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This debate and what Minister Julie Bishop wants to do, needs to go beyond the cosmetics. First, there needs to be an acknowledgement of the horrendous exploitation of Ni Vanuatu, Solomon Islands and other Melanesian people ("kanaks") who were enslaved to clear the bush for the Queensland plantations a hundred years ago, and then, those who survived, were ignominiously expelled on racist grounds out of Australia (there is a great ABC documentary on this, airing in Fiji, over and over). It is their descendants who are now fighting for a "seasonal worker scheme" back to Australia. The Seasonal Worker Scheme, while to be welcomed, has to be on a large enough scale to make the inevitable horrendous costs of administration (more jobs for the boys) worth while. As for the 100 places for "holiday workers" supposedly being made available to PNG citizens, that is a bit laughable, compared to the 600,000 or so back-packers from Europe, who are hardly the poverty stricken people from the Pacific that need such work. Out of sight in this debate is the elephant in the room that hardly anyone talks about- the total failure over the last ten years, of Australia and NZ to push the Pacer Plus negotiations, under which many of these issues could have been consistently and sustainably integrated in a binding trade agreement, not subject to occasional lobby pressures from unions at election times, or ministerial whims. Of course, a lot of hot air (and work for many) continue to be generated about the "Pacific Plan" (read the recent Review Report).

This survey may result in some interesting insights and results, but to draw conclusions from such a survey about aid workers in general would be totally unsound. Given that aid workers choose to work in this industry not just for some noble humanitarian purpose, but also for purely selfish reasons- such as getting a foot-hold in the Third World; then with the experience under the belt, working for some regional or international organisation at some massive tax-free salary not available to them in the metropolitan labor markets. Which of the latter group of aid workers are likely to respond honestly to your survey? If your objective is to obtain solid information that can be generalized to the aid industry, perhaps the researchers should do the difficult slog of getting a good representative sample of the aid industries (countries) they want to learn about, and do a survey of a truly random sample of workers (at different levels) in these selected industries. The results might then be worth reading.

Hi Dr Samiak I am the Project Manager for our PNG PEPE Project and think I can help answer your questions. Medical supplies can get to remote health facilities in PNG in one of two ways. The first is through medical supply kits, where centrally funded contractors are responsible for distributing these kit sets to all health facilities across PNG. This includes even the most remote aid posts, as in recent years, the contractor would only get paid if they took a photo and obtained a GPS reading from the site where the kits were delivered. This is known as the ‘push’ system, as it should provide health facilities with their basic medical supplies. The second way for getting drugs to remote health facilities is through Area Medical Stores. This is also known as the ‘pull’ system, whereby health facilities order drugs based on their requirements. Provinces are funded through the health function grant to pay for the costs of distributing ordered drugs from Area Medical Stores to health facilities. Often provincial and district health officials will have access to this funding as well as vehicles to assist with distribution, however some provinces allocate this funding directly to health centres who are then responsible for pick up and deliver of drugs to remote aid posts they may manage. I think it is fair to say that the ‘pull’ system requires significant strengthening to deliver medical supplies more reliably. This is why the medical kits are so important for remote health facilities. Hope this helps to answer your question. Colin

