Comments

Denis, I also look forward to reading your book. In 1997, with Bougainville slowly recovering from destruction and theft of property, I was involved in attempting to secure new two way radios for communities right across the region. Isolation, poor roads, lawlessness in some areas, challenged health and education services made the radios almost essential. Australian Aid, so we were told by officials, was not possible because the radios were to be placed in community headquarters which were church run institutions or parish centres. It seemed that there was a fear that the support would be used for evangelical purposes or at least might appear to be a contribution by Australia to evangelical endeavour. If there is a concern that the values of the religions, which provide communities with services, do not align with mainstream Western development values then there may need to be a review of Western development values. We have seen this throughout the history of PNG, officials or evangelists who see the need for local alignment with mainstream Western values as a prerequisite to receiving the cargo. There can be good reasons for this but when it is directed at a religion and not state it would seem unfair. If this principle were applied to secular institutions development workers would need to face the probability that they are providing support to institutions and officials showing very little practical signs of alignment with mainstream Western practice. Lawrence Stephens

Hi Matt, Thanks for producing this first assessment of the numbers involved. I think you rightly identified and highlighted a few key issues: (1) the disaster's financial damages will be very large; (2) aid is not going to be sufficient to plug the funding-for-reconstruction gap (if we can rely on past experience); (3) tourism sector is very vulnerable to both damage to infrastructure and changes in perceptions - experience seems to suggest the sector takes years to recover from similar shocks (see for example Christchurch in NZ or the Hawaiian Island of Kauai). You have included in your assessment the financial damage to stocks (the immediate destruction of assets), and flow (the decrease in GDP growth), but you have not included the direct impact on people, in terms of their well-being and livelihoods. As a classic example of the Broken Window Fallacy (from Bastiat's 1850 essay), disasters do result in short-term boost to economic activity during the period of reconstruction, but human welfare is clearly decreased by the need to spend precious resources on the reconstruction of physical assets. Research shows that in poorer countries and households this need usually comes at the expense of spending on non-food expenditure, such as education and health. As such, it can lead to long-term adverse impacts that can indeed "take Vanuatu back a decade of development." The key to preventing that, it seems, is externally-supported aggressive and rapid reconstruction. The Pacific Insurance Pilot Program (PCRAFI) and the mostly in-kind bi-lateral assistance from Australia and New Zealand are clearly vastly insufficient for that to occur. The international community's attention span is typically quite short, so it is also essential to speed up this process.

Hi Sonja, Thanks for taking the time to make this detailed response. I've fixed the typos you pointed out, and will leave the issues of substance to the author. Just a point not about this comment but to everyone considering contributing to this discussion: we very much welcome your comments, but, as per our blog and comments policy, we won't publish personal attacks. Regards, Stephen.

Thanks for this Matt, it is a thoughtful and important piece of work that will form part of the basis of what will need to be serious thought about the longer term future of economic development in this country. It is important that the people who actually know about Vanuatu contribute to this debate as it unfolds, not least so we can be of use to those people who don't have any understanding of the country's political climate, economic trajectory to date, cultural diversity, etc (a lot of whom seem to be here right now) but who are going to be making some very important decisions and seeking to advise and/or influence the Natuman government (and successive governments no doubt). Although the disembarkation of passengers from the cruise ship that docked in Vila on Wednesday was greeted with joy (by everyone even those of us who normally complain about cruise ships as we sit in gridlocked traffic) the impact on tourism more widely is already being felt. Staff at 2 of Port Vila's resorts have already been laid off - one of those properties will not reopen till December and the other has yet to disclose when it will reopen. Both Air Vanuatu and Virgin have revised their schedules, reducing the number of flights between here and Australia. There is a long road ahead.

Good write-up, Matt. Some people with a close view of the situation have suggested that we will move from about 2.5% growth to 'strongly negative'. As such, I suspect the RBV's prediction is too rosy, and the ADB's post-Pam estimate may be too modest. Govt. revenues are going to drop through the floor in part because of lower levels of activity, but also because of the tariff and tax holiday that GoV has announced on all materials and equipment needed for the rebuilding phase. A mitigating factor, however, is the speed with which the private sector has coped with the disaster. Digicel, TVL, UNELCO and other utilities/service providers are pretty much back in top gear, and retailers are benefiting from a short-term boom in hardware and related goods. Even wholesalers have benefited as GoV bought out pretty much the entire stock of foodstuffs in the country. None of this takes away from your point about the impact, but it will be interesting nonetheless to see how quickly the 'bounce' starts.

Thank you for the research about the number of foreigners coming to PNG to work and invest.

