Comments

I hate to disagree with my former good-guy MP Bob but I do feel quite strongly that, as important as the subject of Trachona is, that it is not the role of the Commonwealth to buy into such activities. I am speaking from the point of view of someone who worked in a number of Commonwealth countries and who did gain an appreciation of that colonial heritage, much to my surprise. But I think its role ought to be restricted to what it does best, and where no other organization operates ie stick to the heritage of British governance systems, including those related to parliament and law. Joel Negin's terrific chart in his article in the same volume clearly illustrates the plethora of agencies which exist - and remind of the need to be focused, and stick to what one has the mandate for and the related expertise/skills/resources. There is already much overlap between agencies and some are spread very thin, providing quantity not quality. I would suggest that the Comm. should stick to what it does best, and if there is no need for those types of interventions, it should be dissolved.

Thank you Carman... appreciate your excellent piece of writing which demonstrates your worldly experience.

Totally agreed Paul. So much work has been done to upgrade the Company Haus website, which has become a beacon of hope for private sector development in Solomon Islands.

I agree with you Robin that poor quality programs are likely to make up much, much less than 20% of the current program, however in a constrained funding environment I think it makes it even more important to systematically identify and prioritise those activities which have the biggest poverty reduction impact per dollar invested. Of course, in reality, other criteria such as Australian political and strategic interests and contractual obligations will also apply, but I would hope that DFAT will be working to ensure that this 20% cut to aid program funding will result in a much smaller reduction in the aid program's poverty reduction impact. This will require more than just giving the program a hair cut, but assessing each of the individual strands of hair.

I dont know why but I come to love this country so much I hope one day I wll be there either for employment or vacation. I am from Tanzania and thru information from internet and youtube PNG is having a very bad reputation by Western media - its like South Africa, Brazil and America just to mention a few are better places than POM, but this is how western media does when it come to third world countries especially Africa or any other place.

Joel, Ryan, Sam and Garth, Thanks all for your comments. Forgive this blanket reply, but it's easier to do it this way: 1. I’m not a proponent of eliminating aid to Indonesia or reducing it to a rump. $230 million per annum, or something like it, is a lot of money. 2. If Australia’s aid allocation policy were to make country allocations broadly proportional to absolute-poverty headcounts or total population levels, a lot of country allocations would have to change dramatically. 3. I'm not a proponent of basing aid allocation on per capita GNI alone. The piece above does not base its recommendation, a step-down in aid to Indonesia, on improvements in Indonesia’s per capita GNI (which currently stands at US$3,580, in the same ball park as the Philippines, Sri Lanka, Vanuatu and Mongolia). 4. The recommendation is, rather, based on the observation that aid to Indonesia was ramped up to an extreme degree for purely political reasons post-tsunami, that it remains at an artificially elevated level ten years later, and that Indonesia has meanwhile moved on in several ways. I don't recall anybody arguing that Indonesia was receiving too small a share of the Australian aid budget prior to 2005. 5. It’s possible in principle that Australia is getting such good development returns on this massive investment in Indonesia that we should forget about the origins of its huge aid-share increase and be happy that the money turned out to be so well spent. But it's extremely unlikely that a dollar spent in Indonesia is so superior in impact to a dollar spent somewhere else. 6. It is also extremely unlikely that DFAT could identify a 'bottom billion' dollars' worth of genuinely poor-quality aid projects to axe across the whole aid program. It might find some tens of millions by taking this approach but any further cutting would have to be justified on non-quality grounds. 7. Given the government’s decision to take the aid program down by $1 billion in 2015-16, there are actual, large trade-offs to be made here. If the suggestion is that Indonesia should suffer no greater proportional cut than other countries, it should be acknowledged that many other countries will feel their cuts much more keenly, as they are more reliant on our assistance than is Indonesia.

While I understand, and sympathise with, your argument for larger cuts to the Indonesia program Robin I think that average income per capita is an inadequate criterion by itself to determine aid levels. This is especially so when there is still a very large number of very poor people in the country and the average per capita income at around US$3600 is still less than one third that of the upper bound for ODA eligibility. In addition there are provinces in Indonesia that are poorer and have larger populations than some of countries to which Australia gives aid. In 2011 the Independent Review of Aid Effectiveness concluded that significant increases in aid to Indonesia could be effectively used and that Australian aid had a high capacity to make a difference in the country. Instead I would hope that DFAT would take a more results-oriented approach and determine, in co-operation with partner governments, and across multilateral programs, which activities are failing to meet a benchmark for cost effectiveness in reducing poverty.

