Comments

Well I really enjoyed reading it. This tip provided by you is very useful for good planning.

Many thanks for your post. In relation to comparisons between Fiji and Mauritius, I would like to highlight the importance of trade preferences for the development of industry in both nations. Subramanium and Roy (2003) found that export manufacturing was the foremost reason for the economic success in Mauritius and that furthermore, preferential access to OECD markets for garment manufacturers in Mauritius (particularly relative to Asian producers with obvious competitive advantages in terms of economies of scale and lower-cost production) was important for growth of the sector. Whilst the multi-fibre agreement, which had been important for Mauritus, ended in 2004, it had allowed Mauritius to develop an industry that could shift to more complex, and more value-added, manufacturing tasks. I won't go into the full details here (perhaps another blog piece is in order) but the preferential access to Australian and New Zealand markets for Pacific manufacturing exports, provided under SPARTECA, were also absolutely vital for the explosive growth of garment exports from Fiji from 1987 onwards (though Rabuka's incentives for foreign investors in the form of tax-free factories probably helped too). While maligned by many as an industry that was ultimately uncompetitive, by the late 90's 18,000 people worked in Fiji's garment export industry and it had overtaken sugar exports as the single greatest source of export earnings. Whilst the sector contracted significantly following the removal of subsidies for Australian fabric exporters in 2000 (which had been a key incentive for exporting fabric to often-Australian-owned 'cut, make and trim' operations in Fiji, which would in turn re-export finished articles back to Australia under SPARTECA preferences), and the expiry of the MFA (which had guaranteed a quota of Fiji exports to the US) garment exports from Fiji are still worth around FJD 90 million per annum, and the sector could yet remain a longer term prospect (particularly if the restrictive rules of origin requirements of SPARTECA are reviewed). Sorry to bang on, but the overall point is that meaningful access (and in many cases preferential access) to metropolitan markets has clearly been important for economic growth in both Pacific island countries and the African small island states. A lesson to be drawn is that Australia can do a lot more to improve market access for Pacific exporters.

Hi Stephen, Great blog - thanks. Perhaps you or colleagues have addressed this elsewhere but who is the ODE? It's internal to AusAID, right? So it's not independent assessment? Is that something you think AusAID needs or do you think an independent review every 5 years is sufficient. Most aid NGOs have independent evaluations for their projects - should AusAID have the same? Having AusAID staff evaluating AusAID projects for AusAID managers that they might work for in the future sounds a bit tricky... Would be interested in your thoughts. Joel

Steve's insights are very insightful and, in my opinion, very correct. The islands should be approached as any community development project should, an almost textbook approach. Consider approaches to develop micro enterprise and do not assume that islanders do not see the opportunity but face significant social constraints to entreprenership reflected by inadequate or poorly expressed public policy.

I think there are a number of wrapped issues here but all I am concerned with at the moment is the PNG context. - Firstly let me say that that the provision of a vehicle in Canberra is a very poor proxy for whether a vehicle should be issue in another country - you are comparing apples and oranges; - Secondly - let me ask how do you define "extensive private use" - maybe going to the cinema (isn't one) going for long country drives (not likely) ducking across to Lae (sorry the road doesn't go across the ranges) nightclubbing (crazy if you do). Much is made of the provision of a vehicle as if it is some sort of massive fringe benefit when the reality is that it is an essential component of ensuring a secure environment.. The problem I have with this particular issue is not so much that people make a contribution to the private use of provided motor vehicles it is that this is the same stream of thought process that has seen the non-APS adviser community largely stripped of the provision of motor vehicles without consideration of the full implications. The debate is narrowly focussed without full consideration of the implications. Well informed? Yes I wish some were!

