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Solomon Islands: Was RAMSI worth it?

Solomon Islands: Was RAMSI worth it?

Tobias Haque and Doug Porter have worked on Solomon Islands for the past several years. The views expressed here are those of the authors and not necessarily those of their employers .

Jenny Hayward-Jones' recent paper (Australia's Costly Investment in Solomon Islands) suggests Australia's support for the RAMSI intervention in Solomon Islands went on too long, did not achieve enough, and cost too much. We argue that these claims need to be tested against global experience and Solomon Islands' social and economic realities. 

Did Australia support RAMSI for too long?

Probably not, for two reasons. First, the costs of conflict, and the propensity of countries to relapse into violence, are high. The World Bank's World Development Report on Conflict, Security, and Development showed that civil wars cost on average the equivalent of 30 years of GDP growth of a medium sized country and that 90% of civil wars during the 2000s occurred in countries where there had been conflict in the previous three decades. Second, global research shows that emergence of legitimate institutions capable of preventing repeated violence takes, even in the best cases, 15 to 30 years. Because of this, the g7- (a group of fragile and conflict-affected countries, including Solomon Islands) has repeatedly called on donors to recognise the inherently long term and political nature of state-building and peace-building.

These global lessons are applicable in the Solomon Islands. In purely economic terms, the World Bank estimates the cost of the tensions at 134% of Solomon Islands' GDP. Incomes in Solomon Islands are only now returning to pre-tension levels. A return to violence in Solomon Islands would have been disastrous. As recently as 2010, half of Solomon Islanders believed law and order would break down without RAMSI and 29% believed that the violence of the tension period would return.

By all accounts, the drivers of conflict in Solomon Islands remain unaddressed. Local institutions are ill-equipped to deal with continuing problems of social order, uneven access to services and economic opportunities, and disputes over logging and development spending. All available evidence suggests that the premature exit of RAMSI would have precipitated further violence, at major cost to Solomon Islanders and the international community. Global experience shows that investing in conflict prevention is typically much more cost effective than post-conflict interventions.

Did RAMSI do enough? 

The Lowy Institute report cites increased aid dependence of the Solomon Islands as a further shortcoming of the RAMSI intervention. If aid dependence is measured in terms of the amount of aid provided to a country, then any increase in aid will necessarily be judged to have increased aid dependence. As we have argued here and here, Solomon Islands' economic prospects remain fundamentally constrained by geography: its small and dispersed population and isolation from global markets. Small island states in general, and Pacific islands in particular, often rely heavily on international transfers. It is not clear how the policy levers at RAMSI's disposal could have been expected to alter this reality. [fold]

Solomon Islands now relies heavily on external support for the functioning of certain formal institutions: public finance, courts, police, etc. But, as the Lowy Institute report notes, these institutions could not seriously have been expected to achieve self-sufficiency or any significant broadening of capabilities within the prevailing political context. And, as the Lowy Institute report also notes, RAMSI's mandate was never to bring about the wholesale political or administrative transformation that would have been required to achieve such self-sufficiency. Such an agenda, at minimum, would have required a much broader political mandate, more extensive resources and, upfront, a decades-long commitment.

Did RAMSI cost too much?

The Lowy Institute report's claim that Australia's investment in RAMSI was 'disproportionate' needs to be informed by some metric of proportionality. Globally, 38% of aid goes to conflicted and fragile states. Per capita aid flows to Solomon Islands are not out of line with those to other small post-conflict countries or even to other Pacific island countries unaffected by civil conflict (see figure below).

Source: World Development Indicators.

Average annual expenditure on RAMSI equated to around 0.06 % of Australia's total government expenditure in FY12/13, and 0.02% of GDP. The vast majority of Australian official development assistance (ODA) to Solomon Islands went to payments to Australian officials, consulting and contracting firms. Expenditure on RAMSI provided security against potentially disastrous economic disruption and human suffering in a poor neighbouring country during a time of intense need, while imposing only limited costs on the Australian economy. 

Towards better metrics of success

The case for RAMSI's intervention was compelling. Criticisms that the intervention was both too long and did not achieve enough are contradictory. The desire of policy-makers to keep RAMSI's activities tractable, focused and time-bound limited the possibility of addressing more fundamental drivers of conflict and underdevelopment. 

There is much to be learned from the RAMSI experience. Claims that the cost the intervention was not justified, however, need to take adequate account of: (i) the plausible alternative of a return to violence; (ii) inevitable limits to the achievable extent of social and institutional transformation within short  time-frames; (iii) realities that Pacific economies will depend on international transfers even under best possible domestic policy and institutional settings; (iv) the levels of support provided to other small post-conflict and Pacific nations; and (v) the fact that Australian support to RAMSI was often captured by Australian citizens and firms, rather than representing a pure loss to the Australian economy. 

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