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Hi Ashlee Would love to get in contact with you. This is a great piece. Please contact @Julie_Ulbricht on Twitter or via julie dot ulbricht @ gmail dot com Here is a recent article I wrote for ABC http://www.abc.net.au/unleashed/3744414.html (note, name is formerly Julie Cowdroy) Thanks Jules

Thanks for the interesting comments. I agree with most of your points. I share you concerns about implementation, and especially the social responsibility levy which I imagine will encourage tax evasion among high income earners (although note the “tough talk” about cracking down on tax evasion in Bainimarama’s speech, which suggests that govt has at least considered this possibility). I also agree that revenue forecasts in the budget seem optimistic. Regarding fiscal sustainability, I guess my argument is that the government is stuck between a rock and a hard place, with a stagnant economy and high levels of debt. I think in that context it has struck the right balance between trying to encourage economic activity (especially through giving the money to households that are more likely to spend it in Fiji) while not significantly worsening debt levels. The budget certainly isn’t perfect - just note the increased allocations to the military. It doesn’t address the microeconomic problems in the Fiji economy. But I do think it improves on previous budgets the regime has implemented.

As a sometime World Bank-watcher, I must admit to not having paid enough attention to Australia’s relationship with it. So, it’s not surprising that I found Banking on Aid a thought-provoking report. One interesting aspect that the report did not delve into is that, over the years, the Australian Government has made only limited contributions to debt relief schemes. Presumably, this is because most Australian aid has been grant based. However, increasing support for the Banks means the Australian Government contributes to rising debt. This is a particularly pertinent issue given the growth in lending by the World Bank in the face of the Global Financial Crisis, which will – if previous examples are anything to go by – result in debt problems in 15 or so years given that, for many of the poorest countries, international financial institutions hold the lion's share of their debt. To take this further, the sub-prime crisis and sovereign debt crisis are connected in a range of ways but a key one is that mainstream banks shifted from consumer to state lending, as states came to be seen as a lower risk. The big increases in World Bank lending since 2009 are likely to be having some influence on global markets. Thus, while many developing countries undoubtedly need additional resources in the face of the current crisis, the question is: will the consequence of new loans be a new round of the debt crisis, shifted back to developing countries? On the debate here about why Australia makes earmarked contributions rather than core contributions, one answer may simply be that IBRD contributions are not counted as official development assistance (ODA) and thus do not contribute to the Government reaching 0.5% of Gross National Income by 2015. In the section on 'critics: economic philosophy', I would have liked to see a little more discussion of the limiting nature of the World Bank's ongoing primary commitment to conservative monetary and fiscal policy and the lack of progress on alternatives to financial liberalisation. The evidence that continues to emerge about the push back into big infrastructure projects, the ongoing use of conditionality and the lack of poverty focus only confirms that Australians concerned about the best use of aid funds should be asking our Government some hard questions regarding support for the World Bank. Susan Engel is the author of The World Bank and the Post-Washington Consensus in Vietnam and Indonesia: Inheritance of Loss (Routledge, 2010)

Thanks for a really interesting post. Great to have some commentary on this stuff. I would, though, have a slightly different analysis of the Fiji budget. Firstly, I'm not sure that there are many efficiency benefits from the tax hhere. The income and corporate tax reductions are to be partially financed through the new Social Responsibility Levy: an additional tax of 23 percent – 29 percent of total income for those earning more than $270,000. This is estimated to provide additional revenues of $9.8 million. The introduction of this levy seems likely to introduce very high marginal tax rates for high income earners, potentially offsetting many of the possible efficiency benefits of the lower income rates, and certainly creating strong incentives for evasion. Tariff and excise measures and new taxes on credit card and telecommunication transactions seem opportunistic, distortionary, and possibly difficult to enforce. The various changes to tariffs and excise also seem to lack a consistent policy intent. Overall, this looks a bit like populist redistributional rejigging, rather than sensible economics. I also think there are some big questions about fiscal sustainability, and I would say that this budget is heading in the wrong direction - It is not clear how substantial corporate and income tax reductions have been reconciled with a projected 0.5 percent increase in direct tax revenues as a proportion of GDP. The projected increase in VAT revenues of 2 percent of GDP is presumably driven by increased incomes in households with a higher propensity to consume - but this seems fairly optimistic. Some boost to revenue is expected from improved compliance. However, even the Budget Supplement notes an “optimistic outturn”, and my cynical take is that these fiscal outturn projections are politically influenced and not likely to be realized. If Fiji wants to engage in deliberate deficit-financed expansion to get over a bad patch, I think they should be transparent about it and have a credible plan for dealing with the underlying structural issues. I'm worried, though, that this budget is about the spending without the transparency or the plan. I think you are absolutely right to point out that civil service reform is the elephant in the room - but I guess my take would be towards seeing this budget as populist politics, aimed at retaining the support of the middle-class and public service, rather than sensible economic reform.

