Comments

Paul, your article correctly highlights the dangers to PNG's long term economic growth by the a) reckless spending of the PNG government (running budget deficits) and b) BPNG resorting to unconventional monetary policy You are merely highlighting what the authorities already know. However, you might not be aware that given the kind of country PNG is Politically and Economically (its two principle underlying problems) most of PNGs macro-structural development agendas will never be realised. First, The electoral system of electing genuine legislators (leaders as they are referred to in PNG) in a functioning democracy is probably another 20 years away for PNG. When Democracy at its very core is broken and dysfunctional, it is not a democracy. Second, The unfavorable economic fundamentals underpinning the PNG economy. There has always been a net flow of wealth out of PNG (since the formation of the country). In order for a country to gain economic independence, wealth/capital must be reinvestment and recycled to build domestic capacity. When you have foreign dominance of the PNG economy and its wealth, the incentive is not there to reinvest (but rather repatriate offshore). Paul, it will do PNG a lot of good if we have more commentators who took a real serious look at these two broken systems, that are the pillars of any economically successful democracy. May I also add, that the economic principle/theory that you and many other economists, policy developers, and commentators prescribe for PNG has sadly been in use and is not working. Conventional or Unconventional monetary tools (call it whatever you will), does not work work (never has and never will) in a PNG type economy that operates outside the normal realms of national economic fundamentals.

Couldn't agree more Jason. When I hear donors and advisers moaning about 'lack of political buy-in' my standard response is 'what are you giving them to buy into' - makes for some very short conversations!! And the ability of 'capacity development' to build the skills that officials need to navigate the political realities in which they work is as yet untested.

Thanks for addressing this important topic Harry and Bede. I think that an important area to support each of your seven steps is to understand that capacity already exists. Quite often it has built up over a long time and it has deep social and cultural roots. A bit like Tess’s comments above, the best results come from such a strengths-based approach. This takes time and a lot of inquiry and listening.

Yep, 20+ years of capacity development and the basic problem remains the same - a lack of political will to actually implement evidence-based policies. This, as in developed countries, comes back to a lack of scrutiny surrounding resources, be they sea, land or air (aid) based. Donor countries have spent millions attempting to build internal governance capacity while neglecting external governance capacity, beginning with news media, which has been systematically stripped of resources over this timeframe. Without a well-informed citizenry, there will never be any political pressure to adhere to policy that builds good governance. Australia and others are still trying to build capacity for development while denying the informational tools to enable this to happen. In the light of the recent attacks on the ABC, this is as true at 'home' as it is 'abroad.' Given that most economies are led by provincial politicians, who are in turn answerable to party donors, mostly big business, do treasury officials need to focus more attention on dealing with political realities and less on process and procedures?

Thanks Paul. Good analysis. The problem the country will face about having the inflation rate higher than the growth rate in private sector investment must be critically considered by BPNG.

Thanks Ruth, I found this discussion of a key front-line service delivery issue really interesting.

Thanks Ronan. While you may not think it is a crisis, those in Liberia and Sierra Leone with whom I speak frequently certainly think it is. More than 5000 dead and estimates of up to 10,000 infections a week in December if appropriate action is not taken. And the crisis in the health system is real. Is it a crisis for Australia? No, clearly not at present. And unlikely that it will be. But I hope you managed to get past the word 'crisis' in the title to see that there are lessons for Australia and our immediate region should a more virulent influenza strain emerge. I do hope you are right that "it will die down pretty quickly" but I would expect our government agencies to be prepared should it not.

Presidents are now elected in the LLG General Election by the voters through the electorate. They can be dismissed for neglect of duty. The OLPGLLGE and the LLG Administration Act give different pathways for dismissal. It may be by appeal to the Provincial Governor, or through appeal to the Minister for Inter-Government Relations who may commission an enquiry by the Department of Provincial and Local Government Affairs. In this case, Councillors and community leaders counseled by outside expertise appealed to the Minister. Shortly after the President returned to the LLG and called a meeting.

