Helen Hughes: More aid is no solution for Islands

Opinion

Australians and New Zealanders pride themselves on giving the Pacific a helping hand. Yet the Pacific economies have not grown appreciably faster than the population for the 30th successive year.

The Pacific has lost a whole generation to stagnation and most of the islands - Samoa is an exception - are losing another. The $1.5 billion in aid that the Pacific receives each year - the highest aid a head in the world - is part of the problem rather than the solution.

Aid makes it possible for Pacific governments to avoid economic and social reforms. The elites prosper but villagers are little better off than they were at independence.

Infant and child mortality and maternal deaths are on a par with sub-Saharan Africa and, for women, the Middle East.

An HIV/Aids epidemic is developing. Only half of the children in the larger Pacific states are at school. Those at school are not learning anything because the Pacific has become a victim of post-modern imperialism so that children do not learn to read, write or do mathematics.

Women work hard to provide enough food for the growing population, but boys grow into men without ever having an opportunity to earn an income.

This is why crime and civil conflicts are endemic. The few islanders who have prospered are emigrants. Their island families live on remittances.

The international financial institutions' internal documents agree that they have nothing to show for their efforts. The World Bank and the Asian Development Bank have yet to admit that their Band-Aid millennium development goals, devised to appease their non-government organisation critics, have no application to the Pacific. Because they focus on distribution rather than production, they undermine the agricultural productivity and jobs without which the Pacific has no future.

The United States Millennium Challenge Corporation has selected Vanuatu to be the first recipient in the Pacific of its aid for countries with a well-defined path to development.

But Vanuatu arguably competes with Tonga as having the most counterproductive economic and social policies in the region. Its Government is laughing all the way to the bank as it pockets American dollars.

Australia and New Zealand are on their own in the Pacific. They will be judged internationally by how the Pacific performs. The Australian Government took the lead in organising the regional assistance mission to the Solomon Islands, in mounting the enhanced police and legal mentoring aid programme for Papua New Guinea, and in recent discussions with Vanuatu, to fulfil its obligations to Australian taxpayers by ensuring that aid had a mutual obligation context.

The Pacific islands have a litany of excuses for their poor economic performance. Distance, topography and tribalism are blamed. Some New Zealanders have lent their support to this clamour for aid in perpetuity.

But the Pacific is near the world's most rapidly growing markets in Asia. The islands are beautiful and rich in agricultural land, minerals, timber and fish. The cost of transport and communications has fallen. All countries had to overcome tribalism and learn an international lingua franca.

If the Pacific islands abandon their excuses and adopt policies suited to their endowments, each island could grow at 7 per cent a year and more, and in a generation achieve such high living standards as that of Taiwan, a developing country rapidly catching up to industrial countries.

The Pacific is grossly over-governed. It has 733 legislators - with the number of voters for each parliamentarian ranging from 11 in Tokelau to 25,360 in Papua New Guinea - 209 cabinet members and commensurately swollen public services.

Pacific islands belong to up to 40 international organisations. Politicians and public servants are so busy travelling to meetings and conferences and the Pacific is so awash with international bureaucrats that no one has time for pressing domestic problems.

Australia and New Zealand are not colonial powers and cannot make Pacific island choices or manage their economies. Colonialism is dead. But Australian and New Zealand Governments have a responsibility to their taxpayers to ensure that aid will no longer subsidise island governments that choose stagnation.

Papua New Guinea's press is airing a reform debate, but the citizens of repressive states such as Vanuatu and Tonga depend on journals such as the Times of Tonga and the internet for reports on what is going on in their own countries.

The media in Australian were key to informing voters in the Nauru election.

Australian and New Zealand media thus not only have a role to play in fostering the debate that will ensure that sensible aid policies help rather than harm the Pacific but also in making information about the Pacific available to the islanders.

* Emeritus Professor Helen Hughes is a senior fellow at the Australian Centre for Independent Studies. This is based on her report The Pacific is Viable.