Comments

Nic, PRIF is not really a mechanism for funding infrastructure projects. It's a coordination mechanism for the major donors operating in the infrastructure space in the Pacific (though China is not a member) . And it provides technical assistance/knowledge products. So quite different to AIIB. As far as I'm aware, there's next to no information available about the Asia-Pacific trilateral initiative

Very interesting - thank you for the comment. You don't happen to know the name of the World bank report from the 1990s to which you refer?

Thank you very much Mathew Dorman for this report.

I get wary of debate about 'infrastructure' that suggests everybody knows what is meant when they hear the word. I am continuously attending meetings in Dili where people speak about infrastructure as if it is something that can be installed once, and then forgotten. Many people fail to recognize that infrastructure covers a number of sectors - transport and communications, health, education, small business and commerce etc. etc. and that it includes both hardware and software. The term 'soft infrastructure' I find ridiculous as it seems to ignore the fact that all infrastructure, even road building, requires software, i.e. the personnel network of knowledge and skills to make it work, keep it maintained and not fall into disrepair. I find the most neglected component of infrastructure is knowledge infrastructure, i.e. the cables and wires, plus the personnel with knowledge and skills which will enable a country to have a functioning, post office, library and internet system to get books and learning materials around to all educational institutions for teaching and learning of the knowledge attitudes and skills needed to develop the country. Such a system, if it existed, would inevitable help the small and medium enterprise sector as well (as happens in Fiji). The UN's World Summit on the Information Society had a great deal of sensible recommendations to make on this but they are rarely discussed. Timor-Leste came to independence at a time when it was widely believed the private sector (in reality foreign telcos) could take care of all that, it didn't happen. Timor-Leste is at the bottom of the WEF's computer readiness index and, despite offers by Australia's AARNET to assist universities, little has been done to ensure students and academics have access to good library and computing facilities.

Thank you Mathew for this post. Unfortunately, to date, much of the commentary focussed on the China Belt & Road Initiative and the China AIIB concessional loans has tended to emphasise a geopolitical perspective. Instead I would prefer that the China concessional loans initiative be evaluated in development terms because I think that the initiative to fund infrastructure has a basis in the Chinese experience of development and reflects evolving Chinese theories about poverty alleviation and how sustainable economic growth and development is achieved. The Chinese emphasis on infrastructure investment concentrating on roads seems to have crystallised following the ‘Global Learning Process and Conference on Scaling Up Poverty Reduction’ held in Shanghai in 2004. The Roads Improvement for Poverty Alleviation (RIPA) program was launched with World Bank support in selected provinces in the mid-1990s. RIPA focuses on linking those rural villages and townships which do not currently have basic all-weather access to the existing road networks. In the case of Henan Province, quantitative analysis resulting from an ex-post evaluation of the RIPA components showed that remote settlements that had been engaged in subsistence farming prior to the program had made markedly better progress in economic development, social development, and poverty alleviation than comparable populations in control areas. http://web.worldbank.org/archive/website00819C/WEB/PDF/CASE_S-4.PDF Your reference to the paper by John Gibson and Scott Rozelle (‘Poverty and Access to Roads in Papua New Guinea’) is very appropriate. A scheme for measuring the poverty alleviation effect of roads in PNG was included in a report to the World Bank in the 1990s. This scheme was based on using Gibson’s earlier work on household income and consumption, modified and applied by a questionnaire to be administered by the PNG National Volunteer Service in selected areas where there had been significant road development. In my view this is still research waiting to be done in PNG. Doing so would be especially appropriate in the context of the PNG LNG Project and the Papua LNG Project where significant road infrastructure is being created under the tax credit scheme. Vailala

Interesting read Jesse. In 2011 when Brisbane was flooded on 11-13 January, I lost most of my possessions in my apartment in East Brisbane. I managed to drive my car out and save important documents and personal items. The Queensland Government provided a quick response by making grants of $900 per person to assist in short term recovery. It still took 3 months to get things back to normal and I look back on this event as an example of the resilience of Queenslanders. It was the same in Tonga, during TC Gita. I was evacuated to the Scenic Hotel near the airport. The day after I was clearing downed electricity lines to allow vehicles taking AusAid supplies delivered by Australian C17 to reach Nuku'alofa. Residents of nearby houses destroyed by the cyclone were scavenging materials to rebuild while I was clearing the road. They didn't wait for handouts.

Whatever happened to the Pacific Regional Infrastructure Facility (PRIF)? As the name suggests, this was the mechanism used by Australia, Japan and the ADB for infrastructure projects in the islands, before it was overshadowed by China's AIIB. Where is the analysis of PRIF and the pluses and minuses of projects it has funded in past years? How will PRIF relate to the new Asia-Pacific mechanism (merger, takeover, co-ordination?)? Why a new mechanism - is it simply to persuade Washington that the America's JANZUS partners are acting on China??

Thank you very much Prof Stephen Howes for this interesting, informative blog post. Thank you also to Sarah Pearson, Chief Innovation Officer, DFAT, for providing a detailed response. I was really interested to read both the blog post and the responses. I hope this discussion will help to generate positive outcomes for the people in our region who need them the most. Amanda 🙂 Dr Amanda Watson Lecturer Australian National University

It seems evident from the African experience - and Dr. Gillwald's comments - that this policy will have little effect on crime or security, but *will* make it easier to monitor (and possibly suppress) online dissent. It's hard to see how this benefits citizens. Even worse - although a delay has been granted for rural areas, it's almost certain that one effect will be to make connectivity and access more difficult for those who live in remote locations. This would effectively erase one of the most important benefits of telecommunications for PNG.

