Comments

Hi Margaret - interesting post. But doesn't IFC have skin in the game as well? As a lender to the private sector in developing countries, IFC has an incentive to get a return on that investment. If donors fund IFC (through IFC advisory services) to improve the investment climate (for instance), IFC increases its chances of getting a return on its investment. Although it's a different kind of skin in the game, IFC would also face some reputational and business incentives to generate positive outcomes.

Hi Stephen, I agree it would be nice to be in top ten humanitarian donors. But where do cut further? Where does the $200m come from in an already stretched program of work? I would hope that we would not cut from the long-term efforts of building strong resilient education/health/social systems that would make the need for disaster responses less likely. I am not surprised that humanitarian assistance is popular - AusAID, DFAT and others have not really tried to make the case to the public for longer-term system building. Joel

Interesting article Paul and bang on the money for its impact on the commodity exporters who were being pumped up to increase production with a falling Kina (and at least for coffee growers rising prices due to Brazil's drought), even the larger NCM and ABX miners have not been helped with this fiat revaluation. I feel bound to clarify one point tho' "... by May 2014 a private bank could buy a single USD for K2.44 from the central bank and then immediately sell the USD to an importer for K2.86..." The BPNG maintains a Reference Rate BUT does NOT supply currency at the pegged rate. Every two weeks or so they may sell about K60m worth but this is paltry in comparison to the orders. The fact that the BPNG get on intervening at their reference rate is a significant driver as to the bank profitability in 2013 / 2014! They were advised to tender their intervention amount rather than just use their Reference Rate. The market has been consistently short of foreign currency since 2013 with the imbalance getting bigger over time. However before the June trading band imposition there was some liquidity but price uncertainty which has been swapped for near price certainty but supply uncertainty. Forwards have become progressively harder to transact and are now virtually impossible as they require the acquisition of the currency to hedge (no futures markets exist for PGK) Capex inflows have fallen, the multiplier effect of the Exxon etc capex continues to suck in imports ... and the govt's intended infrastructure spend would have cost a LOT more at the pre-Jun 4 rates ... and the LNG USD inflows will not start til end 2015. Fortunately the independent central bank's policy intervention has reduced this budgetary risk.

The first step in dealing with the 'C' issue in PNG is understanding the cultural differences, as - like it or not - when it comes to anti-corruption efforts, context is king. There then needs to be sufficient political will to put money where the mouth is and turn-the-tap-off! That being said, with 10 politicians having stood aside due to the recent NSW ICAC investigations, along with the ongoing Royal Commission into union corruption, it begs the question as to whether Australia really is genuine about the topic. To avoid being accused of "do what I say not do what I do" it needs to clean up its own act as well.

Really interesting post Margaret. I'll be a bit sceptical of the long-term positive results of E&Y's engagement, at least until I see an independent evaluation - the IFC has no shortage of positive stories. We've written a couple of posts arguing that contractors (such as E&Y in this case) have poorly aligned incentives with donors. (See http://aidleap.wordpress.com/2014/07/16/can-contractors-deliver-change-in-complex-systems-2/ and http://aidleap.wordpress.com/2013/11/12/why-the-private-sector-shouldnt-deliver-aid/). In this kind of large-scale private sector development, however, you make a good point that incentives are better aligned, due to the business and reputational risk. At the same time, so are opportunities for the contractor to promote their own interests, so it would need careful management.

Thanks Margaret for this post and I agree that the 'skin in the game' test is a useful one for establishing if and to what extent aid funding should be provided to multi-national companies. It also reinforces the importance of DFAT, ADB and others investing in understanding the contexts in which they seek to work in Pacific private sector development to ensure that the partners that are selected are the ones best place to contribute to sustainable growth in small and often fragile communities.

39 years on and our founding father suddenly admits to "mistakes" from the beginning, a human rights lawyer proposes policies indirectly opposed to democracy, the PM, senior Ministers and Public servants are centre of many serious controversies and a huge K15-K17 Billion debt...let us celebrate what little time we have before 2017, because if nothing changes we might as well migrate somewhere else for shelter. The deaf and dumb have an excuse to be tolerant, but what about the average person out there, when our representatives are clearly oblivious to our concerns and immediate needs, when they are aloof to the attack on our democratic systems, when the executive body has ears only for major corporations and their interests... Happy 39th year of independence Papua New Guinea, let us celebrate how the nation has survived under ruthless crooks and we pray for the day when independence for our country is less tainted by political greed and incompetence!!

