New realism informing aid delivery to the Pacific
An aid specialist says Pacific island governments are asserting themselves more about what kind of aid packages they get from donor countries as a trend emerges towards high-impact or capital aid projects.
An aid specialist says Pacific island governments are asserting themselves more about what kind of aid packages they get from donor countries.
However Professor Stephen Howes, the director of Australia's Development Policy Centre, says questions remain over whether the sort of high-impact aid or capital projects which are popular among Pacific governments are being maintained properly.
Johnny Blades spoke with Professor Howes and began by asking him about PNG's prospects for graduating from aid.
STEPHEN HOWES: It's interesting if you look at the data for PNG compared to the rest of the Pacific, the rest of the Pacific we see a rise in aid dependency, more aid per person or relative to the size of the economy. But not for PNG. And that's because of its size, as an economy, and because of its recent growth. In fact, PNG is less aid-dependent than it used to be. But I think it's important to realise that PNG is still a very poor country and it's going to take... I would see PNG eventually as graduating from aid, but not right now, perhaps in a couple of decades.
JOHNNY BLADES: And just going across the water there to Solomon Islands, how about their prospects, because they still seem so...?
SH: Solomon Islands, of course, has gone up because of RAMSI and that massive intervention. And although RAMSI is now in the so-called transition, RAMSI is still needed in the Solomon Islands. And the risk is if you pull out you might get an outbreak of instability again. So I think keeping aid to the Solomon Islands is very important to provide a sort of floor for the country, or a safety net, a source of stability and security. Solomon Islands has also had some economic growth in recent years. It's a bit like PNG, it's been driven by resources, in the case of Solomon Islands, by logging. So it's not really broad-based economic growth, and not enough, certainly, to provide the employment that's needed. So I would think Solomon Islands and Vanuatu are going to remain aid-dependent for the foreseeable future. Aid is not going to make these countries rich, but it does provide them a useful support. And I think it helps give them time for them to help work through their own problems and issues and chart their own development course.
JB: Do you think in those Melanesian countries in particular there's been a bad spate of capital projects or high-impact, rather than more realist stuff?
SH: I think we've seen a problem in the Pacific Islands with aid projects being used for capital works and then not being maintained properly. So roads are built, but not maintained. I think the traditional donors like Australia and New Zealand have increasingly learnt that lesson. So you see them willing to fund road maintenance. But one of the risks with the new aid coming from countries like China is that they are very much focusing on capital projects, new buildings, new pieces of infrastructure, new hospitals. And there are real question marks over whether those pieces of infrastructure will be effectively used if you don't have the current funding.
JB: And is that because China, for example, is not cognisant of this sort of trap, or they're not willing to harmonise their aid programme with New Zealand and Australia, for example?
SH: I think it's for a number of reasons. I think it's partly because of the way that China does aid. China's aid is tied to the use of Chinese companies. And what are these Chinese companies going to do? They can come to your country for a few years and build what you need. So in a way it's much easier to do capital projects because they're time-limited. You can have a firm plan - you go and you build it and you get out. Once you get into recurrent costs and maintenance it's a much more complex operation. You've got to be there for a long period of time. You've got to work alongside the government. You can't do everything yourself. I think that's what Australia and New Zealand have learnt and I think it's a learning process that China is going to have to go through. What Australia and New Zealand can learn from China is that China does, I think, listen to what the recipient wants, and it doesn't think that its aid is going to transform the countries. Often we fall into that mistake, that we think we can fix their problems through aid. I think China is more realistic. But by the same token, I think Australia can certainly learn from Australia and New Zealand and probably needs to shift its emphasis away from capital projects towards maintenance and service delivery.
JB: And what do you think about the whole alignment as a result of this asylum seeker deal of AusAID, more of an alignment with O'Neill's targets or the O'Neill government's development aims?
SH: Well, it's very interesting. If you look at the actual projects that were announced as part of the new asylum seeker deal, there was a big road being built from Lae, I think, to Ramu, or from Madang to Ramu. The Lae hospital is going to be rebuilt and I think the courthouse in Port Moresby is going to be rebuilt. So, actually, these are capital projects, and that's the shift that it seems the PNG government wants. So it seems quite contradictory to what i've been saying, which is that aid programmes should focus on maintenance and basic service delivery. And I guess you've got to ask the PNG government why they want the Australian aid programme to shift to this direction. And my sense is they want to be able to point more easily at the impact of the aid programme. If you're just maintaining roads around the country or providing drugs to health centres or textbooks to schools, it's important work, but it's not very visible. And I think the O'Neill government wants to have projects that they can actually point to and say, 'This is financed by aid'. And that will reflect both on Australia and on the O'Neill government. So I can understand where they're coming from. My concern is that, one, it's fine that you build the hospital, but then is PNG going to give a commitment to then maintain that hospital and put enough money into funding and also to put in proper management procedures to ensure that investment is well used.
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