National Research Institute Director Thomas Webster was in Canberra earlier in this month. Here he answers questions put to him by Stephen Howes on a range of issues facing PNG. 

Stephen Howes: You’ve just come down to Canberra from the Australia PNG Business Council conference in Brisbane. What was the mood like at that conference?

Thomas Webster: The issue that got the most attention was visas. It is a strain to doing business within the two countries. And it was an issue that was on a lot of speakers’ radars. The deputy Australia opposition leader as well as a number on the PNG government and also the President of the Business Council raised it.

The visa issue came forward in a striking way when the General Managing Director of the IPI Group said that he wanted to take some of the shareholders down for the annual general meeting and he couldn’t get the visas for them to meet in Australia, so they met in Singapore. I think you can see the level of frustration that is there.

Stephen Howes: Talking about the private sector, perhaps you can tell us a bit about the very interesting research you just published on the Porgera Gold Mine.

Thomas Webster: Well the Porgera study is something that came off a visit I paid to the Porgera Mine Site in 2009. I saw that the local primary schools were closed. The high school was closed. I was quite concerned.

I heard, the community saying, oh we need the services from the mine. We’re not benefitting from the mine. But when I talked to the mine management, they kept saying, we’re providing financial grants to different government entities to provide these different services – education, health, road, infrastructure, police, and so on.

So the study was really to try and tease out the agreements and find what the requirements were and whether the different financial benefit streams from the Porgera Mine were going to the national government or to the provincial government, or to the local level government, or to Porgera Development Authority, and also to the landowner entities – the landowner entities directly and to MRDC, which is the government’s state-created entity that manages the landowner funds.

The report clearly shows that Barrick, the operator of the Porgera mine, has paid the different amounts that were required as per the agreement to the different institutions, government institutions. But it’s clearly the government institutions which are not doing what they were expected to do on the ground in terms of looking after health services, education, and so forth.

In terms of the landowners, there are different financial benefit streams to different landowner groups and to entities. It was difficult getting data from those and trying to understand. From Barrick it was clear their payments were made, but what was being  done with those funds and who had responsibility for them and what it was spent on was very unclear.

Stephen Howes: So is your sense that communities are not benefitting from these arrangements?

Thomas Webster: No, they’re missing out. The communities are missing out.

Stephen Howes:  Even from the landowner agreements?

Thomas Webster: Even the landowner agreements. I think the state is reneging on its own agreements to provide different benefit streams to the landowners in terms of provision of roads, in terms of provision of health facilities, even though they’ve received the funds that were intended for them to provide these things.

In terms of the landowner entities, there is no report from the management resource trust MRDC back to the landowners in terms of how their funds are doing.

In terms of landowner groups, the mine pays particular individuals or landowner groups, but these accounts are managed by – I don’t know how they do it, but it’s one or two principal landowners, and then from quiet conversations, they said that these individuals are living in Port Moresby or in Australia.

People on the ground in Porgera, young men and women and children, depend on the company paying them. There are some payments that they get every fortnight and they just live off that. But they don’t realize that there are some other benefits that have been paid, or financial benefit streams that they’re not benefitting from. And they still think that the mine owes them more monies, without realizing that a lot of that has been paid to them through different institutions but they’re not benefiting from that.

Stephen Howes: It’s fascinating research. PNG has elections coming up. What do you think are the big issues coming up that are going to face the people as they go to the polls?

Thomas Webster: Well the big issue is which political party will come back with the sound policies that will help to manage the economy going into the future. With the LNG gas project and expected proceeds of about two billion kina a year beginning around 2014 or so, it’s how the government will set the framework within which they will manage the financial benefits coming off the back of this gas project and other resource projects that are in the pipeline.

Obviously it’s important to elect a good government that will pump money into education, health, and roads and infrastructure, so that services that ensure the quality of living is improved. We know from all different reports that we are on the lowest end of the human development index in global terms.

So the challenge is there. The difficulty is knowing who is going to deliver that. And it’s very difficult. We have more than 40 different political parties. Every one of the political parties are saying that we will do this and they will do everything under the sun. But the onus is on the people to ask: who are the political parties with the track record to do that, and deliver those commitments?  And who are the individuals who can deliver.

Stephen Howes: What about the elections itself? Are you worried about possible problems with the conduct of the elections?

Thomas Webster: I don’t know. There have been a lot of speculations about the common roll, and as I’ve stated before, we never will have a perfect common roll. We would like to have a perfect common roll. But due to the circumstances, it’s a common roll that’s good enough. And like the Election Commissioner said, it’s as good as it was in 2007 and that’s good enough.

How it’s conducted, if it’s a safe and secure environment for one person, one vote, I’m not sure whether we’ll achieve that, but we’ll see what happens. But I’m confident that the elections will be held and we’ll have a parliament sitting in August.

Stephen Howes: You mentioned the two billion Kina a year that’s going to come from the LNG project. This would be a good time for you to say something about the research project we are embarking on together. After all, it was your idea. What was your thinking?

Thomas Webster: The National Research Institute had been working on anti-corruption policy and saying we need to adopt a relevant anti-corruption policy mechanisms in order to prevent abuse of public funds, but we didn’t seem to be getting anywhere. And I think we also didn’t quite understand how abuses are conducted in the public sector in terms of misuse of public funds.

So I thought it would be good to see where the leakages are and how they occur and that would give us an idea of the policy interventions that are needed in terms of making sure that funds are spent well.

This year we have a 10B kina budget. Last year we had about an 8B kina budget. The previous year about 7B. We spent all that money. But many people say, what was it spent on? We still haven’t got drugs in the hospitals. Our schools are falling apart. We have roads and infrastructure that are falling apart. We need to make sure that the money is spent where it should be spent.

