Comments

The missing element is PAT (Participation, Accountability and Transparency)

It's actually true that politics can only go as far as abolishing school fees and providing resources required for education. The major challenge especially in Kenya is as much as the enrollment ratio has greatly improved, is the quality of this education also good? I loved this article.

It's great to see that DFAT promotes inclusive market development and that World Vision project has benefited the farmers including those most marginalised. I remember I met the farmer in the picture who was happy to grow melon which brought him more income during a visit to the New Zealand MFAT funded CADF project with iDE.

A wise person will not stand for PNG politics; only foolish people goes into PNG politics with the aim to change the system and mindsets.PNG cargo cult mentalities has twisted the hot iron of politics and disfigured the true and pure ideals of politics. Only bloodshed shall bring forth the ideal utopia of politics every soul desires.

Yes, I agree totally for incentives to be given to good recruiters and same time harsher penalties be issued to non-complying recruiters such as debarring. The introduction of licensing of recruiters by the three States (Victoria, Queensland and South Australia) is a welcome move. The mandatory licensing of recruiters across the States will lift the SWP image and reputation and achieve the triple win outcome that NZ RSE is experiencing.

I tend to differ from the argument that seasonal workers earn more and costs more compared to backpackers. This is due to the fact that the recruitment agents or farmers do recover back all the costs incurred to getting one seasonal worker in terms of transport, airfare, visa, accommodation and of course the increase in labour productivity by the seasonal workers.

This is a culture in PNG and I think its a very bad practise by our people and the Hon Member has made it very cleare on this false expectations by our people. Good MPs who don't meet their voters personal and business request get voted out and so long as we have this perceptions and practice this country will remain corrupt. On the other hand, PNG national politics is going from bad to worse. Those MPs who are not on the government side are made to suffer by successive Prime Ministers including Peter O'neill's regime. For this we will also remain corrupt and have unfair distribution of resources and development funds. Both these practices in PNG politics must stop. The question now is what should we do as a country to stop this trend of money politics.

The critique proposed in this review is on target: there is an urgent need to walk the talk summarized in the report. Repudiating the "liberal state-building model of the 2000s in its most simplistic and hubristic forms" and advocating working with domestic governments are fine and (today) hardly objectionable theoretical objectives. The urgent problem, however, is to transform these well-meaning macro-generalizations into systematically documented practice at the micro-level – a transformation that often requires moving beyond orthodoxy, and challenging its tenets. Two of these tenets –ubiquitous in the report- come immediately to mind. First is the notion of transformative change. Among the important ideas that the report fails to take into consideration, the absence of the SDGs is the most remarkable. As stated in the two brief references made in the report, the SDGs are about reducing poverty, about gender, and about the relationship between the environment and the economy. But they also provide insight into institutional development, strategic alliances, and rural-urban synergies, promoting innovation in the design, measurement and implementation of policy at the local level - objectives that while not grandiose (as in transformative change) are likely to result in improvements in human development, in a more robust society, and in a more responsive state. An SDG based definition (and measurement) of state fragility would probably erode the sharp distinction between fragile and robust statehood –transforming a polysemic dichotomy into a continuum where we could more easily differentiate, say, the “fragility” of a nation-state such as Haiti, from that of a state-nations like PNG. Second is the urban bias built into assumptions such as “overwhelmingly, economic growth happens in cities” (page 19 of the report). True, many times “during periods of conflict, people rush to the main city” (page 18). But this doesn’t grant the claim that growth is overwhelmingly urban, and doesn’t preclude the opposite scenario: migration to the rural areas due to urban conflict. To (continue to) bias aid and cooperation towards urban centers is to bias it away from where people live –and in favor of an urban elite that may not be most representative of the country in question. Urban based growth can’t take place without paying attention to the rural areas. To be sustainable, urban growth requires a vibrant rural economy capable of producing, at least, a food surplus. And then, a vibrant rural economy requires the existence of a non-predatory urban center capable of absorbing that surplus without exploiting the periphery. Thanks for the review. As usual, good food for thought.

The last four paragraphs summarises the current situation well. Things could be done differently & have a greater understanding of the region. In the case of PNG, people must see there is a genuine interest & faith in their capability, and above all, a bit of positive reporting in the Australian media could work some magic.

