Development Ideas

Development Ideas A study in comparative capitalism Diane Colman A thesis submitted for the degree of Doctor of Philosophy at The University of New South Wales March 2015 Abstract This thesis compares the meaning and practice of capitalist development in its two very distinct forms – manufacturing and agrarian doctrines. The comparison relies upon a particular understanding of the original idea of development which unites the spontaneous development of capitalism with intentional development strategies and emphasises two distinct frameworks, or doctrines, that development policy has taken. Both doctrines are ‘western’ in their origin, emerging from the nineteenth century industrial revolution, and both have sought to deal with circumstances in which unemployment and a resultant social disorder threaten the further development of capitalism. At this time, a manufacturing doctrine was embraced by state policy makers whose intention was to transform the negative impacts of the spontaneous process of competition through further industrialisation in general. Similarly, when changes occur in the international production of agriculture, the effects on society can be severe. Unemployment in towns and in rural areas forced state officials to construct programs for re-attaching the unemployed to vacant or under-utilised landholdings. This form of development concerns a state policy of agrarian development. The ideas and practices of development in South Korea, as an exemplar of a manufacturing doctrine of development will be compared with those of Papua New Guinea which, during the late colonial period at least, was affected by an agrarian development doctrine. The intentional development paradigm of the developmental state thesis has as its centrepiece the combined mobilisation of both public and private capacity to meet well- defined, long-term, national development goals. While these ideas have been applied to the implementation of a manufacturing development doctrine in East Asia and elsewhere, the food and agriculture sector dominates most developing economies in terms of employment and incomes. Growth of this sector is, therefore, essential for the overall process of socio- economic development in developing countries. Renewed attention by international financial institutions and donor countries has focused aid and investment policies on agriculture as the engine of pro-poor growth. The key implication of this study is that developmental ideas can be utilised just as effectively in any type of developmental endeavour, whether it be a manufacturing or agrarian development doctrine. The developmental emphasis on the vital role of the government as trustee for the development of society in the national interest must therefore be recognised as the most important part of any international development doctrine. Table of Contents Acknowledgements v Abbreviations ix Tables and Figures xi Chapter 1 Introduction 1 Comparative development policy 1 Development and non-development 6 Development’s meanings 7 Research Strategy 8 Organisation of the thesis 10 Chapter 2 Framing the Idea of Development Introduction 17 The invention of the idea of development 20 Distinct doctrines of development 23 The manufacturing doctrine of development 24 The agrarian doctrine of development 26 The developmental state framework 29 Conclusion 36 Chapter 3 Liberation, Partition and War South Korea 1945 to 1960 Introduction 39 The hermit kingdom 40 Japanese imperialism 42 Liberation, partition and war 47 Import substitution and underdevelopment 50 Conclusion 55 Chapter 4 Export Promotion, Rapid Growth and Crisis South Korea 1961 to 1979 Introduction 59 i Table of contents Export promotion, rapid growth, crisis and recovery 61 The ‘Big Push’ into heavy industrial manufacturing 69 Conclusion 75 Chapter 5 From NIC to Developed Country Status South Korea 1980 to 2014 Introduction 79 Stabilisation and Liberalisation 80 Globalisation, Crisis and Rapid Recovery 88 The knowledge-based economy 96 Conclusion 97 Chapter 6 War, Restoration and Uniform Development Papua New Guinea 1945 to 1963 Introduction 103 Early colonial development 104 Post-war policy uncertainty 107 Uniform Development 112 Conclusion 121 Chapter 7 Accelerated Development, Independence and Rebellion Papua New Guinea 1964 to 1989 Introduction 127 Accelerated Development 130 From self-government to independent nation 137 Post-independence instability and crisis 140 Conclusion 148 Chapter 8 Spontaneous Development, Growth and Decay Papua New Guinea 1990 to 2014 Introduction 153 Consolidation of crisis 155 Corruption, compensation and continuing crisis 162 Conclusion 173 ii Table of contents Chapter 9 Conclusion Introduction 177 Developmentalism and agricultural development 178 Manufacturing development doctrine – South Korea 180 Agrarian development doctrine – Papua New Guinea 186 Revitalisation of the importance of agriculture in development 194 Bibliography Primary sources 199 Theses and other unpublished material 