Transferring HIV treatment to the PNG government: a good idea?

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Despite its size, Australian aid is rarely front page news in PNG. But it was earlier in the month when the Post-Courier ran a story that aid funding was to be cut to a number of NGOs providing HIV treatment and other health services. The story was based on a briefing note prepared by the affected NGOs outlining the impact of the foreshadowed cuts on their services. The Australian High Commission in Port Moresby responded (in the same article) that funding for HIV treatment would run to the middle of next year (no mention of whether there would be any respite for the providers of non-HIV reproductive health services). The statement also said that Australia was working with the PNG government to help it “better and more sustainably deliver health services, including HIV/AIDS and reproductive health programs.” The implicit expectation that the Australian government expects, or at least hopes, that the PNG government will pick up the tab after June 2017 is consistent with the statement in the September 2015 Australian aid PNG strategy (and reiterated as recently as last month) that “Our investments in HIV will progressively shift to PNG Government responsibility.”

I certainly recognise that Australian aid to PNG is small and faces many demands, only a few of which can be met. But I think the intention announced in the aid strategy, and apparently conveyed to the NGOs involved, to pass responsibility for funding HIV treatment to the PNG government is ill-considered. Indeed, as I argued in my presentation at the ACFID National Conference last week, it illustrates some of the ailments in the Australian aid program revealed by our 2015 Australian Aid Stakeholder Survey.

First, there is the issue of transparency. Despite positive commitments by both the Minister and the Department, the actual level of transparency around Australian aid leaves a lot to be desired. In this case, the Australian government certainly deserves credit for making public, through its PNG aid strategy, its intention to hand over HIV responsibility to the PNG government. But when it comes to trying to understand the decision, and what it might involve, the amount of information in the public domain is sparse.

A search of the relevant DFAT webpage reveals that the funding in question belongs to the Health and HIV Capacity Development Project (sometimes called [p.43] the PNG Health Capacity Development and Service Delivery Project). According to the website, the project should have finished in 2015, but from the most recent portfolio review we know it has been extended to 2017. Of course DFAT could have signalled to some or all of the NGOs that their funding would be renewed, but clearly it hasn’t; in fact, the opposite.

Despite the project having started in 2011, the only information available about it on the DFAT webpage is a design document from the time of its commencement. There is a project website (the main contractors are Abt JTA and Burnet Institute), but this is almost entirely devoid of content. There are no monitoring or evaluation reports, even though the most recent PNG aid portfolio review mentions a “mid-term review” of the project that “will inform future investment” (p.7). The few comments on this project in the annual PNG portfolio performance reviews are overwhelmingly positive. It scores highly (p.34) in terms of project ratings (5 or 6 out of 6) except for sustainability (a 4), which presumably is an indication of DFAT’s own doubts about its professed hand-over strategy.

It is not clear how many people will be affected by the planned hand-over: the newspaper states that 8,000 to 10,000 people living with HIV will be affected by the cessation of Australian aid grants; a recent DFAT portfolio report states that 2,300 HIV-positive people on anti-retroviral therapy as a result of aid funding. The amounts of funding at stake are even less clear. The project concerned has an annual budget of about $40 million (see p. 34 of the 2015-16 portfolio review), but how much of this goes to NGOs is unclear.

Second, the stakeholder survey scored the aid program down for a lack of strategic clarity. In the case of PNG, the Australian government articulated in 2014 its preference for “[t]ransitioning Australian aid support away from direct service delivery,” and that is presumably what lies behind the recent developments. However, that same 2014 strategy indicated that in making this move “excessive risks to the lives of vulnerable people” would be avoided. It is hard to imagine anyone more vulnerable than a person living with HIV. Why the vulnerability exception no longer protects HIV treatment funding is unclear.

More fundamentally, the lack of strategic clarity in this case arises from the fact that Australia is still heavily involved in PNG’s health and education sectors, in training workers, building clinics and classrooms, and responding to TB. You can’t invest in health and education and not be involved in service delivery. It really isn’t clear what aspects of service delivery we will be involved in and which ones we won’t: saying that we won’t be involved in “direct” service delivery doesn’t help. This lack of strategic clarity (which I’ve discussed earlier here [pdf], on p.30) must make decision making very hard.

