If there's one thing our federal government loves, it's spending your money. Not only is the Howard Government one of the highest taxing governments in Australian history, but significant amounts of this huge pile of cash is sent offshore as part of Australia's foreign aid commitments. Now don't get me wrong, I'm not against the delivery of financial assistance to poor countries, (many of the poorest, like East Timor and Nauru just happen to be in our backyard) but I'd like to see value for my money. At a time when the government is crying poor on issues of higher education, medicare, aged care and everything else except defence, it would be comforting to know that there are struggling people somewhere that are getting help from the Australian Government. So just what does Australia do with its aid money?

According to the Department of Foreign Affairs and Trade (DFAT) website, Australia's foreign aid budget ($1.6 billion in 2000-01 and growing) is focused on the countries of the South Pacific. In particular, Papua New Guinea (PNG) and 12 other island states like Nauru, the Solomon Islands etc. In the two decades following the Second World War most of these countries were formally administered by Australia through the UN's Trusteeship Council, so Australia has a moral obligation to these states of whom we are their largest trading partner. So poor are these nations that without Australian aid their economies would collapse (some are managing to collapse with Australian aid as well). The focus of these funds is on economic development, good governance and law and order. All of these things are in short supply in a region that could hardly cobble together an honest government between the whole lot of them.

PNG is the classic case in point of not only the challenges that face Australia in the provision of effective aid, but also how short sighted and ineffectual Australian efforts can be. In the year 2002-2003 AusAID (Australia's primary aid organisation) spent approximately $351.4 million propping up a country in which 1/5 of the population lives below the poverty line and diseases like HIV/AIDS are rife. Despite what were undoubtedly the best intentions of Australia's bureaucrats, the figures suggest that PNG's social development is stuck in reverse. Using the UN Development Program's (UNPD) Human Development Index you can chart the disintegration of the standard of living in PNG. In 2001 PNG was ranked 122 (from roughly 200), but within the space of just one year, it had slipped back to 133rd in 2002. Admittedly a year is not a long time in which to judge slow moving social indicators, so lets go back to the start. Since PNG gained independence from Oz, it has received $2 billion in aid. At present the population of PNG is around 500,000, so in terms of investment per individual, we're talking about thousands of dollars. Yet despite this, even the most basic of measurements like literacy or infant mortality are stagnating or declining.

In the last few months' reports issued by two influential think tanks have confirmed that Australia has fundamentally failed to achieve its aid aims in PNG. Beyond Bali, by the Australian Strategic Policy Institute [1} (which is the government's own advisory body) and Papua New Guinea on the Brink from the Centre for Independent Studies, essentially implied that unless something dramatic happens soon, PNG's economy will implode much like Nauru's. ASPI argue that the remedy is for Australia to exert greater control over the administration of aid - basically a quasi-colonial approach. Conversely, Peter Urban, a former chief economist for DFAT argues that Australia should put PNG on "aid detox", [2] until the corruption of the PNG government can be dealt with to the extent that aid reaches those who need it most. Both of these solutions are worthy of further study, but I lack the space to do that here. In any event, I think a topic focused on the future of Australian aid to PNG would be an interesting debate. [3]

Another principle recipient of AusAID's time and expertise in the Pacific is the Solomon Islands. Without going into too much detail, the Solomon's is one messed up country. It has only recently emerged from a crude civil war, under a cease-fire agreement negotiated by Australia. The so-called Townsville Accord was supposed to end the fighting and address the causes of the conflict (boiled down these are: government cronyism, land rights and the lack of economic opportunity). It was signed early in 2001 and under the agreement Australia would provide personnel and funds to help the islanders collect up arms and ammunition from militias and re-establish law and order. The treaty allocated 30 days for the surrender of all weapons and Australia allocated $30 million to get the job done on time. So far, almost nothing has happened. This is surprising given that at a million dollars a day, Australia could have purchased all the guns in the Solomon's and been left with enough change to build a school or two. Most of the militia in the Solomon's are still heavily armed, in some cases better armed than the police, and law and order is just a phrase uttered by successive governments and has no real meaning on the streets of the capital Honiara.

So crippled is the Solomon's economy that in May 2003, power was cut throughout Honiara because the government was two months late in making a payment (which came after their previous unpaid bills had been rescheduled in instalments). Incredibly that's not even the worst of it. Thanks in part to the power shortage, the parliament of the Solomon's, which quite obviously has much to discuss, has not met since December 2002 and doesn't plan to sit again until November of this year! Electricity is not the only essential element in short supply. Most public servants, from police and doctors to school teachers and garbage collectors have not been paid in many months. This issue was highlighted recently when a group of police fired their guns at the Prime Minister's house in protest. A recent report by the Asian Development Bank details the pathetic state of the economy which shrank by over a quarter in 2002 and has been in sharp decline for the last half-decade. The only financial indicator in the Solomon's that is pointing up is national debt, which has passed 100% of GDP and is still climbing.

By now you should be getting the impression that although Australia allocates very large sums of money and effort to the cause of development amongst our pacific neighbours, there is certainly room for improvement in the delivery of those aims. It is worth pointing out that Australia's contribution has not been entirely pointless. In fact there have been many important achievements. For example over the last few years in PNG AusAID has allowed 1/3 more children to receive a primary education and 450 students to study at the tertiary level here in Australia. In May 2001 AusAID paid for a regional forum for nations of the South Pacific, Japan, NZ and the US in Brisbane to discuss ways to curb the spread of small arms which have been so destabilising to nations like the Solomon's. These are admirable achievements, however it makes you wonder how influential these 450 tertiary educated Papuans will be when there are virtually no jobs in their own country. It's quite likely that many will become useful and productive members of the Australian economy, rather than their crippled homeland. Similarly its great that Australia is helping people discuss the problem of light weapons which are cheap and abundant in this region. But in the Solomon's they already know what the problem is and its quite simple, Australia said it would help take guns out of the hands of the various militia, but didn't do it. I know it's a cliché, but what the Solomon's need is less talking and more action.

---

[1] - For those who like pointless trivia, one of the principle brains at ASPI is Elsina (Ellie) Wainwright, who is not only quite cute, but is also a former debater from UQ.

[2] - See the March 2003 edition of Review, The Institute of Public Affairs.

[3] - Are you listening, Jake?

---

Back to MAD Homepage