Comments

Great post Stephen, really useful. I'm curious about safeguarding and infra projects run through Efic or AIFFP. The multilateral development banks and the Australian aid program have learned (or should have learned) hard lessons on negative community impacts from big infra projects when there isn't sufficient consultation/planning/risk mitigation. It seems these risks are even higher if there is the potential for elite capture of projects through political advocacy, as you mention above. Will these orgs have adequate environmental and community safeguard policies to ensure there aren't actually negative development outcomes from projects? That's one of my concerns.

Was there LO identification for the UBSA? If so who conducted it - Govt or PNG LNG?

Hi Maho, thanks for sharing your observations. Very interesting. I've been thinking out the various correlates between crime and settlements, mainly in the Solomon Islands' context. I think a number of factors are at play, including longevity of place: newer settlements seem more prone to violence ... at least in Solomon Islands. But this alone is not determinative. On the link between relative inequality and violence, one PNG-related study which you might find of interest is: Ivaschenko et al, 2017. ‘Can public works programs reduce youth crime? Evidence from Papua New Guinea’s Urban Youth Employment Project’. Available at: https://link.springer.com/content/pdf/10.1186%2Fs40176-017-0101-7.pdf This study had mixed results, finding that those involved in a Moresby-based donor-funded youth employment program (UYEP) were less likely to associate with others involved in criminal activities but that decreases in participants’ involvement in property damage and alcohol-related crime were statistically insignificant. Declines in the incidences of assault and theft/stealing amongst UYEP participants were comparable to those of the control group. I guess also problematising a neat association between unemployment and crime in PNG is past research which has suggested that people may leave formal employment to partake in criminal activity or undertake both simultaneously. The burning cars trend seems more acute in PNG than Solomons, although it's not unheard of in Honiara. I don't however get the sense that in Solomons it's wholly linked to relative inequality ... opportunism seems to be an important explanation.

Although my observations of Port Moresby are anecdotal, it seems that where certain notorious settlements have mellowed, others have risen to replace them, for e.g. in the 1990s surbubs like Hohola and Gerehu surbubs were most feared and known to produce 'raskols' and gangs. These days, settlements like the Kila Mahuru, Wildlife, 2mile hill, and Erima vie for notoriety. On the other hand, areas like Sabama and Kaugere have been perenially unsafe. In my view, institutionalization and other factors may amount to little in the way of improving these settlements, if poverty is rife in these areas, and there is little access to education, training or employment. It would also be interesting to see if there is a link between relative inequality and violence - which may explain a recent phenomenon of burning cars in Port Moresby. It's become a trend that cars which stop along the road due to mechanical problems, are first stripped of valuable parts (which has largely been the norm), and then torched, presumably out of spite by those who do not own vehicles themselves. Cheers Maho

Beyond the Pacific but still in the neighbourhood, the 2015 Nepal earthquakes would have driven a significant bump in donations for a few agencies in that year. Which weren’t really matched by the Rohingya crisis in 2017.

Hi Terence. Thanks for the article, interesting analysis. Quite a while ago, when I was working at Red Cross, we noted the growth surge in donations following major disasters. Maybe something to do with the positive publicity and profile about successful aid projects which rebuild communities following major humamitarian events. That publicity would continue for months and years after the initial event. Another more general factor maybe that we are now living in a different political climate - where donor governments around the world have slowly turned down the funding tap. Deliberately, international assistance is no longer widely promoted as good humane policy. Foreign assistance has been relegated and diminished and rebranded as part of security and trade impact. And there are more and louder political voices now arguing that "outsiders" are a threat to our way of life..as per the immigration debate. Unsurprising that in this climate, community donations would tend to be more vulnerable.

