Evaluating the Effectiveness of Australian Aid to Samoa

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EVALUATING THE EFFECTIVENESS OF AUSTRALIAN AID TO SAMOA

By William John Hamblin PhD Thesis 2004

DECLARATION

I hereby declare that this submission is my own work and to the best of my knowledge it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in the thesis. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged in the thesis.

I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project’s design and conception or in style, presentation and linguistic expression is acknowledged.

William John Hamblin ABSTRACT

On a global basis over A$450 billion is invested each year in foreign direct investment and aid with a view to supporting development. Developing countries themselves allocate significant sums out of their own budgets in order to stimulate development. Development is concomitantly a major goal and enterprise of the global economy.

Developed countries through aid (Official Development Assistance) spend large sums purportedly to improve the development status of developing countries. Recently voices from within the developed world’s establishment have derided the performance of aid and by default the performance of state organisations charged with managing aid delivery. Australia has not been immune from this criticism. Its aid program while modest by global standards still consumes A$1.5 billion in taxpayers money each year. Australian aid is delivered primarily by the Australian International Aid Agency (AusAID) with smaller contributions through the Department of Foreign Affairs, Department of Defence and Australian Federal Police. AusAID has recently faced severe criticism over failure of the aid investment in the South Pacific to engender development. Most South Pacific countries (excluding Fiji and Samoa) have failed to show desired development. A number have faced bankruptcy (Naru, Solomon Islands), while others have increasing lawlessness (Papua New Guinea).

It is important in the above milieu to examine the delivery mechanisms of Australian aid through its chosen vehicle (AusAID) and determine whether aid has really been effective or not. This thesis reviews the development effectiveness of Australian aid in one Pacific island nation – Samoa. In this context, the effectiveness of Australian development assistance is reviewed in terms of the results of four case studies of project aid to Samoa. The four case studies cover a range of project activity in differing sectors and offer specific insights into aid policy and delivery and the effects other variables such as culture, history and development status have on development outcomes.

The thesis tests the hypothesis that Australian aid to Samoa has resulted in only limited development success and then in ways that are not generally sustainable. In confirming the hypothesis, this thesis identifies that while variables such as the procedural and policy underpinnings of the Australian aid program, aid design/delivery and management, and the history, culture and development status of Samoa impact on the development outcomes, they do not prohibit development.

This thesis concludes that development outcomes will be maximised when there are good macro policies present, sound sector policies and real commitments of the government and people to development. Moreover, this thesis finds that while development theories inform the debate over aid none successfully encapsulates the actual development process.

ACKNOWLEDGEMENT

I wish to acknowledge the support of AusAID and the Government of Samoa in permitting access to project papers and material. Further, I wish to thank those officers within the Government of Samoa and externally who agreed to be interviewed in relation to this thesis. I also acknowledge that the views expressed in this thesis are in no way to be construed as representing the views of either the Government of Australia or the Government of Samoa. Any errors in interpretation of data or omissions are those of the writer. 3

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Table of Contents CHAPTER 1 INTRODUCTION...... 8 The Concept of Aid...... 10 Australian Aid – A Brief History...... 11 AusAID – A Brief History...... 13 Definitions of Development and Sustainable Development ...... 16 Australian Aid and the Modernisation Discourse ...... 18 Outline of the Thesis...... 19 Position of the Writer Within the Context of Research...... 22 Study Setting ...... 22 Limitations of the Study ...... 23 CHAPTER 2 THESIS METHODOLOGY...... 24 Use of Case Studies Instead of Surveys ...... 24 Making Reliable Comparisons ...... 25 Accountability Versus Lessons Learned...... 27 Ex-Post Evaluation ...... 28 Projects Sample and Size...... 28 Review Methodology ...... 29 AusAID Evaluation Plans/Baseline Studies ...... 32 Meeting with AusAID Review Team...... 32 Ratings Systems...... 33 Definition of “Sustainability” Adopted...... 33 CHAPTER 3 LITERATURE AND THEORETICAL FRAMEWORK ...... 35 Why Does Development Matter?...... 35 Underdevelopment and Development in the 20th Century ...... 36 Modernisation Theories ...... 37 Dependency Theories...... 42 Benefits of Modernisation and Dependency Theories ...... 47 Analysis of Development in the 1990's ...... 48 Development in the 21st Century – Globalisation Theory...... 49 Problems with Globalisation Theory ...... 53 Post Structuralism...... 56 World Systems Theory ...... 58 Economic Theories of Development...... 59 The Developing Country Situation ...... 61 Is Money the Prime Determinant of Development? ...... 62 The Aid Debate...... 62 Summary ...... 64 CHAPTER 4 AUSTRALIAN AID POLICY RECONSIDERED...... 66 Evolution of the Australian Aid Program - The PNG Experience ...... 66 Aid As An Instrument of Foreign Policy and Defence ...... 67 Aid As An Instrument of Trade Policy ...... 68 Revised Aid Framework...... 70 Australia’s One Clear Objective...... 72 Is It So Clear?...... 73 A Concept of Development...... 73 Results Oriented Aid/Development...... 77 Has Australian Aid “One Clear Objective”?...... 82 Development Discourse and the Policy ...... 83 Modernisation, Dependency and Globalisation Discourse...... 84 5

Samoa As An Example of Australian Aid...... 87 CHAPTER 5 HISTORICAL AND CULTURAL CONTEXT OF SAMOA...... 88 The Development Impact of History...... 88 Origin of Samoa...... 91 Samoan Ancient History ...... 92 Ancient Samoan Culture...... 97 The Coming of Christianity and the Europeans ...... 98 Traditional Authority in Samoa...... 101 Political Decentralisation, Wealth and Decision Making ...... 102 German and New Zealand Administrations ...... 105 Society and Religion...... 106 The Role of History and Culture in Samoan Development ...... 109 Summary ...... 116 CHAPTER 6 THE STATE OF DEVELOPMENT OF SAMOA...... 119 Overview of Samoa ...... 119 The Society...... 121 The Economy ...... 123 Trade and Balance of Payments ...... 125 Remittances...... 126 External Debt...... 126 Income and Employment ...... 127 Tourism and Agriculture...... 128 Public Sector Reform...... 131 Development and the Economy...... 131 Samoa Political Situation ...... 133 Demographic Trends ...... 134 Samoa and Population Prospects ...... 135 Health of the Population ...... 136 Water Supply and Quality ...... 142 Physical Health Infrastructure...... 142 Health System Staffing ...... 145 Education in Samoa...... 146 Health, Education and Development ...... 150 Impact of the State of Development of Samoa on Future Development...... 150 CHAPTER 7 HISTORY OF FOREIGN AID TO SAMOA...... 152 Aid to Samoa ...... 152 Why Do Donors Give to Samoa?...... 153 What Does Aid Fund?...... 155 Samoan View of Aid ...... 158 Aid Burden in Samoa...... 159 How Foreign Aid Fits Into the Economic Profile of Samoa ...... 160 Results of Aid ...... 160 CHAPTER 8 PRINCIPLES FOR EFFECTIVE AID DELIVERY...... 164 AusAID Project Monitoring and Evaluation System ...... 165 AusAID’s Evaluation and Review Reports ...... 171 Project Sustainability ...... 172 Recipient Country View of AusAID Procedures ...... 173 AusAID Procedures and Samoa Development...... 176 The Issue of Grant Aid...... 177 AusAID Culture...... 178 6

Impact of AusAID Modus Operandi ...... 185 CHAPTER 9 CASE STUDY 1 - BUILDING INSPECTION UNIT PROJECT - PUBLIC WORKS DEPARTMENT ...... 186 INTRODUCTION ...... 186 Project Background ...... 186 Project Objective...... 186 Outputs ...... 187 Project Impact and Development Theory...... 187 Project Setting ...... 188 Evaluation of Project...... 190 Project Sustainability ...... 194 Project Efficiency ...... 198 Project Effectiveness ...... 198 CHAPTER 10 CASE STUDY 2 - COCOA REHABILITATION AND EXPANSION PROJECT PHASE II...... 200 Project Background ...... 200 History to Phase II ...... 200 Project Objectives of Phase II...... 201 Outputs ...... 201 Project Impact and Development Theory...... 202 Project Setting ...... 203 Project Implementation ...... 205 Mid Term Review...... 205 Project Completion Report...... 208 Project Impact...... 209 Evaluation of Project...... 213 Comparison with PNG Cocoa Quality Improvement Project...... 219 Subsequent Actions of Government of Samoa...... 222 The Influence of Culture and Fa’a-Samoa...... 225 CHAPTER 11 CASE STUDY 3 – WESTERN SAMOA FIRE SERVICE (WSFS) UPGRADE...... 227 Project Background ...... 227 Project Objectives...... 228 Project Outputs...... 228 Project Implementation ...... 228 Completion Report...... 230 Meetings with the Fire Service...... 231 The Main Problems...... 232 Recommendations for Improvement...... 233 Subsequent Meeting With Alan Mearns...... 234 Evaluation of the Project...... 234 Project Efficiency ...... 236 Project Effectiveness ...... 236 Project Sustainability ...... 238 CHAPTER 12 CASE STUDY 4 - ROAD RESEALING PROJECT - PUBLIC WORKS DEPARTMENT...... 241 Project Objectives...... 241 Outputs ...... 241 Project Impact and Development Theory...... 241 Project Setting ...... 241 7

Project Evaluation Plans/Baseline Studies ...... 247 Project Completion Report...... 247 Meeting with Faaloga Josefa Falaniko...... 249 Project Evaluation...... 250 Project Sustainability ...... 253 CHAPTER 13 SUMMARY OF CASE STUDY FINDINGS ...... 258 Aid Delivery ...... 258 Efficiency of Delivery ...... 258 The Root Causes of Inefficiency...... 259 Effectiveness of Delivery ...... 264 Project Impact on Economic Welfare of Citizens ...... 269 Project Outcomes and Opportunities Foregone...... 270 AusAID Rhetoric? ...... 271 How Does the Above Analysis Compare with World Bank Findings?...... 273 Theoretical Perspectives ...... 275 The True Determinants of Sustainable Development ...... 281 Summary ...... 284 CHAPTER 14 ADVANCING THE DEBATE OVER DEVELOPMENT THEORY ...... 285 Advancing the Development Debate ...... 285 A New Development Construct...... 287 CHAPTER 15 CONCLUSION ...... 294 Australian Development Cooperation Performance...... 294 The Thesis Question Answered...... 294 The Impact of Development Variables...... 295 Prohibitors of Development ...... 296 Samoan Government Performance ...... 297 Possible Initiatives to Improve Project Aid Performance...... 297 Other Alternatives...... 299 Lessons for Global Aid...... 300 Samoan Futures ...... 301 A Stronger Compact for Effective Partnerships ...... 302 The Applicability of Development Theory to Development Practice ...... 302 ANNEX A - LIST OF MAJOR SOURCE DOCUMENTS ...... 304 ANNEX B - LETTER TO AUSTRALIAN HIGH COMMISSION ...... 306 ANNEX C - AUSAID ACTIVITIES IN SAMOA...... 307 ANNEX D - NEW ZEALAND AID TO SAMOA ...... 319 ANNEX E - FIRE SERVICE REPORT TO THE POLICE COMMISSIONER....322 ANNEX F - BUILDING INSPECTION STATISTICS 1997/98 – 1998/99...... 323 GLOSSARY OF SAMOAN TERMS...... 325 GLOSSARY OF ACRONYMNS...... 326 BIBLIOGRAPHY...... 328

CHAPTER 1 INTRODUCTION

Since the industrial revolution there has been debate over the processes termed development. This debate is not simply an academic exercise. Decisions made in the name of development directly and indirectly affect the life circumstances of most of the world’s population. According to Heller (2003, p 1):

What those choices are and how they are made results from a complicated interaction of politics, ideology, institutions, values and last but not least, the very definition of development. As the failure of so many development models illustrates only too tragically, our knowledge of what actually leads to development is anything but an exact science. Indeed, the very idea of what constitutes development is value laden and conflict ridden.

For these reasons it is essential that issues surrounding development be critically analysed and discussed. There is a vast array of concepts and models that attempt to define both the processes and objectives of development.

Within the global development milieu richer countries continue to provide aid to poorer countries with the professed aim of engendering development. Aid constitutes only a small portion of the resources available to support development. Total official development aid (ODA) flows in 2000 were approximately A$90 billion (US$50 billion). By comparison, foreign direct investment from developed to developing countries total around A$360 billion (US$200 billion) annually. Export earnings of developing countries are close to A$3.6 trillion (US$2 trillion) a year (AusAID 2002, p14). The largest share of ODA of around A$21 billion is directed at Least Developed Countries, while around A$19 billion is targeted at Landlocked Developing Countries (LLDC) with approximately A$18 billion directed at Lower Middle Income Countries. This aid represents a substantial investment in development by donors. While aid is only a small portion of the development resource, it is nevertheless important for the development prospects of most countries especially the small Pacific Island nations. In these countries it represents “virtually the only source of external financing and a very significant part of their national income.”(Grounder 2001, p 291)

Recipient and donor countries have generally considered aid to exert beneficial effects. (See Papanek 1982, Cassen et al 1986, Mosley 1987&1991, Riddell 1987, Burnside & Dollar, 2000, p 847-868). Accordingly, “There has been an economic case for short- run gains and long run impacts of aid flows in relation to production, reaching the poor people, aid savings relationship to foreign exchange availability, to specific projects in health, education and industry sectors, to recent distributional aspects of poverty alleviation, to long-term structural adjustment programs.” (Grounder 2001,p 279). There are, however, many sceptics who consider aid that has clearly negative effects on development, while others consider aid to be a two edged sword that has both positive and negative implications for development. (See Bauer 1971, Hayler 1981, Griffen & Enos, 1971 p313-326, Hughes 2003 who identify the negative effects generated by aid). Thus, there are fundamental differences of opinion as to whether aid actually promotes or impedes development.

It is in this international aid environment that Australia delivers a modest but still significant aid program. Each year the Australian government spends around 1.5 billion Australian dollars on overseas development assistance through its Australian Agency for International Development (AusAID). At various times there have been overall reviews of Australian aid assistance. In 1984 the Jackson Review set the agenda for aid strategy over the next 13 years. In 1997 the Committee of Review of the Australian Overseas Aid Program delivered its report into the operation of the aid program. The Committee in its overview of the overseas aid program states that: “While this is a modest contribution, both in terms of global aid funds and of Australian Government outlays, it is still a significant use of taxpayers’ funds” (CRAOAP 1997, p1). The Review was asked to report on how the Australian overseas aid program could best contribute to lasting poverty reduction, while also serving Australia’s national interests. The Review made numerous recommendations to improve the effectiveness of Australian aid.

In line with the Committee’s strong emphasis on performance and results in aid delivery, the Australian Agency for International Development (AusAID) has embarked on a series of reforms. These have included transfer of operational control to staff at overseas Posts, revision of Country Strategy Documents, a greater emphasis on governance issues and a much greater focus on evaluating the effectiveness of sectoral aid investments. AusAID has and is trying to make aid more effective in delivering sustainable development. It is important to determine how successful AusAID’s development assistance was in the past, the reasons for its success or failure, and how this might apply to current operational developments. If AusAID has not been successful (and if the situation cannot be improved), why continue to spend A$1.5 billion per year on development co-operation? The results of the Australian aid program also have application in the global aid context. This fact is acknowledged by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) in its regular assessment of member country aid programs. All donor organisations are constantly striving to improve performance.

This thesis reviews the sustainability of Australian aid in one Pacific island nation – Samoa. The thesis tests the hypothesis that Australian aid to Samoa has resulted in only limited development sustainability. In doing so, it will review the effects that other variables might have on the development process. The impact of variables such as the procedural and policy underpinnings of the Australian aid program, aid design/delivery and management, and/or the history, culture and state of development of Samoa will be examined. In this context, the sustainability of Australian development assistance will be reviewed in terms of the results of four case studies of project aid to Samoa. The four case studies cover a range of project activity in differing sectors and offer specific insights into the aid policy and delivery and the effects of the aforementioned variables. The case studies are:

Case Study 1 - Building Inspection Unit Project - Public Works Department Case Study 2 - Cocoa Rehabilitation and Expansion Project Phase II Case Study 3 - Western Samoa Fire Service (WSFS) Upgrade Case Study 4 - Road Resealing Project - Public Works Department

THE CONCEPT OF AID

The concept of aid is intrinsically a Western construct. Just as the colonial period engendered various theories of imperialism, the neo-colonial period spawned a group of modernisation theories which “uncritically accepted the structure of the relationships between rich and poor countries that evolved during the preceding epocs of capitalist expansion” (Hoogvelt 1997, p35). It was President Truman in his inaugural address of 1949 who announced the Point Four Program of Development Aid. “It then became the policy of the United States to aid the efforts of peoples of economically underdeveloped areas to develop their resources and improve their living conditions” (ibid).

There are two main themes espoused as underlying the concept of aid. The first is largely related to the United Nations and its agencies especially the United Nations Development Program (UNDP). The second theme has “some humanitarian overtones but is built around the national interest of the donors in terms of security, trade and political influence, and recognises some mutual benefit in the transfer of aid” (Jarrett 1994, p3). The UNDP approach views aid as a moral responsibility of the developed world to the developing countries. This principle has been translated by the United Nations into a system where the burden of aid should be shared by the developed world as a percentage of gross national product (GDP).

Country Amount per $100 Amount

1. Denmark $1.04 per $100 2. Norway $0.93 per $100

3. Netherlands $0.79 per $100

4. Sweden $0.73 per $100

5. Luxembourg $0.72 per $100

6. Switzerland $0.47 per $100

7. France $0.40 per $100 8. United Kingdom $0.29 per $100

9. Finland $0.28 per $100

10. Germany $0.25 per $100

11. Belgium $0.25 per $100

12. Japan $0.24 per $100

13. Ireland $0.24 per $100 14. Austria $0.18 per $100 15. Australia $0.17 per $100 16. Spain $0.15 per $100 17. Canada $0.13 per $100 18. Portugal $0.13 per $100 19. New Zealand $0.12 per $100 20. Italy $0.06 per $100 21. United States $0.06 per $100 22. Lesotho $0 per $100 23. Saudi Arabia $0 per $100 24. Korea, South $0 per $100 Weighted Average $0.19 per $100 GDP

Source: CIA World Factbook, March 2005 11

When the world’s governments met at the Earth Summit in Rio de Janeiro in 1992, they adopted a programme for action under the auspices of the United Nations - Agenda 21. Amongst other things, this included an Official Development Assistance (ODA) aid target of 0.7% of gross national product (GNP) for rich nations, roughly 22 members of the OECD, known as the Development Assistance Committee (DAC). However, as the data above indicate, the rich countries have generally failed to meet aid targets.

Despite appeals for altruistic aid, there is considerable evidence to show that aid is dictated more by political and strategic considerations than by the economic needs and policy performance of the recipients. Even Truman’s aid policy was not altruistic as it took place in the context of the Cold War and political independence of colonial states (which the United States favoured and sought to extend influence over). As Alesina and Dollar (1998, p33) point out “An inefficient, economically closed, mismanaged non-democratic former colony politically friendly to its former colonizer, receives more foreign aid than another country with similar level of poverty, a superior policy stance, but without a past as a colony”. Moreover, the complexity of aid flows is well documented by a recent study by Schraeder, Hook and Taylor (1998, p 294-320). They investigate aid to Africa and reject an altruistic vision of donors’ motivation. They also highlight interesting differences between donors, related to their position in the world order, strategic interest and relationship with former colonies.

AUSTRALIAN AID – A BRIEF HISTORY

Australia’s aid policy has seldom been well articulated. Australia’s aid, like those of other developed countries has officially be expressed as humanitarian; the desire to address relative deprivation and suffering wherever it is seen. Accordingly,

It expresses human solidarity whether inspired by religion, philosophy or enlightened self interest. It reflects the widely held view that grossly unequal access to basic necessities is unjust. This egalitarianism is also ingrained into the Australian psyche as ‘a fair go’ (CRAOAP 1997, p32).

Certainly after 1945 there was a general feeling of good will towards those peoples who had assisted Australia during the war. There was also the widely held opinion that what had happened should never be allowed to reoccur. Defence, trade and aid were therefore intermixed. Australia and its allies continued to administer Annexed and UN Trust Territories in the Pacific. Australia placed much emphasis on its northern border by providing continuous support for the Papua and New Guinea territories. New Zealand settled into administration of Samoa, while the United States resumed control of its Pacific territories.

As Jarrett (1994, p 7) explaines, “Euphoria about aid possibilities in the 1950s and 1960s was reflected in the share of Australian GDP allocated to officiual development assistance: 0.67 per cent in 1967. This fell to 0.38 per cent by 1986/87. With the independence of Papua New Guinea (PNG) in 1976, Australia’s main recipient of aid came into being. PNG remains the largest single recipient of Australian aid (A$354 million in 2002/03). This concentration on PNG resulted from the time when Papua was annexed by Queensland and administered by Australia. Moreover, the people of 12

PNG had suffered for providing assistance to allied forces during World War II and Australia had administered both Papua and New Guinea up until independence. In addition, PNG was of obvious strategic value to Australia militarily and also posed a direct threat to Australia should it be taken over by communists. Further, the existence of gold and oil in PNG provided the opportunity for long-term trade.

Australian aid was in the 1960s and 1970s heavily in the Pacific and South East Asia, reflecting colonial ties and political and military interest. Australia proceeded with its aid policy until the watershed Jackson Review of 1984. This represented the first comprehensive review of the aid program and resulted in significant policy changes. Jackson tried to unify the disparate objectives of the program by developing a coherent rationale for its activities. Jackson argued that aid was most effective when applied to removing major impediments to development. In this respect, he argued that this involved investment in people and in appropriate capital investment activities such as road, ports and dams. Jackson recommended the enhancement of aid effectiveness through a concentration on Australia’s sectoral expertise; a sharper geographic focus for Australia with a concentration on our immediate Asia-Pacific region. He also affirmed PNG’s pre-eminent position in the aid program and recommended a country programming approach directed at increasing aid effectiveness by ensuring aid was delivered against a detailed knowledge of the recipient country environment

In addition, the Jackson Review stressed the importance of “economic growth as the long term means of overcoming poverty in developing countries. This became the basis of the approach to sustainable development pursued by the Australian aid program.” (CRAOAP 1997, p40). As explained by Jarrett (1994, p7) “It could be agrued that aid allocations up until 1986/87 were largely based on humanitarian motives with relatively little concern about the opportunity costs of the resources involved”. The acceptance of the Jackson review recommendations changed aid and made it more strategically allpied and results focussed.

The aid concept was further refined by Bilney (1993). His framework for poverty reduction emphasised that poverty reduction was promoted through sustainable economic growth, investment in human resources through education, health, capacity building and social sector development, and safety nets and poverty targeting including emergency relief. In this framework economic growth is seen as essential and without it broad based development is not possible but it has to be accompanied by human resource development.

As a result of Bilney’s views, priority given to social sector assistance steadily increased. This emphasis remained for many years and was reinforced by the Report of the Committee of Review (titled One Clear Objective) in 1997. The Committee found that the aid program suffered from the lack of a clear objective, leaving it open to be pulled in various directions. The Committee indicated that the program had to focus more on outcomes.

It requires a program that is innovative and responsive to changed circumstances but is clearly and singularly focussed on its essential purpose – the reduction of poverty through sustainable development. It is equally 13

important for the program to be in step with the priorities of recipient countries, and involve local communities (CRAOAP 1997, p1).

The Committee also acknowledged that the aid program served Australia’s interests, stating:

However aid programs are not just about altruism. There is also a large degree of shared interest – and perhaps for none more than Australia. Unlike most other donor countries we live in a developing part of the world…The prosperity of the developing world is clearly in Australia’s national interest….(CRAOAP 1997, p2)

As of 2002 the Australian Minister for Foreign Affairs was still reporting more than one aim for aid. He stated, ”Australia’s commitment to assisting with development overseas also reflects a realisation that in an increasingly globalised world, it is in our own self-interest to help. Not to do so would harm our economy. By promoting growth in developing countries the aid program helps foster stability and expand trade and investment opportunities for Australia” (CRAOAP 1997, p2).

The Minister for Foreign Affairs again emphasised the self-interest objective in his statement, “Our aid has a clear single focus - to advance Australia’s national interest by assisting developing countries to reduce poverty and achieve sustainable development” (Downer, p3). This statement reflects a subtle change in emphasis for the aid program. Instead of a clear focus on poverty reduction it is couched in terms of Australia’s national interest. Critics of AusAID continue to suggest that poverty alleviation and national interest objectives are incompatible. In this respect AID/WATCH campaigner, Tim O’Connor recently stated “The Australian aid dollar is not directed to promoting sustainable development or at alleviating poverty but its primary role, openly acknowledged by AusAID is to promote Australia’s ‘National Interest” (O’Connor 2003). It is clear that, despite the rhetoric, Australian aid never has and never will have one clear objective.

This thesis will address the issue of Australian aid’s multiple objectives but its primary focus is on the development sustainability or otherwise of aid. It will however consider the issue of whether the multiple objectives of aid affect development outcomes. The thesis will also examine whether aid is implemented in an environment where AusAID procedures militate against sustainable project results; poor macro and sector policies exist at the recipient country level; there is failure to comply with Development Assistance Committee of the OECD guidelines for development assistance delivery development best practice and there is an inability of AusAID to match the rhetoric of globalisation with the reality of aid implementation.

AUSAID – A BRIEF HISTORY

The Australian Development Assistance Agency (ADAA) was established in 1974, bringing together functions performed by different departments since the aid program to Papua New Guinea began in 1946. In 1976 ADAA was replaced by the Australian Development Assistance Bureau (ADAB) within the Foreign Affairs portfolio. In 1987 the name was changed to the Australian International Development Assistance Bureau (AIDAB), and in 1995 to AusAID, the Australian Agency for International 14

Development. AusAID provides policy advice and support to the Minister for Foreign Affairs and Parliamentary Secretary on development issues and is responsible for development and management of effective and innovative poverty reduction programs in partnership with developing countries, Australian businesses, non- government organisations and international agencies. AusAID is an administratively autonomous agency within the Foreign Affairs and Trade portfolio. AusAID reports directly to the Minister for Foreign Affairs on all aspects of aid policy and operations.

AusAID is an international development organisation (IDO) and has many traits in common with its contemporaries. Most IDOs were initially organised as all purpose bodies, “mandated to deal with activities ranging from bee keeping to gender mainstreaming….. While their clients lived in other countries, their key stakeholders were domestic. Initially, almost none had effective research capacities or capable field systems. In addition, as public sector organisations, they were weighted down by commercial, security and political agendas that diluted their development impact” (Morgan 2002). AusAID shared/shares most of the above characteristics. It has various flaws in its establishment and systems that may affect the delivery and results of aid. Certainly AusAID in the 1970s and 1980s was a public service organisation. Its operations were governed by Commonwealth of Australia budgetary norms. In AusAID, as with other IDOs, there was a tendency to reward those staff “who committed funds and then moved on” (Morgan 2002, p2). There was a tendency to be fixated on policy issues to the detriment of implementation. Projects for example were designed and subsequently delivered. The lead time between design and delivery often was over two years. The result in some cases was contractors trying to implement obsolete or impracticable project designs. The culture and systems of AusAID also at times have militated against any contractor trying to improve project designs. AusAID’s standard project implementation manual of the 1980s and early 1990s (CPOG) cautioned against contractors trying to alter project designs. In any case, to query a design invited further bureaucratic review and inevitably delayed project implementation. Contractors of course wanted to put consultants in the field as soon as possible to generate income. To query designs meant income was delayed.

AusAID treated contractors with suspicion in the 1980s and throughout most of the 1990’s. In effect, there was no concept of partnership; Australian Managing Contractors (AMCs) were simply there to provide services. AusAID staff, in the main, considered consultants to be overpaid and wanting to extend projects for monetary gain. This view was not entirely unfounded as evidence emerged during the period that some contractors deliberately bid low to win projects and then attempted to increase project costs during implementation. AusAID’s standard project approach at the time, the inputs based contract, acted to provide an opportunity for AMCs to extend or expand inputs and thereby increase profit. (See Liautaud (2001) Gladstone (2001) for useful discussions on this subject).

Today much appears to have changed but AusAID still faces vested interests that often make real change difficult. The Australian development industry (which now includes service and equipment providers as well as a plethora of NGOs); the “aid watchers” which include NGOs and academics; other arms of government (Foreign Affairs, Trade, Austrade, Treasury, Prime Minister and Cabinet etcetera) and AusAID’s internal staff all have vested interests. This complex organisation of 15 development assistance makes change (and therefore improvement) difficult. There has been a view inherent within AusAID that “knowledge had an independent existence detachable from context, perception and action” (Morgan 2002, p 3). Projects were conceived where consultants were required to transfer generic technical solutions to fill the knowledge gaps of their recipient country counterparts to improve their performance. There was a lack of understanding of what was possible and what was not and a failure to understand the complex social systems within which aid was being delivered. This western approach to aid delivery persisted until late in the 1990s.