Thomas Webster is the Director of the National Research Institute in Papua New Guinea. Note that the interview was before the most recent PNG Supreme Court ruling.

On May 11 the Hon. Jannelle Saffin MP, Federal Member for Page, presented a Seminar at the Crawford School for Devpolicy (details here, video available here). Below is a blog post by Ms Saffin summarising that presentation.

I read a comment in an OECD report regarding Timor-Leste that said, and I shall paraphrase: In Timor-Leste, foreigners have the best access to the most senior level of leaders and officials, but they still do not know what is going on.

This is what I see beginning to happen in Burma, and it is one of the challenges, sitting alongside the opportunities.  Foreign experts abound, and indeed some are, but it is like in other places, sometimes the experts know a lot, but not a lot that can be used, or is of use, yet they get lots of attention.  It is like that in politics, so is not unusual, but a point to be conscious of, when working in other jurisdictions and states.

Myanmar is a country in transition.  It has been essentially for decades, and the one underway now, holds much more hope of a good landing, than the ones before it.

The transition is essentially one premised on the trust and goodwill of two leaders, and it has excited the people who are cautiously hopeful and it has attracted world wide attention, with many offers of help.

The two leaders are President Thein Sein, who has state authority, but not political legitimacy and Daw Aung San Suu Kyi, who has political legitimacy but not state authority.

They have agreed to work together, for the sake of the people the nation, and  yes, they have some stated and demonstrated trust; with a relationship borne out of concern for country, and political necessity.

They are joined together in working to make the Parliament work, build and rebuild the State, make the country work, but they are also political contestants, simply by their political positions, backgrounds and intellectual approaches.

There is also the fact that the USDP Government is both a development actor and partner (well that is the way it is going with donors) and also a party to and the cause of some military conflicts still running in the county, with some having committed heinous crimes, in the category of crimes against humanity.

The USDP Government is party to and by its origins the cause of grinding poverty.

So how do you dance with dictators, albeit in transition?  You soft step, sometimes lead, sometimes are led, and sometimes sidestep.  You do it with mindfulness, and not forgetting that we are not engaging with a democratic state, but one that has the potential to be and indeed the people desire it to to be.

Remember the signs that used to be all over Yangon, about peoples’ desires; and all the people used to point and say: Generals’ desires.  Well now there is a beginning of the sharing of political space and power, where peoples’ desires really can be factored into government and the architecture, but with a constitution that marks out the pre-eminent role for the Generals at state level.

The Government has to invest in any programmes/projects that are aid related.

The Government has to have a process for requesting, receiving, and responding to aid requests.

Burma has traditionally operated on a multi layered committee structure and it is wise not to ignore that, to see if it has the capacity to deliver and in a democratic way.  So examine existing mechanisms first before you create any of your own.

Consultation and community development must form a key plank in preparing the aid projects/programmes, and country strategies.

Have a checklist that can guide development partners not being used politically by the governing authorities, in a partisan political way.

Transparency is the key, and all must know how we devise projects/programmes, and publish all.

Have a healthy political development programme that incorporates parliament, and associated bodies and also political parties.  Do this with partners.

Be involved in national reconciliation in terms of supporting the actors involved.

Take a closer look at land and water issues, and see where we can assist.

Scope out legal reform, and given the common law nexus it is appropriate. Support a legal fact finding mission both ways.

Ensure that the NLD (the party of Aung Sun Suu Kyi) is involved, as they are key actors.

Ensure that the ethnic nationalities are also involved as key actors and particularly in rural and regional areas.

Lastly, set up an Australia Centre that can among other things, conduct English language classes, and community education.  It can cover costs and should be funded as part of the public diplomacy programme and not come from the ODA budget.  The British Council and the US Centre and other European Institutes operate directly with great people to people relationships.  We suffer from a lack of such engagement.

In summary, have a principles-based approach and stick to it.  It can and will work. Engage with deliberation that supports and strengthens democratic advances, including the human rights culture that embraces the rule of law and national reconciliation.

ODA and development assistance have to support those primary goals cited immediately above.  I see the split too many times with our political arm, and development arm, acting as completely separate spheres and in the case of Myanmar this cannot be.  So far they are on track together.  This bodes well.

Janelle Saffin MP is the Federal Member for Page and a long-time observer of and advocate for reform in Burma.

Source: Reuters

A roundup of development policy issues in the Pacific by the Pacific Institute of Public Policy and the Development Policy Centre.

Countdown to PNG election mired in more constitutional drama

Parliament was dissolved on 16 May and writs issued for a general election to be held on 23 June, leading to hopes of a resolution following months of political and legal wrangling. Within days yet more turmoil ensued as the Supreme Court handed down a controversial judgment reinstating Sir Michael Somare as (caretaker) prime minister.

The chief justice was subsequently arrested on sedition charges by police, as led by Belden Namah, the deputy prime minister. After a tense couple of days, parliament was reconvened and voted unanimously to reject the Supreme Court’s ruling and declare a state of emergency in three provinces.

The situation remains constitutionally muddled. Governor General Sir Michael Ogio declared he will not sign any documents until after a new government is formed and that he did not sign an instrument to call the emergency sitting of Parliament. In yet another twist, the deputy speaker of parliament subsequently ruled the office of prime minister vacant, and that a new prime minister would be elected by the Parliament on Wednesday 30 May.

Social media commentators reacted to the latest confusion with a sense of weariness of events that have dominated PNG politics since August last year, with most looking forward to the elections as a circuit breaker.

The Electoral Commission confirmed a record 3,435 candidates will contest the 111 seats as two acclaimed political reformers, Dame Carol Kidu and Sir Mekere Morauta, retire from politics.

Japan strengthens Pacific ties at PALM 6 meeting in Okinawa

The triennial meeting of Pacific Island Leaders (PALM 6), co-hosted by Japan and Cook Islands, concluded in Okinawa with a new pledge of US$500 million in aid from Japan to Pacific island countries over the next three years.