From Bourke RM and T Harwood Food and Agriculture in PNG pp168-172 (available on line from ANU Press) 2.5 Rice production Rice is the most controversial agricultural crop in PNG. Rice imports have been in the range 120 000–208 000 tonnes per year between 1990 and 2005, mostly from Australia (see Section 2.7). In contrast, domestic rice production has been in the range 60–2200 tonnes over the period 1962 to 2000 (Figure 2.5.1, Table A2.5.1), and has averaged about 400 tonnes per year since 1980. This is around 0.25% of rice consumed per year in PNG in recent years. Claims are made for significant local production from time to time, but these are political statements rather than realistic estimates. Production in 2006 was estimated as 300–800 tonnes. PNG leaders accuse the former Australian colonial administration of discouraging domestic rice production in PNG in order to protect an important export industry in Australia. Since Independence in 1975, plans for a domestic, import-replacement rice industry have been a feature of every government white paper on agriculture. Yet, since 1977, domestic rice production has never exceeded 1% of the amount of rice imported. Rice growing in PNG Rice has been grown in many parts of PNG. Before 1900, rice was grown, mainly by Catholic missionaries, in the Bereina area and on Yule Island in Central Province, at Aitape in Sandaun Province, and probably at other places. In inland Finschhafen in the Sarawaget Mountains of Morobe Province, Lutheran missionaries introduced rice growing in the early 1900s and it is today the only place in PNG where it has become a ‘traditional’ crop. After 1918, rice growing in Papua (the Southern Region) was a compulsory village activity under the Native Plantation Ordinance (1918). The Papuan colonial administration sent an officer to India, brought Indian instructors to Papua and established a ‘fully equipped rice mill’ in an attempt to ‘make the Territory self-supporting in rice’. For example, the colonial administration promoted village rice cultivation in the Cape Vogel area of Milne Bay Province in 1923–1926. When this initiative failed, it was concluded that rice growing was too labour intensive and the environmental conditions were unsuitable. Cassava was then promoted and successfully adopted in the Cape Vogel area. In New Guinea, rice growing was promoted at Talasea in West New Britain and in East New Britain. On the Gazelle Peninsula, enough rice was produced for a steam-driven mill to be imported. Rice was grown on Siassi Island in Morobe Province until 1941. During World War II, Japanese troops grew rice on the Gazelle Peninsula in East New Britain, and on New Ireland, but appear to have concluded that sweet potato was a more productive and reliable crop. For example, in Sandaun and East Sepik provinces (then one province), Japanese troops grew sweet potato and Chinese taro, rather than rice, in an attempt to feed themselves after they were cut off from Japan. In Papua, the Australian military administration made rice growing compulsory at Bereina and introduced a mechanical harvester. After the war, in 1947, the New Guinea Nutrition Survey Expedition studied village food production in five locations and concluded that the ‘wider cultivation of crops such as peanuts and rice, which can be easily stored and transported, would help eliminate regional and seasonal food shortages’. W.L. Conroy, who was the agricultural officer on this survey, later became the Director of Agriculture in PNG. He was so convinced that rice could be produced satisfactorily at Bereina that he resigned his post as director to personally supervise the Bereina project. At Bereina, machinery was introduced and tractors were used to cultivate relatively large areas. In the Sepik provinces, in particular around Maprik and Nuku, villagers began growing rice within the traditional shifting cultivation system in the 1950s as part of an indigenous rural development movement led by Pita Simogun at Dagua. Simogun had visited Australia during the war and observed Australian farmer rice-growing