The culture of AusAID is consistent with many other IDOs in that it is averse to change and fails to heed lessons learned. In respect to change, it is well documented that tied aid (aid where restricted tender arrangements apply) increases the cost of aid (See Danielson, Hoebink and Mongula 2002, p 162). Aid tying is condemned in principle by the Development Assistance Committee (DAC) of the OECD. Australia approved the DAC Partnership Strategy resolutions on untying aid. Yet, AusAID continues to be accused of boomerang aid and still restricts project management tenders to Australian and New Zealand companies. (See, for example, Banerjee, Valdivia and Mkandla 2002, p 136-7.)

AusAID staff overseas operates from within the rarefied atmosphere of diplomatic circles. They often “live in white environments, taking little part in such local social events as marriages and funerals.” (See Danielson, Hoebink & Mongula 2002, p 169). As an example, the walled accommodation compound for the Australian High Commission in Port Moresby is commonly referred to as Fort Ocker, while contemporaneously AusAID personnel often bemoan an inability to constructively engage with PNG counterparts. Their counterparts by comparison often live in settlements (shanty towns) due to acute housing shortage.

In respect to lessons learned, AusAID like other IDO’s has poor institutional memory. Its staff is transitory in that staff move from central office to Posts, from Post to Post overseas and eventually to other organisations1. The great bulk of the higher echelon staff is still in Canberra, and the field staff has little policy capacity or historical knowledge. For example out of a total staff of 511 as at June 2002 only 62 were overseas. Of these 62 only 36 were above EL 1 level and only 2 of these (male) were Senior Executive Staff. (See AusAID Annual Report 2001-2002, p 187). Research indicates that current staff of IDOs such as AusAID “appeared unaware of old evaluations and their conclusions and recommendations, let alone whether these had been incorporated into policy formulations, procedures and instruments.” (Danielson, Hoebink and Mongula 2002, p 170).

Finally bureaucratic routine and vested interest in AusAID’s central office often serve to maintain the status quo. Recent efforts by the PNG Government to introduce a Quick Start loan facility to stimulate the private sector have been met with an unequivocal response of “Under No Circumstances” from Canberra. This is despite AusAID, under DAC, agreeing to assist recipient countries implement local

1 AusAID Annual Reports show staff movements and separations. See Annual Report 2002-2003 as example. 16 development strategies and the fact that Minister Downer supported the idea of a loan portfolio for aid. (Downer 1997).

All the above issues concerning the culture of AusAID may have bearing on the results of aid delivery. These matters will be assessed as part of the review of Samoan project case studies, to determine the extent of any influence on aid outcomes.

DEFINITIONS OF DEVELOPMENT AND SUSTAINABLE DEVELOPMENT

While the Committee of Review discussed the objectives of aid and development cooperation, ironically it never really provided a definition of development. Instead the committee simply indicated that the “objective of the Australian aid program is to assist developing countries to reduce poverty through sustainable economic and social development” (CRAOAP 1997, p69). It is assumed here that AusAID considers both social and economic dimensions to development.

The Australian Government admits that there is an element of trade and political self- interest in the aid program as evinced by Minister Downer’s statements. Moreover, AusAID has often found it necessary to justify aid expenditure by indicating the commercial benefits that are derived from its delivery. AusAID has prepared reports on China (AIDAB 1993) and Indonesia that specifically attempt to calculate the commercial benefits that accrue from aid. The Indonesian report clearly indicates that there are foreign policy and commercial dimensions to aid. It states “While there has been substantial analysis of the developmental and foreign policy aspects of aid, it has not fully taken into account the impact of aid on Australia’s commercial interests. The analysis that has been done indicates that commercial benefits have been achieved”. (AIDAB 1995, p1). The report proceeds to indicate that for the period 1987-1991, Australian development cooperation had been effective in meeting the Government’s developmental, foreign policy and commercial objectives.

In respect to PNG, no specific report exists on commercial benefits but AusAID did compile a report in 1990 that investigates the aid program and its assistance to Australian industry. The report again confirms that aid is used as a political and trade tool by the Australian Government. It states: ”Aid promotes economic, social and political stability within developing countries. This is in Australia’s interests since the economic costs of unrest can be dramatic - witness the fall in trade between Australia and Fiji which occurred after the Fiji coups” (AIDAB 1990, p2). The report also indicates that the aid program provides Australian goods and services needed by developing countries and this can be a catalyst to Australian export trade. “Good aid can also be good trade” (AIDAB 1990, p2). The aid program involves large numbers of Australian firms in the provision of goods and services overseas.

The Committee of Review’s best effort at a definition of development might be re- phrased as, ‘improvement in peoples income and their access to the necessities of life, including food, water and shelter, as well as to improve their levels of education, health and sanitation in accordance with Australia’s national interests’. Aid motivation literature supports the above aid definition. Grounder (1995), for example, suggests that aid is provided to assist in the development of countries and also to promote the political, strategic and commercial interests of the donor. 17

While the above definition of development might encapsulate the reality of why Australia provides aid and what its intentions are, there are many other possible definitions. Development has variously been defined in terms of societal development, moral development, economic development, poverty reduction, the role of women, sustainable development etcetera. (See Diamond1997, Kohlberg & Turiel 1971, Fennell et al 2001). All of these definitions are relevant to the concept of development where people are considered as the primary aim of development work and not the development of the material base of the society. Put differently, the material project (For example improved water systems, reforestation) is seen as a means of developing people, and, to the greatest extent possible, projects should be created by and remain in the hands of the local people. Equally much is made of the concept of poverty reduction as a development aim. The Asian Development Bank has recently adopted such a definition and focus for its programs. This definition, however, does not realistically cover programs in the health sector that, for example, do not impact on poverty per se but rather on its effects.

In this thesis it is intended to review Australian aid performance (development results) in terms of its professed aim; that is, sustainable development. While the concepts of sustainability and sustainable development are pervasive in AusAID literature and in the Committee of Review report, they are not clearly defined. In this thesis sustainable development is operationally defined as, the ability of donor programs to deliver development benefits for an extended time after major financial, managerial and technical assistance is terminated. The reasons for this definition being adopted lie in the stated aims of Australian development assistance described above; namely economic and social development, and Australia’s intent that its development aid should be sustainable. In this respect the definition differs from that prescribed by the World Commission on Environment and Development where sustainable development is defined as ”development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Beder 1993, p3).

In terms of Australian aid, it seeks to deliver sustainable development via sustainable program and project inputs. A commonly accepted donor definition of aid sustainability is as follows:

A development program is sustainable when it is able to deliver an appropriate level of benefits for an extended period of time after major financial, managerial, and technical assistance from an external donor is terminated (Cracknell 2000, p247)

In the above sense sustainability in aid projects is concerned primarily with maintenance of inputs and continued realisation of objectives rather than meeting current needs without compromising future needs. Of course projects also seek not to debilitate the environment in which they operate so as to be sustainable.

In line with the foregoing declared objective of Australian aid in this thesis, “development success” is defined as the delivery of sustainable development outcomes via sustainable development programs/projects. Further, the Australian aid program is usually referred to as “development co-operation” rather than “aid”. Development co-operation is the more accurate term in that it indicates that activities 18 are undertaken in co-operation with recipient countries. Aid, by comparison can be confused with an emergency response to provide immediate relief for acute suffering (For example, disaster relief). In this dissertation however, the terms will be used interchangeably.

Two issues should also be pointed out. Firstly, while it will be acknowledged in this dissertation that Australian development assistance has numerous objectives, the primary purpose of this thesis is to explore whether development objectives of Australian aid have been met rather than any contemporaneous aid objectives such as trade and foreign relations. These issues will only be addressed as they affect development outcome rather than in their own right. Secondly, as the Samoan Government has accepted Australian aid under various programs and projects for many years, it is assumed in this thesis that the leadership (at least) of the country is committed to western concepts of development.

AUSTRALIAN AID AND THE MODERNISATION DISCOURSE

The discourse of modernisation has deep roots in Western intellectual history. As a theory of social change, social scientists have long been interested in how societies modernise, or go from a condition of underdevelopment to a modern society with democratic governance, free market economies, and a civil society. Development was treated as “synonymous with the achievement of economic and political autonomy by means of a self sustaining, endogenously (internally) driven process of economic growth. In turn, this requires strong investment … to increase domestic productive capacity..” (Bertram 1999, p337-352). Modernisation is, in effect, depicted as the "process of economic, political, social and cultural change occurring in underdeveloped countries as they move towards more advanced and complex patterns of social and political organisation".(Outhwaite & Bottomore (eds) 1994, p392). Under the modernisation paradigm, aid was seen as a catalyst for economic growth.

Theories advanced to explain the process of modernisation typically begin with implicit or explicit references to a dichotomy between two ideal types, the traditional society and modern society. Traditional society in some versions is also described as "rural", "backward" or "undeveloped". (See Homayoun 2001). Modern society by contrast has synonyms such as "urban", "industrial" and "developed". These types of societal structure are viewed as being historically connected by means of a continuous evolutionary process that follows certain general laws. The theory is that all societies follow a similar historical course of increasing differentiation and complexity from one state (undeveloped) to the other (developed). As some societies have already industrialised they become the basis on which modernisation theories can be constructed. Some theories emphasise the endogenous nature of the process of change. See, for example, Parsons (1937), Rostow (1960), Giddens (1985, 1989) Gilbert (1974), while others emphasised exogenous factors such as the diffusion of values, technology, skills and forms of organisation from advanced nations to poor nations. (See Wright 1989, p77-102, Webster 1990, Coetzee 1996, So 1990, Le Roux & Graaff 2000). But in any case societies are assumed to follow the same patterns of change undergone earlier by the developed nations. Modernisation theories, therefore, seek to identify in the organisation and/or history of industrial countries, the social variables and institutional and structural factors 19 whose change was crucial for their process of development in order to facilitate this process in the newly developing countries. Various authors over more than a quarter of a century developed modernisation models (for example, Parsons (1951 & 1966), Wolpe (1975), Cardoso & Faletto (1979), Rostow (1960), Furtado (1964), Gilbert (1974) to Larrin (1993). By the close of the 20th century the latest iteration of modernisation, the concept of globalisation became prominent. The discourse moved from development of the nation-state to that of internationalisation of trade, communications and culture and the possible demise of nation states. Globalisation emphasizes that progress (development) has taken place in developing countries that have reformed their policies, institutions, infrastructure and deregulated trade. Global economic integration of nations is seen as the catalyst for development. It emphasizes the gains made by “integrated” countries and the tragic situation of marginalized countries. Aside from a shift in unit of analysis, the primary thrust of modernisation remains evolutionary, with the integration of rich and poor economies fostering democratic governance and greater individual freedoms.

In the late 1990s Australian aid adopted, at least superficially, the economic concept of globalisation in the form of neo-liberalism. The Minister for Foreign Affairs reported the effects of globalisation on Australian aid in the following terms, “Economic globalisation, underpinned by rapid technological change will continue to transform the development process. It has fundamentally increased the importance of trade and investment, and offers huge opportunities and challenges for developing countries” Downer (1997). The main proponent of economic globalisation continues to be the Australian Treasury, where the pragmatic economists prevail. Treasury for its part has made it clear that it strongly supports globalisation from an economic viewpoint. It most recently stated, “Globalisation - in the form of increased economic integration through trade and investment - is an important reason why much progress has been made in reducing poverty and global inequality over recent decades”. (Commonwealth of Australia , 2001, p2).

The review of the four Samoan case studies will consider the neo-liberal rhetoric associated with globalisation. It will investigate whether AusAID has systematically pursued development opportunities afforded by neo-liberal philosophy or has maintained a more national-interest oriented aid which hinders development in the South Pacific. Critics of AusAID such as AID/WATCH suggest that AusAID continues through contractors such as ACIL Australia Pty Ltd to pursue outdated concepts of development associated with directly protecting national interest: “They (ACIL) specialize in those old chestnuts institutional and operational strengthening and capacity building” (AID/WATCH 2003).

OUTLINE OF THE THESIS

This dissertation tests the hypothesis that Australian aid to Samoa has not been sustainable. This hypothesis is the opposite to that officially espoused by the Australian Government. (See AusAID 1998, 1999) and is premised on the belief that official reviews of aid have consistently portrayed a postive view of aid for public consumption, whereas the situation at the recipient country level is quite different. In part, the hypothesis stems from the experience the writer has in regard to aid delivery. It suggests that while Australian aid to Samoa has been effective in engendering transient change and some development, that development has not 20 been sustained. This thesis examines the changes engendered by project aid and its sustainability. If the analysis supports the hypothesis, then the value of development assistance may have been dissipated and there are possible lessons to be learned for Australian aid. Moreover, the Samoan result would probably not be unique in Australia’s aid portfolio. It may well be applicable to countries like Papua New Guinea and the Solomon Islands where there are already many criticisms of Australia’s apparent failure to deliver sustainable aid (Hughes 2003). In reviewing the development impact of Australian aid, this thesis examines other variables such as the state of development of Samoa, history, culture and religion and AusAID procedures and internal culture. These variables are examined as they might impact on development cooperation outcome.

As a subsidiary objective, the thesis also examines the applicability of development theory to the practice of development. It will examine whether development theories really depict the development process or whether they fail to identify the real bases for development.

In terms of evaluating the results of Australian aid to Samoa, four completed Australian development projects (in Samoa) were chosen as case studies. The thesis investigation will concentrate on completed projects rather than current projects as with the former it is possible to ascertain if they were successful or not. Projects post-implementation will either show results and be sustained or not. If aid has not been successful, then the analysis of projects and variables will provide evidence for development outcomes.

In exploring the questions of aid sustainability and development theory applicability, this thesis will examine Samoan history, culture and religion to determine if they are intrinsically linked to development potential (as envisioned by the Samoan and Australian Governments). The thesis will assess whether these agents maintain the sociocultural fabric of Samoan society and if so whether they exert a negative influence on Australian development efforts. In other words, how is aid perceived and interpreted within local society? Specifically, is there a clash of value systems which, at least from an Australian perspective, ‘warp’ the intent of aid? These issues will be explored to gain a better understanding of the outcome of development assistance. The thesis will examine whether Samoan history, culture and religion have any effect on development outcomes. It will also review development theories in some detail to see if they are applicable to the Samoan situation.

This thesis contends that internal AusAID systems, procedures and culture have contributed in a number of ways to sub-optimal development results. The thesis suggests that despite apparent agreement between the governments of Samoa and Australia on development objectives, there is nevertheless a clash of cultural norms that can effectively reduce the development success of aid. The thesis explores the proposition that Samoan history and culture act on Australian (and Samoan) development efforts in a negative and surreptitious manner.

In terms of the development projects reviewed, this thesis considers whether despite public pronouncements that Australia is pursuing development objectives in terms of opportunities afforded by globalisation, there is a large gap between the rhetoric and the practice of development. It explores whether Australia has really adopted a 21 globalisation perspective and pursued international trade opportunities via economic development projects. Australia is supposedly firmly in support of the neo-liberal outcomes afforded by globalisation and has strongly argued this perspective in various papers. In Globalisation and Poverty: Turning the Corner (Commonwealth of Australia 2001), for example Australia suggests that increased economic integration through trade and investment is “an important reason why so much progress has been made in reducing poverty and global inequality over recent decades” (Commonwealth of Australia 2001, p2). In this respect, has Australia’s aid investment in trade and economic development supported this objective or is it limited to creating an enabling policy and legislative environment? Does AusAID continue to design and support projects that are based on the presumptions inherent in the old modernisation theories. Moreover, in terms of the subsidiary objective of the thesis, do those theories actually apply to the development process?

This thesis reviews the practice of development in terms of the process of Australian development co-operation in Samoa. In adopting this approach the thesis will highlight the success or failure of AusAID projects in delivering sustainable development. If the projects were not successful it will investigate why the failures occurred and why official evaluations of some of the same projects suggest the opposite. In one respect the approach taken in this thesis is akin to Escobar’s (1991, p676) distinction between “development anthropologists” who from the inside and through processes of translation and communication try to make development better and “anthropologists of development” who hope to stand outside and to comment on the discourses and practices of the ‘machine’. This thesis derives from inside the process of development practice.

The next sections of this dissertation, will briefly analyse the possible effects variables such as history, development background and AusAID culture/procedures may have had of Samoan development outcomes. These in turn set the scene for a detailed analysis of development in Samoa as illustrated by the four development project case studies. The Samoa case studies will be used as a catalyst to identify the actual development outcomes of Australian aid. In examining Samoan history this thesis will review the culture, beliefs/superstitions and religion of the country and the power these exercise over society today. By examining the strength of Samoan belief systems it is possible to adjudge the effect they may have on aid and development. This process is somewhat akin to the concept of gravitational pull whereby the mass of one planet or moon affects the conditions on its neighbour. A similar approach will be taken to examination of the state of Samoan development.

In respect to AusAID procedures, these will be examined from both a written procedure and impact viewpoint. They will be compared with industry “best practice” procedures - those prescribed and accepted by the Organisation for Economic Cooperation and Development (OECD), Development Assistance Committee (DAC). This process will elicit both the intended and unintended consequences of the procedures. Data will demonstrate whether the procedures employed in project delivery in Samoa impact on the outcome of development project outcome or not. In respect to AusAID culture its relationship to development outcomes and impact on project management will be highlighted.

POSITION OF THE WRITER WITHIN THE CONTEXT OF RESEARCH

I was employed in the Commonwealth Public Service for over 20 years and during that time worked for many years with the Department of Trade and Austrade. In that setting I became aware of the export market that aid offered Australian companies through various AusAID schemes such as Development Import Finance Facility (DIFF) and the Private Sector Linkages Package. Moreover I became aware of the lack of commercial savoir-faire within AusAID. For the last 15 years I have been on the staff of or contracted to commercial organisations where I have, inter alia, prepared bids for international aid projects, been Team Leader on four AusAID overseas projects and worked for the World Bank on technical assistance assignments. Three of the AusAID projects where I was Team Leader were in the South Pacific (two in PNG and one in Samoa). The researcher is currently Team Leader on the PNG Incentive Fund which is the pre-eminent AusAID project in PNG. I am therefore acutely aware of the problems facing aid in the Pacific, AusAID’s culture and limitations and the politics of aid. In respect to the section on the Culture of AusAID in this thesis some of the material presented derives from my personal observations and experiences.

STUDY SETTING

Samoa was chosen as the review site as it has had a very stable government over the last 20 years, it has consistently espoused economic and social policies, its government has a long commitment to reform and Australia is the pre-eminent donor. It has agreed to and implemented structural adjustment programs2. In addition many of the international donors (JICA, NZAID, USAID) and United Nations agencies (WHO, UNDP, UNICEF, FAO) have their headquarters for the Pacific in Samoa so it is both attuned to international views and benefits directly from the close contact that occurs. Samoa knows how to attract donor funds..

Further, Australia has adopted internationally recognised approaches to assisting policy reform in Samoa. Samoa has supported customs, treasury, agriculture education and health reform in the country under a number of project initiatives. In reviewing Australian aid to Samoa, it was decided to concentrate on projects rather than programs as the bulk of funding to Samoa is delivered via the former mechanism. Nevertheless, Samoa as a stable country, with defined development policies and donors using standard development strategies is an ideal type to use as the basis for development study in the South Pacific. (By contrast a study of Australian aid to Papua New Guinea or the Solomon Islands would have to acknowledge the extremely poor policy and political environment into which the aid was delivered).

The Australian Agency for International Development (AusAID) and the Government of Samoa were contacted and they agreed that a review of four completed projects in Samoa could be undertaken. These projects are the Building Inspection Unit Project - Public Works Department; Cocoa Rehabilitation and Expansion Project Phase II;

2 For example UNDP Structural Adjustment Facility Aug 2002. See also Nic Macellan, Pacific Islands Troubled by Trade at http://www.focuswo6.org/publications/2001/Pacific- Islands-troubled- by- trade.html and http://www.ausaid.gov.au/hottopics/pacific/samoa.cfm and http://www.imf.org/external/oap/activity/1999/031899.htm (Accessed 12May 2005). 23

Western Samoa Fire Service (WSFS) Upgrade; Road Resealing Project - Public Works Department

As part of the review, however, it was also decided to analyse the following variables to determine if they had any impact on development outcomes and sustainability. The variables are the history and culture of Samoa; its state of development and AusAID program/project procedures

LIMITATIONS OF THE STUDY

This thesis has clear limitations in that its analysis of development success or failure is in terms of only four completed projects. As such the data analysed are limited and largely historical. Morever, AusAID has since embarked on a range of reform measures that, in part, impact on some of the study findings. In addition, as the projects were all completed, access to all records and personnel involved proved difficult. There were gaps in project documentation and the views of involved personnel may have been changed over time.

There is no significant attempt in this thesis to investigate macro economic impacts during the period that the projects were being implemented. As the projects were conducted nearly 10 years ago and the long term impacts (sustainability) have been analysed, the impact of macro economic activity during a decade has however been noted. While an effort was made to select projects across different sectors this situation was influenced by AusAID recommendation and records availability. As the projects were chosen by AusAID and agreed to by the Government of Samoa it can be assumed that they do not represent a worst case scenario. If there was any bias in selection of projects it would probably tend to be towards the selection of the best rather than worst projects. Hence, results obtained by examining the selected projects would tend to have some applicability to the entire AusAID project portfolio in Samoa.

While the actual project (case study) results can be measured, and the relationship to the AusAID Samoa development portfolio is evident, it is more tenuous to relate thesis findings to the wider Australian development cooperation effort. The extrapolation of thesis findings to the wider AusAID and global development context is obviously less compelling and deserving of further research. Nevertheless, if the thesis hypothesis is confirmed it will provide significant insights into the development process. It will provide a basis for direct comparison with other AusAID development efforts and those of other donors. This may lead to consideration of alternative aid implementation models.

Finally, in respect to development theory, the implications to be drawn from the review of four case studies are limited. However, as the analysis will provide an opportunity to test theories in practice, it is therefore of some import..

CHAPTER 2 THESIS METHODOLOGY

This chapter details the evaluation methodology for the thesis. In this respect there are two elements to the methodology. Firstly there is an analysis of the variables surrounding the delivery of aid to Samoa and secondly there is a review of the four specific case studies of aid delivery.

The analysis of the variables surrounding aid delivery includes the history/culture of Samoa, its state of development and the systems/procedures and culture of AusAID. These variables are analysed largely from available reference material, discussions with Samoans/AusAID staff and personal reflection as a participant in the development process both in Samoa and the Region. The second stage of the methodology is to review four case studies of Australian aid delivery to Samoa and analyse these in terms of development impact and sustainability. These results are examined in terms of the impact the variables in the first part of the methodology may have had on the process and the overall success of Australian aid delivery to Samoa That is, has it engendered sustainable development?

The case studies analysed were selected by AusAID from a number of completed projects. The projects are in various sectors and had varying official results as at project completion. While the selection by AusAID might, prima facie, be a cause for concern regarding impartiality, the main reasons for the selection were their relative size/impact and availability of supporting project material.

Indeed, if there were any bias involved in the choice of projects, those selected would tend to be the ones with the best result, not worst. Hence an analysis that finds problems with the projects would also tend to have applicability to the complete AusAID project portfolio.

USE OF CASE STUDIES INSTEAD OF SURVEYS

There is always an issue with use of case studies in lieu of surveys in respect to sociological analysis. Surveys, according to Mitchell, have become the instrument of choice in sociological analysis “partly due to the vast expansion of quantitative techniques stimulated by the wide availability of computers.” (Mitchell 2000, p165). The issue is one of quantitative research versus qualitative research method. In respect to case studies however they are qualitative research oriented and “aim to understand in depth, and in its natural setting, recognising its complexity and its context. It also has a holistic focus, aiming to preserve and understand the wholeness and unity of the case.” (Punch 1998, p150). Indeed as Mitchell points out, use of case studies often attracts the criticism: “How do you know the case you have chosen is typical?” In this respect, the projects chosen represent approximately 50 per cent of the Australian projects completed during the same time frame in Samoa.

In the context of AusAID’s projects, a multi-site study has been chosen. The method employed is similar to that of the Study of Dissemination Efforts Supporting School Improvement (Crandall et al 1983) where multiple sites were chosen in order to focus on the same issue (in the current case, AusAID performance in sustainable development) in a number of settings, using similar data collection and analysis procedures in each place. 25

Another issue with case studies has been whether it is valid to make inferences from the case material. “One of the primary purposes of conducting such multi-site studies is to escape what Firestone and Herriott have called the ‘radical particularism’ of many case studies and hence to provide a firmer basis for generalisation.” (Schofield 2000, p79). As Mitchell correctly asserts, there is a solid basis for use of inference from case study. “The essential point about the basis of making inferences from case material: that the extrapolation is in fact based on the validity of the analysis rather than the representativeness of the events.”(Schofield 2000, p168). This view is supported by Manson who indicates that case study is “concerned with how and why social phenomena or processes happen in particular circumstances and particular ways and can certainly support predictive ideas about how those things might vary in different contexts” (Manson 2002, p 175).

Moreover, the issue above demonstrates a confusion concerning procedures appropriate for making inferences from statistical data and those, “appropriate to the study of an idiosyncratic combination of elements or events which constitute a case”. (Schofield 2000, p165). Basically quantitative techniques are inappropriate to much of the analysis of AusAID project performance. The data often simply do no lend themselves to quantitative analysis as they are not statistical in nature.

As Sarantakos (1993, p193) identifies, “Today, case studies are considered to be valid forms of inquiry in the context of descriptive as well as evaluative and causal studies, particularly when the research context is too complex for survey studies or experimental studies, and when the researcher is interested in the structure, process and outcomes…”. In fact Hacking (1990) points out that quantitative scholars must do more to recognise the inherent structures of power and control within statistical methodologies such as surveys and censuses and their propensity to provide data that lack context and common sense.

MAKING RELIABLE COMPARISONS

Part of the methodology of this thesis is to review in some detail the history, culture and religion of Samoa. This review, is included as Chapter 5, and not only serves to assist in determining if culture and history impact on development outcomes but also provides a better basis for making reliable comparisons and conclusions from data. It is easy to make comparisons and interpret data incorrectly. It is necessary to understand the culture and history of a country in order to more effectively make development statements and comparisons.

The truth of the above statement is probably no more apparent than in the case Margaret Mead in Samoa. (See Mead 1928 and Freeman 1983). In regard to comparison and inference Morris -Jones states that “in Western idiom certain forms of political Indian behaviour are clearly corrupt, whereas in the idiom of the Indian political system, the same behaviour is an expression of loyalty” (Morris-Jones, 1964, p23). Similar views are expressed by Przeworski & Teune where they state,”For specific observations a belch is a belch and nepotism is nepotism. But within an inferential framework a belch is an insult or a compliment and nepotism is corruption or responsibility.” (Przeworski & Teune, 1970, p92).

Observations and comparisons in this thesis will be made given an appreciation of the Samoan history, culture and religion.

In respect to the issue of making valid comparisons Przeworski & Teune produced an influential treatise on comparative method based on Mill’s (1852) method of similarity and difference. They described two general comparative strategies known as the most similar systems and most different systems designs (Przeworski & Teune, 1970). The most similar systems strategy is predicated on locating two or more similar systems which have social, cultural, political, demographic etcetera similarities. If the two systems share numerous similarities then the number of experimental variables is reduced accordingly. This in turn allows the researcher to isolate the key variable or set of variables to be the subject of the study. The most different system design operates on exactly the opposite concept. The idea is to find two systems that are different in many respects except for the variables under investigation. By comparing two very different projects, for example, it is possible to eliminate a range of variables that may affect development outcomes in a manner that would be otherwise highly difficult to achieve. The projects selected in this thesis vary widely in objective and implementation and provide a good basis for use of the most different system comparative method.

The most important advantage of comparative analysis - especially that which is qualitatively oriented - is an ability to address complex causality. Complex causality implies that for any event a multitude of causes probably exist that have different effects in different contexts. As Ragin (1987, p27) explains it:

First, rarely does an outcome of interest to social scientists have a single cause. … Second, causes rarely operate in isolation. Usually it is the combined effect of various conditions, their intersection in time and space, that produces a certain outcome. Thus, social causation is often both multiple and conjectural, involving different combinations of causal conditions. Third, a specific cause may have opposite effects depending on context. For example changes in living conditions may increase or decrease the probability of strikes, depending on other social and political conditions

“The point to remember is that other methods of inquiry (such as experimental method and statistical analysis) cannot adequately deal with complex causality. Comparative (case-oriented) analysis, by contrast, is especially - perhaps uniquely - suited for dealing with the peculiar complexity of social phenomena” (Rueschemeyer 1992, p 4). This is because comparative analysis “can and does deal with cases as a whole - meaning that a full range of factors can be considered at once within particular historical contexts (which themselves may vary over time). This is especially apparent with regard to deviant or anomalous cases. Comparative analysis can help explain why, for example, some relatively poor countries – such as India and Costa Rica – are democratic, when statistically-based studies would predict just the opposite” (Lim 2003, p16). A further advantage of comparative analysis when performed in a qualitative manner, is to provide a better understanding and explanation of the relationship among factors. “To use a metaphor from aviation, we might say that quantitative analysis shows a strong correlation between engine failure and plane crashes but it typically does not tell us the exact reasons (or the 27 chain of causal events leading to the crash – since not all engine problems, even similar ones, lead to the same outcome” (Lim 2003, p17).

This thesis adopts a comparative and qualitative approach to case study analysis.

ACCOUNTABILITY VERSUS LESSONS LEARNED

The history of aid evaluation has been marked by two competing objectives: accountability and learning from the lessons of aid delivery. Under the accountability mantle, the main purpose of evaluation is seen as addressing the question of whether aid works and how effective it has been. (Accountability in this context relates to development results and impact rather than the common use of the term in respect to control of public or other funds).