The meeting was notable for the first-time inclusion of the US, discussion of maritime security issues and Japan’s intention to pursue defence cooperation with Pacific island countries. In addition, the meeting called for ‘emerging donors’ to comply with international aid co-ordination mechanisms.

Analysts have read this as a response to China’s growing influence in the region.

Leaders of 13 Pacific island countries, Australia and New Zealand attended the meeting. Fiji’s military prime minister was not invited and did not send a representative.

New Zealand cuts aid budget

The New Zealand government announced last week that planned increases in aid will be pushed back to 2016: the Government inherited a plan to increase aid to $600 million by 2010, but this has been repeatedly deferred, and is now pushed out to 2015-16 . While official development assistance is estimated to increase [pdf] to NZ$535 million in 2012, an increase of 8 per cent on 2011, assistance is projected to decrease to NZ$499 million in 2013 and will remain at NZ$495 million until 2016.

While specific data on the changes at the country level have not been released, it is expected that the Pacific will bear the brunt of the delayed assistance. In 2011-12, Pacific island countries accounted for 81 per cent of New Zealand’s country programme aid spending.

This budget has been criticised by Oxfam, noting that it puts New Zealand near the bottom of the OECD in terms of the proportion of national income to aid. However, Foreign Minister Murray McCully says that the delay is justified due to cost of the Christchurch earthquakes and that all existing programmes can be continued at current levels but with possible changes in priorities.

Pacific economic roundup

The latest ANZ Pacific Quarterly [pdf] and World Bank report note that the resource-intensive economies – PNG and the Solomon Islands – are outperforming the region’s other economies. With global economic concerns continuing, countries dependent on remittances and tourism continue to face difficulties.

The Tongan 2012-13 budget was presented to cabinet on 25 May, with government expenditure set to increase by US$6.7 million to US$101 million. This is despite revenue dropping by US$15.3 million, including US$3.9 million of budget support. Proposed additional spending includes the establishment of a new authority to develop tourism, and measures for promoting fisheries, agriculture and handicrafts.

The budget announcement comes as the Tonga Development Bank cuts interest rates and loan repayments for three months.

Shifting geopolitics

The Fiji military government has again demonstrated its intention to expand relations beyond traditional partners, with the announcement that it will open a new embassy in the United Arab Emirates, and work towards on an open sky policy.

China has signalled its intention to invest further in Pacific fisheries and open its market to tuna exports from the Parties to the Nauru Agreement (PNA).

Meanwhile the Vanuatu government has defended its links with Indonesia amidst protests over West Papua.

Following renewed discussion on Australia’s approach to the Pacific, Papua New Guinean blogger Martyn Namarong embarked on a tour of Australia to foster a greater understanding of the relationship between the two countries.

Political manoeuvrings reflect issues with parliamentary systems

There have been a number of controversies recently reflecting the issues associated with managing the Westminster parliamentary system. In Kiribati, there are plans to strengthen the role of the Public Accounts Committee, including the appointment of a member of the opposition as chair.

Meanwhile, in Tonga there has been controversy over cabinet reshuffles, which have led to divisions within the ruling party and criticisms of a minister’s proposal to make members of the opposition ‘associate ministers’ ahead of an anticipated vote of no confidence.

Elsewhere, in Cook Islands, the appointment of an unelected female speaker of parliament drew strong criticism from the leader of the opposition, who labelled it a ‘vote of no confidence’ in the parliamentary representatives of the governing Cook Islands Party.

In brief

• 49 people rescued after MV Solfis sinks in Solomon Islands.
• Pacific islands want progress on PACER Plus.
• Samoa continues celebrations of 50 years of independence.
• Marshallese reported separately for the first time in US Census.
• Pacific leaders discuss withdrawal of RAMSI military personnel.
• Calls to discuss independence in American Samoa.
• IFJ releases first report on media freedom in the Pacific [pdf].
• Vanuatu election date confirmed.
• US Senate committee cut $93.4M in Guam funding.

This biweekly roundup of development policy issues in the Pacific is a joint venture of the Pacific Institute of Public Policy and the Development Policy Centre. Editorial content is the responsibility of Derek Brien, PiPP Executive Director, and Stephen Howes, Devpolicy Director.

Apparently female parliamentarians are important as well – World Bank researchers have associated them with a reduction in corruption.  The UN has even included increasing the number of female legislators as a key outcome of Millennium Development Goal 3.

In the latest Devpolicy Discussion Paper (peer reviewed and forthcoming in Applied Economic Letters), we explore whether having more female legislators affects broad economic outcomes. Our research covers 119 democracies over the last four decades.

We find that, for the average democracy, each percentage point of female parliamentary representation increases annual per-capita economic growth by around 0.16 percentage points. Our estimates account for the effects of other variables on economic growth and also potential reverse causality from economic progress to improved gender representation.

Why this is the case requires further research. We try to separate the impact of having more female MPs from the impact of broader attitudes to gender. The ability of elected females to achieve improvements in the overall state of the economy is perhaps driven in part by the fact that female MPs have to break through a ‘glass ceiling’ to enter parliament in most countries.  These women may on average be quite extraordinary and thus have a greater effect on policy outcomes than the average male parliamentarian.

Globally, there has been a reassuring upward trend over the last three decades in the representation of women in parliament.  However, it remains that on average less than one in five seats in national parliaments are held by women. Some countries have no females in their parliaments.

Source: Paxton, P., Green, J. and Hughes, M. (2008) Women in Parliament, 1945–2003: Cross-National Dataset, Inter-university Consortium for Political and Social Research, Ann Arbor, MI. World Bank (2012) World Development Indicators.

