KEY TAKEAWAYS
KEY TAKEAWAYS
Outside powers often treat aid as an easy geopolitical win in the Pacific. However, Papua New Guinea’s (PNG) Minister for National Planning Sir Ano Pala’s recent public critique of Australian aid at Australia’s latest development plan launch in PNG punctured this perception. Pala’s statement should serve as a reminder that Pacific Island countries won’t be bought with aid packages in the tussle for geopolitical influence in the region, particularly those that do not align with Pacific priorities or build local capacities.
The United States can learn from these kinds of critiques as it expands its Pacific aid footprint in a bid to compete with China for friends and influence. To build the types of sustained and beneficial partnerships that Pacific Island countries seek, Washington should avoid treating aid as a competitive numbers game. The volume of aid doesn’t correspond with quality, nor does it necessarily translate to helping communities, and overburdening countries with duplicative aid programs can do more harm than good.
Australia launched its Australia-PNG Development Partnership Plan in September with the sort of roll-out that has become familiar in Pacific capitals as partners step up assistance to the region. The event was proceeding as expected with the usual rhetorical paeans to development partnerships until Pala — a veteran of these sorts of events and whose ministry is putatively responsible for aid coordination — launched into a critique of “boomerang aid” that has filled the pockets of Australian companies and consultants rather than improving local capacities. Pala warned that Australia’s funds are often “wasted,” and appealed for more “cohesive and impactful” interventions.
While such open criticism of development partners is rare, it was not a one-off. In early October, another PNG minister, Richard Maru, caveated a speech honoring the contributions of American servicemen during World War II with a call for Washington to substantiate its partnership with PNG with tangible benefits.
Leaders elsewhere in the Pacific have voiced similar concerns and urged partners to support development on Pacific Island countries’ own terms. Fiji’s Prime Minister Sitiveni Rabuka expressed a willingness to “look a gift horse in the mouth” by rejecting aid he deemed unsuitable to Fiji’s sovereignty and development priorities. Timor-Leste's president, Jose Ramos-Horta, launched multiple haymakers at Australia this month, including by calling out the exploitative nature of a labor mobility scheme providing employment for Pacific workers in Australia.
These politicians do not always, or even often, represent and act in the best interests of ordinary citizens themselves. Yet, a kernel of truth lies in these critiques, one that echoes frustrations that can be readily gleaned from any frank conversation with those working on aid in the Pacific. With a crowded landscape of donors at their doorsteps, Pacific Island leaders now find themselves in a position to shed light on these widespread grumblings and demand better of traditional development partners.
Traditional donors in the Pacific have launched a flurry of aid packages to reassert their influence and counter China. Beijing surged onto the Pacific development scene in 2008 and has been a mainstay ever since. Australia, already the region’s long-time dominant development patron, doubled down on aid as part of its Pacific Step-Up strategy, and has gone further still over the last few years.
The United States, which has historically punched below its weight as a Pacific development partner outside of the Freely Associated States (the Federated States of Micronesia, Marshall Islands and Palau), developed a new-found zest for engagement in the region upon deciding to counter China’s growing influence. Aid commitments featured prominently in the United States’ Pacific Pledge in 2020 and later in its first-ever Pacific Partnership Strategy, which the Biden administration announced in 2022 with an initial pledge of $810 million in new assistance in areas spanning from climate resilience and health architecture to connective technology. The U.S. Agency for International Development (USAID) buttressed its presence in the region accordingly, with re-establishment of a regional mission in Fiji and the elevation of its office in PNG.
Aid is considered a no-brainer for courting the Pacific. After all, the region’s development needs are immense, and Pacific Island governments’ financing and perceived capacity gaps obvious. The Pacific Islands rank among the world’s most isolated and climate-vulnerable countries, and lag in health and education infrastructure. The Asian Development Bank estimates that the region requires investments exceeding $2.7 billion annually through 2030 to tackle its most pressing development challenges.
While geopolitical competition has usefully forced open donors’ purses to help fill the Pacific’s development financing gap, some question the motivations behind it all. Former Secretary General to the Pacific Islands Forum Dame Meg Taylor and former Australian diplomat Solstice Middleby observed that this struggle for influence incentivizes donors to “look good, rather than do or be good.” Pressure to demonstrate commitment and comparative benefits to Pacific Island countries has amplified the “numbers game” mindset among traditional donors, which risks sacrificing quality for voluminous and flashy aid commitments.
The aid industry has little to show for the $40 billion in development assistance pumped into the Pacific Islands over the past decade.