The “lessons learned” approach adopts the process of studying selected aid successes and failures with a view to establishing why some interventions fail while others succeed and to incorporate such lessons in future aid design. Donors usually favour the lessons learned approach as they are usually anxious to improve the efficiency and effectiveness of their programs. The concept of lessons learned as the basis for evaluation has been around since the evaluation of development aid first began in the early 1960s. Lele (1975), Mosley (1983) and Sensi & Cracknell (1991) all raise the concept of lessons learned as a basis for aid evaluation.

The accountability proponents, such as auditors and those who represent taxpayers, want to establish if aid has been ‘successful’ and has there been ‘value for money’’. They are more interested to know whether aid has succeeded than why it has succeeded. For example as noted by Cracknell, the World Bank attempted for many years to “evaluate all its projects at project completion stage not because it found the results of particular significance in improving its own internal performance, but because it felt it had a duty to the member states to demonstrate that al the Bank’s expenditure was being systematically evaluated, that is, the evaluation programme was accountability-driven”. (Cracknell 2000, p57). This same approach was adopted by the Australian National Audit Office. (ANAO 1996).

It would be useful to know both whether and why aid worked as both evaluation streams provide useful insight into the effectiveness of aid. Cassen (1986), OECD (1986) and Riddell (1987) reach a similar conclusion. This, however, presents problems as there is an underlying tension between the two objectives. The following table highlights some of the potential incompatibilities:

Table 1: Characteristics of Accountability and Lessons Learned Approaches Accountability as the Lesson-Learning as the Objective Objective Basic aim is: Finding out about the past Improving future performance Emphasis is on: Degree of success or failure Reasons for success or failure Favoured by: Parliament, Treasury, media, Aid agencies, research pressure groups institutions, consultants, developing countries Selection of topics: Based on random samples Projects selected for their potential lessons Status of evaluation: Evaluation is an end product Evaluation is part of the project 28

cycle Importance of data from Data itself relatively Data valued for the planning evaluations: unimportant and appraising of new projects Importance of feedback: Relatively unimportant Vitally important Source: Basil Cracknell, Evaluating Development Aid, Sage Publications, New Delhi, 2000, p 56

The above tensions between the two approaches have affected the way donors have evaluated their projects. The World Bank, for example, attempts to evaluate all its projects at completion stage “not because it found the results of particular significance in improving its own internal performance, but because it felt it had a duty to the member states to demonstrate that all the Bank’s expenditure was being systematically evaluated, that is, the evaluation programme was accountability- driven”. (Cracknell 2000, p 57).

While tensions obviously exist between the above approaches, this thesis combines both in order to accurately identify if and why, Australian aid to Samoa has been sustainable. It will attempt to establish the degree of success or failure of aid projects and the reasons for success or failure.

EX-POST EVALUATION

This thesis also adopts a strategy of ex-post evaluation of projects as distinct from an impact evaluation. All projects selected have actually been completed for a number of years. This provides for the maturity of project outcomes prior to evaluation. In other words, for the projects selected, ample time has passed for projects benefits to be realised and for the impact of non-sustainability to be evident. The review period covers an extended period from 1997-2004 wherein initial interviews and research took place and this has subsequently been informed by additional research and aid discussion.

Impact evaluations have often been undertaken at formal project completion, even though the project benefits/problems may only become apparent years after project completion. They are therefore of doubtful value. In any case it is standard AusAID practice to have the project managing contractor compile a project completion report. So in one sense impact reports on the selected projects already exist, although biased to the views of the contractor. These contractor impact evaluations will provide data to study the outcomes of each project in more detail. They will provide a basis for comparison with the thesis ex-post evaluation.

PROJECTS SAMPLE AND SIZE

As previously noted, it was decided to concentrate on Australian project activity in Samoa rather than program activity. Program activity refers to on ongoing development support for a sector (For example health) and usually has high level goals. It spans many years and is composed of many inputs. These inputs might include specific development projects, allocation of academic scholarships, vocational training, support for attendance at international meetings, conduct of seminars etcetera. Development projects by comparison are discrete initiatives within the program and have specific objectives. The choice to review projects was made as most Australian aid to Samoa is delivered by the project mechanism. Moreover, because program activity is also often characterised by many small 29 relatively disparate interventions over a prolonged period it is much more difficult to determine its effectiveness.

In terms of size, the projects selected represent significant inputs of Australia development assistance to Samoa. At the time of implementation, the projects would have accounted for approximately twenty per cent of Australian aid for the period. For example in 1992, three of the four projects were still being implemented and their combined annual expenditure was approximately twenty per cent of the total Australian aid allocation of approximately A$10 million. Small development program interventions were not selected for review as the number of variables affecting project outcomes was considered too great to permit any meaningful translation of the results into reasons for development success at the national level. For example, funds to support the work of an NGO in respect to improving the health and hygiene of school children would normally not be subject to the preparation of a structured program implementation document with specific objectives and performance indicators. Rather, funds might be provided to assist the NGO continue work already in progress and subsumed in the general NGO budget. In such circumstances it is very difficult to determine whether the aid input engendered any health/hygiene improvements because the inputs are diffused within the NGO corporate budget, organisation and personnel costs. The outputs/results may also be a direct result of previous NGO activities rather than the recent financial input.

The sample of projects reviewed was small compared to the total number of projects undertaken by AusAID in Samoa since funding commenced. However the study reviews projects that have been completed for at least two years in order to judge real project impact and sustainability. In this regard the projects selected represent a much higher percentage of the available project cohort. Also as indicated earlier, the logic of comparative inquiry enables control of certain variables in these different cases while allowing others to vary and this process provides greater insight and more generalisability.

REVIEW METHODOLOGY

The evaluation of the selected projects adopted a limited triangulation method where several different approaches to review have been attempted, including field visits, desk review, interview and comparison with baseline data.

In respect to triangulation, if it is desired to produce useful knowledge that might be applied in in practice in multiple contexts, verification takes on a degree of importance. “Canonised ideas of rigorous fieldwork, thick description and triangulation, and so on, become the means of persuading readers of the veracity and potential applicability of one’s research” (Talburt 2004, p3). In this thesis significant time has been expended on fieldwork and in detailed descrition of the case studies. Further, triangulation constitutes part of both fieldwork and analysis. Lincoln and Guba (1985, p283) described triangulation and highlighted “as the study unfolds and particular pieces if information come to light, steps should be taken to validate each against at least one other source( for example, a second interview) and/or a second method (for example, an observation in addition to an interview”. This thesis uses a range of triangulation methods as stated above. Even within the 30 interviews, trangulation was used by cross checking interviewee responses with persons from other agencies, contractors and industry or professionals.

In addition to the above, limited “member checks” as prescribed by (Lincoln and Guber, 1985, p236) were used where interview participants were presented with analyses on findings for validation and discussion. This situation occurred with the Building Inspectin Unit Project, Cocoa Rehabilitation and Expansion Project, and Fire Services Project. It was not possible with the Road Resealing Project as most of the personnel had departed and their was limited opportunity for interviews with existing personnel.

As is evidenced by the above there were strenous efforts made to verify data. However in respect to a concentration on data verification, Wolcott (1990) wrote about how qualitative researchers had a preoccupation with the veractity of a study’s description and interpretration to the detriment of the task of communicating understandings. He rejected qualitative research’s quest for certainty and stated ”our efforts at understanding are neither underwritten nor guaranteed by, the accumulation of some predetermined level of verified facts” (Wolcott 1990, p 147). “Wolcott positioned himself, and qualitative inquiry in general, as participants in interpreting and constructing social worlds rather than recorders of verified data”(Talburt, 2004, pp1-2). A strength of qualitative inquiry is said to be its search for meaning. As such, this thesis also places emphasis on interpretative aspects which writers like John Smith (1993, p184) suggest is “the central focus of social and educational inquiry”.

It was proposed to conduct a review of the economic re-estimated rate of return for the Cocoa Rehabilitation Project as the contractors had compiled an Internal Rate of Return (IRR) estimate for the project at commencement stage. The IRR was not compiled as it would have been a fruitless exercise given that the export of cocoa had ceased instead of expanding. As such it was clear that any IRR would have shown negative returns and been a perfunctory exercise.

In all cases, project files and reports were reviewed (a desk analysis), followed by interviews of Australian and Samoan government officials and then field visits to the Project site/sites. Details of major source documents are contained in Annex A to this thesis. The review of project files and reports also covered analysis of regular contractor Monthly Reports and Completion Reports. The Monthly Reports perused might be regarded as part of on-going evaluation for the Projects. On analysis, however, it became clear that the reports monitored implementation rather than evaluating performance. Implementation against Logframe is recorded rather than activity impact. In a number of projects AusAID Mid-Term Reviews exist and these were examined. These reviews provide a better picture of performance against objectives but still tend to focus on revision of management inputs rather than outcomes. Limited meta-evaluation was possible. In the case of the Cocoa Rehabilitation Project by comparison to the AusAID funded PNG Cocoa Project.

Interviews were conducted with a range of persons associated with the projects and more generally with aid to Samoa. Interviews included a range of AusAID personnel at Post, project staff of Australian Managing Contractors for the projects, Samoan recipient agency staff, Samoan Treasury, Department of Foreign Affairs and other 31 officers with knowledge of the projects and/or Australian aid to Samoa, sector experts from private sector organisations in Samoa and Australia and the AusAID review team tasked with reviewing three of the projects. Discussions were also held with multi-lateral and other donor organisations such as ADB, UNESCO, WHO, the World Bank, JICA, NZAID etcetera.

In addition to desk analysis and interviews, comment has been included from the writer’s experience in the international aid field over the last 15 years. This includes reference to actual activity and situations encountered on aid projects in PNG and Samoa.

AusAID’s Lessons Learned Database (which is part of its Activity Management System) and the Development Assistance Committee (DAC) of the OECD principles for effective project management were used as a basic resource tool. Other sources augmented these evaluative information repositories as follows:

Internet pages of The World Bank, Asian Development Bank, Japan International Co-operation Agency (JICA), UK Department for International Development (DflD), Canadian International Development Agency (CIDA), the United States Agency for International Development (USAID), and the German Development Corporation (GTZ)

Material from the US Peace Corps, and New Zealand AID (NZAID)

Cost benefit analysis was deemed inappropriate to estimate the economic rate of return on investment for the Cocoa Rehabilitation and Expansion Project. For the remaining projects this was considered an inappropriate measure due to the very nature of the Projects returns and the inability to accurately calculate these in monetary terms. An attempt to establish an economic rate of return for the Cocoa Rehabilitation Project would be a perfunctory exercise (given its ultimate demise due to cyclones Val and Ofa destroying the industry) and consequently it was not pursued. Projected economic returns for the Cocoa Rehabilitation and Expansion Project were destroyed by the effects of cyclones Ofa and Val in 1990 and 1991 respectively.

While the ADB has produced guidelines for the economic analysis of Projects, these were considered to be inappropriate for two reasons. Firstly the guidelines pertain to loan rather than grant funds. AusAID projects by contrast are all grant aid. Secondly, the projects being reviewed were largely indirectly productive and in such cases the ADB prescribes “the best that can be expected is to be able to value project effects indirectly in terms of the project’s impact on the market value of the product for which the project produces an immediate input or the cost of an alternative, in terms of cost savings” (ADB, 1997, p8). Just how this prescription can be usefully applied to a project like construction of a fire station is not clear especially as in the case of Samoa there was no previous facility and the lowest tender was accepted. Other commentators suggest ”The main reason for (lack of economic impact information) is probably that many aid projects have social objectives such as poverty alleviation or providing education; or objectives of an abstract kind, such as good governance, community empowerment or institutional building, none of which lend themselves readily to economic quantification. .. But the problems are daunting and full analysis 32

(CBA) is unlikely to ever be a dominant feature of most evaluations” (Cracknell 2000, p143).

Indeed, even if the “realised economic rate of return” of a project can be calculated, and it turns out to be positive, it does not necessarily imply that the project will assist the macroeconomic development of the country. As Mosley (1986) notes, aid is “fungible”. By supporting a project that the recipient government would otherwise have had to fund, a donor may enable the government to spend money on other activities that in fact may be wasteful.3 In addition aid is sometimes argued to create rent seeking behaviour4 where economic intervention by government is biased toward special interest groups and one constituency is rewarded to the detriment of another. The impact of aid therefore may sometimes negate the economic benefits derived from specific projects. Devarajan & Swaroop (1998) provide a good analysis of the effects of aid fungibility. The ADB does, however, suggest that an, ”economic analysis attempts to assess the overall impact of a project on improving the economic welfare of the citizens of the country concerned”. (ADB 1997, p 9). This concept of, “project impact on the economic welfare of citizens” was incorporated into the assessment of the projects concerned.

One weakness in the project evaluations is the constant gaps in the reporting material that was available. Many of the monthly reports, six monthly reports and surveys were not held by the AusAID Post in Samoa. Efforts were made to locate copies of the material in AusAID Canberra but again this proved difficult. Hence the compilation of an accurate project history was a frustrating exercise. This issue was largely overcome by the conduct of interviews and site visits.

AUSAID EVALUATION PLANS/BASELINE STUDIES

Baseline studies involve undertaking a detailed review of the situation immediately prior to project commencement. These data can subsequently be compared to the situation after project completion. In accordance with DAC principles, evidence of evaluation plans for projects as part of the initial design stage and any baseline studies conducted as part of program inception phase of projects was investigated. This was then compared to the post-project situation to determine if the projects were successful or otherwise.

MEETING WITH AUSAID REVIEW TEAM

While not planned as part of the thesis methodology I had an opportunity to conduct discussions with an independent review team sponsored by AusAID who were reviewing three of the projects covered in this thesis. These included the Fire Service, Public Works Road Resealing and Building Inspection Projects. The reason for the timing of the reviews is not known. I sent a letter to AusAID reminding the First Secretary Development Cooperation of the research that had been undertaken and was continuing and the desirability of not duplicating review effort. Annex B refers.

3 This has often been the case in countries like PNG where Australian grant aid was used for many years to prop up unsustainable budgets and where successive PNG governments chose to pursue politically attractive programs rather than those that were actually needed. 4 For a good explanation of rent seeking behaviour and its effects, see Garfield (1996) 33

On 20 October 1998 I met with Dr Satish Chandra AusAID Canberra, Mr Chris Wheeler AusAID Apia, Rob Allaburton and Robert Anscombe regarding the Fire Service and PWD projects. This was to acquaint them with the work the writer had undertaken, provide them with a brief on research performed and to discuss the projects in some detail. This thesis compares its findings with those of the review team.

RATINGS SYSTEMS

In evaluation of projects many aid agencies have developed rating and scoring systems. These are used for both accountability and lessons learned purposes. For example the UK Department for International Development has a rating system whereby projects are evaluated according to five categories of performance- From D through to A+. These overall project ratings are compiled following the addition of points scored against various performance criteria. The problem with such a scoring system is that aggregation of success ratings is undertaken subjectively and project activity does not always fit nicely into the scoring criteria. Most such systems are continually being refined to more accurately reflect performance. In the interests of accuracy and credibility of analysis, this thesis will not employ rating or scoring systems in the evaluation of selected projects.

DEFINITION OF “SUSTAINABILITY” ADOPTED

The focus of the evaluation process was primarily on the ‘sustainability’ of the Projects concerned, rather than lessons learned, although these become evident from the evaluations. In this respect, the principles for evaluating projects as defined in the Simons Report were adopted. These in turn reflect common DAC principles. The report states:

”The DAC Principles for Effective Aid (DAC 1992), reflect common understanding among donors of how to assess aid activities. The following core criteria for assessing project success set useful benchmarks for aid management which AusAID could use as a starting point in strengthening its activity analysis:

Relevance of project objectives to development needs in-country, and to the goals of the aid program Effectiveness in achieving the objectives of the project Efficiency of inputs related to outputs. Were the given development benefits achieved at least cost, and were they worth the cost? Impact at the broader development level. Did the achievement of immediate project objectives have the desired developmental impact at the broader level? Were there other, unforeseen or unplanned development impacts which also need to be considered? Sustainability or durability of development benefits, in financial, economic, social, institutional and environmental terms. Is there sufficient recipient commitment to the activity to sustain it? “ (CRAOAP 1997 , p168).

The report highlights that the above criteria have been shaped in the context of project evaluation and to some extent can only be considered once the project has been completed and all the relevant data gathered. Hence this thesis reviews 34 completed projects and adopts the commonly agreed donor definition of “sustainability” as defined in Chapter 1.

CHAPTER 3 LITERATURE AND THEORETICAL FRAMEWORK

In this chapter it is intended to review development literature and examine why development matters. Development will be specifically analysed in terms of the various theories that attempt to explain the concept. The analysis will also look at the effect development theories have had on government and donor strategy. Moreover, the analysis of the theories of development will seek to ascertain if any or some combination (of the theories) adequately depict the actual development process.

WHY DOES DEVELOPMENT MATTER?

In respect to development, in the year 2005, four-fifths of the people of the world are living in the developing countries, most with improving conditions. But the number in absolute poverty and despair is still growing. Industrialised countries have a strong moral imperative to respond to the extreme poverty and human suffering that still afflict more than one billion people. There is also a strong self-interest in fostering increased prosperity in the developing countries. Developed countries are seeking to expand the community of interests and values needed to manage problems that respect no borders from environmental degradation and migration, to drugs, terorism and epidemic diseases. In addition they seek in most cases political, trade and sometimes, military advantage through aid delivery.

The first motive is fundamentally humanitarian. Support for development is a compassionate response to the extreme poverty and human suffering that still afflicts one-fifth of the world’s population. The people who live in extreme poverty, for the most part, lack access to clean water and adequate health facilities; many do not receive sufficient nourishment to live a productive life; the majority do not possess basic literacy or numeracy skills. Their deprivation is unnecessary and its continuation is intolerable. The moral imperative of support for development is self- evident.

The second reason for supporting development is enlightened self-interest. Development benefits people not only in poor countries, but also in the industrialized donor countries. Increased prosperity in the developing countries demonstrably expands markets for the goods and services of the industrialised countries. Increased human security reduces pressures for migration and accompanying social and environmental stresses. Political stability and social cohesion diminish the risks of war, terrorism and crime that inevitably spill over into other countries.

The third reason for trying to develop countries is to counter international problems. Sustainable development expands the community of interests and values necessary to manage a host of global issues that respect no borders - environmental protection, limiting population growth, nuclear non-proliferation, control of illicit drugs, combating epidemic diseases.

Properly applied in propitious environments, aid stimulates development. Co- operation within the United Nations, the international financial institutions, the OECD and other global and regional bodies has greatly enhanced these efforts and shaped an evolving multi-lateralism in which all countries hold a vital stake. The international community needs to sustain and increase the volume of official development 36 assistance in order to reverse the growing marginalisation of the poor and achieve progress toward realistic goals of human development.

There is a compelling need for development co-operation strategies that will help the international community to manage these emerging challenges and opportunities in the 21st century. The choices involve far more than just the relevance and effectiveness of aid programs. Decisions about international support for development will play a part in defining our societies’ overall vision for the future. What can development do to help create a stable global order in which people can live secure and productive lives? How can it help to avoid a future of conflict and chaos, of poverty and environmental devastation? How will development cooperation adapt to the changing global context?

It is abundantly clear to all that development does matter. It is therefore necessary to better understand how development occurs if developed countries are to be more effective in engendering it within the less developed world.

UNDERDEVELOPMENT AND DEVELOPMENT IN THE 20TH CENTURY

In the late 20th century the two main theories of development (modernisation and dependency) were premised on the existence of states on underdevelopment and development within societies. As Outhwaite and Bottomore (1994, p151) indicated:

The achievement of economic and social progress by transforming conditions of underdevelopment (low productivity, stagnation, poverty) in countries variously designated as "poor", "underdeveloped", "less developed" or "developing" is usually understood as development. "Economic growth is a necessary if not sufficient condition of social progress, chartered in the satisfaction that of such basic needs as adequate nutrition, health and shelter (overcoming absolute poverty), to which can be added further conditions of a full human existence such as universal access to education, civil freedoms and political participation (overcoming relative poverty or deprivation). With the end of World War II, the map of the world was redrawn and communist movements took over Eastern Europe and China and anti colonial movements sprang up in Africa and Asia. Both the communist and capitalist camps were eager for converts. In the global context, development became the major goal of governments and international bodies like the United Nations and the International Bank for Reconstruction and Development (the World Bank). Development emerged as a field of specialisation in the social sciences and economics.

Controversy surrounded the causes of underdevelopment and ways of achieving development. Radically different views were expressed regarding industrial capitalist development, of the international economy it created and how it conditions the prospects for development in the Third World. Competing claims emerged from socialists, capitalists and nationalists on solutions to the problems of development and how best it might be achieved.

MODERNISATION THEORIES One group of writers sees development in terms of modernisation theories. Modernisation is depicted as the "process of economic, political, social and cultural change occurring in underdeveloped countries as they move towards more advanced and complex patterns of social and political organisation" (ibid, p392).

The theories of modernisation start with implicit or explicit reference to a dichotomy between two ideal types, the traditional society and modern society. Traditional society in some versions is also described as "rural", "backward" or "undeveloped". Modern society by contrast has synonyms such as "urban", "industrial" and "developed". These types of social structure are viewed as being historically connected by means of a continuous evolutionary process that follows certain general laws. The theory is that all societies follow a similar historical course of increasing differentiation and complexity from one state (undeveloped) to the other (developed). As some societies have already industrialised they become the basis on which modernisation theories can be constructed. Some theories emphasise the endogenous nature of the process of change (e.g. Parsons, Rostow) while others emphasise exogenous factors such as the diffusion of values, technology, skills and forms of organisation from advanced nations to poor nations. But in any case societies are supposed to follow the same pattern of change undergone earlier by the developed nations. Modernisation theories, therefore, seek to identify in the organisation and/or history of industrial countries the social and social variables and institutional and structural factors whose change was crucial for their process of development in order to facilitate this process in the newly developing countries.

Talcott Parsons Theory of Modernity

Talcott Parsons (1951, 1966) developed (from Max Weber's theory of value spheres) a theory of modernisation in terms of functional differentiation. The basic propositions of this theory can be summarised as:

All social systems are made up of the interaction of individuals. Such interaction is not random, on the contrary, it is highly structured. That structure is produced consensually through the values and norms of the common cultural system, which determines the actions of individuals. The differentiation of individuals into groups, and most importantly, their allocation into institutionalised roles (including authority or power positions) is carried out in accordance with common accepted norms. Because cohesion is produced through voluntary adherence to the rules, conflict is minimum (Wolpe 1975).

The above process turns the individual components of action - latent constitutive values, integrative norms, purposive motives, adaptive resources - which are integrated in communicative action into the specialised performances of differentiated functional systems. Both at the level of the "general action system" 38 and at the "social system" and the integrative subsystem of the action system, the systems which take over the internal tasks of information processing, innovation and the symbolic-communicative reproduction of the values and norms separate out from those systems which secure the adaptation of action system and social system to external environments.

The system of evolutionary change that led to the development of the system of modern societies can thus be explained by the shift from social stratification to functional differentiation. The rise in autonomous cultural institutions makes possible, by way of the generalisation of values, the legitimisation of concrete norms, which are binding for the social community. A post -traditional educational system, a self-organising economy, autonomous art and individualised religion (the Protestant ethic) are the most important historical examples. By means of generalised influence, social integration can be organised as the inclusive and open-ended formation of free associations into a system of social communities. Parsons concept of a societal community permits the decoupling of political power from the influence of communicative action in social associations and gives the political sphere the necessary freedom to impose functional differentiation and to implement, in a purposive, rational manner, the corresponding juridical and administrative structures.

The model of functional differentiation, developed by Parsons suffers from a fundamental difficulty. For Parson's every form of system formation by means of functional differentiation appears as a broadly unproblematic decoupling of the system and the life world. It is unproblematic because he conceives the life world in terms of traditionalism, particularism, diffuseness and affectual collectivism. For him, functional differentiation is the emancipation from the limits of nature and from traditional forms of socialisation. Thus for example he was able to describe the USSR at the end of the 1960's as a progressive modernisation on the road to the Western system of modern societies and lagging only in certain domains. His theory results in an unbalanced interpretation of Soviet development e.g. it fails to provide any insight into the phenomenon of collectivisation. The concept of functional differentiation permits an adequate analysis of modern transformation and dissolution of traditional forms of socialisation. It does not however permit the question of whether there are modernisation processes (such as the Stalinist Terror, Great Leap Forward, Cambodian genocide) which not only destroy the traditional forms of socialisation but the very possibility of socialisation itself, to be posed. Given this situation, functionalist system theory cannot escape the charge that it embodies a concealed philosophy of history and is constrained by its categories into a certain blindness to reality.

The structural-functionalist approach of Parsons can therefore only be regarded as applicable to certain highly stable societies, which are relatively conflict free and consensual. That is to say the general theory is a specific model for the analysis of advanced industrial social systems that are integrated around a common value system. By contrast former colonial societies are characterised by conflict, cultural heterogeneity and an absence of common values. Alan Gilbert pointed to this fact when he examined Latin American development. He stated, "In many countries this led to military strength being the final arbiter of political power ...... This historical legacy however, is not only manifest in the way governments acquire and keep power. It is also reflected in the way they use it. In particular it has led to the 39 centralisation of administrative power and the weakening of local government" (Gilbert, 1974, p 32). Not consensus, but domination, is asserted as to be the basis of social order and cohesion in such societies.

Despite the shortcomings of the theory, Parson's use of "pattern variables" to describe the ideal typical social structure of "traditional and "modern" societies, affectivity verses affective neutrality, ascription verses achievement, diffusion verses specificity, particularism verses universalism and orientation towards collective interests verses orientation towards private interests have however influenced many of the modernisation theorists.

Rostow's Theories on Development

Rostow provides an economic version of modernisation. He suggests that all societies pass through five stages of economic growth: traditional society, preconditions for take off, take off, road to maturity and the age of high mass consumption. Rostow believes that the process of development going on at present in Asia, Latin America, Africa and the Middle East is analogous to the stages of preconditions and take off in Western societies in the late eighteenth and nineteenth centuries.

Rostow depicts a traditional society as one "whose structure is developed within limited production functions, based on pre-Newtonian science and technology, and on pre-Newtonian attitudes towards the physical world" (Rostow 1960, p4). He suggests that these societies had to devote a very high proportion of their resources to agriculture. Flowing from the agricultural system there was a hierarchical social structure, with some scope for vertical mobility. Family and clan connections played a large role in social organisation. The value system of these societies was generally geared to what Rostow describes as "long-run fatalism" (Ibid p5). That is, the assumption that the range of possibilities open to one's grandchildren would be just about what it had been for one's grandparents.

The second stage of growth is seen in the development of pre-conditions for take off. Rostow states that the preconditions for take off were initially seen in Western Europe in the late seventeenth century as "the insights of modern science began to be translated into new production functions in both agriculture and industry, in a setting given dynamism by the lateral expansion of world markets and the international competition for them" (ibid p6).

Rostow sees the take off stage as a great watershed in the life of a society. Old blocks and resistances to growth are finally overcome and the forces for economic progress come to dominate the society. Growth becomes its normal condition. Rostow indicates that in Britain, the United States and Canada the stimulus for take off was mainly technological. During this phase of development Rostow indicates that rate of effective investment and savings may rise from around 5% of national income to 10% or more. During take off new industries expand, creating profit which is largely reinvested in new plant. The whole process of expansion of the modern sector yields an increase of income in the hands of those who not only save at high rates but place their savings at the disposal of those who engaged in modern sector 40 activities. A new class of entrepreneurs expands, new techniques spread in agriculture as well as industry.

There follows a long interval after take off of sustained if fluctuating progress, as the society strives to extend modern technology over the whole of its economic activity. Rostow sees this stage as the drive to maturity. Some sixty years after take-off what may be called maturity is attained. Rostow defines maturity as "the stage in which an economy demonstrates the capacity to move beyond the original industries which powered its take off and to absorb and to apply efficiently over a very wide range of its resources... the most advanced fruits of (then) modern technology" (ibid p10).

Lastly there is the age of high mass consumption as the leading sectors shift toward durable consumer goods and services. As societies achieved maturity in the twentieth century two things happened according to Rostow viz: real income per head rose to a point where a large number of persons gained a command over consumption which transcended mere basic necessities and secondly the structure of the work force changed in ways which increased the proportion of urban to rural population but also the proportion of the population working in offices or in skilled factory jobs. In addition to these economic changes the society according to Rostow ceases to accept further extension of modern technology as an overriding objective, e.g. increased resources might be devoted to the environment, social welfare etc. In Rostow's theory of modernisation the development process would consist of completing and reproducing the various stages that characterised the social transformation of Western countries. In his theory the historical variations that occur from society to society have no value or interest. It is also a delusion to consider that societies exist in isolation. Rostow treats a society as if it were a separate entity unrelated to the world economic situation or the twentieth century. His theory gives a picture of how some countries developed but not a prescription for how counties in this century and world economic order will develop. Cardoso and Faletto address the above lacuna in Rostow's theory when they state: “It would be naive to assume that Latin America is in the nineteenth century while the developed countries are in the twentieth" (Cardoso and Faletto 1979, p11). Moreover the undeveloped counties are often described as being backward in certain aspects of their structure but not others. Thus, labour unions in Brazil became national and influenced wage decisions well before such transformation occurred in the countries of early development. Accelerated urbanisation in Latin America has come before industrialisation. In Rostow's theory, the economy will be transformed/modernised through consumption and that modernisation will alter the production system. Since investments depend on domestic savings, the modernising pressure of consumption can act as a break on development: it can stimulate the importation of goods and deplete savings in paying foreign suppliers, as well as induce investment in sectors that are not basic to the economy e.g. luxury goods. Cardoso suggests that rather than stressing the modernising factor in the functioning of the economic system it is more important to study the historical-structural context in which such a process is generated. He writes, "To analyse development properly we must consider in their totality the "historical specificities," both economic and 41 social, underlying the development process at the national and international level" (ibid, p12).

