, instead of being sorely disappointed if it all goes wrong. Because it seems to me that everything that the government is saying now appears to rest entirely on the shoulders of our LNG projects. As said in EuroMoney:

“October will be a big month for Papua New Guinea. It doesn’t sound much on paper: it’s the deadline for the final investment decision on a liquefied natural gas and pipeline project. But it’s a project that will change the country dramatically - economically and socially. In fact it’s hard to think of another example anywhere in the world where so much, good and bad, might depend on a single investment decision.”

Immediately though, regardless of whether this really is the beginning of the end for Australian Aid to PNG and whether the LNG projects will come good to fund it all, I think we really do need to have a look at what is going on with all this Aid. Just understanding how much money is being pumped into PNG in Aid and where it is going has to be evaluated. Not just for Australian Aid but for every other country and/or NGO in PNG.

And by evaluation I mean have we ever looked at specific programs or projects in PNG and asking some questions, like; Is the intervention producing the intended benefits and what is the overall impact on the population? Could the program or project be better designed to achieve the intended outcomes? Are resources being spent efficiently? These are the types of questions that can only be answered through an impact evaluation, an approach which measures the outcomes of a program intervention in isolation of other possible factors.

Don’t get me wrong, I appreciate all the assistance, but is it effective? More importantly also, what effect does it have on our government? Is the reason why the Government did not increase spending to health and education in the last budget due to the fact that Aid money covers that at the moment? In other words, does Aid money also make our government lazy in certain sectors?

Yes we should reduce Aid, but where and when? I’m sure any findings of an Aid evaluation may be politically sensitive, but even if after the evaluation we don’t end up phasing out Aid, can we please make sure that it doesn’t make our Government lazy. I’m sure Rudd doesn’t want to waste Aid money and neither do we.

You can read Emmanuel’s Masalai Blog here.


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Mark Thomson

As a genuine development partner Australia should operate from a profound understanding of the fundamental underpinnings and aspirations of PNG. This requires the application of serious scholarship in the formation of policy and strategies.

We need to assist PNG manage its own business, through developing capability to meet security, legal, institutional and administrative needs and to train personnel systematically at every level (national and sub-national) in the requisite skill sets.

I've believed for a long time that the term “aid” is really a misnomer - even in the case of small island states Australian engagement should be about development partnerships to shore up mutual interests. Investments in these areas should be explained to the Australian people in these terms.

A huge divide exists between enabling people to run their own lives, to make their own mistakes and to determine their own futures, and the paternal controller mode that sees centralist systems managing and delivering all government functions.

This is especially so when the controller mode is grafted on and reinforced through external interventions. In PNG the poor performance of the central administration, which is a confused hybrid of centralized and decentralized systems, combined with low capacity levels of public servants, has left a populace that distrusts central government. Community disillusionment and a sense of disempowerment are growing. This feeds civil unrest and crime.

The crux of the PNG problem is weak institutions, lack of efficient resource distribution systems, poor management and training capacity and a lack of bridges to the people in their villages.

The centre can provide a coherent and efficient policy and budget management platform, but it is fruitless if good governance principles and resources are not applied locally and if local user groups cannot engage government.

A pivotal role for civil society and government interaction is to legitimize and manage central resource planning and distribution. An integrated approach is needed to strengthen systems and resources management at all levels of government. It is essential to emphasize and value local participation and ownership, to strengthen home grown training capacity and to focus a large slice of Australia’s program on the hard yards of service decentralization and local user group engagement.

Emmanuel Narokobi

Thanks Bill, tourism is only one aspect of development though. Our agriculture and other SME's need as much development as well to balance growth.

Bill Bohlen

Whatever the outcome, Aid money or money earned from the LNG project, I hope Papua New Guinea will get its act together and develop more tourist projects. The country the has possibilities to be a major attraction for international tourists, if they can solve their law and order problems.

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