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Thursday, 16 August


How politics keeps Solomon Islands and Papua New Guinea poor and poorly governed "IndyWatch Feed"

The Western Melanesian countries of Solomon Islands and Papua New Guinea (PNG) are both poor and poorly governed. Anyone who has spent any time in either country will have seen how governance woes contribute to the countries poverty. Their governments neglect essential infrastructure. Dysfunctional bureaucracies impede legitimate businesses and let other businesses get away with causing harm. Health and education systems are poorly run.

This much is obvious. What is less well understood is the way the two countries politics contribute to their governance woes. In my new Asia & the Pacific Policy Studies paper I explain that many of the governance problems in the two countries stem from their clientelist politics.

In elections in clientelist polities voters dont vote in search of better public policy, or on the basis of how well the country is being governed. Rather, they vote for candidates they think will help them directly if they win. This has the effect of selecting and incentivising members of parliament (MPs) to focus on delivering direct benefits to their supporters back in their electorates rather than running the national government well.

The effects of this are obvious. In both countries, funds that MPs can spend at their discretion within their electorates have grown at the same time as government departments have been underfunded. In both countries, ministers often pay little attention to the government departments they are supposed to be running. Ministers are rarely punished for poor performance. Bureaucracies are not subject to political pressure to improve; they are neglected and demoralised.

It may sound like I am blaming voters in Solomon Islands and PNG for their countries governance woes. Im not. I think voters who vote in search of personal or localised benefits in the two countries are voting perfectly reasonably. Voters decisions are reasonable because the states they live in are weak, while at the same time voters needs are acute. Voters need something from elections, and when the government cant deliver it through better policy and better services, all they can hope for is direct assistance from MPs.

You might ask why voters dont vote for better governance to solve this problem. It might take longer but it would bring greater benefits in the end. The problem is that individual voters, or families, or communities, or even electorates, dont control the quality of national governance. At best, all they can do is elect one MP out of many (50 in Solomon Islands and 111 in PNG), and one MP cant change the country on their own.

Weve resolved this particular probl...


Fortnightly links: challenges for SDG #6, ACAPS, recovering from PNGs February earthquake, and more "IndyWatch Feed"

The results from Mongolias first gender-based violence survey are in.

ACAPS is a non-profit dedicated to providing humanitarian actors with emergency assessments. This Devex article reports on how it helps NGOs decide where to spend their money.

An MSF logistician has invented a vest with a built-in decontamination kit for humanitarian actors in the field.

The interim report into the risk of sexual exploitation in the Australian aid sector has found that Australian aid programs have strong safeguards and protection measures already built in, reports The Guardian.

Devex reports that many countries are facing challenges on achieving SDG No. 6 on clean water and sanitation, and at this rate of progress we wont see it achieved for centuries.

Radio New Zealands Johnny Blades reports from PNGs...

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Wednesday, 15 August


Aid and defence "IndyWatch Feed"

During the height of the aid boom, back in 2012, my then-colleague Ben Reilly complained that Australia was spending too much on aid and not enough on defence. We were on our way, Ben complained, to becoming an aid powerhouse and a military minnow. How times change. As the graph below shows, we are now on track to hit a record high defence-to-aid ratio. We have already increased that ratio from $6 on defence to every one for aid back in 2012 (when Ben was complaining about it, and when it was at a historical low) to $8.60 last year, the third highest ever. If the budget projections are followed through with, in 2020 the ratio will reach ten-to-one, and it will keep climbing.

The ratio of Australian government defence to foreign aid spending

In 2012, we were the 11th most committed OECD defence spender (measured in terms of defence-to-GDP), and the 13th most generous aid donor (aid-to-GNI). We are now the seventh most committed defence spender, but only the 19th most generous aid donor. Its embarrassing.

In dollar terms, aid and defence have been going in very different directions for the last five years. Adjusting for inflation, the defence budget has grown by one-third over this period; the aid budget has been cut by one-quarter.

Aid and defence spending ($ billion, 2018 prices)

We certainly live in uncertain tim...



Government owned telco, Bmobile, provided the biggest embarrassment for Papua New Guineas APEC aspirations for greater digital access and an inclusive economy.
It did this by doubling and tripling data rates for its new merger acquired Telikom 4G network. Since taking over APEC responsibilities, Papua New Guinea, has been echoing the call by APEC member states for a shared future of greater digital access. For the Papua New Guinean, it meant cheaper mobile data costs enabling the development of e-commerce, better disaster reporting and poverty alleviation through the digital economy.