Third, stakeholders thought that the aid program lacked realistic expectations. In this case, it is not realistic to expect the PNG government to take over HIV treatment funding now or in the coming years. PNG is facing a fiscal crisis: government revenue has fallen by about 20% over the last two years and is now back at 2006 levels after inflation. DFAT itself acknowledges (p.3) the consequent cuts to “core government services”. Health has been singled out, with the Central Bank reporting cuts to 2015 of over 30% in the health budget. Church health services – the ones providing the HIV treatment – have seen their budgets savaged. Looking at it realistically, the PNG government is simply not in a position to credibly commit to providing any new health services, not when it is struggling to pay salaries.

Even if PNG had the fiscal capacity to manage the HIV treatment program, institutional weaknesses should give pause prior to any transfer of responsibilities. The same Post Courier article that reported the cuts also noted the in-fighting in the National AIDS Council, and the dispute over its leadership. And don’t forget that the Global Fund used to transfer its funding for HIV, TB and malaria to the PNG government, but a few years ago stopped doing that due to abuse. There is, sadly, little to show for the decades of effort and millions of dollars that the Australian aid program has invested in capacity building in PNG. And there is no reason to think that the current emphasis (in the 2014 strategy) on “system strengthening” and (in last month’s portfolio review) on “the development of core public health capacity” will fare any better.

A more realistic approach in a difficult environment such as PNG would be to build on success: to try different things and to stick with what works. If NGOs have been able to make effective use of aid funding to provide treatment to those with HIV, then keep funding them to do so. In the process, the aid program actually will be building the capacity of a range of service providers.

Fourth, our aid stakeholders bemoaned the poor job being done to communicate and engage with the community about aid. Aid successes in PNG are few and far between, but the response to the HIV/AIDS epidemic is one of them. Australia’s preventative efforts plausibly helped prevent the onset of the generalised epidemic that many feared was PNG’s fate. And now treatments paid for by Australian aid are keeping thousands alive. You won’t read about this success on the DFAT website or in any publication that I’m aware of. It should be celebrated, not threatened by funding cuts.

Ironically, the good news value of Australia’s HIV funding was realised by none other the Foreign Minister, who in an ABC interview in late 2014 said “more people are receiving treatment [for HIV], including more than 11,000 people in PNG, and that’s a particular focus for me… We must continue to provide support for treatment…”

Fifth and finally, the stakeholder survey revealed the biggest weakness of the aid program to be funding predictability. The NGOs involved in this project have lost their funding predictability. They will have to spend time and effort lobbying for funds. They will be reluctant to hire staff. They will be unable to undertake long-term planning. They will spin wheels and waste time. And this is to say nothing of the uncertain future and anguish of the thousands on treatment.

If it was up to me, I would inform the NGOs involved in HIV treatment that they will be funded for another five years. If funds are needed, I would cut back on health infrastructure and government capacity building. I would negotiate with the NGOs involved on effectiveness and efficiency but not around funding per se. In line with the principle of building on success, and not expecting PNG government funding in the near-term, I would refinance other agencies working in sexual and reproductive health subject to a performance review.

Most aid project discussions go on behind closed doors. I’ve written this article, based on whatever information is in the public domain, partly because of the importance of the issue, and partly to illustrate the importance of fundamental principles of aid effectiveness – transparency, strategic clarity, realism, communications, and predictability – principles that on their own can come across as trite or abstract, or both. I’ve also written it because I think we need to re-think our approach to aid to PNG given the collapse of revenue the country has experienced.

Professor Stephen Howes is Director of the Development Policy Centre at The Australian National University.

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Stephen Howes

Stephen Howes is Director of the Development Policy Centre and Professor of Economics at the Crawford School of Public Policy, at The Australian National University.


  • Thanks for the three sets of comments. I’ll only dwell on the ones I disagree with.

    Don, I’ll start with your last comment. I don’t think that looking for a sustainable funding mechanism is the place to start. The health sector will remain under-funded for many years: it’s not just the revenue collapse, it is that PNG prioritizes other expenditure more highly, especially MP funds. The aid program should be asking what it can usefully do in this difficult context.

    I would welcome any examples of successful Australian government health capacity building. We reviewed the evidence in our 2010 PNG aid review. The quote from an ODE report we used then is telling: “Expenditure of $150 to $200 million on TA has not produced a step improvement in performance or capacity.”