Other Criticisms of Modernisation Theory

The theories of modernisation have been criticised in a number of ways. Most important are the accusations of abstractness and lack of historical perspective.

First, "it is a mistake to treat underdeveIopment as a universal original situation, and lack of development in general, as a stage which all developed countries went through" (Larrain 1993, p393). Secondly, modernisation theory tends to assume a prescriptive character and instead of studying historically the structural context of the specific features of underdeveloped societies they only look to establish whether these features follow or depart from the ideal Western model that is supposed to be the norm.

Thirdly, implicit in all the theories of modernisation is the concept that all developing countries should go through the same stages as the Western industrialised countries went through. Furtado (1964, p129) indicates that this proposition is incorrect by contrasting the development process of European, United States, Canadian and Australian development. He concludes, "underdevelopment is, then, the discrete historical process through which economies that have already achieved a high level of development have not necessarily passed". Even when modernisation theorists recognise the existence of historical difference (Rostow, 1960) they do not accept that such differences essentially alter the development pattern.

Modernisation theorists remain convinced that history can be repeated, and developing countries can industrialise in the same way that the West did and in some respects they now have greater comparative advantage in doing so. They conceive the development process as having remained constant over time. But the world situation has not remained constant. In the military field, the development of an atomic bomb changed the world power balance forever and the war in Iraq demonstrated the superiority of technology over manpower. Equally so, the development of a World Economy in the latter twentieth century and the vast stock exchange monetary dealings of the 1990's (that have negated the influence of central banks) have vastly altered the outlook for industrialisation and development in the Third World. The development patterns of the nineteenth century and early twentieth are no longer applicable.

Regardless of its deficiencies, most governments in the non-communist world, post World War II, were convinced in modernisation as the prescription for development. Countries could simply copy others who had developed. Donor countries in most part went along with the same theory. Provision of funds for modernisation of the structures of society and for industrial development was seen as the solution to underdevelopment.

DEPENDENCY THEORIES

The assumptions and prescriptions of modernisation are "generally ethnocentric, sometimes implicitly racist, often explicitly anti-communist” according to Bernstein (1993, p 152). Many authors have vigorously challenged modernisation theory on the above grounds and emphasised the examination of global factors to explain underdevelopment. These challenges are often incorporated into a body of neo- Marxist thought that arose in Latin American social science in the late 1960's.

The idea of "dependency" was born as a reaction against the dualist interpretations of Latin American backwardness. Stemming from modernisation theory, dualism used to distinguish between modern, progressive sectors of the economy and society and the stagnant, traditional branches or regions that were labelled precapitalist.

Dependency theorists by contrast saw development and underdevelopment as functional positions within the world economy rather than stages along an evolutionary ladder. According to Dos Santos, "a relationship of interdependence...... becomes a dependent relationship when some countries can expand through self- impulsion while others....can only expand as a reflection of the expansion of the dominant countries" (Merquior 1993, p146).

Latin American economic thought had been dominated by an outlook identified with the UN Economic Commission for Latin America. Its mentor, the Argentinean economist Raul Prebisch (1963), believed that Latin America's underdevelopment reflected its peripheral place in the world economy and resulted from the adoption of free trade policies as the region's commodity exports suffered from a secular decline in their prices. Latin American producers, unlike the grain producers of nineteenth century areas of white settlement, were not reaping the big profits from free trade.

Dependency theory agreed with Prebisch's diagnosis but rejected his Keynesian prescription. Furtado (1964) provided a conceptual transition from Prebisch by stressing that in underdeveloped countries the small size of the domestic market restricts capital formation, and by envisaging the state as a means of combating structural bottlenecks. He suggested that the "dynamism" of the capitalist economy results, in the ultimate analysis, from the role the entrepreneurial class plays in it, especially in its having to utilise reproductively a substantial part of its constantly accruing income" ( Furtado, 1964, p131).

Furtado gives an example of what he terms the displacement of the European economic frontier and why this failed to induce development in the Third World. He follows the ECLA structuralist approach to dependency. He writes:

The displacement of the European economic frontier almost always resulted in the formation of hybrid economies in which a capitalist nucleus, so to speak, existed in a state of "peaceful coexistence" with an archaic structure; the capitalistic nucleus rarely modified the pre-existing structural conditions but was linked with the local economy merely as a formative element creating a mass of wages. ... the situation became one of equilibrium at a level of permanent under-employment of factors, a circumstance inconceivable in a typical capitalistic economy” (ibid, p132). 43

Furtado concludes that, "underdevelopment is not a necessary stage in the process of formation of the modern capitalistic economies. It is a special process due to the penetration of modern capitalistic enterprises into archaic structures" (ibid p 138).

Wallerstein (1973) followed the functionalist account of the world system but counters the Marxist dependency approach (of Frank hereunder) by explicitly arguing that proletarianisation, central to its account of capitalist development, has been exceptional rather than universal in the modern world system which harnesses a variety of forms of labour to the imperatives of capital accumulation. Wallerstein replaces the static dualism of Frank 's metropole satellite structure with a hierarchy of core, semi peripheral and peripheral locations in the world system, suggesting that countries can shift their locations. He argues further that neither the capitalist or socialist models of development in their pristine forms "made the role of the state machinery central to the success or failure of the model...... Yet in fact the political institution of the state was critical to the process of economic development whether under a capitalist or socialist mode" (Wallerstein 1973, p279).

Andre Gunder Frank (1976) initiated the dependency school by proposing that exploitation of the Third World not only went on unabated after the end of colonial rule but became far more efficient, underdevelopment being the result of the economic capture of backward areas by advanced metropolitan capitalism. Frank coined the phrase for the process "the development of underdevelopment".

For him, development and underdevelopment are not just relative and quantitative but relational and qualitative. The same capitalist mechanisms generate both development at the centre and underdevelopment of the periphery. Feudal areas in the dualist jargon are just those that have suffered most in the process. Thus the most backward areas of South America (highland Peru and Brazil north east) were previously the centre of economic and commercial dynamics of the region. For Frank, the capitalist world economy consists of a chain of "metropole-satellite" relationships between countries, and regions within them, through which dominant metropoles appropriate the economic surplus of subordinate satellites, enriching the former and impoverishing the latter, thereby creating and reproducing their underdevelopment. Traditional or precapitalist social forms in satellite countries are thus really capitalist in consequence of their world market integration. The principal mechanisms of draining surpluses from the Third World are uneven exchange in international trade, expatriation of profits from foreign investment and interest on foreign loans, within an international division of labour that is weighted in favour of the metropoles. Of course this fails to address the drain placed on such economies by their own rulers e.g. Mobutu in Zaire/Congo. Frank asserted that the expansion of the capitalist system over the past centuries effectively and entirely penetrated even the apparently most isolated sectors of the underdeveloped world. He went on to argue in case studies like Chile that:

(a) a high degree of external and internal monopoly has characterised Chile's insertion into the world economy since the beginning

(b) external monopoly has always resulted in the expropriation (and consequent unavailability to Chile) of a significant part of the 44

economic surplus produced by Chile and its appropriation by another part of the world capitalist system

(c) this exploitative relation...in chain like fashion extends the capitalist link between the capitalist world and the national metropoles to the regional centres (part of whose surplus they appropriate)

(d) the result is "economic development for the few and underdevelopment for the many" (Frank 1967, pp 6-7).

While Frank starts with the view that underdevelopment is the logical outcome of the expansion of the capitalist system to colonial areas; he rejects the dualistic interpretation which argues that the pattern of external domination produces a structure of dualism in underdeveloped countries such that there exists, on the one hand, a modern partly industrialised urban sector and, on the other, a traditionalised and economically backward peasant sector. Frank maintains that the sectors of an underdeveloped economy are in fact well integrated in terms of a structure of metropole-satellite relationships that result from the penetration of capitalism into even the remotest corner of the Third World.

As an alternative model he suggests that we visualise a "whole chain of metropoles and satellites, which run from the world metropolis down to the hacienda or rural merchant who are satellites of the local commercial metropolitan centre but who in their own turn have peasants as satellites" (ibid, pp146-7). As Norman Long (1975, p254) explains, "Hence we find that close economic, political and social ties bind the satellites to each metropolis, which expropriates their economic surplus (or a large part of it) to use for their own economic development". The ties of economic dependence are matched by a concentration of political power and social resources in metropolitan centres. This manifests itself in the way that members of a relatively small, urban based national elite control the economic and political life of the masses. According to Frank this tendency towards centralisation is an essential element of the capitalist system.

Matos Mar (1969, p289) attempted to apply the concepts of structural dependency and internal domination to the problems of rural development and change in Peru. He argues that the pattern of external domination established by the Spanish and continued by the advanced industrialised countries is repeated in a multiplicity of ways within the nation and its differentiated social structures. Like Frank, Matos Mar rejects the dualist interpretation of the problem of underdevelopment. He argues that the rural-agricultural and urban-industrial sectors cannot be regarded as separate, opposed structures or social systems for they are mutually related to one another in a complex web of relationships. He proposes instead to use the concept of 'plural' society. This concept he believes emphasises both the singularity of Peruvian society, its unique history and persisting cultures, while at the same time giving attention to patterns of inequality and dependence which have emerged as a result of its incorporation into a wider system of international relations of an economic and political nature. Frank's Marxist perspective of dependency was not fully shared by sociologists like Cardoso (1979), lanni (1999), Fernandes (1981) and Quijano (1978). These 45 sociologists seem to straddle both the Marxist and structuralist perspectives. Cardoso saw social change as dependent on the historical alternatives. He stated:

The concept of dependence tries to give meaning to a series of events and situations that occur together, and to make empirical situations understandable in terms of the way internal and external structural components are linked. In this approach, the external is also expressed as a particular type of relation between social groups and classes within underdeveloped nations. For this reason, it is worth focusing the analysis of dependence on its internal manifestations (Cardoso 1979, 15).

Thus Cardoso's focus is on economic factors conditioning the world market; the structure of the national production system and the kind of linkage it has developed with the external market; the historical-structural shape of such societies, with their ways of assigning and maintaining power, and above all, the political movements and processes that exert pressure toward change.

Like other dependency theorists Cardoso sees underdevelopment as a derivative of the relationship between "peripheral" and "central" societies. He states, "the situation of underdevelopment came about when commercial capitalism and then industrial capitalism expanded and linked to the world market non-industrial economies that went on to occupy different positions in the overall structure of the capitalist system" (Cardoso 1979, p15).

Cardoso transcends Frank's stagnationist model when he investigates the possibilities and constraints of dependent development. Cardoso indicates that ideas of centre and periphery stress the functions that underdeveloped countries perform in the world market but overlook the socio-political factors involved in the situation of dependence. He suggests that a society can undergo profound changes in its production system without creating fully autonomous decision making centres. This was the case he suggests in Argentina and Brazil when they ended the process of import substitution and began production of capital goods. They attained a degree of economic maturity but the industrial sector was still controlled from abroad. He concedes the point that a national economy can achieve a certain amount of autonomy without having a production system and income distribution comparable to those in the developed world i.e. managed dependency. He suggests that this can occur when a country breaks its ties with a given system of domination without incorporating itself totally into another. He cites China and Egypt as examples. Hence the effects of dependency are not always akin to traditional underdevelopment.

Cardoso also puts emphasis on the internal socio-political situation in developing countries. He indicates that it is these forces that give scope for spontaneous diversification of the economic system. Traditional dominant groups may initially oppose handing over their power of control to the new social groups that appear with industrialisation but they may also bargain with them, thereby altering the social and political consequences of development. He emphasises that national economic groups are connected with external groups in different ways and with different 46 consequences before and after the development process begins. More importantly the internal system of political alliances is often modified by international alliances.

Deficiencies in the Dependency Approaches

Booth (1985, p 765) states that, "the major propositions of historical materialism are best understood as functional, rather than simply causal, statements." He suggests that the dependency movement as a whole can be said to have been a response to the challenge to uncover or explain the changing nature of the functional contribution of the institutions of less developed countries to some wider system. The irony is that although neo-marxist development sociology emerged as a critique of modernisation theory it suffers from the same problems.

As in modernisation theory, neo-Marxist dependency consists of elaborate models of society, illuminating the relevant parameters and determining where particular less- developed countries stand with regard to the model. Thus Booth suggests that the problems of dependency theory include the unsophisticated instrumentalist analysis of the state, a lack of attention to the political sphere generally, a lack of attention to the complexities of power and class relations, and a lack of attention to cultural influences and change. Vandergeest and Buttel (1988 p 684) consider that "the historic problematic of otherwise disparate neo-Marxist theories - an emphasis on broadly generalisable features of the Third World formations - has led to a lack of attention to understanding the tremendous heterogeneity of less developed countries".

The above aside, Frank's analysis was quickly challenged by Laclau (1977) who chastised him for defining the modes of production in terms of their relation to the market instead of sticking to classical Marxist stress on class structure and social relations of production. The same sentiments were echoed by Brenner (1977) in his critique of Wallerstein.

The big unanswered question of dependency theory, is how some "dependent" countries can be so affluent. The Canadian and Australian economies are dependent on trade with the United States and in the case of Australia, also Japan. These countries are far more permeated by foreign capital than for example, the Mexican economy which remains less developed and less prosperous. There is no doubt that foreign debt has cast many developing countries into acute financial dependency. Nevertheless, while the proximate cause of the debt was soaring interest rates, its root cause was massive free borrowing dictated/by the decision keep developing countries such as Brazil and Mexico as nearly autarkic as possible. To a certain extent the current debt situation, far from reflecting dependence, may be seen as a nemesis to the will to autarky.

O'Brien adds additional weight to the above when he says that dependency theories suffer lack of detail. He states, ”The actual mechanisms of dependency are seldom spelt out in detail.... Everything is connected to everything else, but how and why, often remains obscure" (O’Brien, 1975, p23). For example Dos Santos' assertion that the development of parts of the system occurs at the expense of other parts may well be true but the argument would be vastly more convincing if the precise mechanisms were elucidated. It is difficult to determine from the literature what the 47 essential characteristics of dependency are. What one tends to find is the circular argument that dependent countries are those that lack the capacity for autonomous growth and that this situation arises, because they have inherently dependent structures (as measured by capital flows).

When dependency theories are used as a base for policy formulation there is also confusion. It is never very clear whether the transnational company is to be nationalised or controlled, which policies are to be used in regard to technical transfers, hi tech development, unemployment or income distribution. The main policy advocated seems to be is the changing of the internal structure to facilitate national development. So the problem is not so much with capitalism but that capital is not natural enough. The prescription for this change seems to be introduction of socialism. In today's climate of abject failure of most socialist systems one cannot take this recommendation very seriously.

In his review of Frank's work on dependency Booth (1985 p 77) writes:

It has been suggested that the terminology upon which Frank has chosen to rely fails to serve as an unambiguous and internally consistent scheme for classifying the varied historical processes and states of affairs identified by him. But it also obliges him to skate over real and important variations in dimensions which he largely neglects.... the usefulness of Frank's analysis ...is curtailed by his conceptual apparatus, which in turn reflects the relative narrowness of the purpose for which it was created.

Again, regardless of the views of critics, dependency theory was important as it demonstrated the truth of the aphorism “it ain’t necessarily so”. It focussed attention on the fact that not all, in fact most, countries that tried to follow the modernisation prescription for development ran into difficulties. Many countries went backwards rather than forwards. It begs the question why do countries like Argentina continue to go backwards? It showed that development was not ordained by pursuit of industrialisation.

BENEFITS OF MODERNISATION AND DEPENDENCY THEORIES

While there are obviously problems in the constructs of each of the above types of development theory and the compilation of a policy framework to adequately address either, there are benefits in their existence. Vandergeest and Buttel (1988, p692) indicate that development sociology has created a repertoire of important concepts including "a vibrant ongoing research program in peasant studies and agrarian structure, major breakthroughs in the analysis of international migration and the informal sector and some notable work on peripheral class structures and class formation".

What the theories have engendered is debate over the process of development. Upon analysis neither set of theories provides a prescription for development in the 21st century but each contains elements of reality.

ANALYSIS OF DEVELOPMENT IN THE 1990'S

Perhaps Warren (1973) is closest to the truth when he suggests on the basis of carefully assembled statistics that not only has industrial growth taken place in the Third World since the war (contrary to the widespread view of stagnation) but also that this growth process has had characteristics frequently thought of as beyond the reach of capitalism in underdeveloped countries.

He asserts that (a) it has been based predominantly on the home market; (b) it has involved the creation of significant intermediate and capital goods sectors in many countries; (c) it has typically come to rely on a quantitatively small net foreign capital input whose qualitative effects have tended to weaken recently for a combination of reasons and finally (d) it has rendered a degree of independent technological progress in the Third World not only possible but inevitable.

In a major polemic in Warren (1980) proceeded to say that capitalism does develop the post colonial Third World except where inhibited by socialist, nationalist or populist policies derived from misconceived notions of imperialism and dependency. Warren returned full circle to an explanation of poor economic performance, suggesting that world market integration is to be encouraged rather than resisted, and that socialist construction is premature until the stage of capitalist transformation is complete.

Warren (1973, p 34) argues that, "dependent development is occurring but that independent industrialisation has begun to take place rather rapidly". Since he wrote this statement in the 1970's it has become clearer that dependent development is possible as well as independent industrialisation.

This situation is certainly evident in developing countries such as China, Malaysia, Indonesia and India. These countries are dependent on the United States and other industrialised countries for trade and also on the World Bank and Asian Development Bank for much of their development finance. Indonesia for example, has developed independent technology in aerospace and bio-technology. It has developed a State aircraft industry in Bandung. This is despite the protestations of the World Bank which indicated its strong desire to ensure Indonesia did not embark on the high technology road until it had further developed its processing industries. It has also, through the Indonesian Planters Association (IPARD), developed high quality bio- technological products in the areas of palm and rubber tree cloning and in eradication of pests.

Warren's position partly converges with that of neo-liberalists who highlight the issues of states, plans and markets in promoting development. Capitalist development and economically active states are clearly compatible as the above examples of Malaysia and Indonesia indicate. Certainly Post war economic development was viewed as the responsibility of states, influenced by the comprehensive planning of the USSR and Western reconstruction under the Marshall Plan. Certainly the role of the State, plans and markets are essential elements in achieving development and worthy of more consideration than either the modernisation or dependency theorists accord them.

While dependent development and independent industrialisation are possible, and States, plans and markets are important, there is perhaps one overriding requirement for development. This factor is discussed by Wallerstein when he cites N'Diaye, a Senegalese sociologist. N'Diaye (1970) wrote that economic development can be successfully achieved only if, "the majority of the people are consciously and firmly mobilised to carry out and defend its implementation" and if its achievement "rests principally on their own efforts”.

DEVELOPMENT IN THE 21ST CENTURY – GLOBALISATION THEORY

The 1990s saw the virtual demise of the traditional Marxist regime, dramatic changes in remaining socialist societies, the elimination of almost all traditional societies and the advent of “globalisation”. These factors influenced development theorists to again examine the bases of development. Globalisation was seen as a key determinant in the development prospects of nations.

Many see globalisation as primarily an economic phenomenon, involving the increasing interaction or integration of national economic systems through the growth of international trade, investment and capital flows. It is however also possible to demonstrate an increase in cross border cultural, social and technological exchange as part of the phenomenon of globalisation. Anthony Giddens defines globalisation as a decoupling of space and time, emphasising that with instantaneous communications, knowledge and culture can be shared around the world simultaneously. Left leaning critics define globalisation quite differently, presenting it as a worldwide drive toward a globalised economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments.

All agree that globalisation is a capitalist process. Globalisation can therefore safely be defined as the rapid integration of cross border economic, social and technological exchange under conditions of capitalism (the effects of which are open to debate).

Globalisation has fundamentally changed concepts of development. Three stages in the development of a world economy can now be distinguished in terms of globalisation theory:

National: In which economies are predominantly national in composition and social organization of economic activities develops independently in each country. National currencies, commercial laws, markets, financial institutions, industries and productive firms emerge and develop. This situation was predominant from the industrial revolution until the founding of Bretton Woods institutions.

International: In the second stage, the national organization continues to develop, but it is accompanied by the increasingly rapid emergence of bilateral and multilateral conventions, systems and organizations at the international level. Banks form international alliances. Governments coordinate their trade and monetary policies. Companies establish overseas production and marketing subsidies to tap into emerging markets and lower costs. International commercial law and regulate activities and promote coordination among nations. This is largely the system that 50 has been emerging with increasing rapidity during the past half century. During this period many international institutions have developed, but primarily as instruments for the coordination and support of national level policies. they have not made the global economy the primary centre of policy making or the primary unit of economic management.

Global: Globalisation of production, trade in products and services, and financial activities regulated and managed by global institutions. This has seen:

1. the emergence of global economic and financial institutions, including a world currency and world central bank, vested with the authority to manage for the benefit of the world economy as a whole. 2. the emergence of uniform global standards, regulations and laws regarding all aspects of economic activity that are now standardized at the national level. 3. unification of markets, which implies the elimination of barriers to trade and labour movements, national economic loyalties, gaps in supply and demand between markets, price differentials between markets, over production spurred by nationalistic economic policies

Moreover, globalisation has engendered profound changes in the pace of development. The long-term trend over centuries has been an increasing speed of development. From the perspective of 10,000 years of history, human progress over the past 200 years has been extraordinary and the achievements of the past five decades have been miraculous. In two centuries social productivity has increased to the extent that the global community is now able to sustain a population 12 times as large as in 1800. “From a rural-based, agrarian society in which less than three percent of the people lived in towns and cities, the human community has evolved into an urban-centred, industrial society in which the urban population now exceeds 40 percent of the total. This change has brought with it and aggravated a host of problems - overcrowding, pollution, crime, etc.- but it has also brought political freedom, economic security, education and modern conveniences to billions of people” (Jacobs, Mcfarlane and Van Harten, 1998, p3).

What is more remarkable is that this social movement continues to expand and accelerate. The 1997 UNDP Human Development Report observed that over the past 50 years the world has made greater progress in eradicating poverty than during the previous 500. Around the globe, life expectancy is climbing, infant mortality is declining, epidemic diseases are receding, famine is becoming less frequent and education is becoming more widespread. Since 1950 average per capita income has tripled, in spite of unprecedented population growth, and average real per capita consumption in developing countries has doubled. These achievements raise the possibility and the hope that unprecedented levels of prosperity could soon spread to all humanity.

These accomplishments still leave more than one billion people in poverty. But there is growing evidence to suggest that today’s least developed countries could match and perhaps even exceed the achievements of the most advanced industrial nations within a much shorter time than it took for the original achievements. Beginning in 1780, it took the United Kingdom 58 years to double output per capita. The United States did it in 47 years, beginning in 1839. Japan accomplished the feat in only 24 51 years, beginning in the 1880s. But after the Second World War, Indonesia did it in 17 years, South Korea in 11, and China in 10. From 1960 to 1990 real per capita standards of living based on purchasing power parity multiplied twelve-fold in South Korea, seven-fold in Japan, more than six-fold in Egypt and Portugal, and well above five-fold in Indonesia and Thailand.

In the early 1950s, when large-scale development assistance began, most people outside the developed countries lived as they had always lived, scraping by on the edge of subsistence, with little knowledge of and no voice in global or national affairs, and little expectation of more than a short life of hard work with slight reward. Since then, many countries have achieved truly dramatic improvement in overall indicators of human welfare:

Life expectancy in the developing countries has risen by more than twenty years (from 41 to 62 years). The percentage of the population with access to clean water has doubled (from 35 per cent to 70 per cent). Adult literacy has risen from less than half the population to about two- thirds. Food production and consumption have increased at a rate about 20 per cent faster than population growth.

Even taking into account recent set-backs and a temporary slowdown, globalisation adherents suggest that there are reasons to conclude that this trend can continue in future and spread to other nations that have not yet reached the take-off stage.

Globalisation adherents consider that the factors responsible for the increasing rate of development will be more prevalent in future. They see it as difficult to single out any one factor that adequately accounts for the increasing speed of social advancement. But they suggest that it is possible to identify a cluster of interrelated factors that in combination appear as necessary conditions and catalysts of development. These are:

Peace: Any evaluation of development potentials needs to take into account the influence of internal and external social stability on social progress. The end of the Cold War has dramatically reduced the threat of armed international conflicts and the catastrophic consequences of nuclear war, providing a far more stable and secure climate for worldwide economic expansion. War is a destroyer of development. It physically demolishes what society has accomplished. The Cold War limited the physical destruction to regional conflicts, but it directed a substantial portion of the energies and talents of the world community into an unproductive arms race. Since 1988, world military expenditure has fallen by about a third, $400 billion. If the current peaceful status is sustained, it could free up even more capital for investment and reducing the inflationary pressure of burgeoning government deficits. The long feared negative impact of reduced military expenditure on economic growth has been much less than anticipated. Falling defence spending has been followed by a surprisingly rapid recovery in defence- dependent states such as California and an unexpectedly long period of national economic expansion in the USA. This experience should help reduce 52 the resistance to further cuts. The end of the Cold War has already resulted in a substantially reduction in military spending. If properly nurtured and supported, it could lead to an unprecedented period of peace and an unparalleled climate for global economic development.

Democracy: Since 1980, a democratic revolution has been spreading through Latin America, Eastern Europe and, most recently, Africa, freeing hundreds of millions of people from repression by authoritarian regimes. As peace provides a secure external environment for international development, democracy provides a stable and conducive environment within countries for more rapid social progress. Democracy raises human aspirations. It encourages individuals to take active initiative for their own advancement. It facilitates freer and wider social interactions. It releases greater social energy. It vastly increases the dissemination of information and the multiplication of new organizations. As the transition from monarchy to democracy was a catalyst for rapid economic advancement of Western countries over the past three centuries, the spread of democratic institutions today opens up greater possibilities for global expansion.

Social Velocity: Development is a function of the velocity of social transactions. The speed of movement of information, ideas, decisions, technology, people, goods and money has significant impact on the productivity of the society and its further advancement. The ‘shrinking of the world’ through better transportation and communication opens up commercial opportunities inconceivable just a few years ago. During the past two decades the volume of international travellers, freight, telephone and other forms of electronic communication have increased by more than an order of magnitude. Between 1980 and 1994, overseas telephone traffic to and from the USA increased from 200 million to 3.4 billion calls. New technologies such as satellite-based wireless phones are reducing the cost of expanding the communications infrastructure. Electronic mail has drastically reduced the cost and increased the speed of written communications. The meteoric growth of the Internet provides instantaneous low cost access to global information sources and commercial markets. The speed of technology diffusion is also accelerating. The Xerox machine was not introduced into India until the late 1970s, more than 15 years after its use became widespread in the USA. Three years ago, Windows 95 was launched in New Delhi just weeks after its release in the USA. Last year Intel announced its latest microprocessor simultaneously in USA, India and Beijing. Our perspective on the next century needs to take into account the impact of the increasing velocity of social transactions on the speed and course of development in the future.

Technological Application: The time required both to develop and disseminate new technologies is becoming shorter, but technological development far outpaces technological applications and accomplishments in even the most advanced societies. Adoption and full utilization of already proven technologies can dramatically elevate performance in every country and in every field. To cite a single example, the average yield of tomatoes in India is 8 tons per acre, yet more advanced farmers achieve yields as high as 20 53

tons. The average yield of tomato in California is 35 tons in California, but one of California’s leading tomato farmers with 1200 acres under cultivation routinely obtains average yields of 55 tons or more by applying advanced systems for micro-nutrient management applicable to all crops and climates. Applying more sophisticated and capital intensive technology, Israeli farmers achieve yields of 250 tons or more of tomato per acre. This wide variation in the application of technology within and between countries is nothing new. But it is a significant determinant of development and a factor that is at least partially responsive to social policies.

Education: Levels of education have risen dramatically during this century and continue to rise in countries at all levels of economic development. The impact of primary, secondary, technical and higher education on development has been documented by a number of studies. It directly influences receptivity to new ideas and information, democratic functioning, the rate of scientific advancement and technological inventiveness, practical adaptation of new technologies, the quality of productive skills, awareness of new opportunities, willingness to adopt new activities, and the capacity to develop higher levels of social organization.

PROBLEMS WITH GLOBALISATION THEORY

Some critics suggest that globalisation has been a recurrent tendency of world capitalism since early modern times. They suggest that while the information revolution is new, “newness of the railroad and the telegraph, the automobile, the radio, and the telephone in their day impressed equally” (Harvey 1995, p9). Even the so-called “virtualisation of economic activity” is not as new as it might appear.

