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About the project

A focus on Pacific Islands has been a central component of the Lowy Institute’s work for more than a decade. We research contemporary challenges facing the Pacific islands region in areas including geostrategic competition, sustainable economic development, governance and leadership challenges, poverty alleviation, and Australia’s relationship with Pacific countries and organisations. We also hold major conferences, workshops, dialogues and exchanges. We have produced influential work on Australia’s Regional Assistance Mission to the Solomon Islands, the 2006 Fiji Coup, normalising Australia’s bilateral relationship with Fiji, Australia’s bilateral relationship with Papua New Guinea, the future development challenges of Papua New Guinea, the economic benefits of greater labour mobility between Australia and the South Pacific, security and resilience dynamics in the Pacific, and foreign aid flows in the Pacific.

The Institute manages four major projects focusing on the Pacific:

The Pacific Research Program (PRP) is a consortium partnership between the Lowy Institute and the Australian National University’s Department of Pacific Affairs and Development Policy Centre, with the support of the Department of Foreign Affairs and Trade. The PRP is designed to be a globally pre-eminent centre of excellence for research on the Pacific. More details are available here.

The Lowy Institute Pacific Aid Map is supported by the Department of Foreign Affairs and Trade and is designed to enhance aid effectiveness in the Pacific.

The Australia-PNG Network is a project supported by the Department of Foreign Affairs and Trade, designed to foster people-to-people links between Australia and Papua New Guinea. More details are available here.

The South Pacific Fragile States Project was a project supported by the Department of Defence to produce independent research and forward looking analysis on the key drivers of instability in the South Pacific and the associated security challenges for Australia and the wider region. More details are available here.

THE MAPPING FOREIGN ASSISTANCE IN THE PACIFIC PROJECT

The Lowy Institute Pacific Aid Map is an analytical tool designed to enhance aid effectiveness in the Pacific by improving coordination, alignment, and accountability of foreign aid through enhanced transparency of aid flows. The Pacific Aid Map has collected data on close to 13,000 projects in 14 countries supplied by 62 donors from 2011 onwards. All data has been made freely available on this interactive platform, allowing users to investigate and manipulate the information in a variety of ways. The Pacific Aid Map is supported by the Department of Foreign Affairs and Trade.

The Lowy Institute Pacific Aid map is available here.

Country profiles from Pacific Islands countries can be found here.

See the Chinese Aid in the Pacific map here.

 

 

Latest publications

Pacific Island Links: Vanuatu election, PNG finances, a 'Facebook for fieldworkers', and more

By Alastair Davis, an intern with the Lowy Institute's Melanesia program

  • The election campaign is underway in Vanuatu and the Melanesian Spearhead Group and the Commonwealth have sent observer groups led by former Solomon Islands Prime Minister Sir Francis Billy Hilly and former Bahamas Prime Minister Hubert Ingraham respectively.
  • Staying in Vanuatu, while there are a wealth of parties and candidates contesting the election, female representation is low with only eight women among the 183 candidates announced to date.
  • This DevPolicy report examines the latest Papua New Guinea Public Expenditure and Financial Accountability assessment, the results of which underscore the need for a transparent and inclusive reform process.
  • PNG Prime Minister Peter O’Neill has announced a cabinet reshuffle and signaled a renewed focus on the Bougainville independence referendum by adding the Bougainville Affairs portfolio to his PM duties.
  • 2015 Aus-PNG Emerging Leaders Dialogue participant, David Kitchnoge writes thoughtfully on the historical links between PNG and Australia, and the importance of capitalising on the agrarian strengths of PNG for development.
  • In the Solomon islands, a $3 million payout to ex-members of the Malaita Eagle Force militia has stirred up controversy and been roundly criticised by leaders associated with the rehabilitation process.
  • A 'Facebook for fieldworkers' has been launched to connect aidworkers, academics and journalists working in remote or difficult environments. The developer, researcher Dr Scott Flower, felt universities don't prepare graduates well enough after spending time in PNG.
  • The Indonesian government has revoked the visa application of a French journalist, Cyril Payen, who had produced a documentary on West Papua. Last year President Joko Widodo promised to open Papua up to foreign media.  
  • The Lowy Institute’s Jonathan Pryke analyses what the latest IMF report on the PNG economy says about the cost of 2018’s APEC summit and actual levels of public debt.
  • The reconstruction effort in Vanuatu post cyclone Pam has an emphasis on traditional housing materials over bricks and mortar ( H/T Kirk Huffman).

