February 2021 marks the first anniversary of the endorsement of the Pacific Aid for Trade Strategy (PAfTS 2020-2025). It was not the first strategy of its type for Pacific regionalism. Clearly, it is too early to make any meaningful assessment of its implementation. I will leave that for later. The occasion, however, should not go to waste. Any anniversary is propitious for strategic reflection. I propose, therefore, to cast an evaluative eye on two aspects of the Strategy – its long and eventful gestation period, and design: and draw out useful learnings that can be incorporated into the 2050 Strategy for Pacific regionalism.
The Strategy was endorsed by Forum Trade Ministers at their meeting (FTMM) in Suva on 3 February 2020. The idea for the formulation of the Strategy was conceived on 11 July 2018 at a Senior Trade Officials meeting during the Pacific ACP (PACP) Trade Officials meeting in Apia. The Strategy had been two years in the making.
The conception of the idea of an Aid for Trade (AfT) strategy during a PACP Trade officials meeting is instructive. The same officials were engaged in the formulation of a first AfT strategy during the time of the negotiations with the EU for an Economic Partnership Agreement (EPA). The EPA negotiations were suspended, and regional geopolitics may have intervened. This led to the rejection of the first strategy, 12 years ago in 2009.
The EU resources earmarked for that were mothballed. Some, if not all, will be recycled to fund the newly endorsed Strategy. The Regional Authorising Officers (RAO) for the PACP states met representatives of the EU in the margins of the 2020 FTMM to sign €94 million AfT financing agreements.
The rejection of the first AfT strategy in 2009 also marked the launching of the PACER Plus negotiations and by the time the Free Trade Agreement (FTA) was signed in 2017, Australia and New Zealand had committed themselves to earmarking millions of dollars for AfT under that agreement. These AfT resources under PACER Plus are currently being disbursed under the extended Pacific Horticultural and Agricultural Market Access (PHAMA Plus) launched on 11 April 2019.
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The Australian Federal Budget delivered last night has increased aid to the Pacific.
An extra A$211 million has been allocated to COVID-19 response in the form of grants, agreed in negotiations with recipient countries, in addition to the $4 billion previously earmarked for international assistance. Further, a small increase in aid due to cuts in assistance in other regions has also been made.
Devex reports that PNG will remain the largest recipient, receiving A$491.1 million, although this is less than the previous budget allocation. Climate partnership programs have also see their funding reduced by A$5.7 million.
As Stephen Howes at the Australian National University writes, the COVID-19 response is being communicated separately to the main aid allocation, perhaps because “the government does not want to be seen to be providing a permanent boost to aid.”
Australia has made big cuts to its aid to South and West Asia, sub-Saharan Africa, the Middle East and North Africa. These cuts continue a trend that has been evident for some time.
Tim Costello, who heads Christian international NGO Micah Australia, says “This increased one-off support of AU$305 million for the COVID-19 response and recovery in the Pacific and Timor-Leste is good news for our closest neighbours whose economies and livelihoods are reeling from the pandemic.”
Oxfam Australia CEO Lyn Morgain has also welcomed the increased allocation, while saying it should be a permanent commitment: “It is heartening to see the Government’s recognition that this is not over for Australians until it is over for everyone. But this change of heart must be permanent.
The Australian government is forecasting a budget deficit of $213.7bn, or 11% of GDP, for 2020/21.
Australia’s Assistant Treasurer says in the post-COVID environment Canberra is willing to re-examine its policies including loan concessionality, debt consolidation and aid allocations to Pacific Islands nations but is not giving any promises or firm commitments.
Michael Sukkar is attending the Forum Economic Minister Meeting which kicks off this morning. Australia has already reallocated well over A$100 million to assist Pacific Islands respond to the health, social and economic impacts of COVID-19. But those funds have been reallocated from the existing aid budget.
The next federal budget is due for delivery on October 6, and Sukkar says: “if we do seek to supplement aid or humanitarian assistance to our region, that will be done with the broad principles of the Pacific Step up and will be focussed primarily on our immediate Pacific region and neighbours.”
Sukkar expects discussion of the A$2 billion Australian Infrastructure Financing Facility at today’s meeting. He says eight projects have been approved, utilising a mix of grants and non-concessional loans, and has not ruled out revisiting the nature of those loans, as there is “great value to moving to concessional loans”.
“Whilst I don’t want to necessarily announce any change of policy, I think the broad view is that we have to be nimble as we possibly can and that means re-examining all pre-existing COVID programmes,” Sukkar told Pacific journalists yesterday.