The IDA Project Office has achieved much since it was formed in early 2013. These achievements include: (i) transfer of the PPP Transaction Office from Department of Transport to DoW; (ii) development of a Budget & Work Plan (and securing funds under 2014 Budget); (iii) establishing an IDA Policy Forum which meets regularly; (iv) developing a Web Site (www.idapng.org); (v) visiting similar institutions and reviewing legislation; (vi) developing an IDA Policy Paper; (vii) developing Drafting Instruction for the IDA Bill; (viii) developing a Draft IDA Bill; and (ix) developing Explanatory Notes to Draft IDA Bill amongst others. The IDA Project Office and DoW have consulted widely with both government and private enterprise stakeholders on the IDA and related issues. A number of discussions have been held with key IDA stakeholders about specific issues including discussions to facilitate understanding of the impact on specific stakeholders, specific information and documents have been provided to allow the issuance of the requested Certificate of Necessity and specific sectors have been briefed with regards their requirement to commence long-term infrastructure planning. The IDA Project Office has participated in planning for the development of the 2015 Budget and briefings in which IDA was a specific issue, including the recent PNG-Australia Transport Senior Officers Meeting held in November 2013, the Transport Sector Coordination Monitoring and Information Committee and various CMIC Sectorial Committees. With regards the 2014 Budget, the IDA Project Office has identified over 50 ‘strategic’ and/or ‘high risk’ infrastructure projects that may need to be overseen by the proposed IDA. These projects are to be delivered by 19 different government institutions including the Departments of Planning, Finance, Treasury, Justice, Police, Communications & Information, Education, Health and Works as well as by the Office of Higher Education, Port Moresby General Hospital, NCDC, PNG Ports, IPBC, National Airports Corporation, PNG Power, National Museum & Art Gallery and the Office of the Coastal Fisheries Development Agency. The infrastructure projects include the construction of sporting venues and residential areas for the South Pacific Games 2015, construction of Multi-Departmental Office Accommodation and public servants house, Parliament House Maintenance, design and maintenance of Court Houses, construction of school infrastructure and the rehabilitation of higher education institutions, the Special Economic Zone - Sepik Plains, the Pacific Marine Industrial Zone, the redevelopment of hospital infrastructure, electricity projects for PNG Towns', water and sewerage upgrades, new roads and bridges and road and bridge maintenance, the International Conference Centre and the construction of wharves and jetties. The cost of these infrastructure projects is over K4.1 billion with funding coming from a number of sources including the Government of PNG including the Tax Credit Program, funds from Esso Highlands and Oil Search and a combination of Grants and Loans from a number of international development partners including Australia, Asian Development Bank, China, JICA and World Bank. It is noted that many of the infrastructure projects identified in the 2014 Budget are components of multi-year projects and as such, if the total project funds for each project had been identified, the IDA List for 2014 would have considerably increased in both the quantum and value of infrastructure projects. Details of these 50 ‘strategic’ and/or ‘high risk’ infrastructure projects that may need to be overseen by the proposed IDA in 2014 are on the IDA Project Office Web Site (www.idapng.org).

This is a great report. The graph shows the supply of medical supplies to Area medical stores in Provinces and then to major distribution points to health facilities in provinces. However, it does not show what happens from then onwards. How should or does the supplies get to the remotes health facilities, eg Aipost in the remote areas of PNG? Who is responsible for this to happen? Is it the responsibility of the health worker at the aid post or other people who care for the health to the poor remote people?