Submarine telegraph cables from the 1860s onwards connected inter-continental markets. They made possible day-to-day trading and price-making across thousands of miles, a far greater innovation than the advent of electronic trading today. “Chicago and London, Melbourne and Manchester were linked in close to real time. Bond markets also became closely interconnected, and large-scale international lending--both portfolio and direct investment--grew rapidly during this period” (Hirst 1996, p3).

“Indeed, foreign direct investment (FDI) grew so rapidly that in 1913 it amounted to over 9 percent of world output--a proportion still unsurpassed in the early 1990s” (Bairoch and Kozul-Wright 1996, p10). Similarly, the openness to foreign trade--as measured by imports and exports combined as a proportion of GDP, “was not markedly greater in 1993 than in 1913 for all major capitalist countries except the United States” (Hirst 1996, pp3-4). The strongest evidence for globalisation theorists has however been in respect to financial markets. Foreign exchange transactions were ten times larger than world trade in 1983; only ten years later, in 1992, they were sixty times larger. But critics suggest that such systems existed in the past:

“Bretton Woods was a global system, so what really happened here was a shift from one global system (hierarchically organized and largely controlled politically by the United States) to another global system that was more decentralized and coordinated through the 54

market, making the financial conditions of capitalism far more volatile and far more unstable. The rhetoric that accompanied this shift was deeply implicated in the promotion of the term "globalisation" as a virtue. In my more cynical moments I find myself thinking that it was the financial press that conned us all (myself included) into believing in "globalisation" as something new when it was nothing more than a promotional gimmick to make the best of a necessary adjustment in the system of international finance” (Harvey, 1995, p8).

This view is supported by other critics who suggest that international financial markets have not radically increased in activity with the advent of globalisation:

“In many ways the international financial market from the late 1800s to World War I was as massive as today's.... The extent of the internationalisation can be seen in the fact that in 1920, for example, Moody's rated bonds issued by about fifty governments to raise money in the U.S. capital markets. The Depression brought on a radical decline in this internationalisation, and it was only very recently that Moody's once again rated the bonds of as many governments” (Sassen 1996, pp42-43).

Arrighi (encapsulates the comments of the critics above when he proposes that, “In this longer perspective, "financialization" heightened interstate competition for mobile capital, rapid technological and organizational change, state breakdowns and an unusual instability of the economic conditions under which states operate--taken individually or jointly as components of a particular temporal configuration, these are all recurrent aspects of what I have called "systemic cycles of accumulation."5 Arrighi further suggests that each of the four systemic cycles of accumulation that can be identified in the history of world capitalism, was characterised by a rapid and stable expansion of world trade and invariably ended in breakdown of organisational structures on which the expansion had been based.

He suggests that at present the United States is in a position to reap the benefits of its leadership of world capitalism (globalisation) but that this will not last. He comments that “the most important reason is that the present belle epoque of financial capitalism, no less than all its historical precedents--from Renaissance Florence to Britain's Edwardian era, through the Age of the Genoese and the periwig period of Dutch history--is based on massive, system-wide redistributions of income and wealth from all kinds of communities to capitalist agencies. In the past, redistributions of this kind engendered considerable political, economic and social turbulence. At least initially, the organizing centres of the preceding expansion of world trade and production were best positioned to master, indeed, to benefit from the turbulence. Over time, however, the turbulence undermined the power of the old organizing centres, and prepared their displacement by new organizing centres endowed with the capacity to promote and sustain a new major expansion of world trade and production”6.

5 Arrighi, Giovanni, “Globalisation, State Sovereignty, and the Endless Accumulation of Capital”, http://fbc.binghamton.edu/gairvn97.htm,p2 6 Arrighi, Giovanni, op.cit., p3 55

Indeed Arrighi attacks the concept of globalisation on the grounds that one of its tenets, that of loss of sovereignty by nation states, is a fallacy. He states, ”These territorial organizations are the states whose sovereignty is said to be undermined by the present wave of financial expansion. In reality, most members of the interstate system never had the powers that states are said to be losing under the impact of the present wave of financial expansion; and even the states that had those powers at one time did not have them at another time”7. Arrighi’s basic contention is that the waves of financial expansion (development) experienced over time are the result of two tendencies. He writes:

“On the one hand, capitalist organizations respond to the over accumulation of capital over and above what can be reinvested profitably in established channels of trade and production by holding in liquid form a growing proportion of their incoming cash flows. This tendency creates what we may call the "supply conditions" of financial expansions--an overabundant mass of liquidity that can be mobilized directly or through intermediaries in speculation, borrowing and lending. On the other hand, territorial organizations respond to the tighter budget constraints that ensue from the slow-down in the expansion of trade and production by competing intensely with one another for the capital that accumulates in financial markets. This tendency creates what we may call the "demand conditions" of financial expansions. All financial expansions, past and present, are the outcome of the combined if uneven development of these two complementary tendencies”8

Basically he suggests that the concept of sovereign states (as recognised in the Dutch treaties of Westphalia) is and has always been a myth. Also, sovereign rights never translated into sovereign equality. Giddens (1987, p266) points to this fact in relation to the United Nations where, ”The "sovereign equality" upheld in the first paragraph of Article Two of the United Nations for all its members was thus "specifically supposed to be legal rather than factual--the larger powers were to have special rights, as well as duties, commensurate with their superior capabilities".

Arrighi comments that the true peculiarity of the present phase of financial expansion of world capitalism is that is that of “the difficulty in projecting past evolutionary patterns into the future. In all past financial expansions, the old organizing centres' declining power was matched by the rising power of new organizing centres capable of surpassing the power of their predecessors not just financially but militarily as well. This has been the case of the Dutch in relation to the Genoese, of the British in relation to the Dutch, and of the US in relation to the British. In the present financial expansion, in contrast, the declining power of the old organizing centres has been associated not with a fusion of a higher order but with a fission of military and financial power.”9

In making the above observation, Arrighi however intrinsically admits that the current version of capitalist expansion (globalisation) is different. It is different in that there is no clear winner, that the fate of all is intertwined. Hence it would seem that in future,

7 Ibid, p5 8 ibid 9 Arrighi, op.cit, p11 56 while capitalism will see the rise and fall of nations, the falls will not be as deep and the rises not so spectacular. In the midst of this macro scenario is the developing state. Its options would seem to be constrained by the system but not so much that it cannot engender modest development.

POST STRUCTURALISM

Other critics take a more predictable approach. They accept that globalisation is occurring but decry its outcomes. They respond with a barrage of statistics that emphasise that inequality is increasing. The gap between the rich and poor nations is increasing. Over the past 10 years, the number of people earning $1 per day or less has remained static at 1.2 billion while the number earning less than $2 a day has increased from 2.55 billion to 2.8 billion people. The gap in incomes between the 20% of the richest and poorest countries has grown from 30 to 1 in 1960 to 82 to 1 in 1995. By the late 1990’s the fifth of the world’s people living in the highest income countries had:

86% of world GDP – the bottom fifth had just 1% 82% of world export markets – the bottom fifth had just 1% 68% of foreign direct investment – the bottom fifth just 1% 74% of world telephone lines, today’s most basic means of communication – the bottom fifth just 1.5 %10

Critics suggest this rising inequality is the inevitable result of market forces. Given free reign, market forces give the rich the power to add further to their wealth. Hence large corporations invest in poor countries only because they can make greater profits from low wage levels or because they can get cheaper access to raw materials and natural resources.

While there is a wide range of opponents to globalisation with views ranging from Marxist to ill-defined concepts of ending poverty, there is a current of opinion that favours devolution of power from to global to the local. This view is well expressed by the US based International Forum on Globalisation. The Forum prescribes that local government and institutions should be strengthened and global institutions weakened. Whatever can be done at the local level should be. The mandate and powers of the World Trade Organisaion (WTO) should be significantly reduced. Global trade and investment rules should be subordinated to national and local governments’ decisions about conditions of investment within their borders. Every government has the right to set development priorities, protect the commons, set performance requirements on investment, control financial speculation and curb capital flight. Global trade rules should be subordinate to global environmental agencies and agriculture should be eliminated from global trade rules to allow countries to pursue food security and sustainable farm policy. There should be a fund created to alleviate poverty with revenue raised by a tax on currency transactions, along with other forms of global taxation.

Of course globalisation proponents retort that roll back of globalisation is not an option if development is to proceed. The causes of poverty are not multinational

10 http://www.globalisationguide.org/03.html, Globalisation Guide, Why is Global Inequality and is it Getting Worse 57 corporations or world trade but rather poor health and education along with weak and corrupt government institutions. There is evidence amongst the poorest countries that those that trade with other nations and reform their policies, infrastructure and institutions achieve the highest rates of growth in income per head and the greatest decline in poverty. China, India, Pakistan Bangladesh and Indonesia have “left the ranks of the poorest countries and … are seen as the “new globalisers” (Commonwealth of Australia 2002,p7) in this context. History has also shown that without the WTO, countries would be more inclined to adopt highly subsidised and unsustainable farm practices.

There is another group of commentators that see a post globalisation era. These post structuralists argue about the real meaning of development rather than the process of globalisation. They appear to accept that globalisation brings progress but consider that the progress achieved is not really development or that the costs incurred in achieving that progress are too high. They seek a gentle globalisation, one that cares about the cost of outcomes, one that delivers sustainable development without the harsh IMF reformist doctrines.

The gentle vision of development emerged from a school of thought led by Amartya Zen. It identifies freedom as the agent of universal development as well as its goal. It identifies the tendancy of Western economics to emphasise gross national product or aggregate wealth as indicators of national well being. It suggests that a more sentient measure of development is whether it expands the “real freedoms that people enjoy”. It demonstrates this by referencing the case of Amercian black males, where it reports that high per capita income does not imply longer life. It shows that poor residents of Kerala, India can expect to live longer than richer American blacks. Zen argues that freedom is at once the ultimate goal of economic life and the most efficient means of realizing general welfare.

Authors such as Mc Michael emphasise development as being a “global project”. He views development within a conceptual framework that has shifted from a national to a global project. Development was originally seen as a “broad based international endeavour to bring the non-European countries into the European 20th century by raising living standards of all societies”. (Mc Michael, 1996 p10). Development was seen as a process of economic growth organized nationally. It reinforced the Western notions by assuming that living standards could be measured by a monetary index. There was also an underlying assumption that development would lead to democracy. By the 1970’s Mc Michael suggests this concept of development had been replaced by a World Bank definition that redefined development as “successful participation in the world market” (ibid, p109). This effectively substituted managed global economic growth for the original development goal of national growth. He indicates that the current development debate highlights the differences between globalists and culturalists - “Do we keep expanding industry and wealth indefinitely “ while exploiting less developed countries, or do we “find a way that human communities … can recover social intimacy, healthy environments and sustainable economic practices?”(ibid, p9)

Mc Michael suggests that human stability requires the preservation of community in an inclusive sense rather than in the exclusive formulation of globalisation, and that there is a very real danger that economic prescriptions of globalisation will be detrimental to the interests of social protection. 58

Titles like The Development Dictionary (Sachs ed, 1992), The Post-Development Reader (Rahnema and Bawtree eds, 1997) pursued the post development theme. In this context Berthoud (1992, p81) saw development, “For the grater part of the world’s population,(as) the destruction of ethnic identities and solidarity networks in order to promote the legitimacy of self intersst as a fundamental human motivation”.

Arturo Escobar (1995) also pursued the post development theme. He suggests that the modernization and dependency theories were discredited as development failed to fulfil its promises, the rise of movements that questioned its very rationality and the intellectual appeal of post structuralism. In the 1990’s post structural critiques succeeded in caddying doubt not only on the feasibility but on the very desirability of development. Development was shown to be a pervasive cultural discourse with profound consequences for the social reality of the Third World. He postulates on a post-development era, one in which the centrality of development as an organizing principle of social life would no longer hold. This theme is pursued by fellow post structuralists such as Arce and Long who suggest reclaiming and pluralizing modernity via strategies of development that run counter to the dominant mode; Babbington’s call for a notion of development that in both developmentalist and alternative and Fagan’s suggestion that the cultural politics of post- development has to start with the everyday lives of concrete groups of people such ads women.

Still other authors cling to a Marxist interpretation of development. Jerry Kloby (1997) sees a new class paralleling the growth of economic inequality in the United States. The causes of this are a shortage of investment markets which has triggered a restructuring of the workforce and the other is a more unequal distribution of power among social classes. It is the unequal distribution of power that is one of the root causes of wealth and income inequality and of many of the development problems that exist in the world. Globalisation and polarization have exacerbated inequality.

WORLD SYSTEMS THEORY

World systems theory has much in common with dependency theory. Both focus on the structural causes of poverty but unlike dependency theory world systems theory takes the emphasis off the exploitation of poor countries by their rich neighbours and the north south debate. Instead it puts emphasis on the world system as a whole. It posits one underlying set of processes to which all economies are subject. “The capitalist world economy …..is not static, but is shaped by (1) an ongoing series of relatively short-term cyclical rhythms of expansion and contraction and (2) longer term, or secular, trends of systemic growth or decline”. (Lim, 2003, p91).

World systems theory suggests that the core provides the periphery an opportunity to pursue limited autonomous development during periods of contraction (control is weaker) and the reverse in periods of expansion (where the core reasserts control). World systems theory has another feature - the semi periphery. This is an intermediate zone which acts as an intermediary in the exploitation process of the periphery. (See Roberts and Hite 2000 for a discussion on commodity chains in the world system).

The most interesting feature of world systems theory is that the framework provides for core countries to experience downward mobility but only within the tri-modal structure of the capitalist world economy. 59

So does world systems theory depict the status of Samoa? The review of the development projects would tend to suggest that while world markets and a world system might exist, the fundamental cause of development not being sustained related to domestic policy and administration issues. If there was, for example, no cocoa to export, the world system is hardly to blame. If maintenance funds were diverted within the Samoa recurrent budget for political gain or self aggrandisement, the fault hardly lies in a foreign land or system.

While the world systems approach might shed further light on the macro economic world system it hardly explains development. Indeed world systems theory is a child in gestation in trying to explain away the wrinkles in dependency theory. It provides for downward mobility from the core to the semi core and visa versa. However, it provides little hope of any country on the periphery graduating to the semi core. It suggests that only a very few poor countries are likely to be in a position to take advantage of opportunities for development in periods of contraction (through import substitution etc). Similarly in periods of expansion the main avenue for development is through direct foreign investment and this requires a virtual invitation by core capitalists for a country to join the club. “Most poor countries, of course, cannot even hope to make the cut, so their chances for development along these lines will remain almost non-existent” (Lim, 2003, p 91). It does not therefore provide a convincing explanation as to why countries such as South Korea, Malaysia, Taiwan, South Africa, Brazil, Israel, Ireland etc have developed so rapidly. Nor does it successfully explain development of countries on the periphery such as Mauritius which at independence in 1968 had a per capita GDP of US$260, high unemployment and heavy dependence on sugar exports. “It now enjoys a per capita GDP of $3,800 and a GDP growth that has averaged over 6% for the last decade” (ADB, 2004, p41).

ECONOMIC THEORIES OF DEVELOPMENT

While sociologists have posited theories of development, equally intense theoretical views are advanced by economists. The economic data are in turn used to support the sociological models of development described above. Of import to this dissertation are the specific economic development constraints/models advanced in respect to Pacific Island nations.

Basically three main theories have been enunciated to explain Pacific island countries development/underdevelopment. The first is really an explanation of underdevelopment. It suggests that these countries have not developed as rapidly as might be expected as there are inherent constraints imposed on them in respect to trade and production:

Small population Small local market Remoteness and geographic dispersal Susceptibility to natural disasters Limited access to capital (especially Foreign Direct Investment) Reliance of Official Development Assistance and remittances Large state involvement in the economy

Hence this theory prescribes that management of these factors is an essential prerequisite to development.

The above theme is further developed and refined in the concept of MIRAB economies. Bertram being one exponent of the MIRAB theory notes the above characteristics of Pacific island nations and suggests in addition they are characterised by:

slow economic growth lack economic integration and a combination of large trade deficits with a generally healthy current account balance of payments.

Bertram indicates “Statistics show the Pacific is one of the least integrated region in the world, with trade between the island states amounting to less than 2% of their total exports” (Bertram, 1999, p2). He proceeds to suggest that the healthy current account balances are maintained by a combination of “current transfers (repatriated overseas earnings, private remittances, and official aid) or by capital inflow (borrowing plus direct foreign investment)” (Bertram, 1999, p2). This reliance on remittances etc was seen as a transitory phase by many economists but it has now been perpetuated over many decades. Remittances, overseas earnings, aid and capital inflows continue. The proposition inherent in the MIRAB model is that globalisation of the Pacific economy is well advanced and old notions of self contained national economies are now inadequate to explain the situation.

Recently however the ADB has largely (and unknowingly) debunked the above economic theories of underdevelopment/development. It suggests that the small island states are not a unique microcosm. Indeed the ADB highlights that they are not unique simply because of the inherent qualities of being an island. “Many problems appear to be exaggerated and their adverse economic consequences arise not from the natural features of islands, but rather, from ill advised policies that purport to address them” (ADB, 2004, p38). The ADB highlights that “many small countries from a variety of cultural, economic, political, and geographic settings (e.g. Bermuda, Iceland, Mauritius, and Norfolk Island) have recorded success in overcoming these disadvantages” (ADB, 2004, p39). The ADB findings are also supported by other studies by Easterly and Kraay (1999) and Armstrong and Read (1998, p 563-585).

Some economists suggest that globalisation in the form of the implementation of computer-integrated manufacturing (CIM) has acted to reduce the turnover time of constant and variable capital and led to shortening of product development and product cycles. (See Hoffman & Kaplinsky 1988 and Watson 1990). Others suggest that “it is the scale, complexity and scope of technological change that is undermining national economies dependent on the sale of one or two products – and not necessarily a distinctive ‘globalisation process’ that is marginalising certain economies” (Marshall, 1996, p 887).

While it is clear that Pacific island nation economies have some obvious disadvantages and some particular traits, there is disagreement among economic theorists as to how and whether they can successfully develop. At best it can be 61 said that while the theories inform the debate, they fail to adequately explain the development process in the region.

THE DEVELOPING COUNTRY SITUATION

In respect to developing countries, the fate of world capitalist hegemonists, globalisation or alternative development modalities are not of pressing importance but rather the opportunities for developing country advancement within the current capitalist order. In searching for these opportunities, developing countries must work within the new global society and are beset by a different set of development and sustainability barriers to those of the hegemonists.

The development theories of modernisation and dependency have largely been discredited. Globalisation cannot be denied but is it a prescription for development? Post Structuralist views merely seek to adjust or dismantle what is, for something of an “ideal society”. They do not shed much light on the process of development but rather seek to adjust its outcome.

While globalisation is a fact (whether seen from Arrighi’s, Mc Michael’s, Zen’s or Kloby’s perspective or not), and education, technology, social velocity, democracy and peace play a part in providing conditions for development, are they in the rminants of development. Does globalisation, per se, engender development? Even proponents of globalisation recognise that if a country fails to be part of the system it will not develop.

Moreover, increased economic integration through trade and investment has failed to see development occur in some countries. As an example Papua New Guinea has had over 25 years of democracy, its society has changed far more than most, education and communications have improved and yet its development record is poor. Development has not been uniform as it might be predicted under a globalisation model. As underdeveloped countries are now part of the global system and have similar preconditions for development why haven’t they developed equally?

The anti-globalists point to the fact that in some countries poverty is increasing, and in many countries the poor have not shared in the positive global trends described above. Millions of people still die each year from preventable and treatable diseases; 130 million primary school-age children do not attend school; more than one-third of the children in developing countries are malnourished and one in ten dies before reaching the age of five years. Respect for human dignity, and in particular acceptance of the equality of women, remains an unfulfilled dream for too many. The striking progress in recent decades gives confidence that poverty can be overcome and development achieved. But history has shown that progress is not inevitable, and globalisation also fails deliver development for all.

As the above analysis demonstrates, none of the development theories adequately describes and predicts the actual process of development. There are then other factors at play that determine development outcome. Many theorists consider the additional ingredient to be capital investment (while anti globalisation theorists like Arrighi might also support the notion). Again this is a mistaken assumption.

IS MONEY THE PRIME DETERMINANT OF DEVELOPMENT?

In respect to world economic and social advances highlighted earlier in this paper, it is acknowledged that these could not have been accomplished without money. Money is one of the greatest inventions and social institutions of all time. It is an abstract unit of account in terms of which the value of goods, services and obligations can be measured. The systems of exchange, valuation, issuance and conversion of one form of money into another constitute elements of that organization. The value of money depends directly on the level of this organization. The more developed it becomes, the greater the productive power of money. The development of money has been a powerful force for the development of society. However, in the process the true role of money appears to have been distorted.

The rapid recovery of Western Europe under the Marshall Plan in the 1950s reinforced the idea that capital investment was the most essential ingredient and powerful determinant of economic development (liberal development theory). This experience strongly influenced the policies of international financial institutions and the strategies of developing countries during subsequent decades, leading, at first, to a preoccupation with foreign aid and, more recently, to an obsession with foreign investment. Until recently a severe shortage of capital was considered by many to be the most serious limitation to international economic development.

Recent experience in Eastern Europe and East Asia has caused some reflection on the role of money in development. In the first seven years since the reunification of Germany, the national government invested more than US$1.1 trillion for the development of the East German economy, equivalent in real terms to at least 10 times the entire amount invested all over Europe through the Marshall Plan. During this same period, unemployment in East Germany grew from very low levels to more than 25 percent, while productivity remained at one-fifth the level prevalent in the western part of the country. Contemporaneously, the financial crisis that overtook Japan and other East Asian countries in the late 1990s can be traced to an excess of money that was either generated internally or lent by foreign investors, beyond the carrying capacity of these economies to absorb and utilize it productively.

The above situation raises serious doubts as to money being the priome determinant of development.

THE AID DEBATE

The foregoing analysis illustrates that development is important and that there are various theories advanced that try and explain the process. In the midst of this milieu there is also another debate – that of aid. Does aid assist in development or is it actually a hindrance?

In respect to the above, left leaning anti-development theorists have long argued that aid is not essential for development. Some have gone to the extreme of suggesting that the West is the source of a disease that threatens the livelihood of less developed countries (Shucking and Anderson, 1991). More moderate dissidents condemn development efforts as imposition of Western concepts of industrial progress and economic growth on traditional societies when in fact these societies 63 were operating quite well until development was imposed. Escobar for example states that the West has reduced, “life in the Third World simply to conditions of misery, overlooking its rich traditions, different values and life styles, and long historical achievements. In the eyes of planners and developers, people’s dwellings appear as no more than huts, and their lives…still characterised by subsistence and self sufficiency, as marked by unacceptable poverty.” (Escobar 1995,p 69). Escobar further suggests that it is the Third World elites who appropriated the European ideal of progress for their own benefit. (ibid). Conservative critics suggest that “aid supports large and inefficient governments that create a bad environment for economic activity” (Burnside and Dollar 2004, p1). Boone (1994, 1996) found that aid had no effect on investment or growth in a sample of developing countries.

The theme that aid is not essential for development is pursued by other scholars such as Bauer (1991,p38-49). He contends that the central argument for foreign aid has been that it is essential in order for Third World countries to progress. He suggests that external donations have never been necessary for the development of any society anywhere. In defence of this statement Bauer points to the large numbers of immigrant people in North America and South East Asia who have emerged from poverty by saving and investing funds and large numbers of small companies that have prospered in the Third World without aid.

Are these anti-development, anti-aid theorists correct? This thesis suggests that aid does not always engender sustainable development but that it can assist in the process. It is true that countries have developed without aid (For example the North did not receive aid to develop). Logic would therefore dictate that aid is not essential for development to occur.

The anti-development advocates can be accused of romanticizing the lifestyles of indigenous peoples and inventing an account of their histories which does not always survive rigorous scrutiny; failing to acknowledge certain real improvements in people’s live chances and capabilities in the “age of development” (as measured by infant mortality rates, life expectancy, educational achievement, access to clean water, etcetera);and perversely, of attributing to local people a mistrust of ‘development’ that they might not share in full: many such people recognise that development is about costs and benefits, and they are more interested in the balance of these items than in the possibility of a painless development or non-development (Corbridge, 1995,p9-10)

Nanda (1991) provides a good critique of the views of the anti-development advocates. Moreover anyone (like the author) who has visited remote villages in the highlands of Papua New Guinea, seen young women die in childbirth due to lack of basic medical treatment, seen preventable disease ravage communities, seen people suffer and die when crops or rain fail, has scant regard for romantic notions of indigenous lifestyles.

The views of anti-aid advocates are harder to refute. Aid is not a pre-requisite for development but it appears to assist development if correctly targeted and managed. If we go back to the original basis for aid as formulated by Samuelson after World War II, he states of backward nations:

“They cannot get their heads above water because their production is so low that they can spare nothing for capital formulation by which the standard of living could be raised”. (Samuelson, 1951,p 49)

What is so different now? Governments in the Third World continue to struggle to meet the basic needs of their people and there is insufficient left to target at development. Aid can provide either for governments to divert funds away from basic social needs towards economic development or can directly assist in economic and social development. Aid can take the pressure off. The problem is that many governments divert funds to activities that are not directly productive. As an example Samoa diverted funds for religious and sporting expenditures. Alternatively aid is mismanaged and dissipated and/or a subject of corruption and power entrenchment for local elites.

Aid is certainly not a universal panacea for under-development but it can and does effect sustainable development where it is appropriately managed and targeted.

SUMMARY

The importance of development theories can be seen in the way in which they induce national governments and donor agencies to react. Governments sometimes explicitly adopt theory (or example Marxism) but more often than not it is implicitly adopted by the idealogues within government as they drive policy. Seldom is such theory articulated by government or aid agencies.

Initially modernisation theory signalled that industrialisation would bring prosperity. When this prescription was found to be far from a universal truth, dependency theory tried to fill the void. Arguments regarding the North and South flourished in the 1960s and 1970s and were fuelled by Marxist states and those that perceived inequality of trade (South American states). Dependency theory in turn failed to explain adequately why some countries in the Third World were developing. Along came theories of dependent development to explain the perceived variations on development. These theories too, failed to provide a universal explanation of development.

With the demise of communist states in the 1990’s, the adoption of limited capitalism by China and the rise of globalism, another theory of development was framed. Globalisation prescribes peace, democracy, social velocity, technological application and education as setting the scene for development. Again however these were not always present when countries such as Germany and Great Britain became developed. Lastly the concept of money as a determinant of development arose in the late 20th century.

The evoluation of the above development theory has had a profound impact on government and donor actions. Modernisation theory after World War II drove donors and national governments to sponsor industrialisation. Dependency theory caused a re-think of trade and other policies. It still pervades discussion over national debt. Globalisation theory in turn suggested other preconditions for development take off and has driven governments and donors into a rash of governance, structural adjustment and social infrastructure projects. 65

The problem is that none of the above theories adequately explains development. There are exceptions to every theory advanced. So, there must be other factors at work that determine development. Likewise, aid of not delivered effectly will not result in development. This thesis contends that clues to the missing elements that determine development can be found by analysing why certain donor projects succeed while others fail. That is, by establishing what it is that engenders sustainable development.

In the next chapters an analysis of Samoan history and development background will be undertaken to see if either or both impact on the outcomes of development projects and whether they are determinants of development. 66

CHAPTER 4 AUSTRALIAN AID POLICY RECONSIDERED

Material available on Australian aid and its objectives abounds. Each year the Minister for Foreign Affairs produces a formal report to Parliament, AusAID produces a plethora of publications on various aspects of aid and numerous NGO and other commentators assess aid performance. Despite this, it is extremely difficult to identify any recognition of an underlying development theory that pertains to Australian aid. Furthermore, it is also difficult to locate in AusAID literature definitions of such basic concepts as development and sustainable development.

In the main, the literature assumes that the reader understands and accepts that Australian aid is about poverty reduction and that this equates with development. Moreover sustainable development is taken as simply being about ensuring that the effects of aid continue after aid ceases. While the above is partly true, it does not reflect the actual situation. Aid is more complex than simply having one objective and sustainable development is more than just the perpetuation of inputs.

The development framework of Australian aid has evolved over the last half century from a modernisation perspective in the 1950s to today’s apparent commitment to globalisation. Within this framework the intent of Australian aid has also vacillated at times among objectives such as poverty reduction, economic and social development, political self-interest, trade interests and military interests. These vacillations persist despite proclamations to the contrary. Aid remains an instrument of foreign policy. To understand this situation it is instructive to review briefly the history of aid to Papua New Guinea. PNG was one of the earliest recipients of Australian aid and still remains the largest single aid recipient.

EVOLUTION OF THE AUSTRALIAN AID PROGRAM - THE PNG EXPERIENCE

Post World War II, Australian aid was largely driven by a desire to help poorer countries in their efforts to improve their income and access to the necessities of life including food water and shelter as well as improve their levels of education, health and sanitation. (See Jarrett 1994, p8). At least this was the stated government policy objective and thus formed public perception. However, there were clearly other reasons why Australia provided aid to developing countries in the region. The clearest example of this can be seen in Papua New Guinea where Australia bestowed most of its aid.