In terms of affordability PNG ranked 163rd out of 169 countries in 2013 according to the International Telecommunications Union, the National Research Institute (NRI) said in a discussion paper titled Why are internet prices high in PNG?
It is against this backdrop of high prices that Telikom's previously low data packages were important and essential to realise PNG's APEC aspirations.

In pre-merger 2017, when Telikom and Digicel expanded their 4G networks, SMEs felt encouraged to embrace the digital future. In that short period, empirical evidence showed a marked increase in high definition professional and user generated video content. There was also an evidential shift in favorable attitudes towards the perceived older player in the industry Telikom.
Where was Bmobile? According to PNG Maths Blogspot which also comments on communications related topics, Bmobile worked on reviving its struggling state.
The partnership with Vodafone gave it the much needed oxygen. Today it needs another major CPR.
That CPR came in the form of the merger which has given it an additional 4G network as well as user rights to Telikoms infrastructure. While the government has explained the proposed restructure in terms of a wholesale-retail concept, the move has also stripped away an important growing revenue source for the Telikom.

Then in one blow, Bmobile destroyed the credibility of Telikom 4G while at the same time levelling the competition playing field upwards. The move has also put previously affordable data bundles out of reach for many Papua New Guineans.

The flow on effect? Higher costs and a loss of credibility for the PNG Government in the face of APEC countries talking wider access and lower...

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Tuesday, 14 August


Construction Work Halted on Site of Fraudulent SABLs "IndyWatch Feed"

Fraudulent SABLs that the government has failed to cancel despite the recommendations of the Commission of Inquiry are still causing conflict and injustice - see stories below.

This is what the Commission of Inquiry said about the SABL over Portions 2465C and 2466C.  

There was misrepresentation and fraud involved in the whole process [Report p164]

Landowner signatures were forged in a criminal act [p150].

The whole process was riddled with defects and flaws [p157] and it was obvious that officers from DLPP [including] Romily Kila-Pat deliberately decided to ignore and by-pass the existing protocols and practices [p153].

Those responsible must be held accountable for their unlawful conduct and actions [p165]

Read more about the CoI findings.


Source: Grace Auka Salmang, Post Courier

Enough is enough, was the plea made by landowners of Papa and Lealea villages of Caution Bay, Hiri during a peaceful protest on their land.

The locals peacefully fronted up at the Konekaru site yesterday where a construction was taking place and demanded the workmen conducting the earthworks to stop and move out of their customary land.

Chairman of the Papa delegation committee Pastor Joseph Baeau said several calls through peaceful protests have been made and yet controversial acquisition of land portion 2465C, 2466C and 2485C portions in Konekaru area still continuing.

There is no respect for the law. The subject land portion 2465C and this title where Konekaru Holdings Limited (KHL) and CJ Ventures Limited is holding is illegal, according to a commission of inquiry findings.

Mr Baeau and his committee are calling on Lands and Physical Planning Minister Justin Tkatchenko and his customary land advisory committee to fast track the COI recommendations, stop further illegal land grabbing and remove aliens from Papa customary land....


Papua New Guineas disappearing resource revenues "IndyWatch Feed"

Government revenues from Papua New Guineas mining, oil and gas sector have essentially dried up. With the ongoing effects of the devastating earthquake in Hela province, the eruption of election-related violence in the Southern Highlands, a significant budget shortfall, and a foreign exchange crisis driving business confidence down, the resources of the government are severely stretched and the massively expensive APEC meeting looms in November.

In this context, the drop in government revenue from the resource sector is staggering, and accounts in significant part for the growing fiscal stress. Figure 1 shows the extent of the issue: in 2006-2008, according to BPNG figures, the government collected more than K2 billion annually from the sector by way of taxes and dividends, on mineral exports that had just topped K10 billion for the first time. In 2017, the figure is just K400 million on exports of K25 billion a revenue reduction of more than 80% in the same time that exports have increase by 150%! Government dividends and corporate taxes made up just 1.6% of the value of exports in 2017 (and that was a significant increase over 2015 and 2016). If we take the long-term average share of the value of exports that the government has received (at a little over ten percent), this points to a potential hole of at least K8 billion over the past four years, an amount that would go a long way to covering the current fiscal deficit.

Figure 1

Source: BPNG. Resource revenues are defined as MRSF receipts, that is, the receipts that used to go into the Mineral Resource Stabilisation fund. Even though the MRSF no longer exists, BPNG still records resource revenues, which include corporate tax and dividend payments from resource companies.