Strikingly, the Pacific Island countries lag behind, and have failed to keep up with improvements in female representation globally over recent decades.  Only Samoa and Timor-Leste have female shares in parliament exceeding 4%.  Compare this number with a global average of 18% and our Pacific neighbours are starting to feel a little lonely.

Increasing the number of female legislators is clearly a matter for sovereign nations. Yet donors have a role to play in communicating the broad benefits of improving female representation in the parliament. This is especially important in the Pacific. The challenges are large: in PNG, for example, a bill to reserve a minimum number of seats for women failed to win support in late 2011.

Ultimately, there is growing evidence that there are economic and other dividends to be gained from removing the barriers for females to enter politics.  Hopefully our Pacific Island neighbours will start to take note.

Dinuk Jayasuriya and Paul J. Burke are Research Fellows at the Crawford School of Public Policy.

Focusing on sub-Saharan Africa, recent analysis by the World Bank suggests that child mortality is not just in decline but that the decline has greatly accelerated.  Using the two most recent Demographic and Health Surveys from 20 African countries, they show huge and rapid declines over the past few years.  Senegal, Rwanda and Kenya achieved an annual decrease in child mortality of greater than 8% – the fastest rates of decline seen around the world over the past 30 years.  The analysis has received a great deal of press including in the Economist.

Focusing on Kenya, the World Bank was able to attribute 39% of the decline in child mortality and 58% of the decline in mortality of children under 1 to increased ownership of insecticide-treated bednets used to prevent malaria.  Malaria – transmitted by mosquitoes – kills up to 1.2 million people in each year around the world.

Though this work focused on Africa, reductions in malaria incidence has been seen in the Pacific as well. The last few years of investment in malaria control in Melanesia has seen the number of cases of malaria per 1000 population in Vanuatu decreased from 74 in 2003 to only 14 in 2008. At the same time, the number of cases of malaria in the Solomon Islands decreased by 50,000 contributing to – as in Africa – a reduction in child mortality of 40% since 1990.

This progress has resulted from distribution of long lasting insecticide treated bednets, improved diagnosis and treatment, and indoor residual spraying to reduce mosquito breeding.  For example, AusAID has committed $22m to Vanuatu’s malaria control program from 2010-2014 – with a goal of achieving 100 per cent bed net coverage.

Despite these achievements, there has been some criticism of the emphasis on malaria programming overshadowing other efforts in the health sector.  In the Solomon Islands specifically, there are a number of organisations engaged in malaria control including the Japanese government, AusAID, SPC, the Global Fund, Rotary International, and the Ministry of Health.  Until recently, despite good words about working together, these organisations often duplicated activities and stories of communities playing one donor off another were common.  Another risk is that the laser focus on malaria control has drawn attention and resources away from other more general health work.  The best health workers were pulled to malaria efforts and boats that took malaria control products to remote islands departed half-empty while other medicines languished due to lack of fuel for transport.

Collaborative efforts over the past year have improved this to some degree and the Sector Wide Approach sees the various development partners sit together periodically to share plans.

The success of malaria control globally highlights the rapid impact of innovation in tools for prevention, diagnostics and treatment.  Long-lasting insecticide treated bed nets – to which the World Bank study attributes much of the recent progress – have been recently improved through innovation to last longer and be more effective.  Similarly, rapid malaria tests have been developed and more effective artemisinin-based drugs have come onto the market likely contributing to the reductions in transmission.

As AusAID ponders how to increase spending in health research as agreed in the response to the Independent Review, it would make sense to apply the lessons of malaria innovation to tuberculosis.  As TB continues to spread throughout Southeast Asia and the Pacific, the tools we have to diagnose and treat TB cannot keep up with the realities of the disease.  No new drugs for TB have been introduced in the last 50 years, paediatric formulations don’t exist and diagnostics rely on laboratory capability.  With the spectre of drug-resistant TB hovering in Papua New Guinea and Southeast Asia, investments in the TB response – based on the model of success seen in malaria – are well past due.

Joel Negin is a Senior Lecturer in International Public Health at the University of Sydney and a Research Fellow for the Menzies Centre for Health Policy.

Photo: Alex Jameson, whydev.org

In May last year a friend lent me their jeep while they went home to Australia for a holiday. Large and white, it was a development archetype – one of the famed vehicles that signal the arrival of aid workers everywhere on Earth. It was also a god-send. At the time I was in the process of organising permissions for my PhD research, which meant shuttling from office to office and from one end of town to the other. I had been travelling by bus, taxi and on foot, which was rapidly wearing me out. Upon the arrival of the jeep, slow, stop-start commutes were replaced by air-conditioned travel into town in under 10 minutes. Hillside suburbs were now easily accessible and, all of a sudden, I could get several things done in a morning.

And yet, at the same time the jeep created barriers. Instead of saying good morning to the street sellers who I walked past on the way to the bus stop, I now trundled past them encased in a vehicle they could never afford. I’m not going to pretend that before the jeep I was living as the locals do. I wasn’t. But, for all the comfort it brought, my newfound private motor vehicle did, at the very least, contribute to the gulf that existed between my life and theirs.

Nowadays, I’m back on the bus, with all the additional tiredness that this brings to my life, but I was reminded of my jeep driving days when reading of the recent furore associated with Oxfam closing the pool in its guesthouse in Nairobi. The guest house is run on a for-profit basis by Oxfam (who then use the profits to fund aid work) and its clientele is predominantly aid workers. The pool wasn’t custom fitted by Oxfam – it came with the guest house property. On one hand Nairobi is hot and dry, and having a pool to soak in must make aid workers’ lives somewhat more pleasant. On the other hand Nairobi is hot and dry, so hot and so dry that it has been in the middle of a drought. The water used to fill the pool has no material impact on the drought itself but it was thought that aid workers soaking while the rest of the country baked would be a bad look, and so the pool was closed.