Nice work. I think the point about delving into HIES data is well made – alas if only statistics offices would release the full set of the data and not just PDF’s of the aggregates, then people outside of Government may have a shot at this. In terms of indicators, I think it is worth tracking several and over time – or to put this another way there is merit in comparing HIES results over time. Some interesting ones are: - Basic needs poverty; - Basic needs nutrition – this is usually but not always part of the point above; - Relative income distribution (usually Gini stuff); - Relative income distribution within the country – a point you make very well in your paper and something SPC / AusAID could do with the GIS technology available; and - Results relative to reasonable comparator countries (i.e. don’t compare Vanuatu with Singapore) However, I think the real value in your piece is to highlight the excellent way the World Bank link the sectoral and HIES data. They did this in Vanuatu in 2004 and it remains in my mind one of the finest pieces of work I have seen by the Bank. I think though for those who have never seen the type of results this type of analysis can highlight it would have been good if your note had shown some of the results. For example in Vanuatu we got some outstanding data on how people of different income groups educate their children – basically it showed that most of the kids in secondary came from a certain set of income quintile families etc (middle class and above). The picture for primary was similar and this enabled people to lobby more effectively for universal access to primary education. The information on health was also illuminating. I am hoping that somebody will perform the same exercise with the new HIES. The only slight downside with these kinds of analyses, especially in our region, is that you have to make a few “heroic” assumptions from time to time to cater for the quality of data – but that is ok as long as those assumptions are made explicit. We did similar work with Satish Chand when he did the ADB Pacific Island Economic Report back in 2001 I think it was – and last year we managed to take a time series look at some data using his base data set. So for example it was interesting to see the Gini coefficient change over time – showing an increase in inequality in the mid nineties and a decrease in the first part of this century.

PNG on brink of ruin as government hangs in the balance On Monday 12th December 2011, the Papua New Guinea High Court handed down an expected 3-2 judgment that there was no vacancy in the office of prime minister on 2nd August, after a parliamentary vote of 70 to 24 to elect Mr. O'Neill with Sir Michael Somare in hospital in Singapore (Jo Chandler, Court reinstates Somare as PM, The Age, 13 December 13, 2011 refers). ''Sir Michael Somare is to be restored to the office of prime minister forthwith,'' the court ruled. With this decision, the government of PNG has become unworkable. Allan Prentice (Professor Allan Patience (Teaches at Sophia University, Tokyo. He is a visiting scholar at the Asia Institute, Melbourne University), PNG on brink of ruin as government hangs in the balance, The Age, 9 December 2011 refers), in a recent opinion piece said that “this is especially unfortunate because the O'Neill government has shown signs of addressing serious governance failures that have plagued the country for more than 30 years. These failures have led some observers to think that PNG may be becoming a failed state. The omens are all there: escalating crime rates (including murder, drunken violence, illicit drugs, prostitution, burglary, carjacking); horrific violence directed at women (rapes, bashings, torture, killings); some of the worst maternal and infant mortality rates in the world; plunging literacy rates; collapsed health and education systems; endemic tribal warfare in the Highlands; land grabs by foreigners; unsustainable exploitation of natural resources; decaying infrastructure; massive administrative incompetence; and the breakdown of public institutions such as the police and the civil service. Each year the United Nations Human Development Index highlights that PNG is one of the most miserably governed states in the Third World. Equally worrying is Transparency International's annual reporting that levels of corruption among PNG's politicians, public officials and managers are among the world's worst. That means PNG should be placed in a special category of ''ruined states''. Ruined states are the victims of corrupt ruling elites that cannibalise their states' resources for themselves, their families and their tribal cronies. Glaring examples of ruined states include Robert Mugabe's Zimbabwe and Kim Jong-il's North Korea. Leaders of such countries deserve to be labelled the ''new cannibals''. The Opinion makes for interesting reading noting very recent developments in PNG. The Opinion can be sourced at www.smh.com.au/.../png-on-brink-of-ruin-as-government-hangs-in-the... Mr. E. John Blunt is a Procurement and Institutional Expert with extensive experience in leading public procurement reforms in a variety of international development environments. He is currently working with the Southern African Development Community Secretariat in Botswana.

