Comments

Thanks for this Grant, it's great to learn more about the work you've been doing in PNG. Although ICAC only gets a brief mention here I would like to pick up on that. I actually have some quite strong reservations about the use of a mechanism such as this and I think what you have presented here actually bears some of them out. I think we need to address what the market failure is that an agency such as ICAC can address. If it is a failure of process then I don't believe introducing another component into the process will fix that and is likely to make it worse. If it is a failure of acceptance/understanding/credibility - which your work indicates may be the case in some instances then I think it is very difficult to create a state-based/derived institution that can overcome these barriers. I'd love to hear more about what your thinking is on this.

Thanks for this Joel. Another aspect of decision-making about funding to multilaterals relates to influence. By increasing its contribution to World Bank, ADB & IFC funding Australia has been able to influence programming decisions within those organisations, which has led to increased engagement in the Pacific island region - so how and where the cuts come in relation to multilaterals needs to be considered in conjunction to how and where cuts come in bilateral and regional direct funding arrangements to minimise the risk of a double hit to the overall financing.

Grant, Thanks for the article. I may in a way be "taking the bait", but I have to disagree with the notion that corruption can be beneficial. The notion that corruption can help as long as it benefits marginalised people seems to ignore the fact that every act of corruption contributes to the shaping of incentives. Specifically, the more dominant corruption is as the way of doing business in a society, the more incentive people will have to rent-seek, rather than work hard, invest or innovate. The focus group respondents simply highlighted that corruption benefits those involved. In my opinion their sympathetic responses to the petty forms of corruption probably stems from the fact that they can relate closely to those that benefited from these corrupt acts. However I feel compelled to speak for the "silent masses" that your respondents did not relate to. These are all other people in society, who did not directly benefit from the corrupt transaction, but who are negatively affected by the perverted incentives (e.g. non-merit-based allocation of jobs, resources and votes) to which it contributed and which reduce societal productivity. Crucially, societal norms and the effects of reduced productivity tend to stick around, meaning that a sizeable portion of the silent masses are constituted by future generations of PNGeans. Although corruption benefits those that participate in it, a micro analysis of corruption is inadequate because it is necessary to consider the overall consequences of each corrupt act, in the present and the future. I think we need to keep the message about corruption clear.

Nice of you to recognise Australia, Midnight. But I think you are wrong about Australia being the largest regional donor, unless it has overtaken Japan.

Mr Xanana is the one who must take the blame for the whole range of issues in Timor Leste. After more than 7 years in office he has spent more than 7 billion dollars, but still do not see any concrete results. Read this: For a wealthy nation such as Australia, it is a noble thing to do in helping third world countries like East Timor. Unlike other underdeveloped countries around the world or in our own South Pacific region in particular, East Timor is bestowed by God the abundance of natural resources, most notably are oil and gas resources. This tiny nation is receiving average 270 million US dollars every quarter in revenue from its oil and gas resources. Probably not many countries in the world (of East Timor’s size) that have similar fortune as East Timor. Let us compare East Timor with its peers in the South Pacific region such as Fiji, Vanuatu, etc. To my best knowledge, unlike East Timor, Fiji and Vanuatu do not have any significant mineral resources such as oil and gas that East Timor has. They rely much on tourism industry. But they are doing well. They progress and improve. East Timor’s annual budget is 1 billion US dollars. The question is that with this financial position, does East Timor qualify or deserve to receive foreign aid of this kind? No. East Timor does not need this kind of aid. Ideally, East Timor can support itself financially. Unfortunately, what we have been seeing until today is that after 14 years of independence, instead of moving forward, East Timor is moving backward. Let us simply count from the period when Mr Xanana Gusmao came to office as prime minister. He has been in office for more than 7 years – which means that more than 7 billion US dollar have been spent, but there is no a concrete result whatsoever. 1.5 billion dollars for 2014 budget will go down the drain. Mr Xanana's both terms in government has never been effective anyway....Billions of dollars just wasted, melted away and went down the drain. Instead of moving forward, East Timor is moving backward. Bad roads, bad hospitals, schools, bad electricity, no running water, just to name a few and you name it. Mr Xanana even has no idea and vision how to patch up a pot hole let alone to build a new road. Roads built during the Indonesian era have turned to dirt road beyond recognition and incredibly muddy during the wet season and slippery and so forth. Just as an example of comparison, during the Indonesian era, when people travelled by a public bus from Dili to Suai via Ainaro - took around 6-7 hours to get to Suai - that already included meal and toilet stops. But now it takes 15 hours from Dili to Suai. What a huge setback! What Xanana has been saying all along to tackle corruption and mismanagement and those kinds of things is simply rhetoric. Back in 2009 in his speech, Xanana was saying “if TL’s petroleum is wisely and transparently managed, it will allow us as a sovereign nation to use our own resources to improve our infrastructure, invest in health and education and grow our economy so that we can build our country and provide a brighter future for our children”. This is totally rubbish. Xanana does not even have the capacity to keep Dili clean. It is dirty, filthy, stinky, you name it let alone to build the country. Just look at the so called Dili international airport. East Timor's condition will never improve despite East Timor is among the tiny nations that earn large amount of cash revenue from its oil and gas resources. The bulk of East Timorese do not get any benefit from their natural wealth and still and remain live under the poverty line. Mr Xanana only enriches certain class of people which are the contractors that secure government or public projects. Even though they – the contractors – do botched job, poor quality of a project and even an unfinished project, they manage to get payment from the government because they bribe, connive and conspire with government authorities. They carve up the money among themselves. Then they spend the money for luxury cars, building private villas, overseas trip/holidays, purchasing properties overseas such as in Australia, Bali etc. East Timor is one of the tiny naturally rich countries but will remain poor.