    Finally, PNG is a resource dependent economy. It is going to be subject to busts and booms. These are difficult to manage, but you can’t look to the extractive industry to help solve them for you. (By the way, the Kina needs to fall a lot more.)

    John, for all your defence of the aid program, you yourself admit that now is not the right time to hand over responsibilities to the PNG government, given the financial crisis. Australian aid can and does change its priorities, but I would like to see effective aid. As I keep saying, in a difficult environment, when you find something that works, build on it. If the aid program has a new and better model, let them share it with the rest of us.

    Garth, I can’t see what strategic need is served by discontinuing successful programs, especially when discontinuation means probable failure. Failure is in no-one’s interests.

    I’m glad the post has generated some discussion, and look forward to more.


    • Stephen,
      I also would not argue that “a sustainable funding mechanism” is the only place to start. I would argue that a sustainable funding mechanism is a fundamental pre-requisite for health development in PNG, and has not been achieved to date, partly because the magnitude of the gap has not been recognised. That applies to both donors and government. Either the global community and governments are serious about the health SDG, or we accept your view that “the health sector will remain under-funded for many years.” I believe it is a little too early to write the SDG’s obituary. In PNG and globally there is the potential to do better.

      Yours response to my comments on Capacity Building seem to confuse “Technical Assistance” with the broader concept of capacity building. Throughout PNG there are impressive examples of health infrastructure (hospitals, clinics etc) that have been built through Australian aid over the years, and are continuing to operate effectively. My point was not that there needs to be an influx of TA, but a sustained investment in the physical and human resources required to run a health system. For instance PNG produces only 45 doctors a year, while the population grows by over 200,000. Australian aid has put its hand up to a help address the Midwife shortage, the Pharmaceutical system failure etc. I don’t think you should be making these assertions on 6-year-old data. Time you brought your evidence base up to date, since 2010. Successes are worth identifying, though not as publicity worthy as the failures. Some of those success have been Australian Aid inspired, some led by parts of the PNG health sector. Some have even come about by MPs investing their funds in health services.

      Finally, your comment about resource booms and busts and “you can’t look to the extractive industry to help solve them for you”. Could not agree more. But third parties, if they are independent of the extractive industry, should be able to assess the extent that the costs and benefits of the operation of the extractive industry weight up in favour of the country’s citizens. The industry, while it negotiates its social licence, does create the impression that it will fill government coffers for years to come. The “surprise” of the revenue crash may partly be due to the lack of financial contingency, and third party scrutiny, of what these deals were likely to deliver, when and to whom. I believe there is a need for better understanding of how this government revenue crash occurred in this resource rich country, and how a more sustainable arrangement could be built based on the bitter experience of the last two years.

      • Hi Don,

        I am all for studying aid successes. Indeed, my blog was about one. I’m sure there are health infrastructure success stories in PNG, But I don’t think building infrastructure should be seen as capacity building. Building clinics (and training health workers) are both just aspects of service delivery – they are no different in this regards to supplying drugs or supporting NGOs to deliver health services. They just support different aspects of the service delivery chain. The capacity building approach is, by contrast, about trying to improve government policy and planning, and is typically approached by Australia by the provision of advisers. This is where there are few successes. I do try to keep any eye out for them. The case of Australia trying to improve the procurement of drugs in PNG is an example of a repeated, and recent failure.

        On the issue of booms and busts, I agree that lessons should be learnt. There is a large international literature on this, the main take-way for me is that it is extremely hard to manage a resource-dependent economy. Turning points are notoriously hard to predict; and countries tend to borrow, increase the public-service salary bill, and introduce expensive new policies at the top of the boom. Unfortunately, PNG did all of these. That is the legacy of the resource boom, and it is why, apart from the revenue fall itself, core services are now being cut, and will continue to be underfunded for years to come.

        Regards, Stephen

    • No there is no strategic advantage for Australia in discontinuing successful programs, but there may be in reducing health aid expenditure if the government hosting your refugee detention centre prefers to have infrastructure funding.

  • Stephen your article and Don’s reply highlight for me the problems caused when the Australian government fails to put the on the ground needs of the poor in PNG first and instead focuses on meeting Australia’s strategic needs through the aid program.

    Regardless of what the Australian government would like in terms of trade, economic development and PNG governance, the reality as both of you point out is that vulnerable people continue to suffer at the present time. The Australian aid program to PNG (and many other countries) is seriously failing these people and also failing the people of Australia who, as surveys tell us, overwhelmingly believe that our aid should be helping the poor and vulnerable.

