6 Sep 2013

Aid landscape in the Pacific is changing

5:11 pm on 6 September 2013

Aid spending has boomed in the Pacific over the past decade but almost all the island nations remain unlikely to graduate from being recipient countries.

While on the global scale aid volumes are beginning to decline, due partly to international financial troubles, the Pacific region is expected to remain a prime focus for aid programmes.

The future prospects of aid in the Pacific were discussed at a forum held this week in Wellington called 'Looking Forward: Aid Beyond 2015'.

At the same time, as Pacific leaders gathered in the Marshall Islands for the Pacific Islands Forum summit, there were signs of a shifting balance in the regional aid fabric.

Johnny Blades has more:

The biggest immediate change looming in the Pacific aid landscape is the indication by Australia's Coalition that it will slash US$4 billion from future foreign aid spending if they win the election. This comes as the coalition noted "allegations of corruption" surrounding Australia's US$365 million a year programme in Papua New Guinea. However there is little evidence that PNG's corruption problem is hampering the aid programme. The director of Australia's Development Policy Centre, Professor Stephen Howes, says corruption is not a problem in the delivery of aid in PNG or other parts of the Pacific. He says what is more of a problem is ineffective aid.

"STEPHEN HOWES: So one example of this would be that Australia helped PNG introduce a new curriculum for its schools. I think about $40 million the first half of last decade. That curriculum is now deeply unpopular. It's seen to have reduced the quality of education in PNG and the PNG government has decided that it's going to scrap the curriculum and develop a new one. You've got to say that aid project has failed, not because of corruption, but because they were bringing in an inappropriate model."

The Australian model of aid, focusing on delivery of services like health and education, differs from China's. An increasingly important aid donor for Pacific countries, China targets so-called 'capital' or 'high-impact' infrastructure projects. Professor Howes says China typically leaves the recurrent costs and maintenance for such projects to other donor countries, but that these projects are directly requested by Pacific island governments increasingly assertive about how they want aid to be used.

STEPHEN HOWES: What Australia and New Zealand can learn from China is that China does, I think, listen to what the recipient wants. It doesn't think that it's 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 China can certainly learn from Australia and New Zealand and probably needs to shift its emphasis away from capital projects towards maintenance and service delivery.

New Zealand's government now focuses its overseas aid programme, on fostering economic development, often through projects which target critical infrastructure improvements. This week, New Zealand's prime minister John Key announced a US$3.9 million initiative, to help low-lying Pacific countries Tuvalu, Tokelau, Kiribati, the Cook Islands and the Marshall Islands better manage their fresh water resources. John Key says that water shortages hold these economies back.

JOHN KEY: This $5 million spread over five years and over five countries will ensure that we can do some really practical things which kiwis are good at doing, enabling them to have fresh water, so it really is just basic stuff like fixing up gutterings, making sure they're not affected by the very low-lying conditions they face and they can trap that fresh water that falls on the particular islands.

Professor Regina Scheyvens of the School of People, Environment and Planning at New Zealand's Massey University says the government's policy of seeking tangible outcomes from its aid efforts in the region is understandable. But she says it's a shame that New Zealand aid has stopped supporting development in other areas where results are less tangible, like advocacy work by civil society.

REGINA SCHEYVENS: We have students doing Masters and PhDs and looking at some of the broader issues of development in the region. And they're often talking to people working for NGOs, trying to deliver development programmes in the region. And they're finding they're facing a number of frustrations. There are NGOs in the Cook Islands who said to one of my students that they're really disappointed. They feel like they're just in a role of service delivery now, that they're contracted to do that by donors, rather than actually having a voice like they used to have in the past.

Meanwhile Oxfam New Zealand's Barry Coates says the regional aid landscape is changing along with the balance of power in the Pacific. He says this is evident in the emergence of the Melanesian Spearhead Group, and the Fiji-initiated Pacific Islands Development Forum.

BARRY COATES: It's a different model. And the days of Australia and New Zealand playing a dominant and overweening influence in the Pacific Islands Forum have been voluntarily exposed, and how all of this will play out is yet to be determined, but I think we're going to end up with a very much more nuanced view of regional integration, regional co-operation and the role of Australia and New Zealand.

However, there is a rise in aid-dependency in much of the Pacific region. Professor Howes says maintaining aid for countries like Solomon Islands remains critical.

STEPHEN HOWES: So, yeah, I would think Solomon Islands and Vanuatu are going to remain aid-dependant 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.

In the Pacific Professor Howes sees only PNG as potentially being able to graduate from aid in a couple of decades. Although it is still a very poor country, PNG is becoming less aid-dependent. Its prime minister this week announced a raft of aid packages to to Tuvalu, Tonga and Marshall Islands. Fiji has been pledged US$20 million - half of which is to assist in planned elections next year. Peter O'Neill denies that that PNG is aspiring to be a major donor in the Pacific.

PETER O'NEILL: We are also committed to being an active member of the region. We know that the challenges that the members within the region face are similar to ours. And this goes without saying, we have our own challenges at home also. But in a true Melanesian and Pacific way we are there to help where we can.

Mr O'Neill says PNG is able to assist in these ways because of its enormous economic growth over recent years which is forecast to continue in the medium term. He says from next year's budget onwards there will be specific allocation for PNG's regional development assistance programme.