Comments

I agree completely that formality for its own sake brings few advantages. Formality brings with it access to the legal system and access to finance. If the legal system is opaque and costly and if access to finance is not possible, formalizing is not a sensible course of action for those in the informal sector. It is one of the reasons that the cost of formalizing in the Doing Business Indicators (while also often inaccurate anyway) is an indicator that by itself does not make a lot of sense.

Thanks Grant for your excellent blog. I think your analysis is solid and well-founded. The 'song and dance' you mention reminds me of the 'dog and pony show' idiom. That is, a highly promoted, often over-staged performance, presentation, or event designed to sway or convince opinion (http://en.wikipedia.org/wiki/Dog_and_pony_show). Given your analysis, the big question is "what is the appropriate role for the Australian bilateral aid program in promoting good governance in PNG?" Can anti-corruption programming in a bilateral aid program like Australia / PNG maintain its coherency and integrity if it is perpetually playing second fiddle to the main game of preserving power relations? Or is the aid program better off sticking to delivering public goods like health and education, whilst trying its best to minimize fraud, and not wasting its time and money with good governance promotion? Will history judge good governance programming to be largely a 'dog and pony show'? Or are we getting better at it, learning our lessons, and reaching higher levels of effectiveness? Do you think we should continue to call donor technical support for state agencies in PNG 'promoting good governance', even when the political commitment isn't there? Or should we adjust our nomenclature to the apparent reality? Would the good governance agenda be better served if we removed it from the structural shackles of the bilateral program, and handed it over to a more 'independent' body? Or is that a futile exercise that will end up in the same place? Your blog provokes some difficult questions, but certainly these questions go to the nub of the issue of the effectiveness of the Australian bilateral aid program in furthering human development in PNG. Surely, a worthwhile exercise.

There is a fine dividing line over publically discussing the policies and practices of another nation without these comments coming back to bite you in the bum. Just look at Clive Palmer's latest outburst about the country who helped make his fortune. Look at the reaction in some quarters about Tony Abbott's recent public comments about the upcoming Scottish referendum. The Australian government's responsibility to the taxpayers who elected them and who provide the aid monies is however not to be taken lightly. Neither is our national interest. PNG like Indonesia, is a sovereign country. There have been questions raised about Australia funding schools in Indonesia that actively promote Islamic fundamentalism. Is this in out national interest? Australia cannot publically support the corrupt use of our overseas aid and Julie Bishop's decision to withdraw funding of the PBG pharmaceutical purchase and distribution operation after two very successful years was based purely on stopping Australia funding continuing corrupt practices of the PNG government. That decision should send a clear message to the PNG government yet look what happened? Those responsible for public health (read PM, Minister and Departmental Head) simply ignored the decision and went ahead with what they wanted to do anyway. PNG Minister Malabag, who personally intervened to ensure the pharmaceutical tendering process was corrupted was a guest speaker at a recent conference in Melbourne. Did anyone at the conference think or want to challenge the Minister about his decision over the PNG pharmaceutical contract as he strutted the stage? Behind closed doors however is a different ballgame. Who knows what is said between our Foreign Minister and other national governments? The problem is simply one of leverage. Australians are clearly not seen as having much due to our past history of non accountable generosity to others. The clear problem is not what we say but what we do. The Chinese are reportedly able to gain significant leverage in the Pacific by picking up projects others don't fund. Even New Zealand has a better 'bang for their relatively small buck'. Perhaps the time has come to be 'no more Mr Nice guy' but that has to be behind closed doors. The public must be given no chance to actually find out what has been said. The only way the public will therefore ever find out there has been a change in the wind is through results then starting to happen. It is axiomatic that weak kneed apologists will demonstrably never be given any credence where thieves, bullies and the corrupt are concerned.

Likewise, lets not jump to conclusions on the riches of formalizing business. David McKenzie from the World Bank has gone here and the record is mixed at best. See here - http://www.worldbank.org/en/news/feature/2013/07/11/Rethinking-Informality-What-is-Keeping-Firms-from-Going-Formal

The recent events project the ‘c-word’ both as a sword and a shield. It seems the expectation has always been among many people – “please help,” either it be aid or interventions in the affairs of rule of law. But as Australia realign its commitment to confront its own challenges, the Pacific states are awaken to a new reality – the limitations of Australia’s commitment to their needs. The task then falls on the frail domestic institutions. The recent actions by the Ombudsman Commission and the Courts shed some hope but to what extent remains to be seen. Australia may have a duty but it would be a mistake for the people of the Pacific to rely on that assumption.

Thanks Grant. Missed the Manus reference first time round. S

Hi Sinclair, As we mention, Manus is one of the reasons why Australia found it difficult to speak up against Parakagate and the disbanding of Taskforce Sweep. PNG's economic boom also reduces Australia's leverage. Still, Australia needs to find ways to speak up about corruption at this critical time. With a surge of money soon to flow to the government, the stakes are only getting higher. Cheers G

In considering Canberra's 'deafening silence' over the Parakagate scandal and O'Neill's extraordinary and profoundly damaging antics to evade justice and subvert legal process, there is a rather prominent elephant in the room that is not mentioned. Namely, the Australian-initiated detention centre in Manus. O'Neill is only too well aware of the leverage this provides him in dealings with Canberra and has played - and will continue to play - this gift to maximim political advantage. A vivid illustration of one area of Australian policy (border control) undermining another (anti-corruption in foreign/aid policy)

Thanks for this post, it is important and timely. Australia's 'deafening silence' in this space mirrors equally concerning non-engagement in other areas where supposedly 'Australian values' are being disregarded, including (but not limited to) the dismantling of the rule of law in Nauru.

Hi Louise, Great points. I fully agree that the delivery of scholarships hasn't really seen much innovation. Universities are comfortable and DFAT hasn't pushed innovation as hard as it could. Perhaps there is an opportunity now. Making sandwich courses / shorter placements in Australia / ongoing support in country part of the scholarship program and requiring Universities to innovate and partner would be challenging but might strengthen scholarships for the longer-term. The Colombo Plan is picking Asian Universities where Australian undergraduates can study and earn credit so some type of similar model between Australian Universities and LMIC Universities should be feasible. Joel

Hi Tess, Very good point. I definitely agree that creating a community of practice in country should be encouraged. DFAT is already doing that in places and is putting lots more effort into alumni networks than they used to. I also think that some structured model of ongoing engagement (supported by some funds) could ensure that those links between scholars as well as with Australians are maintained and deepened. In our qualitative work we have heard lots of goodwill towards Australia but that alumni are partnering with European or American institutions in their policy and research work. Joel

Hi Ashlee, Really great point about the impact of scholarships on countries with limited human capacity. The hope is that the long-term benefit outweighs the short-term loss of skill but the evidence on that has not really been compiled. And your point about family responsibilities and gender aspects of scholarships is critical. The qualitative phase of our research (ongoing) is very seriously looking at that angle. The choices that some women (and men) take to leave young families at home to come to Australia must be incredibly difficult. Going out of our way to support those families would be expensive but might broaden opportunities for women. It of course also suggests that in-country opportunities be opened up. Joel