And in their different ways, my jeep and Oxfam’s pool tap into an aspect of aid work that is rarely talked about but also the subject of profound discomfort amongst many aid workers: the difference in living standards between aid workers (at least most of the time) and the people who they work with.

In Honiara the differences are readily apparent: while much of the city lives crowded into informal settlements, most aid agency staff enjoy comfortable residences nestled the various hillside suburbs nestled behind the town (for the record this PhD student hasn’t quite made it into the hills but can be found in a very comfortable room, just a short dash from the cooling Pacific ocean).

There are three reasons why I think we find aid opulence discomforting.

The first is financial: every dollar that is spent on residences for aid agency staff could, in theory, be spent on vaccinations, or roads, or nurses, or teachers or other actual end products.

The second reason is to do with information: isolated in enclaves it can be hard for aid workers to stay in touch with the real needs of the people they work with.

The third is to do with local perceptions: aid discourse may be all about partnership and this may be genuinely intended by aid agencies, but when aid staff lead isolated and lives of astounding affluence (by local standards) this would seem likely to undermine ideals of equal partnership, at least in the minds of aid recipients.

Above and beyond this, I think a lot of people feel uncomfortable, simply because it feels wrong to be experiencing comfort in the midst of such profound lack.

These are all good reasons for concern. But on the other hand, there are also very good explanations for why the discrepancies exist.

There’s safety for a start: Honiara’s not particularly dangerous, but home invasions occur and expats have been murdered over the years. And other aid destinations (think the large cities of Africa or Latin America or Port Moresby) are often very dangerous. Safety necessitates enclave living.

There’s also exhaustion. People living in the comfortable, orderly, temperate cities of the average donor country may scoff at this. But the fact of the matter is that aid work is often hard work. And living in most developing countries can be profoundly exhausting. Although, as I learnt, creature comforts can ease this to some extent. And, given how hard most aid workers work, it seems unfair, not to mention ultimately inefficient, to expect aid workers to spend their entire careers in a state of uncomfortable exhaustion.

Finally, urban areas in most developing countries are often cleaved by deep economic inequality. There often isn’t much in the way of middle class living for aid workers to be inserted into. Meaning, that affording aid workers some degree of comfort and safety often requires going all the way to affluence.

This doesn’t excuse every excess that occurs in the world of aid. Some consultants are paid far too much for example. Or, in the case of Honiara, a reasonable number of short term aid workers end up in the city’s most expensive hotel, when they could be accommodated just fine in other nearby hotels for quite a lot less.

Nor do my justifications in the second half of this article mean that the sources of discomfort that I raised aren’t real. They are. But I guess that this is – for the most part – an inescapable aspect of the deeply unequal world that we live in: the fact that even attempts at doing good often bring with them huge inequalities of their own.

Terence Wood is a PhD student at ANU. Prior to commencing study he worked for the New Zealand government aid programme.

Picture: Stuart McEvoy

Danielle Hay and Stephen Howes present an interesting analysis of the take-up of the Pacific Seasonal Worker concluding that, ‘given the experience to date, it would clearly be premature to regard seasonal horticultural work as the answer to the problem of promoting Pacific migration to Australia’ (p.39).

The Pacific Seasonal Worker Pilot Scheme (the pilot) was never about ‘Promoting Pacific migration to Australia’ but rather about development in the Pacific islands, a very different agenda. The aim of the pilot was to test whether such a scheme could: (1) assist Australian horticulturalists who could not find enough local workers, and (2) provide development assistance to participating Pacific islands by enabling their citizens to be granted subclass 416 visas to work in Australia for up to seven months in a year in eligible horticultural enterprises, thereby gaining work experience and skills and earning money which could be remitted home. Consistent with the principle of circular migration, the worker, skills and money would all return to enrich the home community, and the worker would have the opportunity, all being well, to return to Australia as a seasonal worker in the following year.  To discourage workers from establishing permanent roots in their new communities (migrating), visa conditions do not allow accompanying family members. The scheme was intended to be demand driven, in other words, if there was no demand for workers, there would be no recruitment.  The pilot was a test of reciprocal needs: whether, and under what conditions, the needs of Australian horticulturalists and the needs of Pacific islanders for developmental opportunities could be mutually achieved.

Hay and Howes are probably correct in stating there is currently no great labour shortage in Australia. They are also likely correct in suggesting that some of the need is otherwise filled by working holiday makers and illegal workers. Others also filling this need include grey nomads and those working in the cash economy in breach of other federal and state jurisdictions or under ‘sham’ contracting arrangements.  Legislative changes recommended by the Howells review and likely to be implemented in July of this year should make it easier to impose sanctions on those who employ illegal labour and may go some way towards eliminating the more organised elements of the illegal industry and creating more opportunity for seasonal workers.

Hay and Howes are also probably correct in assessing that the horticultural industry would resist any attempt to reduce the appeal to working holiday makers of working in horticulture. But it would be a mistake to see working holiday makers labour as in competition with Pilot labour.  It is, in fact, complementary. Horticulturalists have an elastic demand for labour: in the off-season it is low, ramping up during planting and pruning, and reaching a maximum during harvest. Depending on the crop, the harvest might last four to six weeks – not long enough to keep a Pacific Seasonal Worker (PSW) employed for the four months minimum it has been estimated needed to recoup expenses and make a reasonable saving.  However, with the PSW employed for four to six months either side of the harvest with other duties, there is room for the shorter term working holiday makers to provide the necessary additional labour for the six-week peak, and since the timing of the harvest is always a bit unpredictable, the flexible availability of working holiday makers works well.

