Comments

Hi Peter, Thanks for your comment. I agree business is crucial. But it is not the only sector or activity that is crucial to any particular country's development. There is no one road or one answer to sustainable development. This means to me that decisions about how to spend aid and on what require careful country context analysis, and the active involvement of various stakeholders in the country concerned. Re: women working in business, there are many precursors that need to be in place before that can occur, all of which require their voices in analysing their situation. In my experience, one precursor is often supporting women to have the number of children they want, so they are actually able to leave the house and their caring responsibilities to go to work. Social progress is complex. Why make it even harder to achieve benefits from NZ ODA for the poorest people by trying to also use ODA to advertise and sell NZ businesses? I thought that was what NZTE was for.

I agree with Therese's idea of moving away from evaluating Australia's aid based on the percentage of GNI and using the percentage of the budget expenditure. I had a short letter published in last Monday's Sydney Morning Herald using that statistic: It is good to see our Foreign Minister exhorting her British counterpart to increase its Foreign Aid to the Pacific (“Britain pumps up Pacific presence”, SMH, 21 April). This may strike some as hypocritical when Australian total aid has fallen from $4.3 billion in 2011-12, which represented 1.2% of total budget expenditure, to $3.8 billion in 2017-18 (just 0.8%). I can only assume that the rumours of further cuts to our Foreign Aid in the upcoming budget are “fake news”.

Chinese aid and presence in the country more is feasible and can be 'felt and seen' by ordinary citizens and I think this is what matters. Traditional donors like AusAid and JICA are being blanketed by the Chinese aggressive presence. Chinese workers literally do the actual work and they don't sub-contract or just give the money and disappear. Majority of the people do not care much about systems and processes, but rather something that is physical, like the big infrastructure projects being built by Chinese. They will be in the country for a longer period.

Of course it is not only Chinese companies that run afoul of the World Bank anti-corruption rules, Australia's own SMEC is facing similar blacklisting difficulties but still remains favorite to build the Government's Snowy 2 Hydro project.

Thank you, Ghandi Katao, for these four categories of rationale for low demand for credit from licensed MFI's.

Micro credit is dependent on both demand and supply factors. Ghandi Katoa highlighted a number of supply (and institutional)factors. I offer a demand side view that microloans cannot be raised unless there is a bankable proposal - the generation of business ideas. PICs are mostly followers, imitators and copycats. There is a need for a 'Bank of Ideas' - some of these are kept in archives of research institutions and or Universities. This crosses the field of small business development- a component badly missing from financial inclusion or micro finance programs. Currently, there is too much focus on savings and very little on the generation of income either through paid employment or small business creation. Bankers should also start learning business creation apart from learning bank or lending policies.

Unsure how a picture of Idi Amin is germane to a pitch for more Australian aid, little of which has gone to Uganda or Africa. The picture is definitely not of Mobutu Sese Seko of Zaire or Robert Mugabe of Zimbabwe.

I like the concluding part of this article, '''Doubting the'''' effectiveness of Chinese investment and the ability of PNG to keep firms (from China and elsewhere) accountable. My view: Indeed we lack the ability to hold the investors accountable mainly due to lack of transparency because individuals are involved and some deals are done under the table. Recently I visited a factory that built the overhead bridge in front of the VC in POM. I was told that NCDC engineers, managers etc visited the factory, yet they didnt take notice of the hazards or safety concerns, which were enormous. I asked the manager of the factory what these officers said about his factory and the reply stunned me, that they are happy that the factory can get work done. See, we do not follow the norms and procedures ranging from not just financial management and experiences of projects of these kinds, but all details like safety, the rights of workers, people's fatigue management, the work environment etc. Those people who represent PNG need to look at these from a broader perspective. When I asked why there was no investment from the US or Australia and again when asked if people from these countries came to visit, their answer was that they don't allow them to come. So, investors take advantage of our ignorance and also what they give under the table and think we have done a good job! The reality of background that needed to be checked stings!

There is a need for further research to understand systematic approach by Chinese government to exploit a vulnerable country like Papua New Guinea if Papua New Guinea wants to take this burden off its shoulders. Where Papua New Guinea stands today in puddle of swamp would take a fair amount of decades to come out given the depth of loan we owe China and the volume of corruption within Papua New Guinea Government.

Chinese companies are set to outbid other local and foreign companies and secure many of the large scale projects in the country. It will be difficult to stop this trend due to many reasons. One reason is most of the money sourced for the various projects come from the Chinese government. Thus, they will want their own companies just like what Australia has done.

I like the comment made by JK Domyal. As someone who lived and studied in China. I feel that China has more to offer PNG compared to Australia. This is reflected in the PNG government's position. Also the recent trip by NCD's political heads and Tkatchenko's comment on China in the local media supports this point. PNG has a special place for Australia but we cannot ignore the rise of China. In regards to security, it is a security dilemma that Australia is faced with. The increase in China's capability is a threat to other established powers or middle powers like Australia. Australia will slowly lose its influence in the region as China continues to grow. The challenge is now for Australia to change the way it sees its Pacific neighbours, especially PNG. Maybe it is time to see PNG as a peer regardless of the developing country tag rather than small brother. In order words, a mutual relationship rather then a patron-client relationship.

There are two issues that, although outside the discussion, give rise to low borrowing levels. The first is stringent rules for eligibility to borrow. Although not as stringent as commercial banks, they are still restrictive enough that 90% of people who save with those MFIs cannot meet the criteria. The second is interest rates. A micro loan is for a small emterpreneur making small profits yet the interest rates are comparable to commercial banks. No one wants to borrow.