It is hard to comprehend how a major housing project could be so inept. Who thought it was a good idea to move people (and especially vulnerable people) into new housing without water connected? And so on. The fact that major infrastructure gets as badly implemented as often as it does is (unfortunately) not all that surprising, but when it is basic housing, we really do need to step back a bit and ask what is going wrong. It is not the lack of information or comprehension of the issues. There is already a massive literature on housing, as well as an extensive pool of competent commercial and international/local suppliers, and above all widespread cultural and practical knowledge around housing. We each have some vision and understanding of what housing means and what is sensible. One can only come to the depressing conclusion that no-one in authority bothered to pay any real attention to the situation and wishes of the intended recipients. No doubt there will be deeper concerns expressed about the financing and the contracting and so on, and we would all do well to accept that housing is not a simple issue, given its cultural and economic resonance. But when it comes down to it, if it becomes too hard to build simple houses, there is a serious problem that needs to be fixed. Using local suppliers imbued with an understanding of local materials and culture would probably be a good start, though there can be economic traps in that route as well..

Great blog Robin. Many of us are watching the mergers in Canada and Australia with interest. It is easy to see gains for both countries, but it is not so easy to figure out what will happen practically. We can all think of countries -- often fragile and conflict-affected states -- where populations are in dire need of foreign assistance but whose governments, shall we say, are less than popular! One wonders what is going to happen in the prioritization of scarce aid dollars (Canadian or Australian) between countries in dire need but with few trade opportunities and maybe even no desire for trade and national economic growth, and trade interests. It's not difficult to imagine situations of almost a conflict of interest between the merged Ministry's agendas. One could also ask where does the human rights agenda fit into this?

Thanks for writing this article. I'm curious as to the source of the number in your first sentence; the most recent data I'm aware of put the number of Timor-Leste people below the poverty line at around 50% in 2011 -- a tragedy -- essentially unchanged since 2007. I tried to check how much has been spent on MDG Suco in 2013, but the gov't's Transparency Portal is not working. However, as of 14 October, only $3.8 million of the $39 million appropriated for the MDG-Suco program during 2013 has been disbursed, with another $26 million obligated by contract. In 2014, the Government proposes to spend $23m more on this program, plus $45 million per year in 2015 and 2016, and $12m/year in 2017-2018. That money could educate a lot of children or cure a lot of sick people.

Appreciate this… . Thanks.