Lingering questions for PNG's 2016 budget: APEC and public debt

The 2016 Budget was one of emergency for Papua New Guinea. Adjusting to a 20% collapse in revenue caused by plummeting commodity prices and an economic slow-down, the government has implemented expenditure cuts that are harsher than those contained in Greece’s austerity package.

In many ways, the 2016 Budget was the one PNG had to have. While commentators, including myself, have questioned the severity and the way in which cuts have been made, all agree the government could not keep spending at the pace it has been given the collapse in revenue and rapid increases in public debt. But will expenditure actually slow? And what is the true level of public debt in PNG?

We can shed some light on these questions by focusing on a specific, big-ticket item of expenditure: PNG’s hosting of the APEC leaders’ meeting in 2018.

Source: Business Advantage PNG

Port Moresby is going through a massive transformation in preparation for this event, driven by a confusing mixture of public, private and state owned enterprise (SOE) expenditure. Due to the degree of off-budget expenditure that is commonplace in PNG, it has been difficult up to this point to quantify the public cost of the APEC event, not to mention overall public debt. But, thanks to a recent Article IV consultation report from the IMF, we are a step closer to answering both of these questions. Before we move on, however, it is important to note that while sources don’t get much more credible than the IMF, these are sensitive issues in PNG and public information is scarce. What is sorely needed, and what the taxpayers of PNG should demand, is more information and transparency from the O’Neill government.

It was October 2013 when PNG was given the go ahead to host the 2018 APEC leaders’ meeting. At the time, Prime Minister O’Neill argued the event would deliver immense tourism and investment value by in elevating PNG on the global stage. The meeting, which brings together heads of state from 21 Pacific-facing nations including the US, China and Russia, is one of the few events on the annual international summit schedule that heads of state regularly attend. It is however, perhaps tellingly, most famous for decking leaders out in traditional, often colourful, attire.

Drawing up to 10,000 delegates and media for more than 180 planned meetings (as noted on page 46 of this budget document), the security, logistics and accommodation demands of the event are daunting for any city. Australians will no doubt remember the controversies surrounding Sydney’s 2007 APEC meeting, while last year’s Philippines APEC was also controversial and its value a source of debate. The challenges will be even more acute for Port Moresby, the 3rd least livable city of 140 measured by The Economist Intelligence Unit.

The government has not taken these challenges lightly, and quickly established a coordination authority to oversee the preparations for Port Moresby. Little was publicly heard from this authority in the following two years until CEO Christopher Hawkins revealed much more detail at the PNG Advantage Business Summit in August 2015, including the map reproduced above, that shows five major precincts for the Leaders’ week meetings.

Anyone who has recently visited Port Moresby will note how many of these precincts incorporate new developments, such as the Paga Hill development (where the leaders’ meetings will be held) and accompanying ring road, the Star Mountain Hilton development (being constructed by the Mineral Resource Development Company, a state owned enterprise), and another planned airport upgrade. (Despite this surge in construction, the leaders’ week itself will still require accommodation options on cruise ships to offset capacity constraints). Mr Hawkins stressed that the costs of these new developments would largely be absorbed by the private sector and this 'won’t be the multibillion dollar APEC people are expecting'.

Paga Hill's proposed development. (http://www.pagahill.com/#!paga-hill-estate/co67)

Reflecting this commitment the government has budgeted, as shown on page 46 of this document, 80 million Kina (roughly US $26 million) in expenditure for APEC in 2016, half of which will focus on security (with which Australia is committed to assist). Expenditure will no doubt ramp up as we get closer to 2018, and that is to say nothing of what is being spent outside of the budget process. A comprehensive budget for APEC expenditure over the next three years was expected to go before Parliament in October, but nothing has yet been made public. Given the cash crunch the government now faces, such a lack of transparency is underwhelming.