I am sure most people interested in and knowledgeable about PNG Politics would have detected a number of errors when reading Professor Jan Kees van Donge’s recent article entitled ‘Peter O'Neill's statecraft: a skilful politician’; however since Stephen Howes, a Development Policy Blog editor, has basically invited me to identify some of the errors, here is my assessment in brief as follows: 1. The Professor stated: "The opposition is minute and, immediately after the 2012 election, consisted of only four seats." My response: Immediately after the 2012 election, the Opposition did NOT consist of only four seats. The Opposition, immediately after the 2012 election consisted of 17 seats. 2. Professor: “This increased when four members of Don Polye's T.H.E party joined the opposition after being expelled from the government coalition. It was striking, however, that they were very reluctant to join the opposition and defined themselves initially as being on the middle bench when O'Neill dismissed Don Polye as minister of finance." My response: At the material time, Prime Minister O'Neill did not dismiss Don Polye as Minister of Finance because James Marape was the Minister for Finance and still is the Minister for Finance. Don Polye at the time he was dismissed was the Minister for Treasury. Furthermore, Don Polye initially was silent about the reason why he was sacked and chose to stay on in government until after the UBS Deal was exposed by the then Opposition Leader Belden Namah. To my knowledge Don Polye was forced to move on his own to the middle bench, without any of his T.H.E Party members beside him, where he stayed for months (March-November) until his move to the Opposition with his remaining party members. 3. Professor: "The three ministers belonging to T.H.E. stayed on." My response: The professors’ comment implies that T.H.E party had three Ministers in government who stayed on as Ministers after T.H.E Party Leader Don Polye (Treasury) and Kikori Open MP Mark Maipaikai (Labour & Industrial Relations) were sacked, however there were four T.H.E party MP’s (and not three) who stayed on as Ministers: Deputy Prime Minister & Inter-Government Relations Minister Leo Dion, Labour and Industrial Relations Minister Benjamin Poponawa, Forest Minister Douglas Tomuriesa and Higher Education Minister Delilah Gore. Prior to this, three T.H.E Party members who were ministers had already been sacked – firstly T.H.E Party member David Arore was sacked followed by Don Polye and Mark Maipaikai. Although the member for Ijivitari David Arore lost his portfolio he decided to stay on in government by also joining PNC. Eventually after T.H.E Party acquired the distinction of possibly being the first political party in PNG to get thrown out of government (in late August/early September 2014) it seems that the remaining members of T.H.E Party had no choice but to join their Party Leader Don Polye. Five of them, including Don Polye, moved to the Opposition in the November sitting where I believe, based on legal advice (as per the Constitution & OLIPPAC), Don Polye then proceeded to have himself illegitimately elected as the Leader of the Opposition...but that's another story. 4. Professor: "Michael Somare's National Alliance also defined their position as on the middle bench when they formally left the coalition." My response: National Alliance never “also defined their position as on the middle bench when they formally left the coalition” because National Alliance never moved to the Middle Bench. National Alliance never formally or informally left the coalition. The parliamentary leader of National Alliance is Aitape-Lumi MP Patrick Pruaitch who replaced Don Polye as Treasury Minister. Former NA Leader Grand Chief Sir Michael Somare moved to the middle bench late last year at the end of the November sitting but not National Alliance. 5. Professor: “O'Neill quickly dismissed William Duma as minister of mines and established dominance in the resources sector." My Response: At the time, Hagen Open MP William Duma was Minister for Petroleum & Energy. Namatanai Open MP Byron Chan was/is the Minister for Mining. 6. Professor: "William Duma was succeeded by Francis Potape, whom Duma had succeeded in 2011." My response: The Professors comment implies that Francis Potape replaced William Duma as the Minister for Petroleum & Energy. This is incorrect. Madang Open MP, Nixon Duban took over the Petroleum & Energy portfolio from William Duma. 7. Professor: "Polye was sidelined as minister of finance when O'Neill clinched the major loan from UBS to buy the shares in Oil Search." My response: The Professor's comment is not entirely correct because Don Polye was the Minister for Treasury at the time. 8. Professor: "Most notable is the ten year prison sentence imposed on Paul Tientsen." My response: Paul Tiensten was not sentenced to ten years imprisonment. He was sentenced to nine years; however four years was suspended on condition he repays the money he was found guilty of misappropriating (by writing a foot note) so in fact he received a 5 year sentence but that’s a moot point. 9. Professor: "O'Neill has in fact taken control of the anti-corruption bodies, and that could be an important incentive to conform in PNG's political culture." My response: I believe that what the Professor stated as a fact when he claimed “O'Neill has in fact taken control of the anti-corruption bodies” is completely false. It is absolutely not true plus what were you trying to say at the end, Professor by suggesting “that could be an important incentive to conform in PNG's political culture”? I received a number of comments, publically and privately, regarding the Professor's article after I posted a link to his article. One commentator said: "As another person commented – it glosses over the facts and when it does deal with this issue of widespread and continuing allegations of corruption and the activities of the PNG authorities in regard to this its language is wishy washy. Examples: “controversial politician”. “Controversial issues surrounding predatory behaviour.” “Governance issues”. If Development Policy Blog is going to serve any purpose then let’s have the full truth and nothing but the truth. This is the article’s biggest error. It is the sin of omission and the giant one which makes it truly worthless. But there are others – and another one is an error of fact that insults everyone involved in the fight for truth and justice against official corruption. The article states that “O’Neill has taken control of the anti-corruption bodies." NO HE HAS NOT. The Ombudsman Commission remains independent. The judiciary remains independent. The vast bulk of the police force remains independent. Development Policy Blog owes them an apology. There are other equally ridiculous statements in the article, but I can’t really be bothered debating them.” Regarding typographical errors (typos) in the article I noticed only three typos. Former Prime Minister Pais Wingti’s name was incorrectly spelt "Pius Winti" plus former Pomio Open MP Paul Tiensten's last name was incorrectly spelt “Tientsen”. I could of course dispute other comments made by the Professor apparently based on his own perception of Peter O’Neill’s performance as Prime Minister but that would be time-consuming and pretty much a waste of my time. However, I will pose one more question to the Professor which maybe he can take the time later to answer: Professor: “He seemed to be in an almost existential struggle with Michael Somare in 2011-2012 during the O'Neill/Namah government. Each argued that the other should be in jail.” My response: Perhaps the Professor made his comment based on TV journalist Kathy Novak’s interview of Sir Michael Somare in which Sir Michael said “I’m not going to let it go. Peter will go to jail.” Where and when did Peter O’Neill argue or even say that Sir Michael Somare ‘should be in jail’? After Sir Michael Somare entered parliament during the political impasse and served court orders to the Speaker? Overall, I found the Professor's article interesting; however if I was to grade it for objectivity I would give him a “D” because of all the errors which I find inexcusable especially coming from a Professor of Political Science when the correct information is out there in the public domain and of course information could have been easily cross-checked and corrected in his article before publication. We all make mistakes, but I believe the Professor made one mistake too many in his article, an article which I note journalist Rowan Callick recently quoted part of in his article: 'Peter O'Neill: PNG's champion of progress' published by The Australian.