It is true that the pilot is highly regulated. Regrettably it needs to be. DIAC took lessons from the early experience of the RSE, as well as from its own history with the subclass 457 visa, and recognising that this was a vulnerable cohort subject to exploitation, made provision for their welfare by requiring approved employers to commit to the pastoral care of workers as a precondition for approval to recruit workers. In her review [pdf] (p.6) of the short-term 457 skilled visa, Barbara Deegan found many workers in Australia on this visa had been exploited in their pay and or workplace conditions, either due to a lack of knowledge of their rights or because they were afraid to raise them. Nic McClellan described RSE workers [pdf] similarly as ‘not [having] the skills to negotiate bureaucratic systems’ (p.27).  McClellan found that during the first year of the NZ RSE program there had been weaknesses in arrangements relating to the provision of pastoral care, ‘with lack of work at down times (which means no income but ongoing expenses for housing and food) being a major concern’ (p.4).  As the history of the 457 and the RSE show, unfortunately the protection of vulnerable workers cannot be left to the goodwill of employers but needs to be regulated and monitored. The pilot requirement for contingency planning (which Hays and Howes would like to see omitted as part of reducing the documentation burden) was imposed in response to McClellan’s findings.

Even with careful regulation there are still welfare issues. Culturally workers are not predisposed to complain of mistreatment by authorities and are often ignorant about their workplace entitlements or reluctant to speak up because they are afraid to risk losing their position. The pilot represents an enormous opportunity for the workers, families and communities, even more so because they have the opportunity to return in future seasons and repeat it, so there is every motivation to succeed. For workers there is nothing to be gained in alienating an employer from whom all good things flow, so few do.

It’s true the Pilot has not been well promoted, but it is questionable whether this is a government responsibility. The scheme was introduced by government in response to a campaign by the horticulture industry over many years that millions of dollars of produce was left to rot and industry expansion was prevented due to the lack of available labour.  However, when the pilot scheme was implemented, surprisingly it received little industry support. This is one of the most marked differences between the RSE schemes and the pilot.  In New Zealand, the peak horticulture body, Horticulture New Zealand, has driven the RSE scheme from the beginning, and as Hay and Howes suggest, also took the lead in cleaning up their own illegal labour problem. The organisation employs a full-time manager of national seasonal labour, Jerf van Beek, who plays a key role in promoting and supporting the scheme.  In Australia, there has been no single body representing the horticulture industry since the collapse of industry support for HAC (Horticulture Australia Council) in 2009.  While many peak bodies released media statements in support of the pilot when it was initially announced and occasionally since, there has been no sustained attempt to promote the pilot by any segment of the horticulture industry hence the widespread ignorance about the scheme that Hay and Howes found in their survey.  Horticulturalists rely on their own crop-specific organisations as well as locally based affiliations such as shed meetings for information and recommendations about innovations in the industry and it is through these mediums, and the credibility and legitimacy given to messages thus conveyed, that growers need to be informed regarding the benefits of legal labour options like the Pacific Seasonal Labour Pilot and Program as well as the negative impact of illegal labour.

Hay and Howes make a number of recommendations for government to increase recruitment numbers: creating a market for the scheme by reducing the number of illegals and working holiday makers, and increasing the uptake of the scheme through promotion and by reducing the compliance burden for growers and shifting more travel costs back to workers. The questions need to be asked, why seek to increase numbers in a demand-driven scheme and why is this a government responsibility?  The government, through the pilot, has met its objective of demonstrating that a seasonal labour program can have mutual benefits to Australia and the Pacific.  Hays and Howes noted ‘the generally very positive experience of the small number of growers which have actually participated in PSWPS’ (p.37).  Their satisfaction is generally based on the reliability of the workers and the fact that with an average of 30 per cent additional productivity (an estimate consistent across both schemes) the workers more than cover the estimated additional 10 per cent in recruitment and regulatory costs. This is why those employers who have tried the scheme continue to use it and generally increase the number of workers employed in the following season. The scheme has also demonstrated that it has met its goal of delivering financial benefits to individual workers, though we have yet to see the longer term developmental impacts of remittance income, skills and training.  As the pilot ends and the permanent program begins, it is time for government to take a step back and industry to take a more active role in leading the scheme.  Under the program it is likely that there will be less government regulation and monitoring and greater responsibility put on growers to do the right thing.  Approved Employers would do well to remember that, like any employee, seasonal workers are most productive when treated with respect and rewarded appropriately.

Cynthia Halloran works for the Department of Immigration and Citizenship. The above represents her personal views, and is written entirely in a private and not official capacity.

Timor-Leste elections and prospects

Former guerrilla leader and ex-army Chief Taur Matan Ruak was sworn in as the new President on Sunday, replacing Nobel Laureate and international figure for the independence movement Jose Ramos-Horta. The election, which the UN labelled “an important milestone for the consolidation of peace and stability”, marks an important landmark as the country celebrates its 10 years of independence. General elections will be held on July 7. James Batley from AusAID, and Australia’s first ambassador to Timor-Leste, is optimistic about the country’s prospects in this blog.

Global aid to fall in 2012

Global aid is set to fall even before inflation in 2012 according to Devpolicy’s latest Policy Brief (a blog summary is available here) by Kathryn Zealand and Stephen Howes who analyse 2012 aid budgets for major donors and find that 8 of the top 15 donors are planning on cutting aid this year. Further analysis is also available on the Devpolicy blog on the recent Australian budget (here), and on the collapse of the scale-up effort in Canada and the prospects for the scale-up continuing in the UK.

NATO, aid and Afghanistan

Afghanistan has dominated discussion at the recent NATO summit in Chicago, where NATO fully endorsed the Afghanistan withdrawal. At the summit Julia Gillard has committed to increasing Australia’s aid to Afghanistan by $85 million a year to $250 million by 2015 in an agreement signed with Afghanistan President Hamid Karzai, on top of the $300 million already committed for security forces. The US and Australia have used this increase to influence other coalition members to do the same.

