2003_09_september_saty forum png

The Papua New Guinea telephone is an indicator of the importance of Australian aid to the country.

The phone book (white and yellow pages) for the whole country of 5.5 million people is smaller than the Batemans Bay area phone book.

In this small economy, Australia’s aid is about 3 per cent of total GDP. It is about 12 per cent of the national government’s budget. It is a big-ticket item in PNG. Even from the Australian perspective it is big – about a quarter of our total foreign aid. And please do not tell the average Australian taxpayer that we give $300 million a year to PNG. They would scream very loudly. I dare say an opinion poll would say cut it to shreds. That is perhaps why our Prime Minister, so in tune with popular opinion is putting his foot down with PNG.

Now he and Foreign Minister Alexander Downer are right to ask where has all the Papua New Guinea aid money gone.

Plenty of people in PNG are asking exactly the same question.

Similarly, people on both sides of the Torres Strait are asking the question: Where do we go from here?

Whether Howard and Downer have gone about it in the right way is another matter. Downer is right to say that PNG is stuck with Australia. Talk in PNG of getting aid elsewhere – China and Malaysia, for example — is ludicrous. Gone are the cold war days when developing nations could trade off one gullible ideologue against another for aid money.

But then again, Australia is stuck with PNG. PNG is our neighbour and will remain so. It is in Australia’s interest to have a political stable and economically advancing PNG.

Economic growth is crucial. Contrary to the extreme green view of the world, economic growth means you can do more with less and so you can improve the environment. In developing countries economic growth is crucial because it gives hope. It gives a sense that things are improving.

Some huge humanitarian crisis bought about by economic collapse in PNG will cost Australia dearly.

So co-operation is going to be more effective than coercion.

Downer said, “It’s not Papua New Guinea money and we’re entitled to a say on how our money is spent.”

That sounds fine, but it has difficulties. Pre-independence, Australia had almost total say in what was spent where. After independence in 1975, the view from Australia was that an independent PNG should determine its own priorities. A large portion of aid money – too much of it – went to supplement the Budget bottom line.

In the first decade that worked reasonably well because the Public Service functioned well. It had a significant number of ex-patriate Australians and had a public-service culture: public interest, appointment on merit, policy advice in the national interest, accountability and so on. That is obviously not a uniquely Australian culture, far from it. But it might have been seen as one in PNG and therefore a form of neo-colonialism.

In any event, from about 1985 those in political power did their best to circumvent and undermine the Public Service. In a place where village, province and wantok come before nation, appointment on merit and policy with national goals had little chance. Wantok (one talk) refers to your own people who speak you language. You have obligations to them that go beyond your obligations as, say, an officer to a job description and public-sector standards or an MP to the national interest.

So the aid money goes astray or the priorities are wrong.

Now Howard and Downer say they want an end to the blank cheque and want to have a greater Australian say and supervision, even to the extent of placing Australian officers within the PNG administration. It was wrong on several counts.

For a start, over the past decade a great proportion of Australian aid has already been moved away from blank cheque Budget supplements to more tightly controlled specific aid projects.

Secondly, the Downer statements were obviously offensive to the PNG Prime Minister, Sir Michael Somare. In a culture that reveres the big man, it made Somare look smaller and not being treated as an equal. In his culture Somare cannot be seen to be the small man. So any hope of co-operation goes out the window.

Thirdly, the idea that Australia must supervise Australian aid to ensure it goes to the right places is misplaced. It invites indefinite dependency. It is illogical: Australian supervision of aid will continue until Papua New Guinea can administer the aid properly.

This goes beyond the old fish and fishing rod parable: if you give a man a fish you feed him for a day; if you give him a fishing rod you feed him for life. That is a reasonable statement about aid – building physical infrastructure is important. Of more importance, though, is the building of intangible infrastructure – especially the culture of appointment on merit, accountability and financial management.

Somare was spot on when he called for Australia to PNG public servants trained in Australia to help instill appropriate work ethics and financial management. Alas, his idea was not taken up. This precisely where Australia must do more. And help with law and order – without that there can be no expansion of tourism which can do much to help to develop understanding. And there are some magnificent things to see and do in PNG.

Australia must help build up the capacity of PNG to administer aid (and its own money) effectively and ethically. If Australia does more supervision, the chance to build up PNG capacity falters.

Worse, it undermines the PNG national government and PNG democracy. People in PNG start appealing directly to Ausaid and other aid agencies rather than going through their own processes.

Australia must also wean PNG off the big-project mentality. The latest one – the gas pipeline to Queensland – has fallen over, like others before it. Hopes are built up and then dashed. Fix the little things that people can see and concentrate of agriculture where most of the people work.

Obviously you cannot change this overnight, but at least Australia should be aiming at building PNG capacity to administer well. Howard and Downer are going the wrong way.

It is far too easy for Australians to say PNG is basket case, going from bad to worse. But there are hopeful signs. For a start PNG has had half a dozen peaceful, democratic changes of government in the past 25 years. No other developing nation has achieved that. The literacy rate is 65 per cent and 85 per cent of primary age children go to school – many in rural areas walking or canoeing 10 kilometres. School fees are paid and education valued.

Yes, GDP has fallen 25 per cent in the past 10 years (and 2.5 per cent last year) and debt is at 90 per cent of GDP. But there is still a great entrepreneurial spirit in PNG.

Also institutions are in place which can reduce corruption: the Ombudsman Commission, the Auditor General, the Police Fraud Squad and the Coalition Against Corruption. The Public Service Commission has got back its power (lost in 1986) to secure appointment on merit – rather than political or ethnic association — for the top level.

Moreover, there is a post-independence group of people trained with Australian aid who have returned to the country with some determination to create a better future – again a better trend than in other developing nations.

There is no need for despair yet.

Leave a Reply

Your email address will not be published. Required fields are marked *