Monday, June 21, 2010

AusAID in Papua New Guinea: any way forward from here?


This is the final article by PAUL OATES analysing matters raised in the recently published Review of Australian Aid to PNG

IN ITS PREFACE the Review states that its overall aim is "to consider and recommend how Australia's aid can most effectively contribute to Papua New Guinea's current, medium and long-term development priorities."
In my first article, I examined claims that the PNG public sector was ineffectual and not delivering intended government services because of reasons including failures of leadership, management, strategy, knowledge, and capacity. And a bunch of other factors that suffocate good governance.
I proposed that, to achieve real results, full control by Australian departments over some areas of aid expenditure might be considered on an interim basis.
The second article looked at an existing AusAID performance report in the context of the recent aid review and showed why it has not been possible to initiate a results-based programme or effectively monitor the use of AusAID funds.
The main problem in appraisal is the interweaving of Australian aid funds into PNG government programmes. The PNG government operations are unable to be properly monitored or assessed simply because there are no effective mechanisms to do so.
Despite this, the Review remains bullish, saying: "There is a shared commitment to act." Well tally-ho, but where?
It seems to me, after scrutinising and weighing these reports, that changes to the status quo are unlikely to occur in the near future.
Details on the website explain how, at the 2008 Australia-PNG ministerial forum in Madang, it was agreed that the continued placement of senior and experienced officials in the PNG public sector would help accountability and good governance.
A previous Australian government programme was renamed Strongim Gavman [strengthening government]. This program was to be run from Canberra with this remit:"Our officials are focused on providing strategic and policy advice and on building capacity in the PNG public service, including through mentoring to improve the knowledge and skills of PNG staff."
In other words, there was a new name but essentially no change to how the aid programme is run. Therein lies the current dilemma.
The review highlights changes in the level of aid Australia gives to PNG, which has fallen in real terms since independence. It is stated:"There are signs that PNG is diversifying to other donors. 2010 PNG budget documents put Australian aid at 68% of the total. China has started to provide aid."
Prime Minister Somare has publicly declared a 'Look North' policy and the PNG Opposition Leader has claimed China is bribing PNG leaders. While Australian aid has been maintained at a steady level, it remains highly fragmented.
Since 1999, per capita spending by the PNG government on health and education has decreased from K140 to K40. While PNG's GDP has substantially risen, spending per capita has remained at virtually the same level as at independence. The Review states:"Education, health and infrastructure have long been important sectors for Australian aid. In the last decade, governance has become an increasingly important area. Over the period 1975 to 2002, 27% of Australia's aid went to education, 24% to infrastructure, 12% to health, and 21% to governance (AusAID, 2003).
"The main change over the last decade has been in the area of governance, where the share of total aid spending almost doubled from 20% in 1999-00 to 36% in 2009-10.3 Health has increased its share of the aid programme (thanks to new HIV/AIDS spending), but education and infrastructure have both seen a significant decline."
In other words, real spending on education and health (other than on HIV/AIDS) has decreased while spending on governance has increased. Yet the same review suggests that PNG governance has been steadily worsening. Clearly the switch has not had the desired effect.
So what opportunities are there to change the current regime? In 2010-2011 it is estimated that official Australian aid to PNG will be $457 million. Yet under the situation revealed in the Review, this amount will virtually disappear without any real benefit to the PNG or Australian people.
On the web page under the heading 'Mutual Respect', it is stated that:"Australia and partners will also acknowledge accountability to our respective Parliaments for the impact and effective use of development assistance."
Yet how can accountability to the Australian Parliament be discharged when AusAID has publicly acknowledged it is not possible to monitor the impact and effective use of aid given to PNG?
It seems there will be no opportunity this year to review the current bilateral arrangements at the highest political level because the Rudd government cancelled the annual ministerial forum with PNG. The official explanation was that this was due "to limitations on ministerial travel in an election year." Hmmm.
Unless AusAID can effect major changes to its PNG operations, it appears another $457 million will go the same way as the previous billions and disappear into a big black hole that is the PNG government.

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