Thanks to the IMF, however, we have a more feasible estimate of the true cost of APEC. Page 6 of the IMF report notes the government plans to spend 3 billion Kina (roughly US$1billion or A$1.5 billion) over the next three years on APEC, equivalent to approximately 7% of all government expenditure over that period (last year the Philippines spent roughly US$200 million while at the other end of the spectrum China spent about US$6 billion in 2014). To put that into perspective, health and education expenditure will total 3.5 billion and 3.7 billion Kina respectively over the same period. If APEC will indeed cost the 3 billion Kina forecast by the IMF, the PNG government will need to work hard to justify it as core services are slashed, and close to half a billion kina still needs to be found to finance next year’s general election.

Star Mountain’s proposed Hilton development (http://www.starmountainplaza.com/gallery)

Of course, expenditure of this scale will bring some benefits. The IMF notes that it will contribute to overall economic growth in the country, and employment in and around Port Moresby. The meeting itself may also promote tourism (though recent research from the ADB of major events held in the Pacific questions the validity of this claim) and investment in the country. New high end infrastructure and hotels will also benefit the Moresby elite and expat community.

But given the tight fiscal constraints and multiple expenditure demands facing the government of a country with one of the lowest levels of human development in the world, and where 40% of the population live in absolute poverty, voters have the right to ask what are the true costs and benefits of holding this event. 

Whatever the final figure is for APEC, it will no doubt have to be largely financed by debt, another contentious issue in PNG. The 2016 Budget has already pushed debt figures past the legislated debt limit of 35% of GDP (see page ii of this document). But the budget only tells half the story when it comes to public expenditure in PNG. The balance sheets of SOEs, off-budget loans, and outstanding obligations to government superannuation funds should all factor into overall public debt, regardless of how well they are collateralised. Until recently much of this remained shrouded in mystery, but, thanks again to the IMF, we can draw a more comprehensive picture of the government’s debt profile, as shown in Table 1.

Table 1: PNG's debt as a proportion of GDP

Source: IMF Article IV, page 9

These numbers are still moderate relative to many other countries, but they are significantly higher than the figures used by the PNG government, and they are growing rapidly. With official debt servicing already having more than trebled from 2012 to 2016 and now accounting for 10% of government expenditure, the government cannot afford any more extravagant expenditure. That isn’t to say that APEC should be completely abandoned — that train already appears to have left the station — but the government’s financial position obliges it to be as frugal and transparent as possible over the next three years.

When the PNG government made the decision to host APEC, Prime Minister O’Neill hoped it would be an opportunity to showcase the country’s burgeoning economic success and promote PNG as a confident and modern nation deserving of its seat at the APEC table. The 2018 event may still fulfill that goal, but it can no longer be at any cost. If the government is still confident in the event’s value, then it must be prepared to prove it to the people of PNG with greater transparency and comprehensive, justifiable, costings.

Aid and development links: dengue vaccine, refugees and wages probe, jargon and more

  • The world’s first dengue fever vaccine, which in clinical trials has prevented up to 93% of severe dengue cases in people aged 6-45, is about to be released in Mexico, the Philippines and Brazil. Dengue fever causes about 25,000 deaths around the world annually.
  • The Economist has a piece detailing concerns about the UK’s new aid strategy, which were first brought up by Owen Barder late last year.
  • Vinod Thomas, Director General of the ADB’s independent evaluation unit, discusses five surprising findings from evaluation results in 2015. 
  • A new working paper has shown that the influx of half a million Syrian refugees in Turkey has had no impact on wage rates. The CGD blog has more on the other findings (local prices have slightly gone up in refugee dense areas) from the paper.
  • Larry Elliott, economics editor at The Guardian, argues that with the the refugee crisis worsens the world’s poorest are losing out as more and more donor countries aid budgets are being reallocated to deal with the crisis.
  • Sticking with migration, Feakonomics has an excellent podcast from the end of last year asking whether migration is a basic human right, and what the economic benefits of open migration might look like.