Thanks for the wonderful comments and insights put forward. It is of paramount importance to enhance, empower and upgrade the skills of our CHWs who tirelessly work in the rural health facilities with their limited knowledge and skills. It is also appreciative to see the great effort and aid from the Australian Government to facilitate maternity up-skilling studies for CHWs in PNG. Some hospitals have executed the plans and utilized the necessary funds for such trainings. Kundiawa General Hospital and Mt Hagen are two typical examples that are currently undergoing this maternity up-skilling program for CHWs from the rural health facilities and hospital as well. This I think is a way forward for all health personal to prioritize maternal child health issues and to further reduce the maternal and neonatal morbidity and mortality. Thanks, Nancy Geregl Midwife (Kundiawa Gen. Hosp)

Not responding to any comments so far on having an opposition I would like to draw your attention on the issue. PNG politics does not fit into any of the known and practised political systems in the world! We can say PNG practices a Westminster type but if you look at it closely and compare the fundamentals of the approaches PNG goes through from election process in choosing a leader to the way parties form governments, it seems a joke! An elected politician is a leader before and during the campaign period but once s/he gets elected s/he is nothing but a donkey dragged along by an invisible force so this so-called leader loses all thinking power and the dignity s/he has as a person and a leader. Who can admit the errors made in the past other than the father of the nation himself, Honourable Grand Chief Sir Michael Somare? That is our hint! PNG needs to go back to its roots and reassess the mistakes and rebuilt its foundation to be a vibrant Westminster democracy! The system at the moment is based on Melanesian ideology which is based on 'big man', chieftainship, Maimai, the list goes on. There is a talk about who should get into Parliament at the moment; Bigmen/women? Businessmen/women? Grassroots? Educated elites? Who?... Back to the present about operating a Westminster type of government without opposition by my Governor, Honourable Powes Parkop. I want to pause a question to him with due respect. So far in the current Parliament, which MP from the government ranks has the guts to speak out on sensitive issues apart from the three brave opposition MPs? Democracy cannot prevail without an opposition in PNG, period!

The idea to have direct political control of the IDA as indicated in the draft IDA Act is not good because politicians and the NEC will manipulate IDA to suit their interest, thus, undermining the effective operation of IDA and efficient allocation of resources to address national infrastructure development needs based on sound engineering and economic judgements or justifications.

P.S.: A far more scandal-prone area may be the opaque US financing of think tanks abroad: http://www.publishwhatyoufund.org/updates/by-topic/ngos/donors-should-reveal-their-funding-think-tanks-abroad/ See also: http://onthinktanks.org/2014/09/10/think-tank-accountability-are-they-really-just-hired-guns/

Interesting and persuasive. Two caveats: 1. CGD's transparency did not facilitate a beat-up. Rather, it was the transparency of Norway that enabled the NYT journos to get hold of what they saw as a smoking gun. CGD's transparency actually worked in its favour, as it enabled CGD in its statement to convincingly argue that it never felt it had anything to hide. If CGD had concealed its funders (as other think tanks do) and then the NYT had dug out the Norwegian documents revealing a "secret link", everything would have looked far more suspicious. Contrast the rather muted criticism of CGD by commentators since the NYT piece was published with what happened to other US think tanks in 2013: http://www.transparify.org/blog/2014/4/29/secret-think-tank-funding-and-reputational-risk 2. The danger of think tanks breaching the Foreign Agent Registration Act has in fact been flagged in the past. See for example the link pasted above, and also the four annotated bibliographies compiled by Transparify (the initiative I work for): http://www.transparify.org/publications-main/ Foreign bodies' funding for US think tanks has cropped in the news regularly over the years, and will doubtlessly continue to do so in the future. Transparency, not opacity, is the best way of managing observers' legitimate concerns: http://www.huffingtonpost.com/till-bruckner/think-tanks-funding_b_5797832.html BTW, a great compilation of all reactions to the NYT piece to date can be found here: http://www.thinktankwatch.com/2014/09/think-tank-funding-transparency.html