The next President of the European Bank for Reconstruction and Development (EBRD): Suma Chakrabarti

The Board of Governors of the EBRD announced their pick on May 19^th. Sir Suma Chakrabarti, currently the most senior civil servant in the British Ministry of Justice and former head of DFID, will start his four year term on July 3, 2012. The EBRD has invested more than €70 billion into Eastern Europe, and has taken on a new level of importance as the G20 last year ordered it to play the lead role in providing financial support to fledgling democracies in North Africa.

In the lead-up to his nomination, the first openly contested race in the Bank’s history, the CGD interviewed four of the five nominees. The selection defied expectations that Philippe de Fontaine Vive, the presumptive French Candidate, would take up the role and is the first time in the Bank’s history a Brit has taken the Presidency. The openly competitive process, the first of its kind in a multilateral, should place even further pressure for reforms in the next rounds of IMF and World Bank selection.

Praxis Discussion series on aid effectiveness

On April 12 the World Bank offices in Sydney hosted their latest Praxis Discussion. This time Michael Carnahan, the new Chief Economist at AusAID; Matt Morris, Deputy Director of Devolicy; and Truman Packard, Sector Coordinator for Human Development at the World Bank were brought together to address some of the big questions on aid effectiveness. See the hour-long discussion (with q&a) in its entirety below.

The World Bank’s new Global Findex database

The World Bank released the first round of its Global Findex database, based on more than 150,000 interviews, that aims to ‘fill a gap in the data landscape’ to show how people in 148 countries save, borrow, make payments and manage risk. The data shows that three quarters of the World’s poor are ‘unbanked’. Some initial results on financial inclusion in Asia Pacific are summarised by the Bank here. An infographic outlining some of the major results is available here.

In brief

The World Bank has released its annual compilation of environmental data for more than 200 countries, known as the ‘Little Green Data Book 2012.’

The Annual Bank Conference on Development Economics (ABCDE) was held this month focusing on accountability and transparency for development, summarised here.

The World Bank has launched a new report ‘getting to inclusive green growth’, available here.

The ADB held its 45^th Annual Meeting this month, which focused on inclusive growth. A summary of the outcomes are available here, here and here.

The 2011 Development Effectiveness Review (DEfR), ADB’s fifth annual performance report by Management, found that ADB made further progress toward its Strategy 2020 targets, and that reforms are succeeding.

A recent CGD report discusses how Cash on Delivery could help Tabacco Control in Developing Countries. Ian Anderson recently highlighted the issue in a blog post.

Reports that the number of people without clean drinking water may be as much as five times larger than the UN has stated highlight the vital importance of the WASH initiative blogged about recently here.

The Economist summarises a recent presentation by Esther Duflo on how an absence of optimism plays a large role in keeping people trapped in poverty.

Jonathan Pryke is a Researcher at the Development Policy Centre.

The approach to growth and development that works tends to be indirect, more subtle, and more a matter of a better environment for investment, growth and development. It is more a matter of tilling and tending, weeding and fertilizing the soil for investment, than transplanting a healthy and expensive tree into unprepared ground and then having to transplant again and again after the first and subsequent ones died. More supportive policies and institutions have tended to lead to more private sector development.  Greater focus on context, leadership, ownership and participation has been more likely to lead to capacity development in the public sector. The same applies to economic growth and development. But this is still not a story that is well known, well understood and therefore it is not readily supported.

When poverty reduction directed development activity in the Pacific (Blog #4) Ron Duncan and I were equally aware that a framework for effective investment, economic growth and the reduction of poverty existed. Though we were approaching this realization from separate careers and different perspectives, we both knew that the evolution of the theory of economic growth and the history of development efforts both established the same set of relationships that explained how hardship and poverty could be reduced (for more, see our ADB paper on a Framework for Establishing Priorities in a Country Poverty Reduction Strategy [pdf]).

In the 1950s growing economies was understood to be all about direct injections of capital and labor. The success of the post WWII Marshall Plan endorsed this simple equation and so the means to European reconstruction was transferred to aid and development, but without the same beneficial impact. Subsequent theorizing included the importance of education, skills and the quality of labor. As the experiences of aid and development continued to be frustrated by the lack of positive outcomes so the search for a better framework and approach continued. In the 1970s academics picked up on the idea that policy mattered. In the 80s and 90s theorists included the nature of technological change and then the importance of inclusive institutions and good governance, including property rights.

This evolution of thought and experience has eventually described a more complete framework for growth and development, a framework that can be depicted in the form of a tree. If we reverse this process of discovery, starting at the roots of the ‘growth tree’, there can be no effective investment in economic, social, and environmental development without civil order. When this is in place, society can then start to draft formal and informal contractual arrangements as well as other rules and regulations.

In turn, these rules of society support the demand for and application of good governance, and good governance helps society to apply better policy and to build relevant institutions. With good governance, better policy and institutions in place, private markets and the delivery of public services can develop.

Effective private markets and a performance-oriented public service are, in turn, fundamental requirements for viable investment including development projects that help reduce poverty. Firm roots help build a solid trunk and this in turn produces the branches to yield rich seed and fruit – which when ripened can be cast to the earth to produce new growth.

From the roots to the trunk of the tree are matters of State. Above this are matters of the private economy and the delivery of public welfare. This suggests that a performing economy and improving welfare delivery very much depend on the quality and stability of the State.

The relationships within the tree are not static and the various components all depend on each other. The nature of growth and development is a cyclical one. Preferably these cycles are virtuous but they can depict dormancy or even decay. The quality of the fruit depends on the health of the tree with the latter depending on the quality of its environment, soil, spacing, and watering.