Upon PNG’s independence in 1975, Australia agreed to provide budgetary assistance to support the country’s economic and social development. Budget support was seen as essential to facilitating to PNG’s independence and security. Aid began in February 1974 when Australia agreed to provide A$500 million in social and economic aid for the period 1974/75 to 1976/77. In March 1976 these arrangements were extended and modified whereby Australia agreed to provide a minimum of A$180 million per year for the period 1976/77 to 1980/81. When Australia’s global aid budget was reduced in 1986/87, Australia withdrew from its 1985 aid agreement with PNG, and replaced it with new arrangements. These arrangements included the introduction of project aid that continues today as the main aid delivery instrument.

There is very convincing evidence to suggest that Australian aid delivery to PNG has not been designed purely to promote economic and social development. (See Babbage 1987, Bowman 1993, Parkop 1993, Wilkinson 1996). Nor has it been solely targeted at poverty reduction. Aid has had a multifaceted role in PNG that continues to this day. This situation also occurs to differing degrees with all other Australian aid recipients.

Until the 1990s Australia followed to the modernisation model of development in PNG and regionally. This was re-enunciated as globalisation theory in the1990s but failed to be acted upon with any degree of alacrity. Within this framework aid continues to be a development tool but also has other purposes. These purposes are as an instrument of foreign policy and defence and as an instrument of trade policy.

AID AS AN INSTRUMENT OF FOREIGN POLICY AND DEFENCE

Aid has been and still is an instrument of foreign policy. PNG and Indonesia provide good examples. Bowman states that, “the governmental changes affecting aid administration in the 1970s and in the period since 1987, illustrate the formal links between aid and foreign policy and how they interact with the shape of the program.... The examination of the Australian development co-operation to PNG and Indonesia consistently demonstrates that foreign policy considerations have been significant in the aid relationship with both countries.” (Bowman 1993 p87-88).

In looking at Australia’s foreign policy interests in PNG it is necessary to consider the relationship/situation that existed prior to PNG independence. Wilkinson (1996, p178-179) examined the relationship between the two countries up to 1972 and provided five reasons why a special relationship existed between PNG and Australia. These were PNG’s strategic significance to Australia; the government having humanitarian and moral obligation to advance the welfare of territories in its charge; UN trusteeship obligations; Australia’s heavy financial and human involvement in PNG since the war and Australian business interests in PNG

The strategic significance of PNG to Australia cannot be overestimated. It is clear that Australian defence thinking is now and has been since PNG independence that an internally unstable neighbour represents a threat to Australia’s strategic defence interests. Babbage (1987, p88) nsummarises the situation as “Australia has a strong but not vital interest in the maintenance of a regime in Port Moresby that does not seek to undermine Australia’s broader security interests. It is in Australia’s interests for PNG to remain united with a strong central government maintaining internal cohesion”. Both Australian aid and the Defence Co-operation Program are used to promote internal stability in PNG. PNG is also a major force in South Pacific regional politics. Good relations with PNG are beneficial to Australia’s wider foreign policy strategy of “constructive commitment” in the sub-region. PNG can deliver South Pacific votes in the United Nations for Australia and its nominees.

Elsewhere in the region, Australia has used aid to influence countries like Naru to take asylum seekers. It has used the threat of aid cessation to pressure countries like Fiji during recent coups. It is clear that Australian aid has manifestly assisted with Australia’s foreign policy objectives in the region.

AID AS AN INSTRUMENT OF TRADE POLICY

Development Co-operation funding was also designed with Australian business interests in mind. AusAID has often found it necessary to justify aid expenditure by indicating the commercial benefits that are derived from its delivery. AusAID has prepared reports on China (AIDAB 1993) and Indonesia (Mc Master 1997) that specifically attempt to calculate the commercial benefits that accrue from aid. The Indonesian report clearly indicates that there are foreign policy and commercial dimensions to aid. It states “While there has been substantial analysis of the developmental and foreign policy aspects of aid, it has not fully taken into account the impact of aid on Australia’s commercial interests. The analysis that has been done indicates that commercial benefits have been achieved”. (AIDAB 1995, p1). The report proceeds to indicate that for the period 1987-1991, Australian development cooperation had been effective in meeting the Government’s developmental, foreign policy and commercial objectives.

In respect of PNG, no specific report exists on commercial benefits but AusAID did compile a report in 1990 that investigates the aid program and its assistance to Australian industry. The report again confirms that aid is used as a political and trade tool by the Australian Government. It states, ”Aid promotes economic, social and political stability within developing countries. This is in Australia’s interests since the economic costs of unrest can be dramatic - witness the fall in trade between Australia and Fiji which occurred after the Fiji coups”. (AIDAB 1990, p2). The report also indicates that the aid program provides Australian goods and services needed by developing countries and this can be a catalyst to Australian export trade. “Good aid can also be good trade” (AIDAB 1990, p2). The aid program involves large numbers of Australian firms in the provision of goods and services overseas. In 1994-1995 AusAID let 130 contracts to 71 Australian firms each worth in excess of A$1 million. The total value of these contracts was A$876,040,200 (AusAID 1995, p7). However, these were management contracts for projects and the actual expenditure on Australian products and services would be less than the above figure.

Aid does yield returns to Australia in terms of goods and services purchases. As an example, there has been a high return to Australian exporters from PNG aid. In 1987-88 around 80 per cent of total country program expenditure, excluding budget support to PNG, was spent directly on Australian goods and services. See Figure 1 hereunder:

Figure 1 - Estimated Expenditure on Australian Goods and Services from Country Programs, 1987-88

Item Total Expenditure per cent of Expenditure $m Total $m Expenditure on Item Projects 177 115 65 Student subsidy 85 85 100 Food aid 36 36 100 Training 23 22 96 Commodities Assistance Support 15 15 100 69

Program/ Development Import Grants Scheme Co-financing 8 8 100 Staffing assistance 7 5 71 Other 38 24 63 Total 389 310 80

Source: AIDAB, Australia’s Overseas Aid Program: Helping Australian Industry Too, International Development Issues No 10, AGPS, Canberra, March 1990, p 10

The balance of Australia’s trade with developing countries is significantly in Australia’s favour. In 1988-89 Australia’s trade surplus with developing countries was $4.7 billion. AusAID admits the aid/trade link when it states, “Aid plays an important part in maintaining good bilateral relations which in turn are one of the foundations of trade. In recipient countries aid helps promote the preconditions for trade: economic growth and political stability” (AusAID 1995, p7).

In respect to aid delivery AusAID states:

”The objective of the Australian aid program is clear. It is to advance Australia’s national interest by assisting developing countries to reduce poverty and achieve sustainable development.

The Australian private sector plays a significant role in helping to achieve that objective by providing a large and crucial role in the actual delivery of Australia’s overseas aid program. More specifically, the program and its success relies heavily upon Australian expertise to identify, design and implement aid projects. By assisting developing countries to achieve economic growth, the aid program also fosters regional opportunities for investment and trade for Australian business” (AusAID 2001, p6).

AusAID admits that Australian business has a large part to play in aid delivery. In 1999-2000 there were 609 AusAID projects worth a total of A$1.55 billion to Australian industry (AusAID 2001, p8). There is tacit recognition by AusAID that there are clear benefits to Australian industry from aid and that aid will stimulate trade.

The DIFF scheme is another Australian “aid” mechanism that is clearly identified with trade outcomes. It financed high priority development projects by providing a mixed credit finance package to developing countries. The DIFF financing package combined a substantial aid grant through AusAID with export credits from the Export Finance Insurance Corporation (EFIC). In effect, the DIFF scheme permitted Australian companies to bid for projects in nominated countries at concessional rates, thereby securing Australia’s economic interests. A review of the DIFF confirmed the above and concluded, “the DIFF had generated substantial commercial benefits for Australia. Almost all firms surveyed reported that DIFF had been important to their business, with half stating that it was either crucial or very important to their operations.” (Commonwealth Parliament 1995, p56).

The DIFF scheme was cancelled after the 1997 review of AusAID but was eventually replaced by the Private Sector Linkages Program (PSLP). This program was 70 designed to act as a “partnership between a business entity in a developing country and an Australian business, who share the goal of funding a developmentally worthwhile project in a developing country. The PSLP promotes sustainable development by harnessing the expertise and capacity of Australian enterprises to work with counterpart organisations in the developing country.” (Sullivan 1998). As of 1998 PSLP had funded 180 activities valued at A$17.7 million. As the Australian company effectively obtains the job without tender, the PSLP is effectively a nice fillip for Australian business.

AusAID reports that, ”When the effects of aid in generating increased trade, both via trade spin-offs and by promoting economic growth and stability in aid recipients, are added to the these purchases (project and budget support) it is clear that for every dollar spent on aid there is ultimately substantially more than a dollar’s worth of business generated in Australia” (AIDAB 1990 p13). Clearly Australian aid is an instrument of trade and this fact is recognised by AusAID.

The role of aid should be seen as multifaceted. It has foreign affairs, defence and trade objectives as well as the often enunciated development goals. As Jarrett (1994, p 60 & 191) identifies:

Australian official development assistance (ODA) is but one of the policy instruments available to serve Australia’s national interests in the international arena. These interests include the furtherance of viable and stable governments in our region through regional cooperation and social, political and economic reform in the countries receiving ODA. To suggest that aid is apolitical is to mislead taxpayers in the donor countries, and is unlikely to be believed in the recipient countries

These interactions among defence policy, development assistance, immigration policy and various dimensions of foreign policy are highlighted further in Evans and Grant (1991).

REVISED AID FRAMEWORK

While Australia did (and still does) use aid for non-development purposes, the espoused purpose of aid continued to be humanitarian. Australia insisted that its aid was designed to help poorer countries improve their income and access the necessities of life including shelter, food and water as well as improve their levels of education, health and sanitation. This clearly stemmed from an Australian Government acceptance of the theory of modernisation. Aid was its instrument. Whether the Australian government was, however, aware that it was pursuing the concepts inherent in modernisation theory is not clear.

The above (humanitarian) situation began to change however in 1984 when the Report of the Committee of Review into the Australian Aid Program (Jackson 1984) set the scene for aid strategy for the next 13 years. It was the first comprehensive review of the aid program and resulted in major changes to policy, programs and management. Jackson argued that aid was most effective when applied to removing constraints to development. His recommendations included a concentration in investment in people and in capital-intensive facilities such as dams, roads and ports. 71

Jackson, also suggested that Australian aid should concentrate on Australia’s areas of sectoral expertise.

Jackson stressed the importance of economic growth as the long-term means of overcoming poverty. This became the basis for the Australian aid program’s approach to sustainable development. Jackson’s recommendations were largely about the delivery of aid to stimulate growth. His recommendations, while still tacitly acknowledging modernisation theory, sought to improve aid outcomes. By concentrating on Australian areas of expertise, however, there was still a major element of trade inherent in aid delivery. A great deal of the aid was returned to Australian industry by way of consultancy fees and direct procurement of Australian goods. Further, critics complained that by delivery of inappropriate technology the aid sometimes resulted in long term costly maintenance bills and expert foreign assistance that developing countries could ill afford. Thus aid was said to be engendering dependence not development.

Another key step in formulation of this policy was the 1990 World Development Debate hosted by AIDAB, which provided the forum for a public debate on the subject of poverty reduction in developing countries. In 1991 a report titled Poverty Alleviation Through Australian Development Cooperation was published and a three- pronged strategy for the aid program was formalised. Poverty reduction became the professed objective of Australian aid.

In 1993 the evolution of development assistance policy continued with the release of a publication entitled Poverty Reduction & Economic Growth in Australia’s Development Cooperation Program (AIDAB 1993). The paper outlined a new policy framework for poverty reduction in the aid program composed of sustainable economic growth; investment in human resources through education, health, capacity building and social sector development; and safety nets and poverty targeting which includes emergency relief

The economic growth category was broadly defined and incorporated support for essential infrastructure, agriculture mining, industry, environmental management and institutional strengthening. Capacity building was seen as inherent in economic growth and hence assistance for economic policy formulation was included under this category.

Capacity building was also seen as intrinsic to human resources development. The principal focus of this element was social sector development through health and education. Included in this category was community-based development through non-government organisations. This was directed at increasing employment and income possibilities of the poor. AusAID therefore supported small scale local enterprise development under this category.

The third component of the policy related to safety net and poverty targeting. This included emergency humanitarian aid and refugee support. Emergency food aid formed a large component of this type of aid but it also included water supply and sanitation provision.

Bilney (1993) when announcing the above strategies indicated that in this framework economic growth was seen as essential. Without economic growth broad based development was not possible but it had to be accompanied by human resource development. Bilney saw a direct link between economic and social development. Again however this framework for Australian aid continued to reside within the oft unstated but omnipresent theory of modernisation. In 1997 another review of aid policy was commissioned. The Committee of Review of the Australian Overseas Aid Program delivered its report into the operation of the aid program and the tenets of its recommendations (One Clear Objective) have guided Australian aid delivery to this day.

AUSTRALIA’S ONE CLEAR OBJECTIVE

The Committee’s challenge to AusAID was succinctly stated as:

to reorientate the program to focus more consistently on outcomes. This requires an organisation that value critical analysis and fosters an evaluative culture; one that learns from past successes and failures while focusing on the future. It requires a program that is innovative and responsive to changed circumstances but is clearly and singularly focused on its essential purpose - the reduction of poverty through sustainable development. It is equally important for the program to be in step with the priorities of recipient countries, and involve local communities (CRAOAP 1997, p1).

The objective of Australia’s aid program has most recently been defined as: “To assist developing countries to reduce poverty through sustainable economic and social development” (CRAOAP 1997, p69). Although again largely unstated, this new objective was set within a revised theoretical framework. This fact is evident from comments by the Australian Minister for Foreign Affairs in respect to the global aid environment where he stated, ”There are strong linkages between the process of globalisation and the international aid environment. The opening up of markets, decisive role of trade and high mobility of capital are key features. A challenge for the international community is to ensure that globalisation continues to work to consolidate development and reduce poverty” (Downer 2000, p1).

The graduation from modernisation to the globalisation discourse has never really been clearly enunciated in AusAID literature. It is not even clear if AusAID, internally, really understands or accepts any distinction. Indeed it was one of the criticisms that the Committee made of AusAID that it required, “a more analytical approach to the task of aid policy, planning and delivery.” (CRAOAP 1997, p1). The Committee even recommended (unsuccessfully) a Development Co-operation Advisory Board that might, inter alia, advise, “the government on aid policy on their own initiative or at the government’s request” (CRAOAP 1997, p313).

The main proponent of globalisation continues to be the Australian Treasury, where pragmatic economists prevail. Treasury for its part has made it clear that it strongly supports globalisation from an economic viewpoint. It most recently stated, “Globalisation - in the form of increased economic integration through trade and investment - is an important reason why much progress has been made in reducing 73 poverty and global inequality over recent decades” (Commonwealth of Australia 2001, p2).

AusAID continues to assert that it is following a globalisation path. Most recently the Minister for Foreign Affairs announced a new strategy to reinforce the policies established in 1997 and set out a revised policy framework. He said:

“For the first time in history we are making unprecedented gains in reducing poverty.” There is international consensus on the foundations for long term poverty reduction:

Strong economic growth drives development and reduces poverty. The quality of economic growth is also important for reducing poverty in a sustained manner. There must be investment in human capital, particularly in education and health. And there must be an environment that encourages the private sector, generating jobs for the poor and incomes. Outward looking states - those countries that have taken advantage of globalisation and integrated into the world economy by liberalising trade and investment - have achieved much higher rates of growth. Good governance - sound policies, mature institutions and accountable systems - is also a prerequisite for sustained economic growth and reductions in poverty” (Downer 2002).

Again this pronouncement would suggest that AusAID has adopted globalisation as part of its development strategy. But has this actually happened?

IS IT SO CLEAR?

The focus of Australian development co-operation since 1997 was supposed to be on “reduction of poverty through sustainable economic and social development” rather than directing all resources to the “maintenance of services” and “service provision”. However this has not really occurred.

AusAID has, at the officer level, interpreted the above to mean, a concentration on alleviating the relative deprivation of people by focussing on absolute poverty reduction. Hence country strategies are more and more focussed on sub-sectors such as primary health and primary education. The PNG Country Strategy (2002) is an example. This refocusing of the objective has severe consequences for development co-operation. It leads development co-operation down the path of “aid” as opposed to “development”. In this context “aid” can be defined narrowly as assistance to maintain current institutions and infrastructure concomitant with an emphasis on social development outcomes. “Development” can be defined as a commitment to improved and sustainable social and economic outcomes.

A CONCEPT OF DEVELOPMENT

In pursing its poverty reduction strategy, AusAID has concentrated on developing social infrastructure and providing an enabling environment for economic development. The Minister reiterated this in his latest statement, “Australia’s aid is responding to this agenda by … creating an enabling environment for private sector 74 growth and supporting investments in infrastructure and human capital” (Downer 2002).

The DAC has long recognised that the above strategy alone will not result in sustainable development. In its paper “Shaping the 21st Century: The Contribution of Development Co-operation” it states:

“We now see a much broader range of aims for a more people centred, participatory and sustainable development process: • Reducing poverty while achieving broadly based economic growth….” (OECD 1996, p13)

This view is shared by the Asian Development Bank where it states, ”The lesson is clear: growth can reduce poverty by generating employment and incomes, and labour intensive growth can reduce it even faster.” (ADB 1999, p8). Indeed the AusAID Committee of Review accepted the role of economic development in reducing poverty. It stated, ”economic growth plays a vital role in sustainable poverty reduction in developing countries” (CRAOAP 1997, p76). It then proceeded to indicate that strategies that focus solely on social development are inadequate - there has to be a economic dimension.

The situation now within AusAID is that the pendulum has swung too far to the left and there is an over-emphasis on social development. It is probably best described by considering development in terms of a continuum as follows:

Development Continuum

AusAID Strategy to Reduce Poverty

Social Infrastructure Enabling Environment Economic Development

Education, health, Agricultural Specific development transport, law and extension and credit projects & initiatives justice services, legislation

There is, within AusAID, an emphasis on provision of social infrastructure at the expense of economic development. AusAID concentrates on education, health and law and justice projects at the expense of projects that have a direct, postive, economic impact. There is some commitment to road infrastructure but very little evidence of support for agriculture and export driven industries such as fisheries, small scale mining, sustainable forestry or tourism. In respect to economic development AusAID prefers to concentrate on the the creation of “an enabling environment” for development. An enabling environment translates into support for agricultural research and technical assistance to customs agencies and trade departments to facilitate changes in laws that are perceived to facilitate an improved outlook for commerce. New economic development, tertiary health and education 75

(as distinct from primary/rural/preventative health and primary education initiatives) are simply not regarded as priorities by AusAID as it pursues poverty reduction.

Concentration of aid on social sectors is however not confined to AusAID. Halonen- Akatwijuka points out that “donors tend to favour social sectors (health and education) over other public expenditure programs (For example transportation). Due to incomplete information they may all concentrate too much on the priority sectors, leaving the lower priority yet important sectors lacking in funding” (Halonen- Akatwijuka 2004, p2). This finding is supported by data from Mackinnon where he provides the following table that clearly shows, ”There has been a major shift towards social sectors” (Mackinnon, 2003, p11)

Table 2 Shares of ODA by Type, All Donors

Shares 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Sector Specific of 55.9 52.4 65.0 61.1 71.4 70.6 70.6 71.6 63.8 57.0 59.3 63.6 which: Social 16.7 14.0 19.6 19.8 28.3 29.8 26.6 31.2 29.7 29.9 33.7 25.7 Economic 25.1 27.1 26.4 29.9 31.5 32.4 29.7 28.4 24.8 19.4 18.4 26.8 Productive 14.0 11.3 19.0 11.4 11.7 8.5 14.4 12.1 9.4 7.7 7.1 11.0 Multisector 18.4 18.1 11.9 12.0 7.4 5.5 6.4 3.9 7.9 4.7 5.8 3.1 Program/Structural Adjustment Debt Relief 8.3 16.2 9.9 13.2 9.2 7.4 7.4 8.6 11.1 7.1 8.4 11.4 Food Aid 5.2 3.8 2.1 1.6 1.6 2.3 1.4 1.8 2.1 6.0 4.0 1.2 Nonfood 1.9 1.7 2.5 2.3 2.4 2.9 4.1 2.6 3.8 9.6 6.1 5.1 Emergency Admin. Costs 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.6 0.5 2.2 3.2 1.0 NGOs 0.0 0.1 0.3 0.1 0.1 1.0 0.6 1.0 1.0 0.8 2.7 2.4 Unallocated 1.1 0.5 0.8 0.7 0.7 1.4 0.9 2.2 3.0 3.0 1.8 4.1 Source: Creditor Reporting System, DAC Website

Even where donors do support economic sector projects little actual assistance is targeted at the private sector in the Pacific. The ADB suggests in this respect that “funding agencies should make private sector development a central part of their overall development strategies for the pacific” (ADB, 2004, p170). Further, the ADB notes that “apart from the ADB, and to a much lesser extent, New Zealand, there is something of a vacuum in the area of assistance for the private sector. No other donors are placing a consistent, focussed effort on private sector development in the Pacific” (ADB 2004 p170). In respect to private sector development the ADB states “by following private sector-friendly growth-oriented policies, Pacific countries will ensure that they capitalise on the growth of the world economy” (ADB, 2004, p160).

As the following pie chart indicates there is a clear emphasis (49 per cent) on education, health and governance in the aid program. What the chart fails to show is that funds targeted to rural development are often not directed income earning but rather research or export facilitation activities. There is almost no direct support to export generation industries.

Diagram 4: Estimated sectoral breakdown of Australian aid 2003-04

Source: Budget Statement by the Honourable Alexander Downer MP, Minister for Foreign Affairs 13 May 2003

In view of the above, it is obvious that current AusAID strategies alone will not engender development. They are “aid” oriented not “development” focussed. There needs to be a contemporaneous emphasis on economic development in order to make social infrastructure initiatives sustainable over the long run. That is to say, attacking poverty reduction solely by addressing social ills and inequality will not generate jobs and taxes to pay for the maintenance of those investments. It will not engender sustainable development.

AusAID has not adopted the tenets of the Committee of Review recommendations and the DAC approach to development. It has not pursued social development in concert with achievable economic growth. Options for poverty reduction are clearly differentiated. Poverty can be reduced, in a sustainable way, only by simultaneously working from both ends of the above continuum. That is by addressing social problems and also by actively pursuing economic development programs in priority sectors.

In respect to the above, the DAC Guidelines on Poverty Reduction state:

“III Common concepts and approaches for understanding and addressing poverty

15. Promoting pro-poor growth and reducing inequality. Increasing economic growth rates is essential. …… Vigorous, sustained economic growth in the private sector creates jobs and incomes for the poor. It also generates public revenues to finance social development and social protection programs and strengthen the institutional framework and physical infrastructure for efficient markets…”(DAC 2001, p2). 77

The interesting point about AusAID’s position is that it acknowledges that economic development reduces poverty. A recent AusAID report stated, “It is undeniable that economic growth is the main driver for development and poverty reduction. Key social indicators, such as maternal and infant mortality, literacy levels and school enrolments generally improve in line with per capita income increases” (AusAID 2002, p11). While it acknowledges the effects of economic development, AusAID seems unable to introduce real initiatives designed to stimulate such development.

RESULTS ORIENTED AID/DEVELOPMENT

What the Committee of Review indicated was that AusAID had to learn from its mistakes, look forward and ensure efficient and effective overseas aid delivery. In respect to effective aid delivery the Review stated:

“Assessing development outcomes, anticipated and actual, is crucial both to improved performance and to public accountability. This requires a rigorous approach to measuring aid effectiveness, despite the difficulties this involves. While aid is inherently risky, and innovation is to be encouraged, the chances of failure are unnecessarily increased by failing to heed the lessons of the past. There is now a broad consensus on the essentials for program and project effectiveness. AusAID appears to have a good grasp of these principles at a policy level but, due to a range of constraints, has found it difficult to adhere to some in practice. AusAID’s country programming approach, activity selection evaluation and feedback systems all require strengthening. (CRAOAP 1997, p161)

What the Review demonstrates is that, inter alia, aid is risky, it is not always sustainable; a modicum of innovation should be encouraged; chances of failure are unnecessarily increased by failing to heed the lessons of the past and AusAID’s country programming approach, activity selection evaluation and feedback systems all require strengthening

It is clear that, in most development cooperation programming, AusAID staff seek to reduce risk to a minimum at the expense of innovation by pursuing social infrastructure programs. These programs in the primary health and education sectors, provide return with minimal risk exposure. In the long run however they are simply unsustainable without contemporaneous economic growth.

In respect to learning lessons from the past, has AusAID really learned the real lessons? It can be argued that AusAID continues to pursue the same poverty reduction strategies as in the past with the same limited results. It has not really understood the discourse of globalisation. It continues to pour funds in the same tired institutional strengthening project “initiatives” that have failed to achieve sustainable outcomes. (The evidence for this statement will be seen in the analysis later in this thesis of selected AusAID projects in Samoa).

AusAID has not moved with the World Bank and other donor organisations into the realm of loan finance. It continues with a grant regime that is totally hamstrung in the possibilities it has for engagement with the private sector. This is despite the fact that the Committee of Review recommended introduction of a loan scheme. Indeed 78 in 1997 the Minister for Foreign Affairs advised, “Soft loans would be a useful instrument of aid delivery in some cases. Loans would leverage the aid dollar and allow undertaking of some larger projects (e.g. a A$1 aid grant can be used to create a much larger concessional loan);….allow some flexibility in the level of aid concessionality for different countries and sectors.” (Downer 1997).

AusAID wants to work with the private sector to stimulate development but its own strategy for this is to create a good policy environment in which the private sector can operate. This presumes that the sector can/will expand to take up any opportunities so created. This notion is a complete fallacy. There is often a need to actively assist such enterprises, a fact only too well understood by all State Governments in Australia. AusAID cannot/will not fund the private sector directly as it requires that beneficial ownership of assets created using aid funds remain in public ownership. For example this means that AusAID cannot provide grant funds to a company that wants to build a mill (even though the mill will create a viable export commodity).

The need for a loan portfolio was canvassed by the Committee where it reported (in respect to country aid programs), “The Committee believes that loan repayments can instil greater activity appraisal than grants, especially in recipient countries, and more local commitment, leading to a higher probability of success in activities supported” (CRAOAP 1997, p195). The same however holds true for private sector loans. The World Bank has used International Finance Committee (IFC) to finance an array of private sector activity. For instance, private hospitals and tourist hotels have been financed. The IFC had as at June 1998 invested in about 140 tourist oriented projects in 60 countries. ”The projects range from small tented camps in Africa to large high-rise hotels in Asian cities” (IFC 2002).

In terms of the impact of grant aid, Australia (largely through AusAID and its predecessor agencies) has spent A$7.7 billion in PNG since its independence as the Table 3 hereunder illustrates. This equates to a massive A$14,034 billion at 2001/02 current value.

Table 3 - Australian Budgetary Assistance to Papua New Guinea Since 1975

Year Budget Balance of Programmed Total Aid Average Current Support Payments Activities & (A$m) Index Value (b) (A$m) Support & Other Aid Base 1989 - Index = Retirement (A$m) 1990:100 135.4 Benefits (a) (A$m) (A$m) 1974-75 42 100 142 26.925 714.09 1975-76 56 104 160 30.400 712.63 1976-77 190 5 195 34.625 762.54 1977-78 200 4 204 37.925 728.32 1978-79 215 2 217 41.000 716.63 1979-80 223 2 225 45.200 674.00 1980-81 232 2 234 49.425 641.04 1981-82 241 2 243 54.575 602.88 1982-83 263 2 265 60.850 589.66 1983-84 288 2 291 65.025 605.94 1984-85 299 3 302 67.800 603.11 1985-86 303 4 307 73.500 565.55 1986-87 305 9 313 80.350 527.44 79

1987-88 275 11 286 86.250 448.98 1988-89 275 15 290 92.575 424.15 1989-90 275 15 23 313 100.000 423.80 1990-91 275 30 305 105.275 392.28 1991-92 270 37 307 107.275 387.49 1992-93 259 46 305 108.375 381.06 1993-94 244 56 300 110.350 368.10 1994-95 213 77 290 113.900 344.74 1995-96 178 119 297 118.725 338.71 1996-97 320 120.275 360.24 1997-98 106.6 191.2 319.2 120.250 359.42 1998-99 320.9 121.825 356.66 1999-00 35.5 18.5 264.9 328.9 124.725 357.05 2000-01 23.7 300 323.7 132.175 331.60 2001-02 14.1 300.3 328.8 134.800 330.26 Total 5,121 15 655 7732.5 14,048.39 Sources: Auditor General’s Audit Report No. 13, 1990-91, Australian International Development Assistance Bureau - Aid to Papua New Guinea; and Budget Related Paper No. 2, Australia’s Overseas Aid Program 1995-96; AusAID Budget Summaries 1997-2001; Australia's Overseas Aid Program 2001-02, Statement by the Honourable Alexander Downer MP, Minister for Foreign Affairs, 22 May 2001 Notes: (a) Australian Bureau of Statistics; (b) Represents the Australian purchasing power as at 31 Dec 2001; (c) Index for Quarter ended 31 Dec 2001

Much of development impact of the above money has been dissipated. The results are not there. While projectisation has improved the situation vis-a-vis the old budgetary support mechanism, the impact of development assistance is largely hidden and dissipated in primary health, education and infrastructure development and maintenance. For example, AusAID investment in road maintenance may keep roads open but there is no development/advancement. Development Co-operation investments are continuously being eroded by the failure of the PNG government to invest in infrastructure maintenance. The PNG program runs the real risk of a continuance of past mistakes - no sustainability.