Thanks for this post which I think will be of interest to a number of people. I have been thinking about it for most of the day. It raises some important issues. I find some of the material presented quite problematic which is, I think, a reflection of the problematic nature of capacity development as envisioned and delivered via the aid programme. First of all, I think the term 'capacity development' can and probably should be largely done away with. When staff members from the Australian Treasury or DFAT or anywhere else are given an opportunity to learn something new so that they can do their jobs better, we call it 'professional development' so there is no reason to have a different term for doing it in Solomon Islands or Timor-Leste. Secondly, the material here is informed by a supply side approach to this type of activity, which is probably because that is how it is designed and delivered via the aid programme. For example 'The potential scope of capacity development activities can be very broad, so it is important for advisers to assess the options thoroughly'. I would suggest that it is for the personnel within a given agency to assess options and determine which are most appropriate for them as individuals, units and organisations - they are the ones who know the context in which they are working, where their existing strengths lie and what they need in order to do things better. There may be scope for facilitating the articulation of these things internally and externally. Thirdly, there is a presumption that this form of activity can and should be delivered by an individual who has a counterpart. However, what is often more likely is that the 'counterpart' is an entire organisation and that what would be more useful (to the organisation) would be access to a suite of services and inputs tailored to priorities (some of which may change over time) and cognisant of competing calls on resources (sometimes money but mainly time). If and when donors recognise the value of this approach it will open up opportunities to provide support of this type using innovative methods which are likely to provide better value for money, including utilising local resources rather than importing them from elsewhere. This post makes reference to the importance of 'soft' capacities and to that list I would add items such as analysis, influencing, negotiation, coaching and mentoring. I have had a number of discussions about innovative ways in which the aid programme can assist in responding to these needs and value add to investments that are already in place. There is more to say and do in this space.

Sorry but the whole "crisis" has been blown out of all proportion like Avain flu and all the others. The world has known about Ebola for 25 years. It freaked me out reading how fast it spread when i read a book on it 20+ years ago. I am sure like all the other superbugs, avian flu etc it will die down pretty quickly. Ronan

Great blog and very clear lessons. I thought one missing piece is how advisers are managed, A dual and mixed reporting line to civil service line manangers and funding agency heads can be a part of the problem,

Priyanka, Your post raises an important question about the role of China and other emerging economies in delivering global public goods such as climate change. Even if China only acts domestically to reduce its domestic greenhouse gas emissions, as the world's largest emitter those actions will deliver global benefits for the world's climate - so it's reasonable to expect that China will continue to devote most of its climate-related resources at home. But there's definitely a case for China and some other emerging economies to step up their international funding as well, not least as an expression of solidarity with poorer countries. Having said that, I think it's important to put in perspective the magnitude of current flows. China's pledges at New York were, as you say, somewhat unclear. The only concrete dollar figure mentioned was US$6 million 'to support the UN secretary general in advancing South- South cooperation on climate change' (). A recent article in Foreign Policy magazine described the sum, correctly in my view, as 'paltry' (). The other financing pledge that China made at New York was the one you mentioned - doubling South-South cooperation on adaptation. But the announcement made no mention of the baseline from which funding would be doubled. As far as I can tell (), China pledged at the Rio+20 summit about RMB 200 million (around US$33 million) for the fund. Pledging the same amount again is quite a bit more substantial than the $6 million figure featured at the summit, but still very small compared to the size of China's overall development cooperation budget. It's perhaps also worth recalling that while China has contributed to the Global Environment Facility for many years, in the most recent GEF replenishment this year it chipped in around half of one per cent of total funding (about US$20 million) (). By contrast, even if the Green Climate Fund may not meet the expectations of many - let alone the funding needs of developing countries - it has already attracted over $2 billion in funding (), and is likely to generate considerably more in a formal pledging session in November. While some emerging economies - notably Korea, Mexico and Indonesia - have started to make pledges to the Fund, the lion's share has come from industrialised countries. So I agree that it's fair to expect some emerging economies to do more on international climate funding. But the big challenge will be to boost this funding beyond token levels, and I'm not sure that there are clear signs that this is happening yet. Finally, whether or not China earmarks more funding specifically for climate change, another challenge looms large - climate-proofing its existing development cooperation program.