By Stuart Schaefer, Director International Programs, Save the Children Australia and James Batley, Distinguished Policy Fellow in the State, Society and Governance in Melanesia Program, part of the ANU's Coral Bell School of Asia Pacific Affairs at ANU.

Jenny Hayward-Jones's departure from the Lowy Institute will leave a real gap in the public debate over development issues concerning Papua New Guinea and Australia's role. This also includes her invaluable role in helping establish the Australia-Papua New Guinea Emerging Leaders Dialogue. Her valedictory research paper, The Future of Papua New Guinea: Old Challenges for New Leaders, is a very good scan of the development issues facing Papua New Guinea and has prompted a number of reflections from us.

It's hard to take issue with Jenny's analysis of the various challenges facing Papua New Guinea; in particular we think it's great that she draws attention to the risks posed by the steep growth in expenditure on the District Services Improvement Program (DSIP), i.e funds effectively controlled by Papua New Guinean MPs.

The conclusions drawn in the report are certainly laudable from a management perspective: focus on a limited number of priorities, and once they have been dealt with, move on to the next tier. This is a particularly important principle in an environment where there's never any shortage of suggestions — mostly well-meaning, but not always evidence-based (or affordable, or internally consistent) — for how Papua New Guinea's budget and the Australian aid program should be spent.

In many respects, the paper bears a strong family resemblance to the sort of internal DFAT/AusAID analyses of Papua New Guinea and its development challenges that have been produced over many years. Yet this prompts the question why so few PNG and Australian leaders over recent decades seem either to have been unable to draw similar conclusions or, more importantly, to implement them. This in turn reminds us that Papua New Guinea's development challenges are more than technical problems; they're political, and politicised, issues — and on both sides of the Torres Strait. To put this another way, in addressing Papua New Guinea's development challenges it's critical to understand the political incentives that drive the way resources are allocated in the PNG budget and in the Australian aid program.

For instance, the analysis in the paper appears to take it for granted that PNG leaders see it as in their interests to have strong national institutions, and that what constrains efforts to strengthen them is essentially a shortage of financial resources. This assumption needs to be tested more rigorously — particularly when set against the unprecedented growth of the DSIP.

From Australia's perspective, the article correctly notes that development issues need to be addressed by more than just the aid program. But it could go further in acknowledging the extent to which the aid program is shaped by broader political realities in the bilateral relationship. Indeed, surely no Australian bilateral aid program is shaped more by political considerations and pressure than the one with PNG. Of course, this is a fact of life. Even so — to cite just one recent example — it's undeniable that the deal to re-establish the Manus processing centre has had a real impact on the bilateral program.

While we applaud the paper's call for selectivity in funding initiatives either through the PNG budget or the Australian aid program, there is scope for questioning the evidence base on which such funds might be allocated. The paper states, for instance, that 'Many PNG and Australian business people and government officials have commented to the author that weak capacity and inadequate skills in the public service are the most critical inhibitors to development in Papua New Guinea.' Experienced people may have claimed that, but is it true? Claims that this or that sector represents the fundamental constraint to development in Papua New Guinea (or elsewhere) are very familiar to those responsible for running the aid program. The key lies in rigorously testing such claims.

Equally, while we think the priorities suggested in the paper are certainly worthy of close consideration and analysis by both governments, we're a little nervous at use of the phrase '[potential] circuit breakers' to describe them. Such language is a little too redolent of the search for 'the secret of development' in Papua New Guinea, in a context where shortcuts to a stable and prosperous future simply don't exist. Indeed we need to remind ourselves continually that development gains will require sustained effort over a long period of time.

Finally, we don't think the paper gives sufficient attention to the issue of resourcing. It acknowledges the forecast increases in PNG's revenue from commodity exports will not materialise. But ultimately any analysis of PNG development needs to recognise the extremely small quantum of money available: anticipated riches or not. With a total government budget of less than AUD $10 billion per annum for 7 million people, there just isn't the money in the short or medium term to spend much more on policing, on electrification, on rural infrastructure or on quality education as implied in the paper. Moreover it's important to acknowledge the structural problems in Papua New Guinea's budget, such as the large spend on salaries that is politically very difficult to deal with.

None of the above should be seen as detracting from the value of Jenny's paper in contributing to a discussion that is of critical importance to Australia. Our comments are provided in the spirit of taking that discussion forward. The paper rightfully reiterates that indicators of declining governance in Papua New Guinea are worrying and reminds us that analysts and policy makers alike need to remind themselves to take a long term perspective on Papua New Guinea's development.

Photo courtesy of Flickr user Hugo Cesar.