As the Review indicated, AusAID needs to focus on reduction of poverty through sustainable economic and social development. Hence AusAID must move beyond the provision of social infrastructure and look more closely at economic development. AusAID indicates that it is addressing the opportunities presented by economic globalisation within its aid program. However its attempts are perfunctory as well as misdirected. It is enmeshed in a social development role. When reporting AusAID’s role in the private sector, the Parliamentary Secretary to the Minister for Foreign Affairs announced:

”It is well-recognised that the private sector has a valuable role to play in international development. This role involves improving competitive forces which should, in turn, produce better growth and more jobs. It also involves divesting governments of activities which can be better conducted by the private sector…... Many developing countries also now recognise the need to privatise and to improve the efficiency of their public sectors in order to create the conditions essential for a vigorous private sector” (Sullivan 1998, p 1).

The fact is that AusAID’s support for economic globalisation is limited to creating an enabling environment for private enterprise to seize the opportunities presented by globalisation. It does not directly assist the private sector with funds or resources to 80 seize those opportunities. It is interesting in this respect to compare Australia’s aid agency’s position regarding assistance to the private sector in aid recipient countries to the Australian government’s support for the private sector in Australia. Aid is not used to directly support the private sector in recipient countries (especially to increase exports) but the Australian government provides a vast raft of support for Australian companies including:

Export Development Marketing Grants R & D Start Private Sector Linkages Package R & D Tax Concession Automotive Competitiveness and Regional Tourism Program Investment Scheme Renewable Energy Equity Fund Biotechnology Innovation Fund Shipbuilding Bounty Certain Inputs to Manufacture Shipbuilding Innovation Scheme Commercialising Emerging Technologies Small Business Answers Program Enhancing Printing Industry Small Business Bushfire Relief Program Competitiveness Scheme Small Business Enterprise Culture Enhancing Project By-Law Scheme Program Innovation Access Program – Industry Small Business Incubator Program Innovation Investment Fund Space Concession National Australian Technology Textile, Clothing & Footwear Showcase Corporatewear Register Petroleum Products Freight Subsidy Textile, Clothing & Footwear Expanded Scheme Overseas Assembly Provisions Scheme Pharmaceuticals Partnerships Program Textile, Clothing & Footwear Strategic Pooled Development Funds Program Investment Program Scheme Printing Industry Competitiveness Tradex Scheme Venture Capital Limited Partnerships Program Pre-Seed Fund

Source: Austrade, AusAID and AusIndustry Web Sites

The above are only some of the Commonwealth Government support schemes for private enterprise. To these must be added all the State based schemes.

By contrast to the above, in the underdeveloped world AusAID sees no need to directly support the private sector. The sector is presumably strong enough to increase production, introduce innovation, compete internationally for markets etcetera without any support. Clearly AusAID’s economic strategy is out of touch with industry requirements overseas and in Australia or alternatively there is some naïve view that the cash strapped governments of developing countries are supposed to find the necessary funds to assist industry. Of course there is another explanation that can be advanced for the above situation. It can be suggested that there is no intention to promote economic development but rather the intention is to foster dependency.

The reluctance of the Australian Government to pursue economic development projects is further illustrated by the following passage from the Parliamentary Secretary’s speech where she tries to provide examples of how aid has helped the private sector develop. 81

“Many of the activities which Australia funds in the infrastructure and education sectors, also contribute to private sector development. This is achieved through the active participation of the PNG firms in the delivery of goods and services….This involvement strengthens the skills and expertise of the PNG workforce. Consequently, business is encouraged, broader economic growth is promoted and - hopefully - income distribution becomes more equitable” (Sullivan 1998, p 1)

Further, and subsequent to the Parliamentary Secretary comments, the Minister announced:

“Since 1996-97, aid program funding for direct trade-related technical assistance and capacity building has increased by more than 36 per cent, to nearly $25 million in 2002-03….. As announced by the Prime Minister at the Commonwealth Heads of Government Meeting (CHOGM) 2002, we have pledged $460,000 to the Global Trust Fund that was set up to support World Trade Organisation (WTO) technical assistance activities in developing countries and agreed to provide $500,000 to support representation and information services in Geneva for small states. A training program for trade negotiators from African countries was run in May this year and will be followed with further trade policy training in other parts of Africa and the Asia-Pacific region“. (Downer 2002).

Again, the above comments concentrate on an enabling environment for economic development. There is no direct assistance/stimulation by way of incentive packages to private enterprise to invest in export oriented production.

Australia agreed at Doha that trade capacity needed to be increased in developing countries. But again its response has been limited to theory not practice. “The 2002-03 financial year will see the momentum increase for the Virtual Colombo Plan, a $200 million, five-year initiative between the World Bank and the Australian Government that promotes access to education and information in developing countries through the use of (information and communication technologies) ICTs. In 2002-03 Australia will spend $31 million on the Virtual Colombo Plan” (Downer 2002).

The above response to increased trade must be contrasted against what the Australian Government has done for its own industries through the Australian Trade Commission and AusAID. It has provided direct marketing support, subsidies and incentives to Australian exporters through a range of programs including EMDG, DIFF, PSLP and EFIC for many years. By contrast, for the developing world, AusAID (along with the World Bank) is a major contributor to the South Pacific Project Facility (SPPF). The SPPF is managed by the International Finance Corporation an arm of the World Bank. The facility’s mission statement gives the SPPF's raison d'etre as "to assist in and accelerate the development of productive, self sustaining, small and medium sized private sector enterprises in the Pacific Island Countries." However, SPPF does not provide finance for enterprises but rather it assists them find finance. It is an advisory service that assists in preparing and then determining if an enterprise is eligible for financing from the IFC, and other sources of capital, such as foreign investment. Its services also include assistance to Pacific governments to 82 privatise selected public sector enterprises, and to foreign investors, and financial institutions, in identifying potential investment projects. The SPPF seeks to create the enabling environment within which private enterprise can flourish.

This approach is however criticised by commentators for not providing the actual help required by entrepreneurs in the South Pacific. “The SPPF selection criteria of projects for assistance are very limiting. The amount of equity required before the SPPF insures a project is very high, in relation to the economies and cost of living in the Pacific countries. This does not encourage indigenous and grassroots ventures, which frequently have no access to equity” (Degenhardt 2003).

The amounts being spent on trade facilitation etcetera are miniscule in terms of an annual aid budget of A$1.5 billion. Moreover, once again the emphasis is not on “hard-nosed and risky” economic stimulation but rather the “soft” and safe areas of health and education. (In this respect it should be noted that the investments are all in areas where Australian business obtains a return). Some five years after the Minister noted that soft loans should be introduced to better address its constituency (For example the private sector) no loan system is in operation or contemplated. The purported reason for non-introduction in 1997 was that, “a high proportion of the aid budget is already committed to projects extending over several years or to our multilateral obligations” (Downer 1997). In the last five years there has been ample opportunity to revise commitments and introduce a loan scheme.

HAS AUSTRALIAN AID “ONE CLEAR OBJECTIVE”?

Clearly from the above discussion it can be seen that AusAID’s concept of aid delivery is inconsistent with the professed policy framework and with the theory of globalisation it professes to pursue. But the picture is more complex than that. Aid continues to be used for trade and political ends. As late as 2002 the Australian Minister for Foreign Affairs still was reporting more than one aim for aid. He stated, ”Australia’s commitment to assisting with development overseas also reflects a realisation that in an increasingly globalised world, it is in our own self-interest to help. Not to do so would harm our economy. By promoting growth in developing countries the aid program helps foster stability and expand trade and investment opportunities for Australia” (Downer 1997).

Downer (2002, p3) again emphasised the self-interest objective in his statement, “Our aid has a clear single focus - to advance Australia’s national interest by assisting developing countries to reduce poverty and achieve sustainable development”. This statement reflects a subtle change in emphasis for the aid program. Instead of a clear focus on poverty reduction it is couched in terms of Australia’s national interest. In effect, Downer is acknowledging what was already evident - that aid is intrinsically linked to foreign affairs and trade. Aid is not independent of the political process. It is clear therefore that, despite all the rhetoric, aid never has and never will have one clear objective.

In terms of Australian aid projects, they are still largely implemented by Australian companies (Australian Managing Contractors, AMCs). These AMCs are required to select consultants from Australia, New Zealand and the recipient country (if possible). In practice most consultants come from Australia. Consultant fees and overheads 83 are all repatriated to Australia. Much of the technology installed also comes from Australia. The major exception is the PNG Incentive Fund in Papua New Guinea where AusAID has focused A$155 million over 5 years on development programs initiated and managed by local organisations with local consultant inputs and local procurement of materials and services.

The recent issue of illegal immigrants to Australia also demonstrates that aid is still used for political purposes. As Justice Einfeld so clearly identified aid has been used to persuade small Pacific nations to accept boat people. The President of Naru has made much of the fact that Australia dumped the boat people in Naru in exchange for aid and that aid has not been forthcoming as promised or at least not to the satisfaction of Naru. There can be no doubt that aid is an instrument of Australian foreign policy. It is not simply used for poverty reduction.

The above fact is even evident in the Committee of Review’s comments where it states:

Giving aid is a matter of enlightened self-interest for the developed world. Secure and predictable development, with fair and equitable access to resources, has positive implications for peace and security, regionally and globally. …Economic development in the region has trade benefits for Australia, enlarging the market for our exports and foreign investment. It also diminishes the risk of conflict in which Australia could become embroiled and the associated risk of large-scale refugee movements. Properly targeted, Australian aid can help to deal with global environmental, health and security problems that could have severe effects on Australia and on neighbouring developing countries (CRAOAP1997, p32-33).

It is therefore apparent that while Australia supposedly has a primary objective in aid delivery, it is not clearly implemented. Australia also has subsidiary objectives that relate to trade and foreign policy objectives. More latterly the military objective on aid delivery has been replaced by health, quarantine and terrorist response imperatives. The funding of HIV and law and order aid programs in the region attests to this change in emphasis. Recent events in respect to illegal immigration to Australia also suggest that aid is used as a tool to influence the decisions of regional neighbours. Justice Marcus Einfeld (2001) recently indicated for example that aid has been used to bribe Naru into taking illegal immigrants.

DEVELOPMENT DISCOURSE AND THE POLICY

While it is clear what the Committee of Review intended as the objective of aid and while the Minister’s and AusAIDs variations of that objective are evident, there is no articulation of any development theory underlying the delivery of aid. Both the Committee and AusAID are focused on practice not theory. Nevertheless, what can be seen is that the Committee and AusAID accept as fact that the allocation of aid will stimulate development in the less developed world. As a basic principle then, they accept that if the necessary resources and training are given to developing countries development will occur. Of course this is tempered by the fact that if aid is not sustainable benefits will be diminished.

The Australian government believes that aid will generate growth and this will be to the benefit of Australia in the long run. As the Committee of Review indicated, “The prosperity of the developing world is clearly in Australia’s national interest - not only for regional stability and security but also for our own economic future. In an increasingly interdependent world, the people of developing countries are our future partners in business and trade” (CRAOAP 1997, p2). It can be deduced from the foregoing that the development discourse that underpinned Australian aid in the early years was that of modernisation.

Over the years however Australia has taken two separate steps to adjust aid that reflect acknowledgement of criticism of the modernisation concept. Firstly Australia along with other DAC signatories has agreed to untie procurement on a range of projects and agreed to recipient country consultants being assigned to Australian aid projects and in a few countries to local organisations actually managing major projects. This initiative is in response to criticisms of modernisation theory and acceptance of at least some of the issues inherent in dependent development theory. (See Chapter 3). Secondly Australia switched from budget support (in PNG) to projectisation. This adjustment was in recognition of the fact that aid results in PNG in terms of development were very poor. It is in fact a tacit acknowledgement that provision of resources alone will not generate sustainable development.

In the late 1990s Australian aid adopted, at least superficially, the concept of globalisation. The Minister for Foreign Affairs reported the effects of globalisation on Australian aid in the following terms, “Economic globalisation, underpinned by rapid technological change will continue to transform the development process. It has fundamentally increased the importance of trade and investment, and offers huge opportunities and challenges for developing countries” (Downer 1997).

MODERNISATION, DEPENDENCY AND GLOBALISATION DISCOURSE

The problem for AusAID, internally, is that the Australian Government has no clear definition of globalisation and how it actually differs from modernisation. Treasury of course sees it in terms of deregulated and increased trade. But as Schuurman (2001) points out there are as many as nine different views on globalisation. He identifies as "cyberspace globalists", "neo-liberal globalists", "neo-Marxist globalists", "non-globalists" and so on. The point he brings out is that what is usually referred to as globalisation is not a phenomenon in itself, but discourses about a phenomenon.

In the 1950s development was seen as very much part of the modernisation discourse. At the end of the Second World War, when a number of former colonies emerged as independent countries with membership in the United Nations, it was felt that something should be done for the development of these nations. Initially they were referred to as "backward" countries, but soon the politically more correct expressions, "underdeveloped" or “Third World” countries, began to gain currency. Their underdevelopment was attributed to population pressures on the one hand, and lack of capital (because of the inability to generate capital) on the other. With increase in population curbed and capital made available via foreign aid, it was expected that these countries also could reach the modern age of sustained progress which the "advanced" nations had entered a century or two earlier. 85

But development studies soon questioned this unilinear, homogenising modernist approach to development. A distinction was drawn, fairly soon, between overpopulated and underpopulated underdeveloped countries. Then the difference between larger continental economies such as India and small island economies was noted. Modernisation came to be defined as a “conceptual framework that articulated a common set of assumptions about the nature of American society and its ability to transform a world perceived as both materially and culturally deficient” (Latham 2000). Specifically, modernisation theorists posited a sharp distinction between traditional and modern societies. “They took for granted that economic development, from traditional to modern, proceeded along a single straight, unambiguous line. In addition, modernisation advocates expected that contact with vital modern societies would accelerate progress in stagnant traditional societies.” (Thompson 2001).

The assumptions and prescriptions of modernisation are "generally ethnocentric, sometimes implicitly racist, often explicitly anti-communist”(Bernstein, 1993, p152). Many authors vigorously challenged modernisation theory on the above grounds and emphasised the examination of global factors to explain underdevelopment. These challenges were incorporated into a body of neo-Marxist thought that arose in Latin American social science in the late 1960s.

Andre Gunder Frank (1966) initiated the dependency school by proposing that exploitation of the Third World not only went on unabated after the end of colonial rule but became far more efficient, underdevelopment being the result of the economic capture of backward areas by advanced metropolitan capitalism. Frank coined the phrase for the process "the development of underdevelopment".

For him, development and underdevelopment were not just relative and quantitative but relational and qualitative. The same capitalist mechanisms generate both development at the centre and underdevelopment of the periphery. Feudal areas in the dualist jargon are just those that have suffered most in the process. Thus the most backward areas of South America (highland Peru and Brazil north east) were previously the centre of economic and commercial dynamics of the region.

For Frank (1966), the capitalist world economy consisted of a chain of "metropole- satellite" relationships between countries, and regions within them, through which dominant metropoles appropriate the economic surplus of subordinate satellites, enriching the former and impoverishing the latter, thereby creating and reproducing their underdevelopment. The principal mechanisms of draining surpluses from the Third World were uneven exchange in international trade, expatriation of profits from foreign investment and interest on foreign loans, within an international division of labour that is weighted in favour of the metropoles.

Dependency theorists saw development and underdevelopment as functional positions within the world economy rather than stages along an evolutionary ladder. 86

According to Dos Santos, "a relationship of interdependence...... becomes a dependent relationship when some countries can expand through self-impulsion while others....can only expand as a reflection of the expansion of the dominant countries."(Merquior 1993,p146).

Latin American economic thought had been dominated by an outlook identified with the UN Economic Commission for Latin America. Its mentor, the Argentinean economist Raul Prebisch 1963, 1976, believed that Latin America's underdevelopment reflected its peripheral place in the world economy and resulted from the adoption of free trade policies as the region's commodity exports suffered from a secular decline in their prices. Latin American producers, unlike the grain producers of nineteenth century areas of white settlement, were not reaping the big profits from free trade.

Globalisation in contrast includes a spatial reorganisation of production, an increasingly common interpenetration of industries across borders, “the spread of financial markets, the diffusion of identical consumer goods, massive transfers of population, resultant conflicts between immigrant and established communities in formerly close-knit communities, and an emerging world-wide preference for less statism and more democratic decision-making” (Mittelman 1997, p2). “Discussions of globalisation (culturally) describe a process by which the world is becoming increasingly interconnected and unified, subject to homogeneous and uniform processes of cultural unification” (Thompson 2001).

Left leaning critics define globalisation quite differently, presenting it as a worldwide drive toward a globalised economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments (Globalisation Guide 2002). All globalisation critics agree that globalisation is a capitalist process. Globalisation can therefore safely be defined as the rapid integration of cross border economic, social and technological exchange under conditions of capitalism (the effects of which are open to debate). Globalisation and modernisation both prescribe a unidirectional and homogenising ethos. Modernisation is however deeply anchored in the role of the state, the nation state, whereas globalisation is said to result in the weakening of the state, definitely in economic matters.

While it is evident that development theory underpins and affects Australian aid it is clearly not well articulated in the documentation and has minimal impact on day to day activity. Moreover, the primary objective of aid (poverty reduction) is not pursued in terms of the prescripts of Australian aid’s attraction to globalisation concepts. In other words Australian aid strategy is not sufficiently aligned to globalisation concepts. Australian aid strategy focuses on social infrastructure but fails to address global capitalism and the need for increased and deregulated trade. It simply assumes that the private sector can effectively take on the challenge of engaging in the global export market.

In essence, despite the rhetoric of globalisation, AusAID remains entrenched in the old concepts of modernisation and its programs and projects still portray this philosophy of development. Most program activity remains in the social infrastructure 87 sectors and scant attention is paid to economic development of recipient countries other than through creation of an ”enabling environment” for such development.

SAMOA AS AN EXAMPLE OF AUSTRALIAN AID

The above situation is best understood in terms of a specific country setting. The situation with Australian aid to Samoa is not unlike that of other countries in the Pacific. There is a AusAID Country Program where Australia, supposedly in concert with Samoa, sets development priorities and institutes programs and projects to improve capacities/facilities. The latter sections of this thesis will demonstrate that priorities chosen for programs are not always those of Samoa and that the projects undertaken are still those largely dictated by an underlying acceptance of modernisation theory.

The Projects undertaken are largely in the social infrastructure sector and the “enabling policy” environment. Little emphasis is placed on economic development projects. Those that have been attempted (for instance, in agriculture), have failed. A detailed review of specific projects will be undertaken. In 2002 AusAID reported its activities in Samoa as follows:

In 2002-03 Australia will continue to support Samoa's ongoing and successful economic and public sector reform efforts through institutional strengthening and capacity building activities. Australia and Samoa will carefully monitor these activities to ensure achievements are consolidated and improved systems and skills are sustained. In particular, Australia will continue to assist the education and health ministries to improve service delivery, with a heightened emphasis on ensuring the benefits are as widely distributed as possible. Australian institutional strengthening assistance to the Public Service Commission will support the Samoan Government's renewed efforts to rationalise public administration….Australia has commenced new activities aimed at strengthening the management of the agricultural sector, including quarantine services. The design of a longer-term activity to improve the professionalism of the Samoan Police Service will be completed in 2002- 03. (Downer 2002).

The above Program activity clearly shows AusAID continues to concentrate on institutional strengthening and policy reform in Samoa. This situation is consistent across its entire development assistance portfolio. Modernisation theory underpins this emphasis on assistance through institutional strengthening. Little is being done to actually increase production of goods/services so as to partake in the opportunities for globalised trade. The thesis will review selected AusAID projects in Samoa as case studies in respect to the effects of Australian development assistance. The next chapter will review the history and culture of Samoa to ensure that there are no underlying variables that would adversely affect the results of Australian aid inputs.

CHAPTER 5 HISTORICAL AND CULTURAL CONTEXT OF SAMOA

This chapter seeks to determine if there are local historical factors that affect the direction and speed of development in Samoa. The chapter examines Samoan ancient and modern history and explores the effects of culture and religion. If culture are religion are strong and effectively ‘anti-development’, then the speed of development and the type of development that is possible within a short timeframe may be affected. This chapter will explore whether the history, culture and religion of Samoa affect development outcome. It will assess the effects of the inculcation of the Samoan Way (fa’a Samoa) into society. It will address questions like - Is the matai system intrinsically undemocratic and anti-development (in western terms)? Does it stand in the way of swift development progress as it maintains and fosters a system of privilege within society and the public service where inefficiency may in fact be rewarded? Does it effectively stifle good policy making and it reduce the possibilities for effective land usage? Or does the matai system actually protect Samoa from the "Gold Coast" or unbridled capitalist globalisation versions of development? Regardless, in the Samoa context, are there limitations on development imposed by the matai system and the churches?

This chapter will review the history of Samoa and try to demonstrate the relative intensity/strength of societal systems. The chapter tests the proposition that the Samoa societal systems are inherently strong and that they do affect development outcomes. The chapter is of particular importance in that if Samoan societal systems do restrict development outcome they do so against the professed desire of the Samoan government. Often in development literature there is discussion concerning inappropriate Western development being imposed on native cultures. (See for example Sen,1999). This chapter will explore whether this is actually so in Samoa or whether local culture actually constrains the desired development process.

In pursuing this proposition it must be remembered that the thesis is investigating whether Australian aid has been sustainable. This does not imply that if Samoan history and culture have impeded sustainable development, that they are somehow necessarily bad or inferior. It simply implies that they are not conducive to western style development objectives.

THE DEVELOPMENT IMPACT OF HISTORY

There is a phrase “history repeating itself”. The implication is that history is cyclical. A similar theme is inherent in the concept of the “rise and fall of nations”. The assumption is that history does impact on the present and the future. Many scholars point to situations such as Northern Ireland, the Balkans and the Middle East as examples for this proposition. (Livingstone 2001, Pavlidis 2002). From this perspective, the problems of today are rooted in history. Similarly, it can be proposed that history and culture may affect the development of nations. If history or culture determines development outcome, then it is possible that Australian aid to countries like Samoa will fail to engender development.

Elliott and Harvey (2000, p 393-401) pursue the history debate by arguing in a case study on Jamaica that: “…development problems will never be solved by policies that ignore the fundamental underlying problem: the vast inequities in power arising 89 from…political, social, and economic history”. There is an implied causation between economic progress and cultural values. For example capitalist institutions did not just magically appear. “They are products of specific historical circumstances, which the researcher must take into account in order to develop a more complete (although less ”parsimonious”) explanation for why some countries are poor and some are prosperous” (Lim 2003, p 79).

Rationalists also see the importance of history “in the sense that events in the distant past can initiate particular chains of causation that have effects in the present (Levi 1997, p 28). This path dependence is used by North (1990) to explain why Spain the most powerful 16th century state collapsed. A series of external problems (including a revolt in the Netherlands, development of new technologies and a decline in the flow of tribute from the New World) put pressure on Spain to the point of bankruptcy. While the problems were acknowledged by the Crown and bureaucracy they could not, ”alter the direction of the Spanish path in spite of their awareness of the decay and decline overcoming the country” (ibid, p115).

In respect to the influence of culture on development, Lawrence Harrison (1985), in his book Underdevelopment is a State of Mind, presented the ideological gambit in the resurgence of the concept of culture. He emphasises that the reason some countries and ethnic groups are poor may be found in a culture- an inability to change values and attitude. He stirs a new debate about the role of culture in development. Since then there have been numerous accounts proclaiming the rehabilitation of “culture” in the analysis of economic and political development. Notable among these was Samuel Huntington (1997) who strongly affirmed the importance of culture as the primary variable for both development, and the conflict generated by that development. He asserts that the world is divided into eight major “cultural zones” based on cultural differences that have persisted for centuries. These zones were shaped by religious traditions that are still powerful today, despite the forces of modernisation11.

Harrison and Huntington (2000) continue the above theme in the book, Culture Matters. The authors see themselves as the intellectual heirs to Tocqueville who concluded that what made the American political system was a culture congenial to democracy; Max Weber, who explained the rise of capitalism as essentially a cultural phenomenon rooted in religion and Edward Banfield, who suggested that poverty in Southern Italy was grounded in culture. The leading article by David Landes begins with a statement “Max Weber was right.” (p2). Weber (1958) argued that European capitalism was predicated upon a unique and fortuitous combination of a particular institutional matrix and certain cultural values (or “spirit”). In subsequent works on India, China, and the ancient Hebrews, Weber presented contrasting cases of situations in which either the institutional or cultural environment was not conducive to the development of rational capitalism. There has been a return to the scholarship of Weber by a number of social scientists that commonly refer to themselves as “neo- Weberians” such as Mann (1986), Holton and Turner (1989), Swedberg (1998). What Landes didn’t mention is that while all neo-Weberians such as Bilig (2000,

11 The zones are Western Christianity, the Orthodox world, the Islamic world, and the Confucian, Japanese, Hindu, African, and Latin American zones. 90 p771-788) stress the importance of culture, they do not consider culture as either a separate, or isolated from social, political, and economic life.

What Harrison and Huntington manage to do is to weave a theme through the articles in their book, that culture affects the success of aspects of development (For example, education, health, law and justice institutions). In doing so, they do not berate certain cultures for failing to perform in the capitalist world but rather seek to understand the reasons for under-performance. They highlight the “transaction costs” that culture may impose on a country and thereby affect its development potential.

There are however dissenting voices such as De Soto (2000) who rejects culture and history as explanations for economic backwardness. De Soto suggests that it is institutions that facilitate development rather than culture and history. Regardless, history and culture are worthy of consideration when reviewing the development of a country like Samoa. This is because Samoa has such a long history and a strong cultural and religious framework and may serve to support one of the above theories.

This chapter acknowledges the importance of culture and history in the context of development. It interprets culture as not being “a set of primordial phenomena permanently embedded within national or religious or other groups but rather a set of contested attributes, constantly in flux, both shaping and being shaped by social and economic aspects of human interaction” (Rao& Walton, 2004, p2). It seeks to analyse the history of Samoa and deduce whether or not it affects Samoan development today and will continue to do so in the future. It is important to analyse whether history determines development or is merely of limited contextual importance. In other words does history define or influence the development process but not the result.

History is by definition related to the knowledge of past events and in Samoa history was traditionally transmitted via oral means. The absence of a written script in Samoa necessitated strong oral traditions with songs, poems and family histories being passed from one generation to the next. Each member of a family was required to learn the family genealogy since this generally related to the claims to land titles as well. Because everyone learned the same histories it was very difficult for one person to alter history, or for errors to occur without them being detected. However, as time passed the earliest ancestors appear to have acquired mythical status. As Watson (1918, p 22) indicated:

Such tradition as has yet been preserved to the Samoans groups itself naturally under the three heads of war, national custom and legend, and family descent. Matters of family descent were carefully transmitted from father to son through many generations - the favoured place being the village green on the white nights of the increscent moon - and pedigrees are still given in the establishment of family names with definite assurance and with the agreement of opponents; national customs have greatly survived, but with modification; their legends, quietly slipping from the memory of the people, have been extensively recorded by many earlier settlers, and especially by missionaries.

Consequently, there are limits to the type of analysis that can be conducted regarding the effects of history and culture on development. This section therefore seeks to analyse the major historical, traditional, cultural and religious views of Samoan society and compare this situation with their relative importance today.

By tracing the strength of Samoan culture, belief systems and religion from the past to the present, it is possible to ascertain the effect they may have on future development. Basically, the methodology adopted to determine if history and culture have affected Samoan development prospects is to examine history and the nature of Samoan culture, belief systems and religious views and assess how they have affected the development of Samoa to date. If these variables have affected development, the next step is to consider whether they still impact on society today, will they therefore influence future development prospects and if so how and to what extent?

In this section, it is not intended to give an exhaustive chronological account of the history of Samoa but rather look at Samoa in an historical context - to review its traditions and culture as they might affect future development of the country. In this process no contemporary analysis of Samoan history would be complete without examining the impact of Christianity. Hence the following account focuses on provision of details and explanations of the traditional Samoan authority system/ culture and the impact of Christianity.

ORIGIN OF SAMOA

The islands of Western Samoa were first settled about 3,000 years ago, after a very gradual migration eastwards into the Pacific from people originating in South East Asia. Samoa, it seems, was the cradle of the Polynesian culture, and archaeological evidence suggests settlers from Samoa then spread to the other islands of Polynesia including Hawaii, Tahiti and New Zealand. The oldest known site of human occupation is on the western edge of Upolu at Mulifanua where traces of Lapita pottery have been carbon dated at about 1,000 BC. Archaeologists have pondered for decades over the origin, purpose and use of the many prehistoric structures which are scattered over the islands. Many have been lost under centuries of dense jungle growth but many are still visible today.

While the origin of the Pacific people has been fascinating foreign researchers since the arrival of the Europeans in the Pacific, the Samoan perception and philosophy however, discounts all western theories as baseless12.