Yet when the sheen of a new announced aid package fades, what remains for recipient populations? Oftentimes in the Pacific, concerningly little. The aid industry has little to show for the $40 billion in development assistance pumped into the Pacific Islands over the past decade. Unmet needs continue to grow in what has become the world’s most aid-reliant region. Many Pacific Island countries have failed to make significant inroads toward development targets, with some even regressing against key human development indicators. In PNG, the region’s largest aid recipient, three quarters of the population live in multidimensional poverty.
Aid projects in the Pacific Islands are less effective on average than in other regions, which a 2022 study attributes broadly to insufficient adaptation of off-the-shelf aid packages to small island nations. The race for influence in the Pacific has prompted an influx of donors and projects with little recognition of the region’s limited absorptive capacity. Each additional entrant to the Pacific donor space piles on administrative burdens for small bureaucracies, many of which can only dedicate under a dozen staff to servicing all these foreign donor-funded projects and handling additional requests. New aid packages often compete with and duplicate existing programs, bloating already-crowded aid streams.
Admittedly, the architects of foreign aid projects do not single-handedly bear responsibility for the dim picture of stalled development in the Pacific. Weak state institutions and captured elites, including the very leaders lambasting donors for failing to support Pacific development needs, contribute their fair share. The World Bank described an environment in PNG in which the needs of vulnerable populations remain chronically underserved as “elites and other vested interests demand rents and other concessions in return for political support.”
In nearby Solomon Islands, the government allocates a paltry $106 per capita to the health sector. Many Solomon Islands members of Parliament have utilized Constituency Development Funds, intended to support local development priorities, to bankroll clientelist networks instead of substantively improving rural livelihoods.
At the same time, jostling for geopolitical influence encourages donors to focus on apparent quick wins, relegating thorny governance issues and the implicit questions that come with them about the probity of their government partners to the wayside. Take corruption in PNG, for example: 96% of Papua New Guineans find corruption in government a major issue and more than half have paid a bribe to get something accomplished. Minister Pala has acknowledged corruption as an issue recently, even though he himself was arrested for attempting to pervert the course of justice when he was attorney general. The charges were dismissed. Yet corruption is rarely tackled head-on in aid plans. It gets glancing mention in Australia’s latest development plan for PNG, only once as a stand-alone mention.
Jostling for geopolitical influence encourages donors to focus on apparent quick wins.
Equally, donors rely heavily on foreign firms and consultants to shepherd ambitious yet short-term aid projects over the finish line, resulting in missed opportunities for building local capacity to overcome challenges posed by state weakness. Strikingly, local contractors receive a meager 1.2% of Australia’s total aid contracts each year. In 2015, legislation tightening PNG’s regulatory regime governing non-citizen technical advisers called attention to perceived loss of local control over and benefit from PNG’s multi-billion dollar foreign-dominated aid industry, although the initiative has since petered out.
The “boomerang” aid model that has become par for the course in the Pacific risks exacerbating aid dependency at the expense of development solutions that local actors can carry forward once project timelines elapse. In USIP’s consultations in the region, Pacific Islanders have expressed the greatest appreciation for aid programs that defy this norm by offering long-term capacity-building initiatives in areas such as vocational training, support for tertiary education institutes, and administrative and technical skill-building for the next generation of leaders in governments and civil society organizations.
There are a conveyer belt of aid launches in Papua New Guinea these days. Just two weeks after Australia’s announcement, USAID kicked off the Peace Project, a five-year, $26 million initiative focused on peace and stability programming in PNG’s Hela and Morobe provinces, work that includes livelihood support and initiatives to end violence against women. The Peace Project is the flagship initiative to emerge from the U.S. Strategy to Prevent Conflict and Promote Stability. While time will tell in terms of implementation, the Peace Project’s targeted attention to communities and local initiatives outside of the capital city offers a promising start for the United States in re-engaging with development in the Pacific.
If the United States aims to be perceived as a sincere and valuable partner in PNG and elsewhere in the Pacific, it should approach aid to the region as an opportunity to contribute to impactful development solutions, and not just as geopolitical low-hanging fruit. Doing so requires digging deeper than high-level engagements and fleeting project cycles to craft sustained, fit-for-purpose support at the scale at which local actors can effectively manage. This support should focus on underserved local priorities. Designing development initiatives with these considerations provides a foundation for more tailored and effective aid partnerships. Such partnerships can still “look good” amid the quest for influence in the Pacific while making good on the intended purpose of aid to meet development needs.
Meghan Sullivan is a senior program assistant in USIP’s Southeast Asia and the Pacific Islands program.