cooperatives in the Riverina. Similar movements occurred in the Markham Valley and in Oro Province. Some of the villagers involved in these movements brought cargo cult elements into the growing of rice. The colonial agricultural extension service attempted to respond to this movement with the introduction of Rural Progress Societies, hand-powered hullers and subsidised purchases. During this period, village rice production was also promoted by government extension services in Morobe (at Finschhafen), Milne Bay, New Britain, Bougainville, Gulf and Central (at Bereina and Kupiano) provinces. Rice growing since Independence Domestic rice production in PNG has fluctuated from year to year but has been less than 1500 tonnes per year since 1975 (Figure 2.5.1). Most production has been unirrigated. Rice has continued to be grown spasmodically at Bereina in Central Province, as various aid and agricultural investment projects have attempted to make production there sustainable. In the late 1970s the East Sepik Rural Development Project, funded by the Asian Development Bank, made a large commitment to upgrading rice growing and increasing production to 4000 tonnes. However, production in East Sepik Province had almost ceased by 1987. Small irrigated rice projects have been undertaken near Rabaul using Japanese aid; at Gabmazung near Nadzab in the Markham Valley by the Lutheran Mission; at Bubia with Taiwanese aid; at Cleanwater Creek in the Markham Valley by Trukai Rice; at Erap Research Station, also in the Markham Valley, by DAL; and at Bau near Madang by a Philippines non-government organisation. Rice was grown in Bougainville Province during the civil war (early to mid 1990s), but by 2002 rice growing there had virtually stopped. From about 2000, production increased in some locations, including in parts of Central, Oro, Morobe, Madang, East Sepik, Eastern Highlands and Simbu provinces. This was in response to the rapid rise in the price of imported rice (Figure 4.3.3). The peak of the recent expansion in rice planting was in about 2001–2003, but production appears to have declined since then. For example, rice production in Madang Province was about 80 tonnes in 2003, 60 tonnes in 2004 and 40 tonnes in 2005. There was little rice being grown in the highlands by 2005. The Trukai Rice depot at Erap in the Markham Valley was able to purchase only 4 tonnes of locally grown rice in 2004 and 7 tonnes in 2005. Thus locally grown rice remains a minor supplement to the traditional diet in a limited number of locations. At the national level, domestic rice production is still only a small proportion of rice imports and the level of production is a tiny fraction of that of the root crops, sago and banana (see Section 2.2). Research on rice in PNG Contrary to assertions that Australia discouraged PNG rice growing, more agronomic field trials have been carried out on rice than on any other crop (Table 2.5.1). Furthermore, many of these trials were done before Independence in 1975. Of the total number of agronomic field trials conducted between 1928 and 1978, 19% were on rice, compared to 11% on sweet potato, the most important food crop for about two-thirds of rural Papua New Guineans. A significant amount of research has also been conducted on rice since 1978. Why rice production has not become sustainable in PNG A great deal of evidence exists that the colonial administrations of Papua and New Guinea made strenuous efforts to grow rice in PNG in order to offset the costs of imported rice. Given the continued enthusiasm by political leaders and administrators to replace imported rice with domestically produced rice, it is important to understand why rice production has not yet become a sustainable rural industry in PNG. At least seven detailed investigations on aspects of growing rice in PNG have been undertaken since 1950, a number sponsored by non-Australian-based agencies. A summary of their findings suggests there are three main interrelated reasons why rice has not become a sustainable industry in PNG: these are to do with the