There are some precedents for the rapid drop in government revenues from the sector, as Figure 1 show. In 1990 and 1991 just as the resources boom triggered by the Porgera gold mine and oil production at the Kutubu oilfield began revenues collapsed, largely due to the closure of the Bougainville copper mine in 1989; and again, briefly in 2009 due to the onset of the global financial crisis in 2008. But neither of these has been as deep or as sustained as the current hole.

A full explanation of the...

Monday, 13 August


The AIIB and Australian participation in Chinese infrastructure initiatives "IndyWatch Feed"

In recent years, a new challenge has emerged for economic development and integration in the Asia-Pacific: infrastructural connectivity. Driven by three decades of high-speed growth, industrialisation and urbanisation, Asia has proven one of the greatest developmental success stories in the global economy. Economic openness has played a key role in this process, with liberalisation undertaken in both unilateral and multilateral ways greatly lowering the barriers to trade and investment between Asian economies. However, the infrastructure allowing the movement of goods, services, capital, information and people across borders have failed to keep pace with the regions economic dynamism. As a result, infrastructure and connectivity have become a major focus of the regions development policy agenda.

The infrastructure gaps plaguing Asia are a widely known problem. The region has a strong institutional infrastructure connecting its economies: including ASEAN, APEC, the East Asia Summit, their associated policy dialogues, and over 50 bilateral free trade agreements. But when it comes to physical infrastructure the roads, rail, air and sea ports, energy and telecommunications linking economies there is a worrying undersupply. Such gaps are especially pronounced for cross-border infrastructure, which is often ignored by development plans and programming focused on country-based strategies. These infrastructure gaps have become one of the principal barriers to trade, investment, and development in the region. Best estimates indicate that Asia-Pacific economies will need to make a staggering $1.5 trillion of infrastructure investments per year, every year, from now until 2030.

Chinese infrastructure leadership

In a historic move, China has recently taken the lead in efforts to close these gaps. In late 2013, the Chinese government publicly unveiled two regionally-focused infrastructure initiatives. The first was the Belt and Road Initiative (BRI), which promised to build new infrastructure platforms connecting Europe, Africa and the Middle East to Asia. The second was the Asian Infrastructure Investment Bank (AIIB), the worlds first multilateral development bank exclusively dedicated to infrastructure projects.

These initiatives were part of a new phase in Chinese foreign policy, where the country intends to go from being an institution taker to institution maker in global economic governance. China is unique in focusing its foreign policy efforts on infrastructure and connectivity, as this is a domain that other major powers and international organisations have hitherto not prioritised. It reflects Chinese ambitions to be a developmental leader in Asia, by drawing on the successful experience of its own reform period to assist other developing economies in Asia to industrialise through open trade and investment strategies...


Corruption is ONeills Biggest Failure "IndyWatch Feed"

It is six years since Prime Minister Peter ONeill promised the country an Independent Commission Against Corruption. Yet that vision is no closer to being realised today than it was in 2012.

Peter ONeill has totally failed to live up to his promises in both the 2012 and 2017 Alotau Accords that the government would establish an ICAC.

The impact of not having a dedicated anti-corruption agency that is politically independent, fully resourced and that has full powers of arrest and prosecution has been devastating for our economic well-being and the quality of life for ordinary people.

Delegates at last weeks APEC Anti-Corruption and Transparency workshop repeatedly spoke about how corruption inhibits development and is a serious threat to economic growth [1], yet PNG had almost nothing to show in terms of progress under the United Nations Convention on Corruption. [2]

In PNG we repeatedly hear that a large-proportion of the national budget is lost every year to corruption, taking money directly from health and education services.

We also hear about the high costs that businesses have to endure as a result of corruption. Costs which reduce profits, lower employment and limit investment. Yet the government has just dragged its feet for year after year over an ICAC.

While together, PNG, Australia and China are spending more than K1.1 billion [3] on the whole APEC extravaganza in Port Moresby, a tiny proportion of that money would have been sufficient to fund the operations of a robust, independent and well staffed ICAC for more than a decade.

Ridding PNG of the scourge of corruption would do far more to assist development in PNG and ensure the well-being of our citizens than a huge party for the worlds leaders and their entourages.

Perhaps in November, when the leaders from the worlds two biggest economies will be here in PNG, they will ask the Prime Minister why he has not established an ICAC and whose interests he is protecting.



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