The soul of this Project, the Infrastructure Development Authority (IDA), is the Alotau Accord whereby all Government Leaders who make up the present coalition agreed to and accepted 78 Key Statements underlying their Vision for improvement in government services delivery. The primary force behind the Alotau Accord was the desire to lift Papua New Guinea (PNG) from the all too prevailing state of inaction, stagnation and total deterioration of infrastructure and the lack of an effective delivery mechanism for government services. Under the Alotau Accord, the Department of Works and Implementation (DoW) was tasked with establishing an IDA to “take charge of overseeing major transport and public infrastructure projects for the next five years. The Authority will mobilise and negotiate financial resources and technical expertise.” Operationalisation of the Development Fund under the Sovereign Wealth Fund (SWF) also requires the establishment of an IDA in accordance with the Alotau Accord. Establishment of the IDA is a Key Performance Target for DoW. At present, the Government does not have an independent ‘technical’ authority to provide guidance on its infrastructure needs and priorities and to provide assessment of individual infrastructure project proposals. The DoW has formed a small IDA Project Office that has led the design of the IDA and of a Bill to establish it. The eestablishment of an IDA Project Office under a full-time, senior and experienced Government officer provides a single-point of focus for the coordination of all IDA issues and brings together all institutions and individuals currently involved in various aspects of establishing the IDA and other relevant issues and projects. Initial IDA staffing needs have been identified and all staff will be engaged through market mechanisms. DoW received funding for the establishment of the IDA under the 2013 Budget. Under the 2014 Budget, an allocation of K5 million has been included under Treasury. As DoW remains responsible for the establishment of the IDA, these funds are to be transferred to DoW. A number of former senior PNG government executives have been engaged to facilitate interaction with Central Agencies and various stakeholders and to advise on key policy positions. Detail of these engaged executives is on the IDA Web Site (www.idapng.org). Two key Discussion Papers on the IDA concept have been developed by International Development Partners. DoW has held a series of meetings with key IDA stakeholders at both Minister and Secretary level and has facilitated a regular forum with key government and other stakeholders where IDA and related issues have been discussed. Stakeholders include the IDA Project Project Office, Chief Secretary and NEC, Department of Treasury, Department of National Planning and Monitoring, Department of Education, Department of Health, Department of Public Enterprises, Department of Transport, Department of Works, Department of Commerce and Industry, Central Supply and Tender Board, Independent Public Business Corporation, SWF Implementation Secretariat, State Solicitor, Legislative Council, National Roads Authority, National Airports Corporation, Civil Aviation Authority, PNG Ports Corporation Limited, PNG Business Council, Manufacturers Council of PNG, PNG Sustainability Development Program and Representatives of key Donors in PNG including: Asian Development Bank, Australian Agency for International Development, Delegation of the European Union, Japan International Cooperation Agency and World Bank have participated in the stakeholder forums. DoW has participated in and updated participants in a number of fora including an IDA Stakeholder Workshop chaired by Department of Prime Minister and Cabinet with Treasury and the Asian Development Bank, the National Working Group on Business, CIMC Sectoral Committees’, a recent IPA Seminar, the TSCMIC and the Institution of Engineers. Key government officers have been briefed on the IDA concept. A number of institutions similar to an IDA have been reviewed and strengths and weaknesses identified. A potential strategic infrastructure project governance mechanism, the ‘Gateway Review Process’ has been identified and examined to assure strategic infrastructure project delivery. A number of key process capacity limitations have been identified that may impact the design, establishment and operation of the IDA specifically relating to the Governments strategic infrastructure project planning, procurement and contracting and delivery processes. A number of government and private sector institutions have expressed public support for the IDA concept and its establishment. The IDA is an attempt to take ownership of NEC Decisions on improving the social and economic well-being of the people seen from the angle of infrastructure project procurement and implementation in an efficient manner, on time, within budget and of the quality or standard required and all done professionally by experts in the particular fields and done in a manner where there is no compromise on transparency, accountability and sound business practice. IDA will take ownership of NEC decisions to implement strategic infrastructure projects specifically: • to oversee the procurement and implementation of strategic infrastructure project which has a capital investment value of K50 million or more or such other projects as nominated by the National Executive Council as a special project requiring to be overseen or coordinated by the IDA; and • to secure the efficient, effective, economic and timely planning, co-ordination, selection, funding, implementation and delivery of strategic infrastructure that is required for the economic and social well-being of the community, and • to ensure that decisions about strategic infrastructure projects are informed by expert professional analysis and advice. Infrastructure for the purposes of the IDA includes all structures including, for example telecommunications, transport, water, power, education, health, etc. A project includes the design, construction, development, financing and delivery of new infrastructure and the rehabilitation, modernization or expansion of existing infrastructure.

Along with many others, I do think there are significant opportunities for developing niche trading opportunities in Pacific island countries, particularly in the export of high value agricultural products. However, I also agree that the Australian government needs to prioritise domestic legislative and policy changes that would enable greater numbers of Pacific islanders to work in Australia on a temporary or seasonal basis. Perhaps foremost in this regard would be a reconsidering of the incentives provided for ‘backpackers’ to work in rural areas in order to extend their visitor visas. Repealing these incentives could provide rural producers in Australia with a more productive workforce and increase remittances to island states. There is no contradiction between the policy priorities of pursuing niche trading opportunities and increasing regional labour mobility, for they stem from the same insight, namely: that many island states (and more isolated islands within the geographic territory of Pacific states) face permanent constraints due to factors of economic geography that undermine their ability to take advantage of international trade. Therefore trading opportunities need to provide ‘market based rents’ or ‘extra-ordinary profits’ simply to compensate for the cost-disadvantages of island-based production. Where such niche opportunities do not exist, or where they fail to provide economic opportunity sufficient to the needs of growing island populations, metropolitan states like Australia and New Zealand should help island populations to earn incomes abroad, particularly as regional labour mobility is mutually beneficial for those metropolitan states in any case. These arguments have been put forward by many. Winters and Martin’s 2004 study ‘When comparative advantage is not enough: Business costs in small remote economies’ remains a key text. It seems to me that the tragedy of much ‘aid-for-trade’ is that it is directed toward engagement with the regulation of trade – helping Pacific states to understand and implement the disciplines of international trade law and negotiating new trade agreements – instead of being directed toward the development of new trading opportunities which ultimately might be of benefit to Pacific island communities.

