Comments

Thomas, be aware that Australian Aid established an Australia compliant toxic waste disposal system at Baruni post JICA in order to be able to dispose of asbestos waste while satisfying DFAT's regulatory requirements. It consists of a designed, surveyed and marked progressive pit with a 10 year fill lifespan meeting Australian requirements plus some model paperwork for the recording of it designed to be adopted by the Council. Maybe it has already been ignored but if anyone were interested maybe I could supply details. Insisting on using it might help reinforce local practice. We looked at something similar in Lae but the situation there was so bad we decided it was impossible to safely dispose dangerous wastes, any efforts to do so would be ignored, the recovery reds lost and our asbestos would shortly be disinterred in ignorance when the land was redeveloped for something else.

Hi everyone, it gives me pleasure to leave a comment especially for SWP in PNG. I am a Development Consultant and have been vocal in promoting and improving technologies used in horticulture in Papua New Guinea rural communities. I have over the years helped set up Farming Associations, Women and Youth Associations to access financial assistance from the Local Level Government and Donor Aid such as Australian Aid through Programs such as the Strongim Pipol Strongim Nesen SPSN, basically to improve farming techniques to enhance a good harvest. This organised associations need exposure so that to learn from farming in Australia as well as providing an opportunity for the those farmers to earn Australian wage so that to support their Association and profoundly to improve their living standard in those rural setting. Such initiative needs to be embraced and promoted so that it is sustainable and has a ripple effect to the general rural populace in Papua New Guinea. I wish to extend invitation for comments or advise towards this worthy cause. Thank you, Frank Kagl, Nuigini Pine Consultancy. ( NEWLY ESTABLISHED PROVINCE ) Jiwaka Province Papua New Guinea.

Peter you are still active on waste mangement n need champions to collaborate wiyh you in LAE or POM. Kindly get intouch. Vinaka n God Bles Safaira.

Duplication or overlapping is a well known problem highlighted in the aid literature which makes the whole aid delivery system complex and hard to manage. This happens due to aid proliferation - both use and source proliferation - lack of coordination and visibility factor which can undermine the value of aid and its effectiveness. My next paper on the 'influence of foreign aid on public sector capacity in Pakistan' (forthcoming PIDE working paper) would cover this aspect.

It is rather telling that more than a month on from your blog Robin, and comments received, that DFAT has offered no explanation here about Inovasi, no comment on the financial discrepancy you point out, just continuing silence. To borrow from one of your headings, "customer pressure is not enough".

Excellent article and the criticism of New Zealand's very poor effort with regard to resettlement of Syrian refugees is particularly well-made. Richard Bedford Emeritus Professor University of Waikato and Auckland University of Technology

Thanks Marcel. Good to have the feedback. Good to discuss this important issues. My intuition also is that welfare improving outcomes at the aggregate level are possible with an economic modelling approach that excludes the resource sector. This would be similar to trying to understand economic welfare more broadly in PNG. My strong view is that GDP is a particularly poor measure of economic welfare in PNG given the very dualistic nature of the economy. My preference for measuring economic welfare would be a comprehensive social welfare function approach with distributional weightings (so possibly breaking PNG’s formal, informal and subsistence economy into three elements with very strong distributional weightings for the poor – I applied a SWF with distributional weightings approach to my evaluation of World Bank projects in the Southern Highlands of PNG as part of my honours thesis in 1983). A simpler but still difficult alternative is mapping real household disposable income (in line with the Sarkozy-Stiglitz Commission looking for a better measure other than GDP). This information is not available in PNG. A further fall-back is something like a GNI per capita figure but once again that information is not available for PNG. The best solution given limited statistics in PNG is excluding the resource sector. The resource sector is primarily foreign-owned and generally heavily indebted (70% of the PNG LNG project which has driven GDP growth in recent years is debt-financed). There are some linkages through domestic value added (local employment and contracts as well as government revenues and landowner royalties) but these are actually quite limited. This is why I use non-resource GDP per capita when tracking changes in economic welfare in PNG – it is the best proxy measure available. I’d prefer other measures but the statistics just aren’t available. In line with a non-resource GDP measure being a better available measure of economic welfare (as resource exports and imports figures are available), an exchange rate equilibrium model which excludes the resource sector is also one that is more likely to indicate a better way the external sector can contribute to economic welfare in PNG. This gets to the heart of the “Dutch Disease” issue for commodity exporters. With a more appropriate equilibrium position for PNG calculated, I agree entirely with your argument that deviations from such an equilibrium value (whether higher or lower) would represent movements away from an optimal position. We agree entirely that the distributional consequences of such a change are extremely important. There would be clear winners and losers (this has been discussed in earlier blogs). Currently, the millions of cash-croppers and their families in rural areas are clear losers from the existing exchange rate. Unlike in some other Pacific countries, the majority of PNG’s estimated 40% of people that live in poverty are concentrated in rural areas. They are the ones that suffered from the 2015 drought and frosts with inadequate support. Higher incomes in such areas would save lives and create real, sustainable development opportunities. But as you point out, there would be losers in parts of the urban economy (also urban winners for those innovative SMEs seeking to export products, or manufacturers with high levels of domestic value added, or university students getting income from their wantoks in rural areas etc). One final but important point which I should have mentioned in the initial comment – thank you to colleagues who highlighted this as an issue last Friday. There is great value in determining the equilibrium position. The vital choice then becomes transition path towards such a value. One approach is a slow transition to minimise shocks and the pain of adjustment. Possibly this was BPNG’s planned approach until the extraordinary 17% appreciation in June 2014, the movement away from a floating exchange rate and the stopping of the depreciation against the US dollar in mid-2016. An alternative approach is a sharp adjustment to the new equilibrium level (with many variations around the rate of adjustment). The best path for PNG is probably unknown at this stage as key information required for such a difficult judgement call are currently hidden from public view (such as the true balance sheets of SOEs and how much foreign currency debt is being carried, the actual level of backlog demand for foreign currency) as well as the unknown level of international funding from the IMF and others when the adjustment becomes unavoidable (Mongolia's external payment difficulties meant it went to an IMF program last week with $US440m in IMF support and up to $US5.5 billion mobilised from other sources). Cheers Paul

