Somare copped allot of flack from his comments that ‘no one is starving in PNG’ on his last trip to Canberra. I assume everyone feels the same way about that topic, but on a different note I came across Keith Jackson’s comments on Somare’s speech that night on his intentions for a policy shift. And by that I mean a shift to begin an Aid Exit Strategy. Jackson writes:
“Sir Michael said the time has come for PNG “to assert and accept more responsibility for our national development. We must forge a new relationship of equitable partnership with Australia. We will also be accepting more responsibility with respect to regional initiatives.”
Negotiations are about to begin with Australia on an Aid Exit Strategy to ultimately phase out Australian development aid. Initially, in what can be seen a blow to aid agency AusAID, there will be less consultancies and more money deployed to the private sector.
The Exit Strategy will be conducted so as not to prejudice PNG’s development effort and without destabilising the national budget. There will also be a resource shift from the public service to fund infrastructure development in the transport, health and education sectors.”
Is this pie in the sky stuff or can we really do this? I’m not an economist and I’m not in the Finance and Treasury Department, but my feelings are that I would love that PNG can move in this direction, and if this is indeed going to be policy, then how soon can we expect the wheels to start turning?
So for us to phase out Aid, where will the money come from? The odd K700 million blow out reported in the 2008 Final Budget Outcome (FBO) Report doesn’t give me too much confidence at the moment as to how the government will manage finances up to 2012. We also still need to get our LNG projects over the line before we start counting our Chickens. I know I don’t think like this all the time, but when it comes to money, sometimes its better to be conservative about these things so that we are pleasantly surprised when all of it does work out, instead of being sorley dissappointted if it all goes wrong. Because it seems to me that everything that the government is saying now appears to rest entirely on the shoulders of our LNG projects. As Chris Wright in EuroMoney said:
“October will be a big month for Papua New Guinea. It doesn’t sound much on paper: it’s the deadline for the final investment decision on a liquefied natural gas and pipeline project. But it’s a project that will change the country dramatically – economically and socially. In fact it’s hard to think of another example anywhere in the world where so much, good and bad, might depend on a single investment decision.”
Immeditaley though, regardless of whether this really is the beginning of the end for Australian Aid to PNG and whether the LNG projects will come good to fund it all, I think we really do need to have a look at what is going on with all this Aid. Just understanding how much money is being pumped into PNG in Aid and where it is going has to be evaluated. Not just for Australian Aid but for every other country and/or NGO in PNG. And by evaluation I mean have we ever looked at specific programs or projects in PNG and asking some questions, like; Is the intervention producing the intended benefits and what is the overall impact on the population? Could the program or project be better designed to achieve the intended outcomes? Are resources being spent efficiently? These are the types of questions that can only be answered through an impact evaluation, an approach which measures the outcomes of a program intervention in isolation of other possible factors.
Don’t get me wrong, I appreciate all the assistance, but is it effective? More importantly also, what effect does it have on our government? Is the reason why the Government did not increase spending to health and education in the last budget due to the fact that Aid money covers that at the moment? In other words, does Aid money also make our government lazy in certain sectors?
Yes we should reduce Aid, but where and when? I’m sure any findings of an Aid evaluation may be politically sensitive, but even if after the evaluation we don’t end up phasing out Aid, can we please make sure that it doesn’t make our Government lazy. I’m sure Rudd doesn’t want to waste Aid money and neither do we.