environment, with cost efficiencies, and with returns to labour. Environment Upland rice has been grown in many parts of PNG, but yields are generally low at around 1000–1500 kg/ha. Rainfall is too unreliable in some locations in PNG for perennial, unirrigated rice growing. The variation in rainfall from year to year, within the year and in the regularity of the beginning of the wet season is not reliable enough to grow large areas of unirrigated rice (see Section 1.5). This is a major reason why, for example, rice growing has failed to become sustainable at Bereina in Central Province. Where irrigated rice has been grown, pests, weeds and disease have severely reduced yields. Pests and diseases are not a major problem where fields are shifted every year. Soils in many areas have poor water-holding capacity and are thus unsuitable for irrigated rice. Economics The high capital costs of establishing irrigated paddy fields and high production costs per tonne are a severe constraint to the development of a PNG rice industry. The main rice-producing countries of the world have comparatively lower production costs. A number of studies show that the costs of establishing large enough areas of irrigated rice to replace imports would severely distort the PNG economy, would require large subsidies and would result in a substantial increase in the retail cost of rice within PNG. Trukai Industries Limited, the main importer of rice into PNG from Australia, has been growing irrigated rice experimentally in the Markham Valley since 1998, but has been unable to achieve economic yields because of pests, weeds and soil problems. Until recently, imported rice has been a relatively cheap food. For example, up to 1999 rice gave better value for money than purchased sweet potato, banana or Irish potato in Lae. This position changed with the decline in value of the kina, but taking into account the ease of transporting and cooking rice, it remains a competitive food for urban people in PNG. Labour The most important reason that rice cultivation has not become significant in PNG is related to returns on people’s labour. Returns to labour are higher in the production of root crops than in rice, both in terms of yield and food energy produced per hour worked (see Section 5.20). Returns from growing coffee or cocoa are also higher than for growing rice in cash income per hour worked. Therefore, after experimenting with growing rice, many villagers decide they are better off growing root crops and export cash crops such as coffee or cocoa. The one place where rice growing has become ‘traditional’ is in the mountains inland of Finschhafen in Morobe Province, where access is difficult, imported rice is expensive and coffee is costly to market. Compared with other crops, the cash returns to labour from growing rice for sale are significantly less than for cocoa, oil palm, vanilla, Robusta coffee and sweet potato. Many PNG villagers believe the returns to copra and rubber are too low to make harvesting and selling them worthwhile, so it is not surprising they do not participate in rice growing. Another reason that rice production has not expanded in PNG is that it does not fit easily with village culture. This is because when a rice crop is ready for harvest, there is a relatively short period when harvest must occur. Unlike the export tree crops or root crops, delays in harvest can result in significant yield loss. Such delays are not uncommon in village communities because of other demands on villagers’ time. Over the last 20 years a number of economists have concluded that PNG is better off to import cheap rice and to export high quality palm oil, coffee and cocoa, than to try to establish a domestic, import-replacement, rice industry. On the basis of these economic analyses, it is unlikely that international aid agencies will provide funds to PNG to establish a rice industry. That does not mean village smallholders should be discouraged from growing rice. But it does mean that import-replacement production levels are unlikely in the foreseeable future.

