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Australia's aid infrastructure fixation won’t be a boon for the Pacific

Terence Wood
Terence Wood

TERENCE WOOD | East Asia Forum

CANBERRA - The need for infrastructure in poorer parts of the Pacific is obvious. Outside of urban areas, once-paved roads are now muddy tracks. On some islands, planes land on grass runways that are frequently closed by rain. In some places, small boats take hours to move cargo from ships moored off coasts deprived of wharves.

Australia has always devoted aid to the Pacific’s infrastructure needs. In 2013, a recent low point, Australia still spent US$70 million on infrastructure in the region. Other OECD donors haven’t neglected infrastructure either. OECD donor countries, alongside multilateral institutions like the World Bank, spent US$327 million in the Pacific in 2013.

The infrastructure focus of Australian aid to the Pacific is set to ramp up in coming years. This will come through grants — how Australia typically gives aid in the region — and, increasingly, through the provision of loans.

Infrastructure is needed in the less affluent Pacific countries. But Australia’s newfound fixation on infrastructure spending is not guaranteed to be beneficial. There are two reasons why: recipient context and donor motivations.

Aid is never guaranteed to succeed and tailoring aid to the recipient’s context is crucial. It is hard to spend aid successfully on infrastructure in poorly governed countries, such as Papua New Guinea and the Solomon Islands, the two largest Pacific recipients of Australian aid. Unclear property rights and governments too weak to exercise eminent domain make new infrastructure projects difficult.

Such challenges have hampered the development of the Tina River hydroelectricity project in the Solomon Islands, to give one example. It is also hard to get governments in poorly governed states to play the crucial role of maintaining infrastructure.

Part of the reason why roads are in such a bad shape in countries like Papua New Guinea is that governments have neglected the task of maintenance for decades.

Some Pacific Island countries are much better governed than the Solomon Islands and Papua New Guinea. But Australia’s infrastructure focus is primarily on these two countries.

Combined, on the basis of budget data, it is estimated that they will receive about 70% of Australia’s aid for infrastructure in the Pacific this financial year. This could change in the future, but it is unlikely as both countries are central to Australia’s engagement in the region.

The challenges posed by poor governance don’t mean all infrastructure work is destined to fail. But they do mean that it needs to be carefully planned and only undertaken when it’s likely to work. In terms of donor motivations, aid donors that are truly concerned with helping developing countries are more likely to carefully scope and plan projects to ensure that they are appropriate for the given context.

Unfortunately, not all of Australia’s new found interest in infrastructure in the Pacific can be attributed to a genuine desire to help. Much of it seems to stem from a desire to stave off China’s rising influence. That possibly reflects a reasonable strategic concern on Australia’s behalf, but a preoccupation with China is unlikely to be a useful guide when it comes to aiding the Pacific.

Consider, for example, Australia’s promise made along with other aid donors to bring electricity to 70% of the population of Papua New Guinea within 11 years. Electricity is beneficial, but the promise is unlikely to be met. Electrification rates in Papua New Guinea continue to be very low.

So why was the promise made? A popular rationale has been that the electricity work is a response to China’s increasing influence in the Pacific. This is exactly the type of decision making that undermines the chances of aid succeeding.

Another example is Australia’s spending on an undersea cable to improve internet and related telecommunications in the Solomon Islands and Papua New Guinea. Once again, the spend came in direct response to China.

As with electrification, improved telecommunications could bring development gains. Yet much of the impact of the cable ultimately depends on how the governments of Papua New Guinea and the Solomon Islands manage internal internet access arrangements and associated local infrastructure.

Both governments have had their failures in these areas in the past. The cable may bring benefits, but there were reasons why donors were wary of funding this type of work before China arrived on the scene.

Australia’s eagerness to use loans as well as grants to fund infrastructure in the Pacific complicates matters further. Loans have a role in aid work, but it’s also crucial they succeed. If an aid grant fails, the money is wasted. If an aid project funded with a loan fails, the money is worse than wasted.

Infrastructure is integral to development. Aid spent on infrastructure can help. But like all aid work, infrastructure spending is not guaranteed to succeed.

Australia spends very little on foreign aid. The least it could do is maximise its chances of success. Australia’s current lurch towards infrastructure spending is likely to make its aid less effective, not more.

Terence Wood is a Research Fellow at the Development Policy Centre, the College of Asia and the Pacific, The Australian National University

Comments

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Robert Wilson

1973-4 when building the Didiman station beside Dumpu wartime airstrip, the surrounding kunai grassland was infested with death adders and my RDA(Rural Development Assistant) who was living in a bush material house beside that airstrip lost his young daughter to a death adder snake bite one night. That really focussed my attention especially for the two years I lived in the Didiman house on our DASF station. I for ever remember the need to be on the alert at all times for those snakes and after 6 months of near misses and occasional dispatching of a snake (usually through panic) they eventually moved away from the inhabited area. I still remember the late night calls from a nearby village accompanied by a mad dash in the Didiman landcruiser down to Gusap station looking for anti venom to inject a comatose villager. Most times it was too late as they waited too long before coming to see me.

Lindsay F Bond

Hopes for a 50th year acquittal?

USA has had near 250 years and yet recently trumped.

The nature of that retinue may reveal assumptions about composition of crowd.

All those "-ists" are in fact folk seeking at least to be appeased.

Supremacy? In the 1940's, a form of supremacy came to lands of the now-PNG.

Discussion on supremacy had then little to do with 'colour'.
The today-PNG benefits. Was that a little help from friends?

Corney Korokan Alone

The sons and daughters of the Pacific and Melanesia take it seriously when they see their fathers shed tears and cry.
https://www.france24.com/en/20190816-asia-pacific-tuvalu-summit-australia-climate-warning-islanders-forum-coal.

We are offshoots from the greatest continent where long thinking elephants thrive and where homo sapiens from that land were ripped from their culture, family and history to be free labour.

We watch what people do, not what they say.

We understand history is the domain of imperialists and fascists. And is recorded by them.

The power of white supremacy and sense of entitlement is pervasive in the colonised world.

However, our passed-on histories are not lost from us. We truly respect our father's friends.

Sir John Kaputin, Sir Julius Chan, Grand Chief Sir Michael Somare and Sir John Guise have given us sufficient personal accounts and stories to guide us.

Prime minister James Marape is speaking our language on equity and self-sufficiency in five years time when we reach 50 years as an independent country. That is what we believe and will never relent.

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