Thanks Margaret. I see that The Story of Kain Friend Maclay is available on Amazon. Looks fascinating.

Congratulations Robyn for this great recognition. I can witness your tireless efforts to implement projects that have supported livelihoods of poor people living in less privileged village communities in Tanzania, mass Newcastle disease vaccination campaigns of village chickens being one of the most outstanding. People in the involved village communities, particularly women are now able to fulfill some of the family needs including buying school uniforms and exercise books for their children using cash earned from the sale of live chickens and eggs. But most importantly, nutritional improvement of children and pregnant women through increased consumption of poultry products.

Hi Paul, Many thanks for your comment. I fully agree with your second and third point. Also thanks for mentioning the recently released IMF estimates. It’s good to see that theirs are largely in line with ours (in contrast to the ones published in their previous report). Hopefully the mounting evidence of kina overvaluation helps convince the authorities to let the exchange rate move in the right direction soon. Your last point is interesting. Intuitively, given the lack of government services and transfers to rural areas and how partitioned the PNG economy is, using your approach to equilibrium exchange rate modelling could well lead to welfare improving outcomes at the aggregate level. However, I think more evidence is needed of the economy-wide benefits of an “ultra-competitive” kina. While rural cash croppers would profit from such an exchange rate the urban economy would bear significant costs. This is so because an analysis that excludes the resource sector is likely to suggest an undervalued kina for the urban economy on which the mineral sector has a significant impact. But currency undervaluation is just as harmful as overvaluation since it leads to resource misallocation and builds up inflationary pressures. So it is not obvious to me that leaving out the resource sector will ultimately lead to better outcomes. Regards, Marcel

Grant Thanks for this post. After reading it I immediately went to our bookshelves and took down a book I purchased on one of my visits to PNG. It's called "The Story of Kain Friend of Maclay" by Mary Mennis. Mary interviewed the old chiefs of villages near Madang and the story is based on these interviews as well as Maclay's diaries. It reads like a children's adventure story and is beautifully illustrated. What's more, my husband's great grandfather Anton Dohrn, a noted European biologist in the second half of the nineteenth century, knew Maclay, climbed Mt Etna in Sicily with him, and wrote about this adventure in a letter to his sister which is still in the family archives. You never know what a Devpolicy blog will lead to! Margaret

Great contributions! We need more concrete economic research and analysis with open debate about PNG's economic policies as generic economic models may not necessarily suit PNG's conditions. Giving serious thoughts to the issues, researching and openly debate about these matters will bring out the best in research to provide the basis for better policy formulation and implementation to support the vast majority of PNG's population. Thank you to Rohan & Marcel for the analyses and the commentary from Paul Flanagan is a positive input to the analyses. Great work.