Roderick Duncan’s recent article – “Governance Reform in the Public Sector in Pacific Island Countries - Understanding How Culture Matters” is an important reference for all interested in this complex and difficult area. I agree with Duncan that there is little evidence of much improvement in governance in the Pacific island countries (PICs) despite the decade-long efforts of domestic civic groups, international groups such as Transparency International, and aid agencies. While governance is clearly a priority, and a growing focus, for development agencies within the Pacific (and other regions), perhaps the approach of international aid agencies has lacked consistency, perseverance and a failure to learn from the past. Perhaps we need to change our approach and ensure that future reform efforts assure that there is domestic support and account for local culture! If the development agencies change their approach, perhaps we should expect to see political, sociological, and anthropological assessments underpinning reform efforts. E. John Blunt is a Procurement and Institutional Expert with extensive experience in leading public procurement reforms in a variety of international development environments. He is currently working with the Southern African Development Community Secretariat in Botswana.

Thanks Joel for this interesting piece. As someone who has run two of Australia's largest post-graduate programs in International Development , I would make the point that whilst providing postgraduate qualifications for those that do work or would like to work for AusAID is important, AusAID is but one of a very large number of possible employers within the sector. Universities must therefore develop (excuse the pun) qualifications that cater for those wishing to work for AusAID, small NGOs, large NGOs, overseas based agencies, multi-lateral agencies, local councils, indigenous communities, etc. There is a variety of skills and technical proficiencies required across this wide gamut of organisations. So what is ideal for one organisations might not fit the bill for another. It is perhaps why ACFID have around 50 undergraduate and post-graduate courses (not including the embedded Grad Certs and Grad Dips) offered by various Australian universities listed on their website - http://www.acfid.asn.au/get-involved/university-courses Prospective students should speak to those organisations that they wish to one-day work to get a sense of which degree provides the basis for what must be life-long learning in this sector. The degree will only ever be the start - not the end - of learning what is effective development.

I agree with Tess that it is "difficult to get ‘big business’ to be able to operate at the (small) level that can really make a difference" and "engaging with the private sector needs to be a much more localised ‘home grown’ activity." At Jacana (jacana.org) we are trying to build an SME investment industry in Africa, SMEs being the backbone of all economies and SME funding being the biggest obstacle to their develoment. Key partners in this are the publicly funded Develpment Finance Institutions such as the UK's CDC or Netherlands' FMO. But we also need philanthropic (including Programme Related Investment from major foundations) or grant funding to seed this activity in frontier markets such as Mali or Ethiopia where this sort of venture capital and the associated infrastructure barely exist. So this is a partnerhsip between public, private and philanthropic sectors. Investment in SMEs needs this mixture to become established because the cost of executing small investments, and providing the hands-on suport that small businesses need, is too high and risky for purely commercial investors. But the goal is to bring in these investors once a track record is established. The potential from pension funds, insurance companies etc dwarfs the amounts available from aid and philanthropic sources. That in our view is the long-term way of tackling the root causes of poverty.