Thanks Stephen for an interesting blog post. The term innovation, at least as used in the world of aid, is popular because it sounds like something exciting that the private sector does. To the extent that the private sector does innovate in ways that are welfare enhancing, this works, at least to some extent, because market mechanisms provide quite good feedback. (That is, if the new widget is useful people will buy it; if it isn't they won't). The trouble with aid is, of course, that equivalent feedback loops are missing. There is a potential alternative though that could help with the work the iXc: high quality impact evaluations. These should be pre-registered and built into the design phase of iXc projects. Public reporting should be mandatory. Evaluations needn't be RCT's; just the best possible method for gauging the impact of the project at hand. The evaluations would be quite costly, but that would be a small price to pay for the learning that ought to be part and parcel of this type of work. Terence

Hi Amanda, Very well presented on SIM Card deactivation process going on here in Papua New Guinea. From my perspective I still see a need for Telecomunication Companies and NICTA to do more awareness to the rural population in the remote parts of this country so that the people are well informed and aware of it.

Relying on landowner allegations as reported by journalists and the allegations of bloggers and some anthropologists who may have an interest in muddying the waters can lead to confusion. It’s necessary to form a clear picture of the different legal regimes applicable to Infrastructure Development Grants (IDGs) and Business Development Grants (BDGs). That the State has the power to make grants is unquestioned. The petroleum project grants are given effect in the various MOAs/MOUs that are signed with landowners and their representatives. The legal basis on which these grants are made is covered by Oil&Gas Act S173. Ss173 (1)-(4) refers to IDGs which are made to Provincial Governments and Local-level Government. These grants are subject to the approval of the Expenditure Implementation Committee. It is the State’s intention that these grants be taken up by landowner companies under the public contract system. Since the right to win a contract tender is linked to MOA/MOU identified landowners there has been litigation between landowner groups/companies as to the contract participation rights conferred on identified (or not yet identified) project area landowners by an MOU/MOA. For discussion of some the issues that may be involved please see- Walapali v Parindali [2007] PGNC 54; N3172 (16 January 2007)(http://www.paclii.org/pg/cases/PGNC/2007/54.html). For Business Development Grants (sometimes referred to as ‘seed money’) O&G Act S173(5) provides - (5) The State may, in addition to grants made to affected Local-level Governments or affected Provincial Governments under this section, make grants to project area landowners or customary owners of land in a petroleum project area. A fetter is placed on the State’s discretion under O&G Act S174 which limits the total net benefits granted by the State to Provincial Governments, Local-level Governments and landowners to not more than 20% of the total net benefit to the State from any project. For BDG (‘seed money’) a relevant case is Hiwa Tuguba Joint Venture Ltd v Vele [2016] PGNC 415; N6782 (21 December 2016) (http://www.paclii.org/pg/cases/PGNC/2016/415.html). This case acknowledges O&G Act S173(5) and the relevancy of the MOU - Hides PDL1 Landowner License Based Benefits Sharing Agreement. Justice Hartshorn found that the legal basis for the contested payment of a BDG was an NEC decision. NEC decision NG 53/2012 provides that one entity, Hides PDL1 Holdings Limited, is the entity that is to receive K29.28 million in BDGs for Hides PDL1. Justice Hartshorn dismissed the plaintiff’s claim that the Department of Commerce Trade and Industry had a decisive role in the grant of a BDG. [T]he NEC decision NG53/2012 is clear in that it directs the Department of Treasury and Department of Finance to allocate the BDGs. Any obligation that the Department of Commerce Trade and Industry may have had in administering the BDGs on behalf of the State had been discharged or superseded by the NEC decision. The Secretary of the Department of Commerce, Trade and Industry did not have the authority to bind the State. Further guidance as to the status of an NEC decision is provided by The Constitution - S86(2) ... the Head of State shall act only with, and in accordance with, the advice of the National Executive Council, (4) The question, what (if any) advice was given to the Head of State, or by whom, is non-justiciable. Hides PDL 1 Holdings Limited has now morphed into the Hides Gas Development Company (HGDC). The HGDC lists 13 area-based landowner companies (including Angore Corporation) as shareholders. Much further information can be gained from the company web-site. An important function of the HGDC shareholders is to provide area-based labor hire services for HGDC LNG Project field service and development contracts, including Infrastructure Development Grant contracts funded by the developer under the tax credit scheme. Is the BDG scheme generally a success? It seems there has been a good measure of success, bearing in mind that small business development schemes are never 100% successful, even in Australia. The rise of the HGDC may be seen as a successful outcome of a process of trust-building between the project developer and the project host community and the consequential creation of trust relationships between diverse landowner groups. These things are foundational for the development of effective local and provincial politics and the creation of local development initiatives. The rise of the HGDC also illustrates a sometimes overlooked fact that tradition-based societies may often use their traditions as an inspirational basis for rapid modernisation. The O’Neill government has strongly supported the role of provincial and local initatives for service delivery and local development. Many Southern Highlanders and Hela people are strongly committed to grasping the opportunities presented by the LNG Project to initiate local development and reduce poverty. The blog post authors mention the ‘Hela way of menacing’. Is this a form of ‘racial profiling’? Or, should I regard the whole blog post as an example of the ‘Aussie way of menacing’? Vailala