What an enlightening piece. Thanks Michael Kabuni for sharing. Perhaps in your next effort you can analyze power sharing between the Executive Government, Legislature and the Judiciary. In the recent past we had the current PM saying the Legislature is supreme in the matter involving Parliament's removal of Grand Chief Sir Michael Thomas Somare in 2011 when he was in Singapore. Also, we had cases of the executive government through the NEC defending some senior government appointments against the Judiciary's ruling. What interest me is the executive government funds two other arms of government. He who pays the piper calls the tune.

A timely and highly relevant topic Richard. Thank you again for bringing it to the fore. Australia needs to move openly and quickly to adopt its own pathway forward. The present system is inadequate given our size, unbalanced, reactive and unfair.

Thanks Terence! Glad you found the post interesting. And to be clear, while I am an economist and therefore know some of the theory, part of the reason for me writing the post was because I find the debate somewhat perplexing myself and wanted to hear from others. So I approach it humbly - at least as humbly as possible for an economist! Theoretically, when considering whether a good is normal or inferior, it’s only the change in budget line, or income, that we are concerned with - prices, costs, benefits, etc, remain constant. So if a good is truly normal (inferior), an increase in income, with everything else constant, would result in more (less) demand for that good. The point of my post is to argue that just because an increase in income is associated with a decrease in childrearing (Figure One), we cannot assume that prices, costs, utility, etc, remain constant throughout the development process. So actually, *in theory* children are normal while in reality they appear to not be normal because assuming everything else constant is a flawed assumption. But, if we could fairly assume the constancy of these other variables we would expect to see an increase in fertility. I think I grant your point about other factors being more important for such historical change since we don’t see fertility skyrocketing in rich countries. Maybe the best way to approach it is not to equate development - where the constancy of other variables cannot be safely assumed - with exogenous income increases - where they can be safely assumed. Obviously, the vast changes experienced by a country going from poor to rich, as shown in the fertility data in countries that have done so, is vastly different than a country or region experiencing an exogenous one-off income shock, as shown with a coal boom in Appalachia USA in Black et al (2013) where fertility did increase. In the first case, there is obviously a lot more happening and while children may still be theoretically normal, we can expect to see a negative income-fertility relationship because there is just so much changing. But when we look at a mining boom in Appalachia or perhaps an iron ore boom in WA, we would expect to see an increase in fertility. Still, economists seem to have mixed views about all this which is why I have been exploring it. Finally, I want to argue why I think the question of whether children are normal or inferior may be less intellectual pontificating and actually important (a partial response to Ashlee’s last post). Many macroeconomic models focus on k=K/N, the capital per worker in an economy as the engine of economic growth. As an economy develops - or, as K and N both increase - they will be competing with each other to determine the way k changes over time. If fertility is increasing at a low (high) rate, k grows faster (slower). I think most people would agree that fertility is an important indicator in an economy yet we still don’t seem to fully understand how it changes with changes in income. Of course, this sort of modeling is usually done on aggregate so the individual cases Ashlee mentioned in her previous posts are too often replaced in favor of a more simplistic “representative agent” model. I cannot defend every flaw of economic theory and I do not deny the importance of these other factors. Obviously this is imperfect and I’ve actually been trying to crack this with some sort of heterogenous agent model that considers two or three cases, but it’s really hard - maybe even impossible. Let me know if that clarifies the post a bit. If not, I’ll do my best to try again.

Hi Matthew, That's a really interesting post thanks. Sorry, I'm not an economist and so find the theory you put forwards a little confusing, but aren't you arguing that *in theory* kids are inferior goods? Setting that aside, it seems to me the nub of the debate you link to is whether there's a positive relationship between income and children *once you take many other factors into account* (Caplan) or whether this is largely irrelevant because its those many other factors that have driven the massive changes we are currently witnessing globally (Woolfers). You provide good evidence for a positive relationship once other factors are taken into account with the papers you link to. But it's worth emphasising -- particularly for people working in development policy -- that this doesn't mean other factors don't matter, or even that other factors aren't more important in driving the big historical changes. Indeed, the real ramification of kids being normal, once everything else is taken into account, is that other factors must matter much more, otherwise we would have seen fertility skyrocket as countries became more wealthy. As an aside, it's hard to look at Figure 1 and conclude that the drivers of fertility mightn't be very different in wealthy countries from those in developing countries. And, also that this might be more of a step change rather than something that exists along a continuum. Thanks for an interesting post. Terence

Nice article, Richard. The RSE Relationship Managers do a great job on the interface between the Pacifica Labour and Skills Team that George Rarere manages, the Regional Labour Governance Groups that monitor labour demands for labour in the different regions, the Labour Inspectorate that monitors compliance with workplace regulations and conditions of employment, the employers and the lead producer agencies like Apples and Pears New Zealand (formerly Pipfruit New Zealand), Horticulture New Zealand, New Zealand Winegrowers and New Zealand Kiwifruit Growers Inc. They are a vital cog in the system of relationships that sustain the dynamic RSE system that is currently under review as part of a wide-ranging reassessment of immigration policy in New Zealand, including New Zealand's relations with Pacific countries (the "Pacific Reset" that the Minister of Foreign Affairs and Trade, Winston Peters announced early in 2018). The RSE Relationship Managers are one clear signal that Immigration New Zealand is not treating the RSE work policy as "business as usual" despite the fact that the policy is into its 12th year of operation. Maintaining a wider systems approach to the dynamic set of relationships that underpin a managed seasonal migration programme is essential if these programmes are to contribute to sustainable forms of economic and social development in both the labour sending and labour receiving countries.