Comments

Thanks Ash - a good lesson all around about not over claiming regarding what any particular intervention can do.

Thanks for these links--I found the cookstoves one really interesting, as I've read some critiques of it before, but it was interesting to see it laid out in the WaPo article. For those interested in the topic, last year I <a href="https://devpolicy.org/in-brief/are-clean-cookstoves-a-cooked-up-solution-to-sexual-violence-20140807/" rel="nofollow">wrote about</a> some research around the claims that many orgs doing clean cookstoves work were also arguing that they were a tool to end sexual violence in refugee camps-- something that researchers argued was not the case.

Hi Colin, Please allow me to thank you sincerely for your effort in taking on the huge problem we face in PNG. The trend we have now will force many people become to become beggars on our own soil that we rightfully own. I hope the Government of the day will plan and look ahead of our up coming generation in the many years to come. I love this site free to air my views Regards, Charlie

Thanks Garth. Very good point.

Very useful and informative post, thank you.

I agree with the direction of your call Terence. However if the Turnbull Government is going to signal a change of policy from the continuous aid cuts of the Abbott period and convince electors that it is committed to aid it will need to do more than just avoid the next cut and ensure that the aid budget does not drop below its current 0.25% of GNI. I can't imagine the Prime Minister wants to go down in history as the Prime Minister who cut Australian aid to its lowest level of generosity ever but that is what will happen if he only maintains the 2015-16 aid budget in real terms. Given Australia's current low rate of growth in nominal GNI, preventing a further fall in the ODA/GNI ratio would not cost a lot of dollars, and as you say, have no material impact on Australia’s fiscal health. But it would have a real impact on Australia's and the PM's reputation and on Australia's aid partners.

Thanks Michael. I'm inclined to think that Bishop opposed the cuts both on the basis of her body language during the budget speech, and also simply because no Minister likes their budget slashed. That said, as you say, the proof is in the pudding, and if the current government wants anyone to take seriously its claims to being committed to aid it will need to do something tangible -- specifically, can the next round of cuts. Terence

A timely and urgent plea, Terence, with which many furiously agree, but dare not utter publicly. But while reading the political tea leaves is all well and good, let's see some action rather pin our hopes on signals and shadow puppetry. It's not at all clear whether, despite her rhetoric supporting women's empowerment, Julie Bishop's chief role has been to ameliorate the stakeholders affected by cuts rather than put their case in Cabinet against said cuts. Bishop has never uttered one public statement questioning the cuts, other than to use them as an excuse to whack Labor and blame the all-purpose "budget emergency". As deft a politician as we have seen, Bishop has managed to deflect any personal responsibility for any of the negative consequences of the changes wrought during her tenure. If her power has increased with Turnbull's ascension, we will either see some turnaround here or else her actions will have done her talking for her.

Hi Ashlee and Stephen, Many thanks for your blog. It's great to see the Pacific remittances issue receiving due attention. My company, Developing Market Associates (www.developingmarkets.com), on behalf of DFAT and MFAT, manage the SendMoneyPacific (www.sendmoneypacific.org) website that you have referenced. Over the past seven years we have recorded an overall reduction in cost but not to the extent that we would have liked - i.e. attaining the G20 5% remittance target. However what we have seen over the past seven years are significant cost reductions in the higher volume, more competitive corridors to Fiji, Samoa and Tonga that are dominated by Money Transfer Operators (MTO's) rather than bank dominated (such as PNG which you have focused on). Bank costs have barely changed over the six years we have monitored costs, falling by just 2% (to 18.1%) by June 2015. MTO costs on the other hand have fallen by almost 35%, and for some of the most competitive/high volume corridors by over 50% for sending AUD/NZD 200 (e.g. Australia to Fiji: 17.99% in January 2009 to 8.24% in June 2015; NZ - Tonga: costs down 57% from 16.25% to 6.99%). For these competitive corridors, MTO costs are now approaching 5% for sending $200. For AUD/NZD 500 transfers, MTO costs are now below 5% for NZ - Samoa and Tonga, and at 3.79% for Australia - Tonga. Cost variations between providers for the same corridor continue to be very significant. The latest data for November for Australia - Samoa (AUD 200) reports a range between 2.59% to 26.99% - the difference between receiving WST 360 and WST 276 for the same value transfer! A further significant development in recent years has been the increase in available digital remittance services, particularly services paying out to mobile wallets in Fiji, PNG, Samoa and Solomon Islands. Since 2012, digital MTO services have doubled, from 17 to 34, across the 16 corridors covered from Australia and New Zealand. The growth in digital MTO services comes at a critical time during a fraught period for MTOs in Australia and New Zealand as they face operating difficulties or in some instances, closure, due to the de-risking issue. Unfortunately at this stage there is limited disclosed data on the actual volumes being sent via digital services, rather than traditional cash based MTO services and bank transfers. However, there is anecdotal information, via the surveys we conduct for SendMoneyPacific, seasonal worker surveys and interviews, and other communication that we regularly have with Pacific Diaspora communities through our outreach programmes for SMP, that Pacific remittance senders are increasingly using digital services. Please feel free to get in touch if you would like to explore the different services used by Pacific remitters that I have highlighted. We will also shortly be completing Q4 data collection and analysis. Many thanks, Jonathan

[These comments reflect personal views and do not in any way represent official positions of the NZ Government] Hi Ashlee and Stephen, I think there are a few factors at play. On your question about why Pacific costs are stagnant relative to global declines, a lot of that "inertia" in price movements in the Pacific is probably explained by structural constraints such as low scale and volume. Other things constant, compared to the Saudi Arabia / UAE - Phillippines corridor or the UK - Nigeria corridor remittances from A/NZ to the Pacific are always likely to be more expensive. Many global innovations, especially electronic platforms that more efficient and effective "bunching" of smaller remittance transactions by remittance service providers, have had an impact in the Pacific (especially if you move your data set out a few years before 2011). But ultimately they face the same structural constraints - larger corridors can "bunch" more volumes, so they end up benefitting more from these solutions in relative terms to the Pacific. There are also strucutral banking constraints, such as high fees relative to other high-volume corridors. For money to move across borders, especially in the Pacific, most (but not all - e.g. Western Union) remittance service providers still need a financial institution to do that for them (most often a bank) that is a member of the SWIFT transfer system. The impact of regulatory issues is still uncertain, and it will be interesting to see the results of the World Bank's G20 survey on de-risking. Regulators seem to be taking this issue seriously, with a number of global regulators and coordinating bodies issuing statements commiting to investigate the extent to which regulatory settings may be affecting the remittance services market. It's great to see reimttances get some airtime on the blog - there's a lot more we could be doing to discuss and understand this issue. Cheers Vinny

The Lancet's World Report of 14 Nov 2015 gives a readable analysis: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2815%2900959-9/fulltext

Further to my last comment, I note I have overlooked the blindingly obvious: the key output against admin costs is expenditure of the ODA budget. Yet, I don't find this a satisfactory result measure to assess efficiency against. The most efficient way to spend aid would then be to simply give it all to the UN in a single transfer (for example). This could involve an extraordinarily low admin cost for a donor ODA programme. But I don't think many people would think this was necessarily an efficient way to spend donor taxpayers' money (although, one could argue strongly that it is). There has to be a better result against which to assess efficiency.