Appreciate to hear from academician from other country to start the ball rolling on such development challenges. Ironically, from the executive part, the shocking thing is that planners did not even comprehend their own people's socioeconomic situation. Everybody can see this misunderstanding by looking at (as you pointed out) prefabricated houses for the villagers. Beneficiaries will find it hard in some cases how to keep the house clean, how to maintain, how to personalize and even how to improve the house. The idea is they have never been living in such prefabricated houses. We know that changing people's life is simply giving them something new. But it is no true to provide them necessity that is totally opposite with their reality. The story told, majority of Timorese lived in local material-made houses. I can tell, before Portuguese - caves and uma adat, post the Portuguese rule - majority remained and minority changed - and then significant changes happened under Indonesian rule, people lived in the semi modern material-made house like you can see it now throughout the country. Hence, it's a bit unrealistic to expect all of the beneficiaries to live viably under a box looking structure placed in a barren land with no basic infrastructure and distance walking to pick food, to go to school and health center and etc. Another is dragging beneficiaries far away from their source of livelihood. It is somehow true in most of the locations designation that the project even help adding more difficulty people instead of lessening it . If you are a vulnerable person, walking for two to four KMs in one walk, you would probably think that you have made a big mistake for living in such location. There were some programs so called "Transmigration", from which the government should have learned. Indonesian government built multiple transmigration sites all over the country. In Loes, Suai, Lospalos and other districts, for example, once houses were built there, parcels of lands were released for self sufficient agricultural activities. It's not as size as five strides backyard because it could only supply a week's meal. Sufficiently, land parcels were released so that the whole community could make it through a year's meal. Certainly, this model's success, based on several site visits I have done, had so much correlation with Timor Leste's past, like land deprivation by force and all that, but I found a model that is worth of learning since it was a hands on experience, or it existed in our (Timorese) land. With this local historical records, Timor Leste does not need model from either America or Australia because it usually comes up with high technology and high skills. All I can say is that Timor Leste needs to domesticate all the compiled references. For example, From prefabricated house to local material made house, commercial oriented neighborhood to agricultural oriented neighborhood. This could be more suitable. Hasty planning process might have caused less appreciation from the beneficiaries, and also there might be something to do with the budget execution deadline. MDG program was not the first social housing provision programs in Timor Leste. It was preceded by two others, such as from Social Solidarity Ministry, and the other one from Presidency office (Former President Ramos Hortas' ). People might wonder why this MDG housing project differs from the other two in terms of budget which was higher but made worst in result?. One might think that definition of poor or vulnerable people in Timor Leste differs according to each person's and organization's interpretation. Difference in defining poor/vulnerable person influenced so much on project implementation. Everybody can check out the cost for each house. Former President's project executed approximately less than three or four thousand $, slight difference or even probably the same amount for the project from Social Solidarity. Whereas, the cost for MDG housing program is substantially higher than those other two. We can not, of course, compare the type of the house between MDG and those two. But, as it was reported, half of the new MDG houses were abandoned, thus we can infer that the result from MDG program was worse than those two small scale housing programs, which even though simple model and from a small amount of money, houses were occupied and utilized. By the way, whatever failures Timorese have made, we will learn from it and keep moving. Regards

MDG Suco Program is a good case that you bring. It is a reflection about poor project management. But the Government has acknowledged these problems. There is a big reduction in term of budget for the next years. The Government is also committed to purchase inputs locally so that it will have trickle down effect. We are looking forward to policy change in this project.

Very worrying indeed that there appears so little direction from the Minister and so little clarity on the strategic direction of the aid program. A key problem with the broad focus on economic growth, of course, is that it disregards the reality of countries like Indonesia where the economy is growing rapidly but a large number of people are not benefiting from this boom. How else can you explain the increase in provinces such as NTT in fundamental indicators like stunting where the number of children who aren't properly nourished has increased over the last five years to almost 1 in 2. Effective aid in such environments needs to be targeted at the poorest not at growing the pieces of pie for the middle and upper income earners. Focusing on the structure whilst not having a clear strategy is putting the cart before the horse. How this is expected to deliver more 'effective' and 'efficient' aid outcomes appears at best, very unclear. Considering the Abbott government's first forays into foreign policy, this lack of strategy and direction does not bode well for our aid program or poor communities, nor for Australia's already faltering international reputation.