Marianne, A few thoughts re big business and aid: It is hard to see much opportunity for any real progress within the currently prevailing paradigms of business and government. However, we seem to be on the threshold of collapse for a number of these ideas and there are some interesting new approaches that may find an opportunity to be tried as the failure of the old ones becomes increasingly apparent. A new book by Richard Branson sounds interesting in this regard. See: How can we go from THRIVE to thriving? December 6th, 2011, http://theconversation.org/ Also, Charles Eisenstein, the New World Order, and THRIVE , December 2nd, 2011 on the same site A thought provoking book on declining birth rates and the coming demographic crash is also very relevant to the aid situation - How Civilizations Die: (And Why Islam Is Dying Too) by Goldman, David (The collapse in birth rates across much of the Muslim world was a real surprise to me.) Another very informative book is Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens by Shaxson, Nicholas These books are available via Amazon and both have Kindle editions as well. Regards, Walter Starck

Dear Andrew, Interesting arguements. I do qualitative and quantitative research around PNG on sexual health and related. As WHO indicated about CHW, most Church Health Service run facilities in PNG are manned by community health worker serving in very remote parts of PNG. They are doing a great job than government health workers I must honestly say. It is not a complete waste of time. It is needed as general nursing colleges in PNG have limited spacing. Especially for Church Health Services there is good evidence on community health worker's contributions to maternal child health and HIV. I do have reservations for village health volunteers. Volunteerisms is not well understood by Papua New Guineans. There is again enough evidence of failing programs and the issue of sustainability in engaging volunteers in PNG. Taking into account the detoriating health system in PNG, it will be overwhelming for health departments at all levels to monitor and coordinate VHV. One way to go about change to meet those millenium goals is to build the capacity of existing health services in PNG. At least this has been working for Church Health Services in terms of staff capacity building, staff motivation, clinical upgrade, strong health management,adequate and timely resource management, quality assurance, M&E etc. There are other incentives that have been working well for maternal and child health programs in some parts of PNG. Eg. funding waiting houses for pre natal and post natal women near remote clinics to improve access. Continue supporting weekly and monthly MCH clinics (foot patrols) and annual foot patrol immunisation campaigns. MCH being intergrated to other health services like HIV, Sexual Health and family health etc to increase education and access. I'm happy to discuss the models practiced at three highlands provinces of PNG under Catholic Health Services in comparision to government run clinics if you are interested. Kind regards, Marie Mondu Caritas Australia STI Management Program--PNG

Thanks Marianne, this is a really interesting discussion on partnerships between public and private sector. I work for Coffey International Development as Manager for AusAID’s Enterprise Challenge Fund (ECF), which has some interesting lessons for PPP in development. The engagement of private sector in development should be encouraged to go beyond Corporate Social Responsibility - the Business for Millennium Development (B4MD) team calls this expanded role ‘creating value’. Market development programs such as ECF are working in partnership with the private sector to create opportunities for the poor in employment, as suppliers and accessing goods and services as customers. This leads to communities engaging with companies in a meaningful way benefiting both the company and society with a higher likelihood of sustainability, poverty reduction and economic growth. For example – last week I travelled to the Philippines to visit the Cagayan de Oro Handmade Paper Company - a handmade paper factory that uses a naturally occurring fibre called abaca. In 2007 the company was growing rapidly and wanted to develop a secure supply of abaca available locally so applied for an ECF grant to support the set-up costs for abaca plantations with the indigenous people of Claveria, Misamis Oriental. The grant also funded improved transportation system, agricultural training programs and stripping machines to increase yields and creation of a locally run buying station. In the last four months the farmers have harvested and sold 7,000 kilograms of abaca through the buying station at a higher than market price, and this is providing an average additional US$450 for each family in an area where most families are living on around US$2 per day. All farmers I spoke to were planting more abaca. So this way, as the business grows the farmer’s sales and incomes will also grow. The ECF is also providing other grants funding innovative products through private sector ingenuity specifically targeted to poor and remote communities such as mobile banking, micro-insurance and off-grid renewable energy. In all these cases rural communities make up a majority of the customers so this benefits both the company and society. This is one of a number of areas where donors can (and do) support private enterprises - working with national governments and private sector agencies to reduce barriers for the poor to participate, improving the business enabling environment, supporting programs that build capacity and skills in rural communities and funding partnerships with private firms to support the outreach to the poor.