Pacific Nations Need Help Away From Aid

By Catherine Wilson Reprint | | Print |

SYDNEY, Jan 29 2014 (IPS) - Long-term dependence on development aid in Pacific Island nations, many of which have been independent for 30-40 years, continues to cause concern.

The World Bank reports that overseas development assistance (ODA) to the region amounts to 469 dollars per capita, compared to 64 dollars in Caribbean small states and 54 dollars in Sub-Saharan Africa.

Pacific development experts are calling for greater political will for locally driven self-sustaining economic growth and development.

“International development cooperation requires a facelift that begs support from traditional and non-traditional donors whose record of increasing support, even to the detriment of recipient nations, continues,” a spokesperson for the Vanuatu-based think-tank Pacific Institute of Public Policy (PIPP), told IPS.

Equally, “an unwillingness or incapacity of our own Pacific Island leaders to halt the debilitating political mentality of aid dependence must be updated with our own understanding of the political, economic and socio-cultural motivations of donor states that are not always altruistic.”

Major donors to the region include Australia, New Zealand, the European Union, United States, France and Japan with the growing presence of China. Aid supports governments, community projects, local and regional organisations, such as the Secretariat of the Pacific Community, and the inter-governmental organisation, the Pacific Islands Forum (PIF).

Emele Duituturaga, executive director of the Pacific Islands Association of Non-Governmental Organisations (PIANGO) in Suva, Fiji, believes the need for foreign aid will continue due to island states’ small isolated economies.

“If foreign aid was seriously reduced, health and education standards would drastically reduce – with shortage of technical staff, lack of medicines and infrastructural challenges,” she declared.

Papua New Guinea, which has natural resource wealth, including oil, copper, gold and natural gas, has so far failed to translate an economic growth rate of 6-11 percent since 2007 into development progress.

In 2013/14, it will receive 462 million dollars, but isn’t expected to achieve any of the Millennium Development Goals (MDGs).

A core action by Pacific states to reduce aid reliance must be to “better govern our own budgets and machinery of government to make the most of our own resources and any foreign inputs,” PIPP said.

Aid effectiveness is a key issue. Development assistance to Oceania from the Organisation for Economic Co-operation and Development (OECD) has increased from 1.2 billion dollars to 1.7 billion dollars since 2000. Currently aid dependent Pacific nations, including the Solomon Islands, Tuvalu, the Federated States of Micronesia (FSM), Marshall Islands and Tonga are not on track to overcome poverty (MDG1) by 2015.

A 2009 community “aid listening” project in the Solomon Islands revealed issues such as misuse of aid funds, donor-led projects unaligned to local priorities, and “boomerang aid” characterised by large numbers of highly paid expatriate advisors and corporate contractors.

According to PIPP, the impact of corruption on aid and development in the Pacific Islands are “staggering”, and “many in power have had an overwhelming tendency to personalise economic opportunities, public funds and resources.”

Duituturaga said that donors often attribute greater fiduciary risk in giving funds to small community groups and instead direct aid to “governments and large NGOs that then misappropriate funds.” Governments receive about 73 percent of aid to the region, according to PIF.

“Local communities need to be involved from the start to articulate an expressed need for donor funding and develop ownership and accountability for development assistance,” she said.

For PIPP, quantity risks outdoing quality of some aid programmes. The Tongan government’s aid management division, for example, is significantly challenged with managing 200 different donor projects in a small island state of 104,941 people.

Lack of consistent monitoring also means that “credible data simply does not exist to meaningfully measure progress against quantitative goals.”

Donor practices often serve foreign policy, rather than recipient development priorities. In 2002-03 Australia, the largest aid donor to the Pacific Islands, awarded aid contracts worth 58.3 million dollars, of which 47.8 million dollars went to Australian companies.

Duituturaga said donors have a “tendency to bring readymade solutions for the Pacific, instead of investing in Pacific people coming up with our own solutions guided by Pacific expertise.”

A 2011 independent Australian aid effectiveness review reported that use of Australian contractors had halved in the previous five years.

However, questions surrounding Australia’s aid programme and political objectives continue, most recently in relation to its controversial offshore asylum seeker detention centres that have been established in Pacific Islands such as Papua New Guinea.

“Asking a developing nation that happens to be a resource rich neighbour suffering from internal and political woes to support a refugee policy that includes a dwindling development budget component equates to poor policy design and the worst diplomacy,” the PIPP spokesperson said.

The United States strategic foreign policy “pivot” in Asia parallels increasing aid to the Pacific region, in addition to its Compact of Free Association funding to the FSM, Marshall Islands and Palau. Motivations of China and Taiwan, both of which have massive resource extraction stakes in countries such as Papua New Guinea and the Solomon Islands to increase aid and concessional loans to the region invite closer scrutiny.

With foreign aid amounting to more than 50 percent of government development budgets in Tonga, Marshall Islands, FSM and Solomon Islands, there are potential repercussions for political and economic independence.

For PIPP, “Pacific Islands living in debt often dance to the tune of those who provide much needed resources. Even when Pacific Islands are out of debt, they remain indebted in principle for the ‘generosity’ provided to them in the past.”

The PIF-led 2007 Pacific Aid Effectiveness Principles and 2009 Cairns Compact on strengthening development co-ordination aim to increase Pacific ownership of regional development, donor and recipient accountability and aid alignment to national priorities. Since 2010 a peer review process among Pacific Island countries is supporting improved governance, public finance and aid management and national planning.

But there is still a long way to go before foreign aid is seen as consolidating, rather than impeding, self-determination.

PIPP believes better poverty alleviation outcomes and addressing development barriers such as climate change demand less political interference in aid decision-making, while Pacific states need at the same time to boost local economic development through greater regional co-operation.

“Foreign aid should be complimentary to locally driven development which is flourishing in the informal, small and medium enterprise sectors,” Duituturaga said.