205 Secondary sources 206 News articles 242 iii iv Acknowledgements This research has benefited greatly from the guidance and support of my supervisory team. I would like to begin by thanking Professor Gavin Kitching who was my research supervisor at the outset of this project, sending me on my expedition to discover the development ideas in South Korea and Papua New Guinea. Gavin provided invaluable guidance and direction for my project, sharing his expertise and experience. Above all, I am grateful to Gavin for his unique insight into the discipline. Dr Elizabeth Thurbon also made a major contribution to my understanding of the South Korean developmental state as well as accepting the role as my supervisor upon Gavin’s retirement. Liz’s gentle and insightful approach, her friendship and support were a most welcome contribution to my research. Equally, Michael Johnson, for whom I tutored at UNSW, provided guidance to keep me on track when my supervisor was away for extended periods. His considerable experience in development practice made the ideas about development come to life. Of absolute importance to getting this thesis over the line has been Dr Scott MacWilliam from the ANU. At Gavin’s request, Scott very kindly offered to provide so- called informal supervision, but in reality provided the greatest direction to tighten up the thesis, providing a focus to the argument that has made all the difference. That it is down to Scott that this thesis reached the final submission stage is unquestionable. To Scott, I am eternally grateful. Lastly, I would like to thank Dr Jo-Anne Pemberton for coming on board late in the piece when I was seemingly unable to find a supervisor at UNSW to bring me to the end. While she modestly considers her contribution to be small, I really would not have been able to complete my thesis to submission if she had not agreed to accept the role as my official supervisor. In Papua New Guinea, my research was affiliated with the National Research Institute (NRI) in Waigani. I am grateful to the NRI for the assistance provided in obtaining a visa, providing accommodation and a place in the library to use the computer and escape the heat v Acknowledgements of the day. I am especially grateful that this led me to the head librarian, Ena Gimumu, who became my guide, my great friend, my wantok. Ena took me to the places I needed to go. She walked with me, arranged for someone to drive me, took me in the PMV or got someone else to walk me over to wherever I had to go. She told me what everyone was saying, she told me what everyone was thinking and told me how things worked in PNG. She shared her wisdom and shared her family when I was missing mine. While Ena is no longer physically with us, she remains at the forefront of my mind whenever my thoughts turn to PNG, which has been often as is inevitable in writing up this thesis. I remember her beautiful smile, her constant concern for my safety and especially her love. I would also like to acknowledge the contribution made by a number of people in Papua New Guinea. Initially, I took the very providential opportunity of flying to Brisbane to meet Sir Bernard Narakobi, a prominent and influential former leader, who is considered to be one of the founding fathers of Papua New Guinea’s Independence and remains the country’s most important nationalist as author of The Melanesian Way. He was stopping over to speak at a conference on his return to retirement in PNG following his tenure as the Ambassador to New Zealand and was not only kind enough to agree to an interview but gave up much of his valuable time to discuss my thesis in length when it was in its infancy. I also networked with a number of PNG academics, including Danny Aloi and Dr Lawrence Sause from the School of Business Administration at the University of Papua New Guinea, both specialising in Public Policy, as well as researchers Dr Ray Anere and Dr Alphonse Gelu at the NRI. I would especially like to thank Danny Aloi for his collegiality, talking to me at length about the impact of development in PNG and, most importantly, arranging a number of meetings with high ranking public servants. I spoke with the First Secretary of the Department of Personnel Management, Jim McPherson, a long-term PNG public servant, from as far back as the pre-independence days of the kiap. He was kind enough to invite me to his eclectic home where he is father to six children from a variety of backgrounds across the country. I attended a focus group with the staff of the Task Force for Government and Administrative Reform, which included the now late Sir Barry Holloway, a prominent Australian ex-pat who was a member of the first PNG parliament and who had also been in PNG since the kiap days, as well as John Nilkare, a prominent businessman, former MP and former leader of the National Advancement Party, and five staff members, all young women, who were very forthcoming with ideas and opinions.

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