Indeed, I think this is a rather long winded way of saying what we already know and that is good people make for good projects. It would be interesting to see how flexibility and changes to frameworks have changed over time and how that may have affected outcomes,

Farley and Catherine, I'm interested in your support for bulk procurement of drugs. As you point out, it isn't a new initiative, having been the subject of many meetings/discussions in the 1990s and 2000s. A proposal for bulk procurement of drugs prepared by WHO was actually rejected by Pacific island Health Ministers at the 2009 Madang meeting, on the grounds that there was limited evidence regarding its benefits. My understanding was that one of the barriers to bulk procurement of drugs in the region is that PICs already purchase drugs at low prices, meaning that the economy of scale benefits of bulk procurement, in terms of price reductions, would be limited. That argument was made by a 2009 WHO study into bulk drug procurement – “Feasibility study on pooled procurement for Pacific island countries” – which found that “current prices (in PICs) are quite competitive and already very low”. It also cited previous work that had found prices for a basket of pharmaceutical products in Solomon Islands and Vanuatu were competitive with international prices, being 90% those paid in the eastern Caribbean (where a bulk procurement scheme is operated by the Organization of the Eastern Caribbean States). The report was still supportive of bulk procurement, but on the ground of quality assurance and reduced administration costs, rather than discounts achieved through bulk procurement. I'd be interested in your views. Do you consider non-financial benefits from bulk procurement as more important than cost savings associated with economies of scale? Do you know of any more recent work that has examined the cost-benefits of bulk procurement in the Pacific?

Hi Garth, Good questions - but I don't have good answers! Looking at that annex, I am not qualified to assess validity of their model but I suppose with enough assumptions you can get any model to say whatever you want... Some earlier (2004) peer-reviewed analytic work (see <a href="http://pubs.aeaweb.org/doi/pdfplus/10.1257/002205104773558056" rel="nofollow">here</a>) is a bit less sanguine. But to my mind, whether or not the $8 figure (or the $20 figure the OECD also cites) is correct, the issue is whether trade has any benefit for the poor. The $8 figure signifies an increase in exports - which is nice - but that figure does not address to whom the benefit of that $8 is accrued. I accept that in the long-term, increase in exports and trade are likely to have an overall economy-wide impact that will likely help some of the poor. But those links to me need more analysis and explicit strategy to make real. Joel

Thank you Joel for starting this discussion about Aid For Trade. Given the importance of maximising aid effectiveness and the return on tax payer funds, has anyone seen clear evidence that aid for trade does generate economic growth and jobs in developing countries? I notice that the Foreign Minister recently stated in her opening address to the ANU development policy workshop that "For every single dollar invested in Aid for Trade, an estimated $8 in additional exports will be created in developing countries". How confident can we be that the econometric study underlying this statement (see Annex F of OECD 2013 Aid for Trade at a Glance) is adequate to make this sort of statement? I thought that donors had been giving aid for trade in the Pacific for many years - have the returns been this high?

Thank you Bronwyn. I think the PHAMA program is a good example of regional cooperation to help producers in island states take advantage of potential commercial opportunities. I note with interest the development of national 'Market Access Working Groups'. I think the philosophy behind them is sound; as a mechanism allowing the domestic private sector to drive market access priorities, and as a means of stimulating a working relationship between growers and government. I look forward to reading further on the Working Groups. It seems to me that the work of the Secretariat of the Pacific Community (SPC) "to provide support for biosecurity related market access issues at the regional level" is a regional public good that should be supported on an ongoing basis. On the face of it, pooling the highly specialised expertise needed to help island states maintain compliance with quarantine measures in destination markets (in areas such as entomology and plant pathology for example) makes a lot of sense.