November 10, 2022

U.S. and Australian development cooperation is underway. What's the best pathway to impact?

Back in July 2020, Australia and the U.S. signed an MOU stating intentions to continue working closely together on international development efforts. Meanwhile, the U.S. is kicking off renewed engagement with the Pacific and last month, USAID Administrator Samantha Power and Australian Minister for International Development Pat Conroy met.

So as state leaders of both nations pressure Canberra and Washington to get cracking on initiatives, we wanted to get to the crux of what they need to know – and that is, what’s the best pathway to real and lasting impact? To answer this, we put it to the experts from the region.

Jope Tarai
PhD Candidate, ANU Department of Pacific Affairs

The 2020 MOU between the U.S. and Australia highlights the importance of the Indo-Pacific region, while emphasising common development goals and approaches. It wants collaborative efforts on ‘strategic and operational levels’, while maximising efficiency and impact. 

Realistically, it is clear that the geostrategic contests and insecurities of major powers is the impetus for the importance of the Pacific. 

As an indigenous Pacific Islander observing the global geostrategic duel, I’d like to see the approach of what I call ‘safe bounding’ from the two countries. That is, placing safe boundaries on development initiatives in an environment of hyper-securitisation. This could look like including and accommodating critical civil society and academic voices in balancing these interests.

Why is this so critical to impact? Since the inhumane nuclear tests of the Northern Pacific and Cold War ‘strategic duels’, our region has been a site of military contest and projections. There is a concentrated securitisation narrative that may dominate the core of development. Risks range from its dehumanising consequences – such as those who suffered from nuclear tests to those who struggle under militarised states and societies – to the inadvertent enrichment of domestic security forces. 

In the absence of a clear and honest ‘safe bounding’ approach, the sustainability, success, longevity and utility of any development – exactly what is underway with this new MOU – cannot be guaranteed.

Jope is a Fijian scholar who has worked across both the University of the South Pacific and the Australian National University in Canberra. Jope is a wealth of knowledge on Pacific and regional politics and Pacific diplomacy. At the Lab, we love his insightful and nuanced perspectives, commitment to elevating regional voices and endless generosity. Jope is a regular at our Situation Rooms and a wonderful sounding board for ideas.

Theresa Meki
Pacific Research Fellow, ANU Department of Pacific Affairs

China’s increasing Pacific presence has left traditional powers such as the United States, Australia and New Zealand scrambling to become the regional partner of choice with their ‘Pacific Pledge’, ‘Pacific Step-up’ and ‘Pacific Reset’ policies.

Australia and New Zealand have geographical proximity on their side. Moreover, their long-term interest in Pacific development and security makes recent overtures now appear less opportunistic. Largely absent from Melanesia since WW2, the United States can nonetheless capitalise and build on its historical and existing connections. However, to do that well, three things need to be considered. 

1. Responsibility: Unexploded ordnance (UXO) still remains from the Solomon Islands Campaign in WW2, posing a safety hazard and stalling development as any type of heat activity on the surface of the land ignites these bombs. Someone has got to clean up this mess. Why not the United States? 

2. Relationships: Notwithstanding the geopolitical and western militarisation of the region, quality relationships can be fostered through person-to-person connections on the ground. In PNG, only a few U.S. faith-based non-governmental organisations such as the Samaritan Aviation, Summer Institute of Linguistics (SIL) and Youth with a Mission (YWAM) can provide the space to form such personal connections. There is more space for similar local partnerships. 

3. Reciprocity: Relationships in Melanesia grow and flourish on a continuum of respectable exchange. Any relation – personal, local, or international – will turn sour if there is an absence of healthy exchange. For example, there is a collective grievance among Melanesians over the tedious visa application process for entry into Australia, compared to the relative ease at which Australians enter and exit countries in the region.

Theresa is a research fellow at the Australian National University where she recently completed her PhD. She holds deep expertise in regional politics and women’s political participation in PNG and Melanesia. Theresa’s quick wit, sharp analysis and fresh ideas are loved by the Lab.

Maholopa Laveil
KW Taylor Pacific Fellow, Lowy Institute (seconded from the University of PNG)

As increased development cooperation between Australia and the U.S. gets underway, it’s important to remember that where PNG has many socio-economic challenges, perhaps the most pressing is its inability to translate gains from its lucrative resource sector into development.

Under the new development cooperation, in PNG this will no doubt build on existing Australia-U.S. projects, one of which is the $1.7 billion USD ‘PNG Electrification Partnership’ between Australia, the U.S., Japan, and New Zealand, to develop PNG’s electricity sector. Although this partnership is to be lauded, the goal of increasing the share of population with access to reliable electricity from 13% at present, to 70% by 2030, will likely not be achieved.

This is part of a bigger problem of limited resource sector flows into development. When you look at the numbers, in 2019 the resource sector comprised 28% of GDP and 88% of exports.  However, as the sector is largely foreign owned and employs few Papua New Guineans (it employed 17,000 nationals in 2019), its main contribution to development is via government revenue. For all its size, the resource sector contributed only 8% of government revenue in 2019. This glaring disparity is reflected best in non-resource GDP per capita – PNG’s best measure of average living standards – growing by only 0.4% annually between 2014 and 2019.

So what else could Australia and the U.S. do under this cooperation to help PNG achieve its development priorities, and better translate resource gains? Some pathways may include:

  • Support the Connect PNG program – where government intends to work on 16,000km of road over the next 20 years.
  • Support PNG in expanding downstream processing of raw material produced in-country.
  • Support a robust 2023 census – the country’s first chance in more than 20 years to gather complete socio-demographic information.

Maho is a Papua New Guinean economist who has done fascinating research into fiscal policy and economic history in PNG (amongst many other topics). He’s currently seconded to the Lowy Institute from the University of Papua New Guinea. At the Lab, we love Maho’s detailed analysis on economics and party politics, and great Twitter feed that watches the latest updates from the region.

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