All economies, as plants are vulnerable to external shocks as the global economic crises attest. But it is not just a fall in demand that threatens economies. Excessive demand for an economy’s resources – and thereby also for fledgling good governance, for competitive markets and inclusive institutions, as well as developing rules and regulations – can also curtail equitable growth and development leading to poverty reduction. This threat is most evident in the small, narrow economies of the Pacific. While subsistence, demand for primary resources and international aid helped lessen the impact of external economic crises in the Pacific islands the same small and narrow economies and their developing institutions and markets have been much more vulnerable to excessive aid and resource demand. Too much of a good thing can be a curse, a “resource curse” and an “aid curse.” [1]

Pacific governments, influential donors and Pacific societies all need to pay much more careful attention to the framework, approach and also the essential policies and institutions for growth and development as opposed to trying to reinvent theory and ignore experience. Even the smallest, most distant and resource poor economies can perform better when more attention is paid to the proven approach to growth. In my experience, it is simply not the case that, as has recently been argued here, Pacific islands are inherently non-viable. Pacific islands, however small and remote, can develop successfully provided a conventional approach to development is adopted. And I fear that any discussion of alternative, non-conventional, approaches, such as recently put forward by the World Bank (you can find a blog summarizing the report here, and the report itself here)  will excuse the region’s leadership from taking the tough decisions on governance, rules and regulations and the environment for growth that are more difficult for the electorate to understand.

Steve Pollard, known in the Pacific as a government employee, researcher, consultant, and donor staffer, recently retired from the ADB. He has almost 30 years’ experience working toward the interests of better policy for better livelihoods in the Pacific, almost 40 years’ experience in development. 

In this fifth of a series, Steve shares some of his personal development policy sojourns in the continuing interest of adopting better policies and institutions for a better future in the islands. For a compilation of all five  “Pollard’s Pacific Reflections” to date, see here. Watch out for the next installment on “What policy? What works?”

UK aid to date

Net ODA/GNI ratios (expressed as percentages), UK & OECD DAC average

Source: House of Commons library briefing available here [pdf].

As can be seen in the chart above, up to 2000, UK aid as a ratio to national output (GNI) was similar to the DAC average. From 2000, however, the UK began a major scaling up of its aid program, reflecting its 2000 commitment to the Millennium Development Goals. Apart from a dramatic fall in 2007, due to high levels of debt relief in 2005 and 2006, aid has consistently risen since 2000 both as a ratio of GDP and in absolute terms.

The UK should also be credited for the ‘International Development Act’, which was passed into law in 2002, that enshrines poverty reduction as the core focus of DFID’s work, and effectively outlaws tied aid. The UK is also one of the few countries in the world that retains a cabinet minister for international development, a recommendation the Australian Aid Review (p. 28) discussed but ultimately dismissed.

The march towards 0.7

The Blair Government set a clear timetable for increasing ODA to 0.7% of GNI by 2013 as a part of their 2005 General Election platform. The Coalition Government, which came to power in 2010 promising, and implementing, severe austerity, has so far quarantined the scaling up of the aid budget. The last three budgets have held ODA/GNI steady at 0.56%. The Coalition Government has also constantly reaffirmed the multi-party commitment to reach its 0.7% ODA/GNI target by 2013.

The big challenge lies ahead

While quarantining the aid budget from austerity is in itself an impressive achievement, the big challenge for UK aid is clearly still to come.

The scale-up to come 

Sources: Figures to 2010 from DFID’s 2011 Annual Report here [pdf], p. 111. Figures from 2010 onwards taken from the 2010 Comprehensive Spending Review here [pdf], p. 60. Updated forward estimates, but recorded in financial year (April-March) terms found in the 2011 Annual report here [pdf], p. 10, also verify this trajectory. Note that although the UK budgets April-March it also produces calendar year estimates of ODA as this is how all donors report to the OECD.

As can be seen above the Coalition Government has a monumental task ahead of it when it brings down next year’s federal budget. The trajectory of the scale-up, as outlined in the 2010 Comprehensive Spending Review (CSR), has left the heavy lifting for the final year. The CSR document shows that ODA in next year’s budget will rise by an astounding 32%, or around £3 billion, to match the Government’s commitment.

Besides the obvious concern of the political feasibility of such a large increase, how DFID will be able to effectively spend that amount, and sustain that spending beyond 2013, is another big question. The difficulty of answering these questions may be cause enough to delay or postpone next years scale-up, and recent events have drawn concern from campaigners across the UK that the 0.7 target may be in jeopardy.

The failure to legislate 0.7

The Coalition Agreement between the Conservatives and Liberal Democrats included an agreement to legislate the 0.7 target. However, the Queen’s recent speech to Parliament, which outlines the legislative agenda for 2012-13, included no reference to this.  Also, a recent House of Lords’ inquiry into aid advised against a 0.7 bill.

Postponement of the 0.7 bill has been hinted at for months, with the official line being that there is simply not enough time in the legislative agenda as the Government continues to focus on the economy. The Bill, however, is ready for submission and supported by all three major parties so would take up little time.

This failure to legislate, combined with the major surge required in next year’s ODA budget to reach the 0.7 target, is due cause for concern. With the majority of the painful austerity cuts still to happen a backdown, or at least a postponement in relation to the 0.7% target, would not come as a surprise.  After all, this is just what Australia has done.

But it is important to put this uncertainty in context. Unlike Australia, since 2010 the UK has planned on managing their scale-up with this final year spike, with forward estimates consistently incorporating the surge in consecutive budgets. There is also still a clear bipartisan commitment (by the Coalition Government, grumblings of dissent in the backbench aside, and Labour) despite polling suggesting public opposition. This is in itself quite remarkable given the UK’s difficult economic and fiscal position.

The bottom line: expect further increases in aid in the UK, but don’t hold your breath for 0.7 next year – unless UK’s politicians hold their commitments to the world’s poor to a higher standard than our own.

Jonathan Pryke is a Researcher at the Development Policy Centre.