Thanks Robin for a thought provoking and well argued piece. The rationale for cuts in Indonesia appears to be pretty similar to the winding down of the aid program in China and India, so there's at least a precedent. The bilateral relationship is deep and broad, so hopefully any major aid cut would be seen as part of a mature evolving relationship. While I'm not privy to the internal deliberations around the cuts, it strikes me that the whole process would be more transparent and credible (not to mention diplomatically paletable) if the analysis was undertaken and communicated to those effected before the actual announcement was made - it's one thing to make big cuts to the aid program (that may or may not be warranted, depending on your ideological perspective and view of economics) - it's quite another to make them on the run, with little pre planning and in a way that hurts the stakeholders involved and, potentially, Australia's national interests.

Thanks Robin, for an interesting and clean post, on an important topic for which I have not yet seen much constructive engagement. Its worth noting that in in 2014 Indonesia's poverty headcount was 28.4 million: well over triple PNG's entire population (poverty in Java alone is over twice PNG's population). Regarding the scale-up (which if mostly disaster aid should probably be wound back when the disaster is over, I agree), many of the important Indonesian programmes have been well-evaluated and I suspect we have a much better idea of what is working better there (here), than we do in just about any of the other programmes. There is a strong case to be made that the aid to Indonesia has been some of the more effective aid delivered (even if we just focus on poverty, and governance broadly speaking, not the other non-development objectives the program no doubt serves), particularly when we contrast it against some of the other countries' in the region. I'd vote Option 2, or an unnamed third one that targets particular themes/types of aid instead of countries, although this would likely make the quantum harder to hit in a simple way.

Thanks Robin for a wonderful piece. As you note, the level of funding to Indonesia is the elephant in the room. Australian cash is insignificant compared to Indonesia's GNI (US$2.3 trillion). And whether it buys us "influence" is very debatable. Australia can engage on policy issues (universal health coverage for example) without needing huge amounts of cash injections. I think grouping all non-Indonesia and non-PNG country programs together is a bit messy as some of the countries including in that - like Indonesia - are wealthy enough to fund their own development programs. Iraq, Fiji and Tonga for example are upper middle income countries (according to World Bank) - so in theory at least should have sufficient funds to drive their own development agenda (perhaps with some small policy support from DFAT). Samoa and Timor-Leste are just on the cusp of upper-middle-income status and Indonesia and Philippines (two large recipients) are not that far behind (see here http://data.worldbank.org/data-catalog/GNI-per-capita-Atlas-and-PPP-table). Perhaps WB classifications are a bit of a blunt instrument and there of course remain (large) pockets of poverty in those countries. But using the WB classifications as a method for reducing aid would make sense to the Australian public and would - in some ways - return the aid program to a poverty reduction emphasis rather than a model where middle-income Asian countries get the most aid. Joel

Great article - thank you. My multilateral, northern European leaning paradigm says we need a WHO-like entity that is neutral, impartial and independent and is empowered and funded to coordinate and facilitate global health. Unfortunately 'everyone wants to coordinate and nobody wants to be coordinated.' Much of the rhetoric for the recent changes in global health comes from a US / private sector leaning paradigm that 'competition is good'. I agree - often it is and I welcome it. But, with competition for financial and advocacy space comes, paradoxically, increased inefficiency. For example each new entity needs its own experts in communications, advocacy, portfolio management, finance, operations, M+E, gender etc. Competition increases fragmentation at all levels, blurred and overlapping roles, territorialism and decreased collaboration. Competition decreases the likelihood that nutrition, vaccine, MNCH, WASH or noncommunicable disease experts will sit together to collaborate and work together under the umbrella of national health plans. This may be beneficial in the private sector when introducing a new product, but ministries of health struggle to deal with, and coordinate, the increasing numbers of players, indicators to measure and reports to complete. WHO is still (in my opinion) the most trusted partner at country level. In contrast to any of the banks, bilaterals, many NGOs, other UN agencies and foundations. Unfortunately WHO has been undermined by lack of funding beyond specific diseases and many agencies bipass WHO's facilitation role. Without WHO at country level, I believe low and middle income countries would be even more driven by entities with large communications and advocacy budgets; often skewing priorities and budgets away from nationally identified priorities based on local disease burden information and away from holistic approaches to beneficiaries that can be addressed with cost effective interventions and a primary healthcare philosophy.

Thank you Bernard. As it has always been, the grassroots appear to be the ones suffering the most from these socio-economic and political turbulences. Regards Bal