Comments

Hi Lawrence, Really interesting post, thanks. It's such a complicated issue. In Indonesia, I talked to many people who saw eating at Western fast food chains as a kind of aspirational goal and marker of having 'made it' as middle-class. The 'cool' factor is reiterated by the powerful marketing prowess of these companies. There's also the issue of the cost and accessibility of healthy food -- packet noodles are one of the cheapest things around, laden with who knows what really. Even traditional drinks in Java are just packed with sugar. The domestically-manufactured junk food market is huge, so it isn't just those brands from the West causing problems. And street food (even vegetables) is just soaked in cheap palm oil. There's also so much misinformation in the community--I read a news story in a local paper where a mother listed chocolate milk as a health food and in another story about the price of subsidised cooking oil, someone lamented that they couldn't put enough oil in their fried noodles for them to be 'healthy'. And as someone who is overweight myself, the amount of times someone in the street grabbed my arm fat and said "sehat sekali!" (very healthy) in the years I was in Indonesia, particularly when in villages etc, was too many to count! (Funnily enough I never really felt it was a compliment...). Cities like Jakarta are completely hostile to anyone who might want to walk or cycle (except on car-free day), and malls are prioritised over public open space. When you think about the reforms needed in Indonesia to address this issue, it's even more staggering when you think about the steps still needed on other significant public health issues, like smoking. This ties into so many other development challenges, like addressing inequality (particularly the rural-urban divide), sustainable urbanisation, adequate public infrastructure and planning, regulation, education, health service provision, and more...

The IDA and Support for the 2015 Planning and Budget Process The IDA Project Office is participating in planning for the 2015 with the Transport Sector under the leadership of the Department of Transport (DoT). Initial advice has been well received by the Sector. Initial advice has focused on strengthening the planning for and justification of projects through the adoption of a Business Case developed by DoT. An institutions planning and budget process will be strengthened by the development of key sectoral and institution infrastructure strategies and plans, similar to the National Transport Strategy (NTS) and Medium Term Transport Plan (MTTP). The IDA Project Office notes that whilst the Transport Sector is well served by such key documents that inform and align the government’s stated priorities, other sectors appear to lack such documents. At present, the Government does not have an independent ‘technical’ authority to provide guidance on its infrastructure needs and priorities and to assess individual infrastructure project proposals. The proposed IDA may be able to provide such support and reinforce the infrastructure focus of those bodies involved in planning and budget decisions. The IDA Project Office notes that there is some concern with the number of projects received by the Government and the quality of assessment in formulating submissions (2014 Budget Volume 1, p73 refers). As a way to improve this process, it is further noted that the Department of National Planning and Monitoring (DNPM) proposes to introduce a two stage project approval process: (i) The first stage will involve ‘Initial Concept Approval’ where the first year is to ascertain a strategic business case for the project proposal. This will include initial justifications, indicative costing and may request the funding required to develop a detailed business case; and (ii) The second stage will involve ‘Final Government Approval’ where a detailed business case including full justification, specifications costs based on tender quality prices is assessed by Minister’s and considered in the budget process for final government approval. Dow, including its IDA Project Office seeks to be involved in discussions regarding the implementation of this important proposal. The IDA Project office also notes that approved infrastructure projects are to be undertaken in consultation with DoW (2014 Budget Volume 1, p75 refers) and that agencies may only seek private sector implementation or supervision involvement where DoW agrees it has capacity constraints and is unable to assist. DoW, including its IDA Project Office seeks to be involved in discussions regarding the implementation of this important proposal. The current Budget definition of ‘infrastructure’ appears to be narrow and does not adequately reflect either the quantum or value of all ‘infrastructure’ projects funded in the 2014 Budget. It noted that the value of the Capital Expenditure Component of the National Budget is K 7.471 billion. Perhaps the IDA definition of infrastructure is more appropriate. The Government’s procurement process needs to be revised and strengthened as very significant delays have been and are being experienced by DoW and other institutions which is delaying timely implementation of its infrastructure projects. Such delays are not acceptable. It is noted that the Central Supply and Tender Board (CSTB) is required to provide a set of clear guidelines for Departments and agencies seeking approval for centrally coordinated tender processes and appropriate formal undertakings to specify the maximum length of time it will need for its deliberations at each stage of the tender process (2014 Budget Volume 1, p77 refers). DoW, including its IDA Project Office seeks to be involved in any workshop regarding the development of such guidelines. The current review of the Government of PNG public procurement system, to which DoW has contributed, may provide for some longer-term reform and strengthening of this process. DoW, including its IDA Project Office seeks to be involved in this important review.

While I agree in principle that small remote economies suffer diseconomies that hinder trade, I'd also note that Winters (including in collaboration with Martin) excludes Australia and New Zealand regularly from his data as we are outliers - in other words, small remote economies that shouldn't be able to trade effectively, but do. When all things are held equal, remoteness is going to stop trade every time. But all things are not held equal and good policy, people and resources in a small remote economy can overcome distance - as Australia proves. Not much comfort to Kiribati, perhaps, but there is one entrepreneur there trading successfully in luxury yachts, so we shouldn't write industry off anywhere - just recognise it's a hard(er) slog.

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?