Great article

While analysts argue over how big a threat China is, or whether a threat at all, sections of the Australian media have whipped themselves into patriotic frenzy, and taken up the cudgel on behalf of government, with a 'take no prisoners' crusading approach. Fact-checking has been cast aside in favour of cowboy-like antics. That said, the 60-minutes report did highlight some Chinese-funded white elephants that had become a financial burden on the government. There are one too many such monuments in the Pacific.

Thank you Paul for your comments. I found some of your comments not at all understandable until I turned to your reference to the IMF 2017 report. Unfortunately the IMF report contains a somewhat common error which may at first glance seem trivial, but it covers a key point in understanding the political economy of the LNG project. The error is to assume that the royalty benefit (and sometimes the development levy) accrue to GoPNG. These two items underpin the basic legality of the LNG project and the GoPNG scheme for natural resource development. The royalty benefit forms an essential step in creating the State’s title of ownership to uplifted petroleum and the simultaneous transmission of this title (not to the “LNG Project”, which has no legal identity, or form) to the licence concession holders or co-venturers. Why is this fact important? The grant of benefit takes the form of a gift and as such requires, for perfection, offer, acceptance and the passing of the property from grantor to grantee. This explains why there is a Development Forum with an MOA as its outcome or product. The MOA provides the necessary documented attestation for a dealing involving land and the identified landowners signed acceptance of the grant or gift. Much the same considerations apply to the development levy and the income due to landowners, etc, from the grant of equity. The monies that the State receives from the co-venturers (which includes the PNG entity as a co-venturer) in fulfillment of these obligations is property awaiting identified landowner, LLG and PG collection and must, accordingly, be held in trust accounts before payment to the identified beneficiaries. Arrangements for the holding and management of these trust funds (SPVs) parallel those made for the ‘stichting’. The MOAs provide some detail on these matters. This also explains why the GoPNG MOA committments are limited to ‘good efforts’ and ‘best endeavours’. These efforts and endeavours are to be made by GoPNG in support of the choices that landowners, LLGs and PGs are expected to make in respect of their local social welfare, infrastructure and development plans and budgets. So what is at issue here is not the State failing to ‘honour’ its MOA promises but rather the recipient parties (landowners, LLGs and PGs) failing to honour their commitment to engage in local initiatives for the expenditure of the trust fund monies. In part this failure can be attributed to the long failure to identify beneficiary landowners and the confusions engendered by genealogical reckoning. Many Southern Highlanders and Hela people understand this very well. The current political turmoil is a source of great frustration to them as they work continuously to build political solutions and trust. Especially so when they look at the achievements of some other Provinces in implementing social welfare and development initiatives through their own political processes. Other comments made bear on the issue of the commercialization of a gas extraction and export industry, policy settings and tax issues. These can be best viewed through the lens of the unincorporated joint venture structure and its grounding in the concessional licensing scheme legislation. To take just one example, APT. If you don’t have a project people will tell you that the settings are too high. If you do have a project the same people (often the IMF) will tell you that the settings are too low. And so it goes. Recently PM O’Neill and treasurer Abel have commented - “We love our concessional loans” “We need free equity” “We need better returns from resource development projects” A general conclusion is that GoPNG now reckons that the cost of 14.5% LNG Project equity (19% when the landowner equity grant is included) imposed too great a burden on the PNG economy and financial system resources. GoPNG equity was initially pegged at 22.5% in anticipation of a Project capex of US$10 billion. The ExxonMobil discussion papers and reports on the financing arrangements that it led for the co-venturers (but not, I believe, including PNG) note on more than one occasion PNG’s difficulties caused by the negative pledge. Very briefly, this requires that any monies raised by PNG borrowing be allocated first to the pay down of the obligations created by concessional loans. GoPNG participation as an equity owner and co-venturer in resource development projects is an important component, perhaps the most important component, in the management of country risk. Needless to say it is backed up by contract stability agreements with the co-venturers. So, what do we have here? To me it looks more like a “Capex Curse” rather than a “Resource Curse”. It illustrates well the perils that may follow when you enter into a strictly commercial relationship with a very large multinational and and engage with a world of fluctuating commodity prices and markets. I’ll leave the SWF discussion to another day. You have my sincere sympathy in regard to the clumsy and error prone analysis of the IMF. I too once regarded these reports as the epitome of icy analysis based on established facts. Too often these reports are regarded as statements of factual record. That they may be no more than the tergiversations of FIFO ‘cowboy’ economists should always be weighed in the balance, as the experience of other countries shows. Vailala