Wednesday 06 Oct 2021 | 22:25 | SYDNEY
Wednesday 06 Oct 2021 | 22:25 | SYDNEY

PNG and the myth of altruistic aid

29 July 2011 12:07

Danielle Romanes is a development economics and political science post-grad student interning in the Lowy Institutes's Myer Foundation Melanesia Program. 

Responding to the aid debate provoked by Hugh White, Michael Cornish argues:

Australia is being transparent when it states explicitly that its aid program has the twin objectives of furthering the national interest while reducing poverty. This is not the difficult balancing act so many make it out to be. Acting in Australia's interest is not inherently incompatible with altruism, and is in fact usually indivisible from it. If Australian values include providing for those in need, and giving everyone a fair go at life, then this is the national interest.

This is naive. It gives too much leeway to government, and too much credit to the altruism of DFAT (under whose umbrella AusAID operates), in presuming that either body would prioritise 'providing for those in need, and giving everyone a fair go at life' over realpolitik.

Furthermore, defending the inclusion of a national interest mandate as being 'not inherently incompatible' with and 'usually indivisible' from altruism is to miss the fundamental point of the Aid Review, which is to increase the effectiveness of Australian aid. Effectiveness means making sure that every last aid dollar is spent on a project with the highest possible marginal return, and that means not throwing several hundred million at one country when a different, but equally poor and better governed country could generate 20% more poverty alleviation for the same price.

This is precisely why the Aid Review recommends limiting the expansion of aid to countries like PNG, where there is overwhelming need, but equally overwhelming constraints on the return to spending.

As everyone from Islands Business to the The New York Times has reported, PNG's current policy settings and cancerous corruption have seen consistent economic growth translate into little in the way of meaningful human development outcomes for the majority of Papua New Guineans. A lack of income or growth isn't the critical problem, a lack of effective governance is.

Good governance is indispensable to development, but also notoriously difficult to leverage through foreign aid. The Review has made a point of prioritising bang-for-buck spending in the interests of efficiency, and preserving the integrity of the Australian aid program, and thus recommends only a small expansion of Australia's aid to PNG.

Unsurprisingly, the Australian Government's response to the Review betrays no intention whatsoever of heeding this recommendation. Indeed, it repeatedly and emphatically underlines its commitment to PNG, and pledges to increase funding there. Evidently, efficiency does not underlie the Australian Government's aid commitment in PNG.

As Annmaree O'Keeffe pointed out, you can still walk from PNG to Australia at low tide. Instability is an unnerving thing to have on your doorstep, while vast mineral resources are a very attractive thing to have at arm's reach. Australia will stay in PNG because strategic interests always have been, and always will be, the dominant factor shaping Australia's aid to the Pacific.

Which makes you wonder whether aid to the Pacific merits a different definition of 'effectiveness'.

Photo by Flickr user Eric M Martin.