I am very passionate to learn about governance issues about Papua New Guinea and this study is a very good example of Papua New Guinean's understanding of the notion of corruption and ways we perceive ways in addressing these. ( A part of the issues with governance). I think it is something we Papua New Guinea's ourselves continue to struggle to understand and this study is good start. I had a quick read through and I think it would useful to explore further some of the recommendations made and its practicalities in PNG.

Hi Thanks for this comment. Matt's assessment is in relation to economic output not the value of damage & loss sustained - we won't have a dollar figure for that until we get the PDNA report on the 23rd. The payout is not designed to cover the cost of damage and loss, it is designed to provide a rapid injection of cash to governments to assist with the maintenance/restoration of critical services in a post-disaster scenario. And, unlike a lot of other things, the payout does not come from donors, it comes from the private sector (the global insurance market), leaving more of their funds available for other things. Governments generally self-insure when it comes to physical assets such as buildings so it would be odd for the government of Vanuatu to try and take out the sort of insurance cover you might have for your house where you would expect to receive a greater proportion of the value and/or cost of repair. Even if they did take this out (assuming it existed) it would not respond as promptly as this scheme has. As we know it is a pilot scheme so there are opportunities to refine its design and operation, including the modelling on which it is based if that is necessary. Or donors could set up a MDTF (or something similar) that can respond as quickly and to an equal or greater quantum if that is preferable, but it means they are carrying the risk that they may need to pay out to more than one country in a given period - under a scheme such as this the risk is transferred to the insurance market. For what it's worth I was just at a press conference at which the Minister of Finance made specific reference to this payout with approval and confirmed that Vanuatu would be maintaining its participation.

The article describes the nature of the PM. He is skilful by playing political parties and groups and provinces against each other. Also dangles carrots and lollies such as aged care free health or education to gain support and popularity from vulnerable majority of population... popularity policies may be a drain on the economy and cannot backfire.

Hi Tess. If the cost of the cyclone is something like $300 million, as Matt suggests in his blog today, it does make you wonder why the payout is only $1.9 million. Doesn't really seem like an insurance program, maybe a rapid early-payment scheme?

I just had a glance at the blog and I decide to post this point for you to ponder over: What you have said may be true about Peter O'Neill's political skills. But this does not show that he is truly straight. He made sure his rival candidates for prime-ministerial post are eliminated: Paul Tiensten is in jail; Beldan Namah out of the way; Don Polye relegated to opposition; Mark Maipekai thrown out in the cold; and lately Richard Maru cautioned to stay out off the limelight. O'Neill was able to get into power. The events that unfolded during the last national election saw that he made sure his electorate of "Ialibu-Pangia" was the first electorate poling took place and that he was declared winner even before any other electorate polled. So O'Neill had the upper hand in shaping the outcome of the national election that led to the formation of his government. Check out the dates and the time (---etc;) and draw your conclusion from there.