GOVERNANCE AND DEVELOPMENT IN THE SOUTH PACIFIC
NZ Institute of International Affairs/Institute of Policy Studies
Victoria University of Wellington, Joint Seminar April 2009
Summary and Overview
My thanks to the rich insights from the speakers, particularly the panellists on Development on which I will focus. Their quality presentations have made my task manageable.
There has been a recent tendency in international writing on development issues to focus on the two outer opposites of the debate on the contribution of aid. These are usually exemplified by an oversimplified version of Jeffery Sachs, arguing that there is nothing that can't be fixed by greater effort, that some modest share of US funding of the war in Iraq would deal with Africa's problems in 15 to 20 years; and on the other hand former World Bank economist William Easterly, who has carefully reviewed all the approaches to foreign aid, again particularly in Africa, over many years, and has found there is no established route to success, and much disappointment.
The seminar today has confirmed that there is a long continuum of complex issues between these poles, and that the variety applies to the South Pacific as to elsewhere.
I look first at the links between Development and the other topic of the day, Governance. The latter forms a big part of the conditions and factors in which development takes place.
There is a strong consensus about a positive link between the rule of law and development. The rule of law fosters perceptions of fairness and justice, of confidence and of collaborative behaviours.
The discussion on corruption in Pacific Island countries (PICs) is related to this. Nigel Roberts suggested it reflected a lack of control from the centre, which may be another way of referring to weak state capabilities.
There is also wide agreement over the importance of equality to development, difficult to define, but with evidence that marked inequalities in a society provide a distinct negative for development.
And there seems to be growing evidence of a weakening correlation between democracy and development. To a degree, the theory of a strong positive link was blown away by China many years ago, but recent studies show wider applications. This debate is not about the core merit of democracy, but more about issues of the type of democracy and the timing of its applications, with evidence that it takes root best when other conditions such as the rule of law and a level of economic wellbeing are in place.
There was discussion on the merits for the South Pacific of a presidential versus a parliamentary system, but I suggest this be broadened – the Samoan model, a hybrid of parliamentary and customary practice, offers another route to democracy.
Considering Development itself, it is useful to recap Nigel Roberts "three flows" of international revenue: foreign aid and other financial support (loans, etc); trade revenues; and remittances, the last being particularly important in the South Pacific. He made the telling comment that all three are primarily under foreign decision-making, and a key consideration should be to work on the "terms of trade" that relate to these three flows, to "broker better arrangements" for the PICs surrounding these flows.
Both Nigel Roberts and Barry Coates argued for local ownership of the development process. This could mean adapting processes to balance traditional and developed world requirements – such a requirement was not limited to the field of politics and governance. Land was debated as a key issue here – in some PICs there is substantial resistance to moving away from customary tenure, and examples of hybrid systems developed in Africa were advanced.
I note that a recent, widely quoted visitor to New Zealand, the 'Russian oligarch' Stephen Jennings, made a similar point about the need for commerce to adapt to local custom: "Most successful emerging market businesses have evolved in a manner that is highly adapted to their local environment.”
Barry Coates raised the issue of sustainable development: how do we get aid and other foreign engagement to address environmental sustainability issues? Others flagged climate change as a serious environmental threat to PIC development.
Barry Coates also underlined the needs to build on local strengths, to ensure aid was extended to agriculture and the rural economy, and to promote niche markets such as services.
A discussion on the role of trade liberalisation uncovered serious questioning about the appropriateness of standard approaches to this. For the PICs, Barry Coates argued, it would be good to start with the objective of redressing the trade imbalance.
It was questioned whether regional cooperation was helping PIC development, and a number of comments, building on the contribution of Mr Slade to the first panel, affirmed that despite the distances between the PICs, and the absence of political convergence (such as a federation) regional cooperation was playing a useful role. Broadly there was endorsement of the work of the Pacific Forum.
The discussion on the merits of tough conditions being applied to aid showed scepticism over this. The IMF's prescriptions, for example, did not seem to reflect the way developed countries themselves behaved when faced with difficult times.
There was of course discussion on the current New Zealand policy changes relating to NZ Aid. Barry Coates suggested that there was probably not much difference in what one would actually do whether pursuing poverty alleviation or economic growth.
In summary the central themes around Development focused on the need to rebalance the control of aid and other supporting resource flows to increase local ownership and management and decrease the weight of foreign decision-making; to modify systems, processes and policies to better accommodate local and customary practice; and to reinforce the usefulness of collective and regional approaches in overcoming problems facing PIC development.
Neil Plimmer, Chairman of the Seminar, Chairman of the Pacific Cooperation Foundation
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