  •  For something a little more light hearted, The Guardian has a primer for how to speak 21st Century aid jargon, which was been taken over by Silicon Valley speak.
  • The 2016 Australasian Aid Conference will be held next month at the Australian National University in Canberra. The Conference is bound to sell out, so make sure you register early.

Pacific links: Fiji's budget, Ok Tedi restructure, renewables, holiday reading and more

  • Matthew Dornan takes a look  at Fiji’s 2016 budget. He notes that while the overall economic situation in Fiji is sound, the major policy reversals and long list of ad hoc revenue decisions in the budget 'undermine the government’s economic management credibility'.
  • Remittances costs from Australia to Vanuatu topped the list of highest remittance cost corridors in 2015, according to a recent report from the World Bank. More than 20% of every A$200 sent from Australia to Vanuatu is taken up in fees.
  • French Polynesia has signed a deal  with a Chinese consortium to construct a massive US$2 billion tourism project on Tahiti that is expected to create over 10,000 jobs.
  • The Ok Tedi mine, which has been closed since August due to drought conditions and low copper prices, has announced  a complete restructuring once the mine reopens, switching operations to a ‘fly in-fly out’ model. This will have a big impact on local employment and the company township Tabubil, where the school will close.
  • Radio New Zealand’s Johnny Blades has conducted an in depth analysis of the cultural, economic and political impacts of the porous border between PNG and West Papua.
  • Sticking with West Papua, the recent resignation of Indonesian Speaker Setya Novanto over allegations that he demanded a $4 billion stake in Freeport’s Gasberg mine, the country’s largest, reflects how important the state is to Indonesia.
  • The World Bank has launched a new report on the potential for an ICT revolution to generate more than 10,000 jobs in the Pacific. Pacific Beat has a summary.
  • The latest in the World Bank’s Praxis Pacific series is a panel discussion on the opportunities and challenges of renewable energy in the Pacific. Radio NZ has a summary, and the full video is below:

 

Holiday reading

  • Simon Winchester has released a book detailing the history and future of the Pacific, the ‘Ocean of the future’. The New York Times has a review of the book here and you can listen to an interview with the author below.

 

  •  The ANU released a book this month detailing the fundamental shift that has taken place in recent years in the way that the Pacific Island states engage with regional and world politics. The 21 chapters come from a range of authors including President of Kiribati Anote Tong, former PNG PM Michael Somare, and PIFS Secretary Meg Taylor.
  • For a more personal account of the Pacific check out ‘Inside the Crocodile’, where Trish Nicholson details five years of development work in PNG’s West Sepik. Tess Newton Cain has reviewed the book on Devpolicy, while Gordon Peake has done the same for Fairfax.

2015 Australia-Papua New Guinea Emerging Leaders Dialogue: Outcomes Report

In this Report, the Lowy Institute’s Melanesia team summarises the outcomes of the third annual Australia-Papua New Guinea Emerging Leaders Dialogue. The Dialogue assembled a group of dynamic young leaders from diverse fields in both countries. Discussion focused on redefining employment, sustaining rural communities, engaging Asia, and gender inequality. The young leaders used the Dialogue to make new professional connections and are already collaborating to enhance existing initiatives that prove the enduring value of people-to-people relations between Papua New Guinea and Australia.

Pacific Island links: COP21, New Caledonian nickel, PNG education system and more