“I think it’s safe to say that in a post-COVID environment the Australian government is willing to re-examine everything with fresh eyes… and the view is that with the infrastructure facility, more concessional loan rates or loan terms would be likely to unlock particular projects.”
The Minister said discussions about consolidating debt in multilateral forums is “certainly gathering steam.” He also said the demand for Pacific island seasonal workers is likely to continue and the Australian government has done “some fairly important work in ensuring that appropriate quarantining arrangements and protocols are established to ensure they can continue to come.”
“With the Pacific yet to experience COVID-19, we need to err on the side of caution to ensure that the COVID-19 doesn't get a foothold.
“I think it would be a disaster with fragile health systems and other infrastructure for Australia to effectively be sending COVID into the Pacific through the Pacific island workforce,” Sukkar says.
Preparations are currently underway to send 120 ni-Vanuatu workers to the Northern Territory to help with the mango harvest and there are hopes in other Pacific nations that they will also be able to supply workers for upcoming harvests.
On tourism, Sukkar believes in the longer-term, travel bubbles are “an absolutely worthy way to go” but there is still a lot of work to do on protocols, and that no country in the world could say they have yet “perfected the art of contact tracing and ring-fencing before COVID-19 has the opportunity to spread like wildfire.”
“Until you really have perfected that, I think it is very hard to put in place a 'bubble'.
“But the concept of a bubble is really the only long-term solution and the only sense of certainty that we can all have in getting back to what is an economic engine room for the Pacific.”
Building quality infrastructure in the Pacific means going beyond a narrow focus on hard assets, to thinking about the ways that new infrastructure, and accompanying services, will contribute to lasting development outcomes. This requires sustained engagement with island governments, and with Pacific civil society and the local private sector, in the design, construction and management of infrastructure. Ultimately, there is no shortcut for quality.
Our new report, Building Together: seven principles for engaging civil society to deliver resilient, inclusive and sustainable infrastructure in the Pacific islands, argues competition to finance infrastructure projects in the Pacific islands should lead to lasting development outcomes, driven by local priorities. It also suggests civil society should be considered a key partner in the design and delivery of Pacific infrastructure.
Released last week at the Australasian AID Conference in Canberra the report is based on extensive research and consultations in Australia and the Pacific. It sets out seven key principles for policymakers to follow when designing new infrastructure. It is hoped that by adopting these principles, new infrastructure investments in the Pacific will grow local employment, support skills development, promote gender equality, and create more accessible infrastructure for people with disabilities.
The key driver of renewed investment in Pacific infrastructure is growing geostrategic competition in the region. However, there is also no doubt that Pacific states do have significant infrastructure needs. The Asian Development Bank estimates, for example, the Pacific will require US$3.1 billion in infrastructure investment each year until 2030. Pacific island countries also have unique infrastructure needs. Being among the most isolated states in the world, and especially vulnerable to the impacts of climate change, investments in resilient infrastructure can help mitigate intractable constraints on growth in the Pacific.
In recent times, major infrastructure initiatives have been announced. The United States, Australia, Japan and New Zealand have, for example, initiated a major investment in rural electrification in Papua New Guinea. The Australian government is financing new telecommunications infrastructure for Papua New Guinea and the Solomon Islands, and has committed to a ten-year $250 million bilateral infrastructure program in the Solomon Islands. Australia, long the region’s largest provider of development finance, has also established a multi-billion-dollar infrastructure bank dedicated specifically to Pacific island countries. The Australian Infrastructure Financing Facility for the Pacific, which uses a mixture of commercial loans and grant financing, represents a significant change in Australia’s aid program to the region.
Taken together, these new initiatives represent an opportunity to consider, and promote, shared standards for quality infrastructure. Our report is intended to stimulate thinking about best standards for infrastructure investment in the Pacific.
The Australian government has focused on involving the private sector in delivering new infrastructure in the Pacific. The Minister for International Development and the Pacific, Alex Hawke, has, for example, suggested it is time for Australian businesses to step up in the Pacific. In addition to the private sector, our report suggests there should also be a focus on engaging and supporting civil society groups. Working with Pacific civil society in the design and implementation of new infrastructure is critically important for ensuring transparent decision-making; including in tendering and monitoring infrastructure. New infrastructure projects are also an opportunity to stimulate economic growth in the Pacific directly, through the creation of local employment opportunities, skills transfer and capacity development, and through partnerships with local businesses and civil society groups. Given their closeness to communities, civil society organisations can facilitate the engagement of people with disabilities, and women, in infrastructure planning and delivery, helping to ensure that priorities – and design features – are based on local need, minimise risks to marginalised groups, and benefit these groups in their delivery and beyond.