The article that is posted here has already drawn several responses, not as comments here but as emails. Perhaps I should have posted a disclaimer. I’m not an economist, as is probably obvious to those who have read the article, but only a dabbler with a fascination in the history of economies on the world stage. Even in that area the reading list I can draw on is embarrassingly short. Most economists take a “where there’s a will there’s a way” view of national economies, while my article takes a “we’re all victims of our circumstances” approach to development. Anything is possible, most development economists posit. By the clock of world history, of course, it’s possible to imagine a radical change in circumstances. Tourists may begin flocking to Kiribati at some point in the future, or new and valuable resources may turn up off the shores of Yap, or the world may yet find the rare ingredients for a wonder drug in the coral flats of the Pacific, or the Cook Islands might become the next international call center. Maybe, but I wouldn’t count on it. Certainly not in the short term–and that is precisely how the future is defined in the Pacific. My own view is that some places are simply crippled by force of circumstances. Resources are scarce (especially the kind that can be traded on the world market), the marketing attraction of the location is offset by distance and small size, and the population is not likely to find top jobs in Silicon Valley. There are places in the world, like Haiti, whose time has clearly not yet come. Perhaps it never will. But there are other spots, like the Seychelles, who are doing much better. Is the difference simply that the economic planners in the latter did much better than in the former? Then, too, there are those places whose time has come and gone, like Nauru. You’d think that I, of all people, would believe in miracles. They can certainly happen, but most of us pragmatists wouldn’t put money on it. Meanwhile, the nations of the Pacific have to find a way of providing a costly government–not because their former colonizers told them they had to do so, but because this is what it takes to be a part of the modern world today. Education means good teachers who are getting a salary. Health means access to modern drugs and services, that are paid for in dollars or euros or yen. So the Pacific is doing what it can, under the circumstances, to hustle the money needed, even if this means packing off a third of its people to work abroad. If the jobs aren’t to be found in the islands, then send the people to where they are to be found. If there are no products to be sold abroad, then sell off-shore banking or whatever else developed countries will pay for. It’s a pragmatic approach by people who might like to believe in miracles, but don’t dare count on them.

Santif, This comment is completely wide of the mark. The proposal in the APS Adviser Review is simply that public service advisers who would not be entitled to a car in Canberra but who have been given one overseas would have to pay $250 a month if they make extensive private use of their vehicle. It would be left to individual agencies to decide whether cars should be allocated to advisers. If you want a meaningful debate, you need to be well informed.

Fran, I enjoyed reading your paper. It presents some fresh perspectives on a longstanding but very important question. I agree with the sentiment that perhaps we ought to allow for some degree of Pacific "exceptionalism" when it comes to expectations on economic growth. After all, most of these countries face permanent diseconomies of scale and other structural impediments and disadvantages. But at the same time, at least for my own country (the Marshalls), it is absolutely clear that we can do significantly better in managing the resources and opportunities we have towards better development outcomes. While an economic miracle is unlikely, we can still make incremental progress. And this requires strong governance and leadership, and credible policies and plans that are effectively implemented. If any one of these essential ingredients is missing, which is often the case, our chances for real progress are slim. So while some degree of (cautious) exceptionalism is okay when it comes to our expectations on economic growth, NO degree of exceptionalism should be tolerated when it comes to our expectations of governance.

Some elements of insanity regarding the discussion surrounding vehicles for advisers going to PNG; You will pay at least twice as much for a comparable vehicle in PNG than in Australia. The environment and exchange issues mean that maintenance costs are highly inflated when compared with Australia and repairs can take much longer than in Australia (added vehicle hiring costs). Then add the risks of vehicle loss and litigious nature of the society means insurance and associated risk are disproportionately high. Anyone considering a job in PNG should consider the above. Spending $10,000+ (anything less is a mobile coffin) upfront for a job with questionable security attached will come as a rude shock to many who have never been to PNG. Think also about how you will sell - if you can! And remember that these costs are additional to your existing vehicle wherever home is (unless you plan to play the buy and sell game there as well!). I will not be surprised when someone gets killed because they tried to get around in questionable public transport system and paid the ultimate price - and just to put "questionable" into context we are talking vehicles that are not roadworthy, drivers who have questionable skills (may be unlicensed), drivers who have been known to be the perpetrators of crimes on passengers, telegraphing on movements to the criminal element and the list goes on. [This is not paranoia - this is the reality of living in POM and you are fooling yourself if you ignore it.] What about hire cars - consider A$2,500 per month for an old second hand car on long term hire arrangements (probably a lot more by now). Short term hire A$150/day. These are rough estimates from some time back - but consider taking A$2,500 of your monthly salary and you might think twice about the decision to take the job. There are a host more associated issues and the unfortunate aspect of the debate is that people who make criticism of the provision of vehicles and/or associated compensation in lieu too frequently demonstrate a distinct lack of understanding of the operating environment. My suggestion - stop developing positions based on personal bias and undertake some true analysis of the situation then the debate can approach a meaningful level. Now let's get real instead of emotional.

why do you have a picture of the virgin islands on an article about fiji? you call yourself a reliable source ?

Dear Dinuk, Thanks for this much-needed piece. I haven't really been sure what ODE does. Maybe they do lots behind the scenes but with the push for greater transparency, ODE should publish more evaluations of AusAID work and with a more critical eye. It is good for everyone. Your piece is balanced and is the kind of holding to account that we the public need to have. Well done, Joel

I agree and I would also suggest that Vanuatu will be particularly cautious about progressing PACER plus coming on the back of last year's (and continuing into this year) debate around WTO accession. The "plus" in PACER plus has previously been described as capacity building within Pacific island nations but equally the what and how of that has not yet been clearly articulated.