  • The outcomes of the Paris climate change talks have been praised by Pacific Island leaders. PNG’s Minister for National Planning, Charles Abel, spoke to Pacific Beat about the results and his goals for the sustainable development of PNG’s economy.  
  • On The Strategist, Tevita Motulalo analyses the broader implications of climate change in the Pacific on global security. For the countries in this region, the non-traditional security threat of climate change poses the biggest danger and will drive strategic calculations.     
  • This set of photos of Kiribati has been on show in Paris to coincide with COP21. It shows a beautiful side to life in the country that is so vulnerable to the effects of climate change.  
  • Clive Palmer met with New Caledonian President Philippe Germaine recently to discuss the ramifications of the closure of his nickel refinery in Townsville. Nickel is the largest export for New Caledonia, which is home to about one quarter of the world’s nickel deposits. President Germaine reportedly told Palmer that closure of the refinery would cause social and political upheaval in his country. 
  • Papua New Guinea has offered citizenship to 3000 West Papuan refugees. There are estimated to be 10,000 West Papuan refugees living in PNG, some have been there for more than 30 years.   
  • Anthony Swan has written about the PNG government’s decision to abolish the nationwide exams for grade 8 and 10 students, arguing that independent external assessment is critically important because there is limited formal oversight of schools in PNG.
  • A recent editorial in The National laments Papua New Guinea’s current state of development. 
  • DFAT’s Innovation Xchange has launched the $2 million Pacific Humanitarian Challenge to rethink the response to climate change and natural disasters in the region.  
  • Miss PNG Abigail Havora’s win in the Miss Pacific Islands contest has been big news this week. The science graduate is the first Papua New Guinean to win the competition. 'My intent is to bring a message that strengthens the bridge between culture and changing times so young people, especially women, are more aware of what they are contributing to and the type of influence they are exerting,' she wrote on Facebook.

Aid & development links: financing COP 21, microlending, Australia's MYEFO and more

  • COP 21 is over with a deal that has been heralded by world leaders as 'the best chance we have to save the one planet we have', while the expert consensus is that it 'has landed more or less where expected'. Robin Davies pours some cold water on praise for the deal by highlighting three big financing blunders in the negotiations.
  • For a poignant reminder of why the Paris negotiations were so important check out this video (and below) from the world’s astronauts, who have witnessed firsthand the fragility of our planet. (h/t Duncan Green).
  • The Centre for Global Development has released its 2015 Commitment to Development Index (CDI), which ranks rich countries on seven policy areas that affect the world’s poorest people. Australia tied for 10th place. You can listen to a podcast summarising the CDI here.
  • FiveThirtyEight, one of my favourite wonkblogs, has written about the building consensus of evidence that microloans don’t appear to be very effective poverty solutions. Simply giving people money might be a much better alternative. 
  • On the eve Australia’s Mid-Year Economic and Fiscal Update, which in the past has been used to announce major cuts to Australia’s aid budget, Sam Mostyn discusses the importance of a strong Australian aid program.
  • Meanwhile, Fairfax Media takes an in-depth look into the programs that have been directly affected by the largest cuts in the Australian aid program’s history.
  • Finally, Charles Kenny has produced a holiday giving guide split into two parts: one for those with $45 billion to spend (i.e. Zuckerberg, and one for regular people.

Pacific Island links: Ciobo, Tuna crisis, COP21, Vanuatu elections and more

  • Australian Minister for International Development and the Pacific Steven Ciobo is leading a delegation of Australian MPs on a tour that will take in Fiji, Tonga, Samoa and Solomon Islands.  
  • While in Fiji he launched the first progress report on Australia’s $320 million Pacific Women Shaping Pacific Development Scheme.  
  • The annual meeting of the Western and Central Pacific Fisheries Commission is at a halt, as a consensus on how to save overfished tuna cannot be reached. 
  • Foreign Minister Julie Bishop has announced the new High Commissioner to Papua New Guinea. Bruce Davis, previously Vice-President of the ADB and former Director-General of AusAID, will be heading to Port Moresby to take up the position.  
  • Robin Davies takes a closer look at Australia’s commitments at the climate change conference in Paris, explaining that Australia is lagging far behind when compared to other countries’ pledges. 
  • Woodside Energy has withdrawn its plans to take over the Papua New Guinean company Oil Search.  
  • The 15 MPs convicted of corruption and bribery in Vanuatu have been banned from holding public office for 10 years. Elections have been announced for 22 January 2016.  
  • The Lowy Institute hosted the 2015 GE Australia-Papua New Guinea Emerging Leaders Dialogue last week. You can read some of the key recommendations here
  • Jenny Hayward-Jones took the opportunity to reflect on Australia-PNG relations over the last year and the importance of people-to-people connections to maintain the friendship.  
  • Pacific Islands Forum Secretary-General Dame Meg Taylor on the future of our oceans and the imperative to reach a global consensus to maintain their health. 