Typically, it is the actions taken by island governments themselves to manage projects, and to develop robust policy frameworks governing the use and maintenance of infrastructure, that are a key determinant of positive outcomes. This means development partners should be supporting the strengthening of infrastructure governance, the ‘soft infrastructure’ that accompanies construction of hard assets. Often this also requires support for collaborative decision-making that includes Pacific civil society groups at regional, national and project levels. The Pacific Islands Association of Non-Government Organisations (PIANGO) was one of the partners consulted for this report. PIANGO executive director, Emeline Siale Ilolahia, told us it was critically important that new projects be driven by local priorities. “If we’re not careful these projects will be driven by the needs of the people proposing them, and the only beneficiaries will be the companies building them”, said Ilolahia.
“Building Together: seven principles for engaging civil society to deliver resilient, inclusive and sustainable infrastructure in the Pacific islands” was initiated by the Research for Development Impact Network (RDI Network) and co-produced by RDI Network and Pacific Connections (Australia). The report was co-authored by Wesley Morgan, Rebecca McNaught, Sally Baker, Fulori Manoa and Jope Tarai.
This article first appeared on the DevPolicy blog.
By Sadhana Sen
Is the Pacific an aid-dependent region making endless requests for development assistance but with little care for how effectively and successfully this aid is used?
What should be done by Pacific governments, donors and other stakeholders to improve the Pacific’s status in the aid effectiveness tables? We currently rank at the bottom?
Do donors really care about how successfully their development dollars are used across the Pacific region, or is aid just soft diplomacy; a means to influence geopolitical maneuverings in the region?
Delegates to the Australasian Aid Conference (AAC2020) will look at the state of development in Australasia and in the Pacific and aid effectiveness when they meet in Canberra at the Crawford School of Public Policy at the Australian National University February 17-19. Researchers working on aid and international development policy will share their insights and promote partnerships to build the research community.
So what can the Pacific Islanders and those working in the region expect from the discussions?
The conference’s location and Australia’s position as the South Pacific’s biggest aid partner as well as the current Australian International Development Policy Review, means Australian aid will be front and centre of the discussions.
The aid effectiveness sessions are led by the Devpolicy Centre’s Dr Terence Wood who writes on Australian aid project effectiveness – what shapes it, and why is it worse in the Pacific?
There will be a launch of a mapping study looking at funding gaps, opportunities and trends for Pacific women and girls, led by Fiji’s Virisila Buadromo from Urgent Action Fund for Women’s Human Rights Asia and the Pacific and Michelle Reddy from the Fiji Women’s Fund.
A research project titled Pacific perspectives on the World will also be launched at the conference. Led by the Whitlam Institute and an outfit named Peacifica, it “analyses views of a diverse group of Pacific islanders from Fiji, Vanuatu, and the Solomon Islands on their countries’ and region’s future place in the world.” The researchers say they’ve sought Pacific peoples’ views on “the role that Australia can play as a partner in realising that future.”
Other sessions will look at: infrastructure investments and NGO-participation in this sector; gender and development case studies; child-focused aid; climate change; eliminating violence against women and girls; and women’s economic empowerment (which includes Solomon Islands’ Dr Alice Pollard, the founder of the West ‘Are’Are Rokotanikeni Association NGO.)
Several panels are centered around Australian aid to Indonesia. However any mention of West Papua or a look at the plight of the West Papua people under Indonesian rule is a glaring omission from the program.
With this year marking the twentieth anniversary of UN Security Council Resolution on Women, Peace, and Security (WPS,) a panel will discuss the updated WPS Index, revealing areas of progress, stagnation, and reversals, and current opportunities for advancing the WPS agenda in Asia and the Pacific. Case studies include getting women’s issues onto the table in Bougainville, timely given the recent referendum.
Labour Mobility is another focal area, with a keynote panel looking at lessons learned from the first year of Australia’s new Pacific Labour Scheme, and an overview of recent recruitment reforms in Papua New Guinea.
Overall there are 58 panels and 220 presenters. And no Canberra is not closed. It’s had a bad summer with fire, hail and smoke, but the smoke is reducing, the weather is improving, and the conference is in a modern, air-conditioned building, promises Convenor and Development Policy Centre Director, Stephen Howes.
Sen is an independent Regional Development and Communications Consultant.