    Our aid program needs greater predictability, reliability and funding, more transparency, and a committed and long-term concentration on meeting the needs of the poor. It needs less ideology, fewer fashionable ideas and less national self-interest.

  • Thanks Stephen
    For putting into perspective health care funding in PNG with Australian Aid over the past years and current while some facts are:

    Facts. 1. We understand PNG has poor basic health indicators, less funded by government and resulted in poor health service delivery not only to the remote sites of the country but urban clinics as well.
    Facts. 2. Donor funding picked up most of the pressing health issues like HIV & TB which the government cannot adequately address quickly but needs sufficient time to strategically address.
    Facts. 3. Australian has been supporting PNG health programs across a broad range of areas through; grants, direct service delivery, TA placements, through contractors, co-funding, institutional and system strengthening, etc.
    Facts. 4. PNG government continuous to decrease its actual funding into the health sector than what its budget speaks annually, the free health care policy has no material impact in terms of actual funding.
    Facts. 5. Australia Aid funding has specific priorities and interests in health issues of PNG rather than a general funding support to PNG and subject to changes where it sees fit
    Facts. 6. Health issues in PNG is supposed to be PNG government responsibility and changes in Australian Aid is at the discretion of Australian government, it should not be seen as an integral budget component for PNG government.

    The recent decision by Australian Aid to reduce and eventually re-prioritise health funding, especially to HIV response in PNG is a timely call. Maybe it’s not done at the right time when PNG is faced with financial crisis, but the timing is appropriate after many discussions was held on the future of Australian Aid to PNG and in particular the support to health sector. Many discussions were held with those NGOs affected over the last 3-2 years. The TA placement under the Aid program into PNG departments and agencies has ended last year so this change in the health funding is not a surprise to anyone in PNG and Australia.

    The Australian Aid program will come up with a new model to support the PNG health sector which among others will include strategic priorities of Australia like concern for regional health security, getting value for money and success that can be replicated elsewhere with a focus on sustainability, while the level of funding remains the same, decrease or increase as long as PNG remains a strategic partner to Australia in the Pacific Region.

  • Congratulations on raising the issues of health care funding in PNG. The country is facing a major crisis in healthcare funding, illustrated by the plight of NGO’s providing care for people with HIV. Imagine the implications if health care funding by government in Australia were to drop 30% in one year. It would damage the entire sector, and not just a specific , though important, disease.

    It is a mistake to assume that the HIV issues are more important than say maternal health, child health, or immunization,or NCDs. HIV is different as its response is largely donor funded, and it has a high political profile internationally. Many other parts of the sector are in equal if not more distress. It is a systemic problem, not one related to a specific disease or a group of NGOs.

    The roots of this crisis lie in historic underfunding of the PNG health sector. For most of the last 20 years, the per capita spend on health has been less than the minimum level required to achieve global health goals such as the MDGs – which PNG unsurprisingly failed to reach, as it never had a level of resourcing and capacity that made it possible.

    To suggest there is “little to show for the decades of effort and millions of dollars that the Australian aid program has invested in capacity building in PNG” is problematic. The response needs to be far more nuanced – building on success applies as much to Aid Programs as recipients. There is ample evidence of effective, and ineffective Australian health capacity building. Furthermore, Australian Government Aid has been a minority funder of health in PNG for years, the bulk of the resource comes from the PNG government. As noted above, the chronic underfunding has led to huge capacity deficits such as a shortage of 20,000 health workers). The lack of impact of capacity building efforts is because of their size as much as their effectiveness.

    You have previously documented the rise and fall of both the Kina and the government revenue and how “surprised” everyone was that this had happened. There has been very little commentary on how the oil and gas revenues extracted from the country have managed to be maintained during the global low prices , targets met and exceeded, while the full impact has been borne by the PNG government with drastically reduced government revenue and its ability to spend on social services such as health and education. It would seem timely to explore how the benefits and risks of these developments have been shared between government and the extractive industry, particularly when times are tough. Your comments about aid predictability apply equally to revenue predictability in terms of its impact on the wider health sector.

    Health in PNG desperately needs a sustainable funding mechanism, that gives it a chance of meeting the health SDG. That will need to be a combination of government and donor funding.

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