Aid & development links: 'lazy' aid recipients, Australian charity, malaria fund and more

  • MIT and Harvard economists have debunked the claim that aid funded welfare programs in developing countries make people lazy. Vox has a good summary.

  • Devpolicy has posted the second in a two part series looking at Australian development NGO expenditure, which I have co-authored. In this post we look at how individual NGOs have changed their expenditure over time.
  • The Bill and Melinda Gates Foundation is partnering with the UK for a £1billion malaria fund and with Silicon Valley heavyweights Mark Zuckerberg and Jeff Bezos on a clean energy fund.
  • Last week aid worker Steve Dennis won a case against his former employer, the Norwegian Refugee Council, for 'gross negligence' after he was kidnapped on the job in 2012. The Guardian takes a look at what impact this landmark decision will have on the humanitarian sector, with Aidspeak describing it as a ‘game-changer’.
  • Also last week, Australian Prime Minister Malcolm Turnbull made waves when he pledged $1 billion of Australia’s existing aid program to climate change initiatives over the next five years. That equates to roughly 5% of Australia’s total aid spending over that period. It is not clear if this funding will be redirected from other areas of the aid program or will come out of existing aid funding already going to adaptation and mitigation projects in the region.
  • On the eve of a five day tour to Africa by Chinese President Xi Jinping, The Washington Post reported African countries that receive Chinese aid tend to become more violent.
  • Sticking with The Washington Post, a few weeks ago it took a look at new research asking whether a Western education leads to leaders in developing nations launching more democratic reforms. The answer is yes, providing further justification for scholarship programs funded through aid (h/t Devpolicy).
  • Meanwhile, a new report from the Australian Charities and Not-for-profits Commission shows that donations to development NGOs in Australia made up about 12% of all charitable donations in 2014, while Fairfax media asks the question 'How generous are Australians really?'

Photo courtesy of Flickr user Alex Prolmos

Pacific Island links: leaders in Paris, REDD+, budget woes, asbestos, ending AIDS and more

  • Pacific Island leaders are in Paris in force for the COP 21 United Nations conference on climate change. Leaders from Marshall Islands, the Federated States of Micronesia, Kiribati, Tuvalu, Fiji, Nauru, Palau, Cook Islands, Papua New Guinea and Samoa all addressed the conference in the opening days.
  • The Pacific has made global headlines for being most at risk of disappearing due to rising sea levels brought by climate change.
  • The Guardian has an excellent long-form read on the bold ambitions of REDD- as a mechanism for climate change mitigation, and its humble roots in Papua New Guinea. The New Yorker has another on the intersection of Climate Change, El Niño and PNG.
  • Paul Flanagan has produced a two part series providing some forensic level analysis of the 2016 PNG budget.
  • The ADB has released its latest Pacific Economic Monitor, highlighting budgets around the region and the significant challenges governments face in addressing falling commodity prices and El Niño. Unsurprisingly, PNG has been the hardest hit. Also, take a look at the chapter on the (minimal) economic value to hosting major Pacific events.
  • Meanwhile, PNG’s Freedom Rating has taking a slight tumble, with Freedom House authors attributing it to 'Prime Minister Peter O’Neill’s increasingly autocratic leadership style, including his disbanding of an anticorruption task force after he became subject of a corruption investigation'. Rule of law is also an issue, as PNG police continue to make headlines for the wrong reasons.
  • An asbestos removal program has kicked off in Nauru, yet local workers and refugees hired to remove the hazardous material from 41% of Nauru housing reportedly working without proper protection, while the materials themselves end up in an exposed local tip.
  • Tuesday was West Papua Flag Day, where local activists of West Papuan self-determination rights hold ceremonies to raise the Morning Star both in and outside of Papua. There have been reports of a military clamp down.
  • Tuesday was also World AIDS Day. HIV/AIDS affects Pacific Island countries to varying extremes, but Fiji is being heralded for its progress on a path to end the public health threat posed by AIDS by 2030.

 

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