Samoans have always stated strongly that Samoa, of all the Pacific islands has a different story of origin. All the other islands have in their songs, their dances and their oral traditions, a grave desire to return to their homeland known as Hawaiki, the golden land of the Polynesians. All the poetry, hymns and stories of Polynesian talk of Pulotu, the reposing realm of the souls of the High Chiefs and the common people. While the other Polynesians feel that where they have inhabited is not their original land, the Samoans say: O Samoa na ifo mai Lagi - Samoa was lowered from heaven.

12 For a full account of the stories of Samoan creation see http://www.samoa.co.uk/creation.html (Accessed 31 October 2003). 92

Samoa then, according to the Samoans, originated from Heaven. It was created and bred by the "Hidden God", Tagaloa-Lagi. “Tagaloa, the principal deity, created the islands, and from him were descended the founders of the most ancient human lineages, villages and political institutions. First there was the primeval void, giving way to natural phenomena which in several generations produced Tagaloa and the forces and materials with which he created Samoa and begat mankind” (Gilson 1970, p 40).

Ever since their creation, Samoans believe they have lived and populated the six main islands, Manu'a, Savai’i, Upolu, Tutuila, Manono and Apolima. This belief is one of the unquestionable foundations of the Samoan identity that is nationally respected and treasured. In the ancient phase of Samoa's history, there are four main legacies or Tofigas. The ancient history of Samoa is however clouded in mystery and because of oral traditions any interpretation must, in consequence, be a mixture of fact and myth.

SAMOAN ANCIENT HISTORY

The following summary of Samoan ancient history is just one interpretation and opposing views are readily evident in Samoan literature. For instance, the myth of Nafanua is well known but there are a number of variations to the story. Another version of the Nafanua story is that of the 13th Goddess.13 The version of history described here is largely based on and adapted from the academic work of Padre Takito Pili Fido (1995). This version of Samoan history serves to illustrate the strength and complexity of tradition and legend that is integral to Samoan culture.

This version of history clearly demonstrates the extremely strong impact that culture and religion have on the Samoan psyche. It provides a deeper understanding of the reasons behind the way Samoan’s continue to think and behave. In Samoa today, ancient history is still part of village life. The myths and legend are intertwined in modern culture. The actions of Samoans today are, in large part, still guided by precepts from the past that are embedded in the family group and in mind of each Samoan from birth. For these reasons it is worth recalling Samoan legend and tradition in some detail.

First, Tofiga - Legacy of Tagaloa-Lagi

According to Fido, the creation of Samoa is based on two fundamental beliefs:

“Firstly, Samoans believe in the Hidden God, that is all powerful, who exists everywhere, acts as he desires, and has the Mana. This God's name is Tagaloa-Lagi, who gave origin to Samoa.

Secondly, the Tofiga or legacy of Tagaloa-Lagi is that Samoa will be governed by the matai. The authority of the matai originated from Tagaloa- Lagi. The Mana of the God is also bound to the matai. It is also the origin of the fa’a-Samoa embodied in the matai system that is the pumping heart of all the Samoan Legacy” (Fido 1995, p6).

13 http://www.uvm.edu/~sawhite/13goddessnafanua.html (Accessed 7 June 2003) 93

All the paramount and high ranking and sacred titles of Samoa are linked to Tagaloa- lagi. The Samoan identity then, is sacred and unquestionable as derived from this Tofiga of Tagaloa-lagi.

Second Tofiga - Legacy of Pili

PILI - was the son of Tagaloa-Lagi and Sina-Le-Ana the daughter of the Tui-Manua. He descended from the ninth heaven and performed great human deeds in the Islands of Samoa. The legends cast him as the greatest fisherman, the strongest and most fruitful farmer, the fiercest warrior in the wars, and the most compassionate orator of the land. He married Sina, the daughter of Tavae-tele from the western side of Upolu and had three sons and a daughter. As he became older, he called his sons and made his testament for the Division of Upolu. ANA - was appointed to rule the western side of Upolu, forming the district of A'ANA; the seal of his rule was the Spear and the Club of Pili. His Capital was Malae o le Vavau (later changed to Leulumoega). The Sacred Title is TUI-A'ANA. TUA - was given the eastern part of the island Pili gave him his 'Oso' or planting stick as token of his authority. His capital was Lufilufi. The district was called ATUA, with the Sacred Title of Tui-Atua. TUAMASAGA - was chosen to rule in the centre between the twins Ana and Tua. Pili gave him as token of authority his "Fue and To'oto'o", the whisk and talking stick. His capital was Faleula, the district was called TUAMASAGA. TOLUFALE - was assigned Aiga i le Tai that covers Manono and Apolima islands as her home without any authority in the first government of Samoa.

Pili then created the traditional political division of Samoa which still exists and is recognised today. Savai’i was called PULE, with six seats of authority, Palauli, ltu o Palauli, Satuipaitea, ltu o Satupailea, Safotu and Vaisigano.

Animosity developed between the brothers after Pili died. The government lost its unity subjecting the country to easy advances of the Tongans who established their rule at Aleipata on the southern tip of the island of Upolu. Tongan rule of Samoa lasted about six to seven hundred years.

Samoa was finally liberated from the Tongan rule by the brothers Tuna and Fata who re-opened another chapter of the Tofiga of Samoa.

Third Tofiga - Legacy of Atiogie

Atiogie was the famous son of the "Fe'epo". Atiogie was the father of the two heroes who liberated Samoa from Tongan rule. Tuna and Fata with the help of their sister's son Ulumasui, who was said to have sacred powers, drove the Tongans out of Samoa.

Talaifei'i, the Tui Tuitoga or Tongan King, parted with the famous words that founded the Paramount Title 'Malietoa'

“Ua malie toa, ua malie tau, o le a ou alu ou te le toe sau, afai ou te toe sau o le a ou sau i le aloalo folau, ae le o le aloalo tau”.

Translated it means:

"The warrior (toa) is assuaged, the war/fight is settled, I am returning never to come back, if I should return it will be over the waves of voyaging, not the waves of war." (That is, I have enjoyed our fight warrior - if I ever come back it will be as a friend not as an enemy).

Following the defeat of the Tongans, Atiogie made this new Legacy for the district of Tuamasaga. SAVEA, the eldest son will be the first 'Malietoa', and his seat of authority will be at MALI E. TUNA, will be the 'ITUAU' of the Malietoa authority, they will be the northern defender of the rule. Its capital will be Faleata. FATA, will be the 'AL-ATAUA' of the Malietoa. He will be the southern defender of the Rule and his capital will be at Safata.

In this way the Malietoa family started its progressive rule for many years. The most significant reign was that of Malietoa Uilamatu'u, who was known as the Tamafaiga, who feasted on human flesh. The practice was broken when the King’s own son Poluleuligana offered himself, plaited like a fish in a coconut palm leaf for the King's daily meal. The King put an end to his practice and forbid cannibalism in the land. It was during the reign of Malietoa Laauli that the two highest sacred titles of Tuamasaga were consecrated. These were GATOAITELE and the TAMASOAALII. During this period of the Sa Malietoa family rule, Tuiaana Tamalelagi was born from an inter marriage between Malietoa and other paramount-ranking families. On the night of his birth, the two wily matais, Tutuila and Ape of A'ana stole the baby boy and fled to Nofoaiii. From there, they took the royal child to Alipia, a high-ranking matai of the court of A'ana. After resolving the problem with the boy's family, Alipia took care of him. From that day, the name of the village was changed from Malae-o- le-Vavau to Leulumoega, when Alipia's daughter prepared a special bed for the royal child. As evidence of the effect of history in Samoa the village of Leulumoega still stands on the island of Savai’i.

Fourth Tofiga - Legacy of Nafanua

The Legacy of Atiogie completed the Tafa'ifa or the 'Four-in-One' - the four sacred titles that determine the King of Samoa. These were Tui Aana, elected by the court of Leulumoega for the district of A'ana. Tui Atua, protected and served by the court of Lufilufi for the supreme rule in the district of Atua. Gatoaitele, is preserved and elected by the court of Faleula and Malie for the district of the ltuau of the Malietoa. Tamasoali'i, is protected by the court of Safata for the district of the Alataua of the Malietoa. Each district, after the establishment of the sacred titles, employs political leverage to acquire honour and prestige for their high chiefs.

The Faleupolu (orators courts) with all their skill in their profession, worked their ways through marriage lines between the high-ranking families in the country. Through this way the election of candidates to the sacred titles slowly slipped from the appropriate families but to the hands of the scheming Faleupolus. Such professional machinations were quite evident in the rise to power of Tui-aana Tamalelagi, who through numerous marriage lines arranged by the Faleupolu, rose to the highest rule in the land. Unfortunately, he acquired a lot of enemies in the 95 families of the dropped Taupous of the Tuiaana family. After his marriage to Vaetoifaga, daughter of the Tui Toga, he was assassinated by his enemies.

Nafanua - Goddess of War

The epoch of Nafanua was characterized by the multiple presence of people with two- natures, (itu-lua) human and supernatural. Every family, village, and district have their ‘aitu or atua. Atua refers to the earth originated gods. In the hierarchy of the acts of ancient history, Nafanua, the Goddess of War has a very prominent position because of the great deeds she performed for her district and for the country. Etymologically, the name Nafanua describes its origin, Na - hidden and Fanua - land, to mean “hidden in the land”.

Nafanua's origin was of Pulotu - the home of the spirits of the dead. Her father, was the fierce and cannibalistic god of Pulotu named Saveasiuleo who was regarded as the guardian of the realm of the under world - the place where the souls travel to after death. Nafanua's mother is Tilafaiga, one of the twin sisters that brought the tatau (tattoo) from Fiji. They swam across the sea chanting 'the tattoo was for women' but on arrival at Falealupo they changed their song that the ‘tattoo was for men'. (Nowadays, the tradition of the tatau is chiselled on the young men. Women do receive a less ornate version in the form of the malu. The tatau is seen as an indication of manhood and both the tatau and malu are seen as signfying a person as being Samoan. Tradition continues to be highly regarded in Samoa)

Nafanua was born as the result of an incestuous relationship between Saveasiuieo and Tilafaiga who was the daughter of Saveasiuieo's younger brother. When she gave birth she hid the afterbirth in the earth. She was not only ashamed of the illegitimate birth but she also feared that her father would devour her if he knew the baby was born.

War Fame of Nafanua

The fame of Nafanua began with the war between Eastern and Western Savai’i. The East had been winning the war and had been treating the defeated side cruelly. The shameful things included making the matai’s of Falealupo climb the coconut trees with their feet upwards and then making them pluck the nuts with their toes. Nafanua heard from the underworld the gasps and sighs of the matai’s in pain. The goddess decided to liberate them from the oppressive power of the enemy. She summoned her forces to battle.

Wielding her warclub she led the liberation campaign. All her forces had the distinctive war sign of the titi made of coconut leaves. She also covered her breasts with leaves to hide that fact that she was a woman. She routed the Eastern part of Savai’i and raised the West to a position of honour and respect. In the meantime, in Upolu, the scheming faleupolusa bid to acquire the four sacred titles was heading to a full scale war. There was open fighting between the competing factions. The only means of resolving the family disputes was to go to war. Oral history speaks of the terrible consequences of the War for the Titles.

In her bid to maintain stability and harmony in the country, Nafanua offered to intervene. As compensation she was to take the titles to her headquarters at Faiealupo. Her forces sided with Tui Aana Tamalelagi in the war for the Tui Aana title against Tui Aana Sagate. Tamalelagi won and became the sole ruler of the Aana district. The glory and the authority however were taken by Nafanua to Falealupo. It was the same with the Title war of the Tui Atua where Nafanua's forces were requested by Tui Atua Foganiutea against Tui Atua Foganiu'ula. Foganiutea won the battle and remained the sole power in the Atua district. The authority and title instead were transferred to Falealupo.

In the Tuamasaga district, disputes were mounting within the Malietoa family. Malietoa Falefatu sought Nafanua's support again in his struggle for the Gatoaitele title. Falefatu won the dispute and his title was taken by Nafanua. It was the same with the title dispute at Safata where Nafanua helped out.

With all the titles, Nafanua had acquired all the seats of authority in Samoa. She had secured the paramount titles of Tui A’ana, Tui Atua, Gatoaitele and the Tarnasoaalii. With this unique situation, she could have been the first holder of the "Four-in-One" title, the Tafaifa. She however considered herself only as a guardian of the titles in order to create a peaceful reconciliation between the divided districts and families. Nafanua then appointed her priest Tupa'i to be her ambassador in all the ancient capitals of the country.

Prophecy of Nafanua

The sacred titles were still in Nafanua's care at Falealupo. From all parts of Samoa, the faleupolus landed at her headquarters as emissaries of their chiefs who sought a share in her kingdom. One of day, the court of Leulumoega landed and presented their petition for a share in the kingdom. Nafanua accepted the court and compromised by asking the visitors to shift her house from Analega to Fili- ma- Puletu'u. In return she would consider their petition. The court of Tui Aana obliged and acted immediately. Through this work on Nafanua's house, some high-ranking titles of Leulumoega village were conferred, Agilau, Lauvao, Lepou and Leuli.

The completion of the work was marked by feasting and the traditional ceremonies - the falaulufalega. During the feast, Nafanua called upon the court of Leulumoega, congratulated them for the work well done. For the tautua (service) rendered, she would give them the head of the kingdom (Ao o malo).

The court of Leulumoega was greatly honoured. Nafanua instructed them to await the dawn of the next day when she would come to establish the new kingdom at Leulumoega.

On the appointed day, Nafanua and her travelling party arrived tired and thirsty and anchored beside the Mataiva, the private pool of the Tui Aana. Nafanua asked for some water but the young servant girls refused stating that the fresh water is only for the Tui Aana. Offended, Nafanua ordered her group to set sail for Savai’i. Nafanua therefore never fulfilled her promise to install the headquarters of the new kingdom at Leulumoega.

Salamasina- the first ‘Four in One” – Tafa’ifa of Samoa

Nafanua wanted her daughter Soomalelagi to be the Tafa’ifa. So She sent her priests, Auva’a and Tupa’I to Leulumoega to consecrate her. Soomalelagi declined Nafanua’s wish on the grounds that she was too old to face the faleupolus. Soomalelagi suggested then to her brother Tupa’I to relate to Nafanua that it would be wise to bestow the honour on Salamasina, her adopted daughter. She had all the royal blood of the paramount families of both Samoa and Tonga. Tupa’I then returned to Savai’i to confer with Nafanua. After some time, Nafanua accepted the proposal. Leulumoega was prompt to prepare the biggest feast ever in the A’ana district. Bestowing the ‘Four-in -One’ title on Salamasina rendered her supreme ruler over Samoa. It also completed the first part of Nafanua’s Prophecy. The Saofa’I (title conferring ceremony) of the young Salamasina took place at the malae of Ma’auga ma Nu’uausala. Alipia together with three divisions of Aana gave a grand reception to all Samoa who gathered to participate at the first conferring of the “Tafa’ifa’ title. With the help of her adopted mother Soomalelagi, Salamasina’s rule gave Samoa one of the most peaceful times despite its quarrelsome history. Leulumoega became the refuge of all Samoa.

Nafanua’s Prophecy to Malietoa

After the reign of Queen Salamasina, Samoa returned once more to war to solve the internal divisions and title disputes. After Salamasina, the only other successor to hold the Tafa’ifa title was Fonoti. Malietoa was slowly rebuilding its glory once again. The headquarters were now at Malie in Upolu and Sapapalii in Savai’i. When Malietoa Fitisemanu won the divisional wars he did not feel secure with his victories. So he consulted Nafanua at Falealupo. He wanted to know about his share of the kingdom. Nafanua felt sorry for Malietoa for he arrived too late and the divisions had already been made. The head of the kingdom had already been taken by Leulumoega and there was only the tail left. Nafanua urged Malietoa to take the tail of the kingdom and await for the “Head” that will come from heaven to complete his kingdom. “Talofa ua e sau ua ave uma ao o malo. Ua toe nei na o ‘iu o malo. Ae tali ia I lagi se ao o lou malo”

ANCIENT SAMOAN CULTURE

The preceding section demonstrates that prior to the arrival of western traders and missionaries, Samoa had a very strong culture founded in past myth, national custom, and family descent. This was reinforced by a hierarchical village matai system. The strength of myth, and history on the Samoan psyche is further illustrated by Bargatzky (1991, p 413-25), Charlot (1991, p 127-50), Gilliam (1993, p 105-115), Grattan (1948), Herdrich (1991, p 381-435), Holmes (1967 & 1987) and Hovdhaugen (1987). This did not imply that there was harmony within Samoan society but rather that there was an order to things. The many wars that took place among the Samoan’s attest to a volatile society. (See Best 1993, p 385-447, Charlot 1988, p 80-85). Further, “the pioneer missionary John Williams, writing in 1832, found that the people of Manono had a record kept by means of collected stones of one hundred and ninety seven battles” (Watson, 1918, p 23). Very strong control was exercised at the village level by the matai under a “code of conduct”, the fa’a-Samoa. This will be examined in the following sections. 98

As will be demonstrated in the following sections, this authority and control structure was used by the missionaries to gain legitimacy and by colonial administrations to maintain control. Only when culture and custom did not suit the objectives of the colonial administrations was it directly attacked. In some cases missionaries supported retention of Samoan tradition/custom as, in part, it gave legitimacy to their (church) elevated position in society. The result has been a gradual erosion of the authority of the matai and fa’a-Samoa despite stubborn resistance by the Samoan establishment (the matai and church). Moreover, while warfare had been a recognised occupation of the younger men in ancient Samoa, Christianity was about to change this forever.

THE COMING OF CHRISTIANITY AND THE EUROPEANS

Before the arrival of the first European Christian missionaries, Samoa, of all the islands of the Pacific was well prepared for the coming of the New Kingdom from heaven. The prophecy of Nafanua to Malietoa is clear. There were also predictions from the other aitus about the coming of the new religion. A ve-i-le-tala predicted that when the god of the new religion comes, he will eat up all the gods of Samoa. There was also the asserted view that there will come a time when Samoa will be full of foreign gods. Dutchman, Jacob Roggeveen, was the first European to sight the islands, in 1722. In 1768, French navigator, Louis de Bougainville, sighted the islands of Samoa calling them the "Navigator Islands" because he encountered many Samoans sailing small canoes far from the sight of the land and assumed they must be good navigators. By the late 1700s, European traders were plying the Pacific and around 1800 ships began to call at Samoa for supplies. By the early nineteenth century, some Europeans (namely, escaped convicts, seamen and whalers) had settled in Samoa. However, by far, the greatest impact of change on the culture and society of Samoa was the arrival of the Western missionaries. The strong influence of the missionaries and their teachings, have made the Samoan people devoutly religious right up until today, with much time and resources devoted to church activities.

The prophecy of Nafanua was considered fulfilled when the first European Missionaries came in the nineteenth century. Malietoa Vainuupo and all Samoa were overjoyed when the Reverend John Williams came in aboard the Messenger of Peace in September 1830 and preached about the Kingdom of Heaven. He was by far the most influential missionary to arrive in Samoa and changed it forever. The Christian religion was accepted without serious problems because the Samoans saw this as the fulfilment of Nafanua’s prophecy to Malietoa Fitisemanu. Christianity then was the “Head” as predicted by Nafanua. The acceptance of Christianity by Samoans is further emphasised by the fact that no missionary was killed in Samoa like in the other islands; John Williams was killed in Vanuatu in 1839, Peter Chanel was murdered in Futuna in l846, and Mons. Epalle was killed in the Solomon Islands in 1845.

The missionaries did three important things to Samoan society. They set about trying to introduce the Protestant work ethic (capitalism), they attempted to dismantle Samoan culture where they saw it conflicted with Christian teaching and they tried to eliminate the system of common interest in each other’s property and they commenced land alienation. 99

Education was to be the missionary tool to achieve the above aims. Originally, the missionaries were concerned only with teaching adults to be literate enough to read the bible themselves but eventually it was used to “ban the activities and relationships, social and personal, that by mission standards were immoral or tainted with ‘heathenish’ associations, and to prescribe the ethics and conventions of puritanism” (Gibson 1970, p 96). This directly attacked the old system of polygamy, divorce, customary marriage rites, public test of virginity, political marriages, exchange of goods and introduced celebration of monogamous marriages, prohibition of Christian and non-Christian marriages, new dress standards and hair styles, internal partitioning of houses for modesty purposes and use of external blinds.

The Missionaries insisted “that the Sabbath should be strictly kept and that habits of industry should be encouraged. In the latter aim was enshrined the dignity of work and with it the assurance that the people would be able to clothe and house themselves properly and contribute to the support of the mission and church” (ibid 1970, p 4).

As Turner saw it “ the system of a common interest in each other’s property … is a sad hindrance to the industrious … No matter how hard a young man may be disposed to work, he cannot keep his earnings: all soon passes out of his hands into the common circulating currency” (Turner 1986, p 170). Thus “included in the colonial missionary agenda was the goal of diminishing the Samoan concern for collective welfare and replacing it with Western individualism” (Cote 1997, p4). As Meleisea puts it the missionaries acted as ”shock troops” for the onslaught of Western economic practices based on the profit motive (Meleisea 1987, p 18). The missionaries sought to make Samoans more industrious and one strategy for achieving this was by introducing goods that required access to money. The introduction of wage labour provided Samoans with cash and in the process assuaged the missionaries as Samoan labourers were seen as productive.

The missionaries commenced the process of land alienation. Not only did the missionaries obtain land but so did the traders. “To one another, and to the beachcombers who lived among them, the Samoans voluntarily conveyed various rights in land but not as a rule in a manner corresponding to European practice, for example, to the gift, sale or fixed term lease of freehold……..It was to help secure for themselves the services of the missions that Samoans first made land available to Europeans on secure tenure” (Gilson, 1970, p 163). As an example, when the London Missionary Society decided to establish a presence in Apia, the chiefs gave permission for the society to use sufficient land free of charge for as long as required. Some of the early mission holdings (such as Malua seminary) were actually secured under title deeds. (See Gilson 1970, p 163 for details).

Traders followed the missionaries. In 1861 Theordore Weber representing the great Hamburg house of Johann Cesar Godeffroy und Sohn set about acquiring land. By 1888 he had acquired, ”tracts of land …(that) amounted to seven thousand five hundred acres, much of it of the cream of Upolu and therefore of all the Samoas” (Watson, 1918, p47). “Many more acres of the best land were bought than could immediately be planted. The higher plateau was to be colonised by the Germans, the sea coast by Chinese who would become indentured labourers” (Masterman, 100

1934 p 67). However, the outbreak of the Franco-Prussian War saw the demise of the plan.

Many of the changes instituted by the missionaries were harmful to Samoans. Cote suggests that this is the case for the Samoan youth. In pre-contact Samoa “every adult Samoan knew how to perform the basic economic tasks appropriate to their sex in order to survive, there were dozens of specialisations recorded by early observers. The basic economic tasks for men were agriculture, carpentry, hunting and fishing; and for women, weaving, tapa making and oil making” (Cote, 1997, p 1-2). Youth had their own institutions that spanned elements of rites of passage and peer culture. Both men and women underwent a tattooing rite. As Turner noted the man who was not tattooed was not respected. Until a young man was tattooed, he was considered in his minority” (Turner 1986. p 87).

Young men were tattooed in their 16th year and were indicted into the ‘aumaga or group of untitled men. The ‘aumaga was responsible for undertaking work tasks and village maintenance. Young women of fourteen and over had their own institution - the aualuma14. In pre-contact Samoa the unmarried women in the aualuma would live together, separate from the adults. A man in pre-contact Samoa could only leave the ‘aumaga “upon being conferred with a matai title. Otherwise he would remain in it for life” (Cote 1997, p 3).

Cote suggests that these institutions were destroyed by the missionaries and in the process “diminished the status of young people in Samoan society – culturally disenfranchised them – because the institutions they destroyed had guaranteed them basic rights as persons” (Cote 1997, p 5). The aualuma was to first to go with unmarried girls required to live with the pastor and his wife where they learned to cook in an European way. The aumaga did not directly threaten the church and as such its demise took much longer.

What the missionaries did with education was to “drive a wedge between many young people and the ancestral culture. Most devastating to Samoan culture is the fact that mass education has led to a decline in respect for ancestral wisdom, and for those who posses it. The respect for the elder was once a mark of this culture but has diminished as successive generations of children learned competing sources of values and knowledge” (Cote 1997, p 7).

In most villages in Samoa there is little co-operative labour, except in the service of the village pastor (O’Meara 1990). Instead individual wage has replaced co-operative labour.

In summary the missionaries changed the culture of Samoa forever. They dismantled an ancient system with its societal checks and balances and partly replaced it with one of European origin. Samoa became bicultural and this caused a schism in society, remnants of which is still obvious today. Succeeding generations of Samoans were denied traditional rites of passage by the missionaries, and were told that they could prove themselves as individuals by being successful economically in

14 See Meleisea (1987) for a full description of the roles of both institutions.

101 an occupation or career. Unfortunately, this has not turned out not to be true as the jobs are simply not available. For many Samoan youth the Western prescription of value has turned out to be a poor substitute for the guarantee of status and worth afforded under the fa’a-Samoa system.

TRADITIONAL AUTHORITY IN SAMOA

Most of the Europeans that observed Samoans and their customs considered that there was a lack of firm political control and the natives were basically ‘children’. This view of Samoa seemed to permeate all colonial administrations. It was however a view borne out of the belief in a superior European culture and the concept of the “work ethic”. It was moreover a view derived from a poor understanding of the Samoans and their culture. According to Howe, “Samoans, like Maoris, did not create for themselves a politically centralised country as did the Tahitians, Hawaiians and the Tongans” (Howe 1984, p30). Colonial administrators like Wilhelm Solf described the Samoans as ”… the natives are ignorant, they have to be instructed, they are lazy and have to learn to work…the natives are savage, cruel and superstitious, they must be soothed and illuminated: they are all big children in need of education and loving guidance” (Solf 1907, p1-2 & 31).

This same benevolent view of the natives was inculcated in the New Zealand administration. It was expressed thus, ”..in his native state (he) is mild friendly and hospitable and easily led by those who have earned his respect. At the same time he has all the faults natural to his imperfect development, and key to his proper understanding is that he is still a child, well mannered and attractive when pleased, but at all times capricious and wayward, with primitive passions easily aroused” (New Zealand Administration 1925, p41-42).

A more balanced view is provided by Meleisea, himself a Samoan, where he suggests that Samoa had a unitary system of dispersed power. He states, ”Samoan oral traditions also attest to periods in which a single national authority was recognised, and the idea, if not the reality, of a centralised Samoa has existed for many centuries as is evidenced by the existence of a fa’alupega. A fa’alupega is a set of ceremonial greetings that are recited when the fono (governing council of the village) meets. It serves as a constitution and encapsulates, in a few phrases, the origin and rank of each constituent title in the nu’u (village)” (Meleisea 1987, p1-2).

The Samoan system of a decentralised political authority via the nu’u was an anathema to the Europeans. They wanted their traditional centralised system installed so that they could more easily control the Samoans and develop the society/country. What the Europeans failed to realise was decentralised authority did not equate to no authority. In fact there was very real authority exercised in Samoan society. The nu’u was more than just a village, it was a territory which was, “collectively owned and controlled by a number of bilateral, corporate descent groups termed ‘āiga. A nu’u comprised 200-500 people and was politically autonomous with its own hierarchy of leaders, and historical traditions or charter summarised in the fa’alupega” (Meleisea 1987, p5-6).

In relation to the nu’u each ‘āiga was associated with a particular matai title. The matai was the political representative of the āiga and the custodian of the ‘āiga’s land 102 and property. The ‘āiga bestows the title on the recipient. “In the fono irrespective of the rank or status of his tile, every matai has dignity and authority as the head of this ‘āiga. However the fono was ranked by the ascribed status of each of its constituent titles ..” (Meleisea 1987, p8). Matai titles are of two types: ali’i and tulafale. The former titles traced their originals back to the major aristocratic families. The latter titles related to performance of service for and oratory on behalf of the ali’i. This picture is further complicated by the fact that ali’i titles were not necessarily of lesser rank than tulafale titles. Some were of higher status. Moreover a title could be elevated or demoted by the actions of those who held it over time.

What matai titles did, inter alia, was to bestow power and authority. For example distribution of food was organised in accordance with the hierarchical nature of Samoan society. “Goods flowed to those who redistributed them, a process which reinforced chiefly authority and encouraged the wide distribution of resources. For example when fish and pigeons were caught in quantity it was not only not permissible, but impossible for the catch to be consumed merely by those that had caught them. Scarce resources were distributed through the highest chiefs, who redistributed them to lesser chiefs, who shared their portions with their households” (Meleisea 1987, p9).

POLITICAL DECENTRALISATION, WEALTH AND DECISION MAKING

This decentralised and communal system led some like Stevenson (1892, p17) to muse, ”The particular drawback of the Polynesian system is to depress and stagger industry. To work more there is only to be pillaged: to save is impossible”. This same situation in respect to aggregation of personal wealth in a village persists in Samoa today. It is still difficult for the average village dweller to acquire personal wealth. This situation is common throughout Melanesia and Polynesia. In Papua New Guinea, as an example, an officer was retiring with a lump sum pension from the public service. He booked himself into an expensive hotel for three months in Port Moresby, played poker machines and spent his money. When questioned by the writer as to why he would waste it so, he replied that if he went straight back to his village his wontoks would take money from him and he would get nothing. At least this way he was able to spend his money and enjoy himself. Aggregation of wealth in either Polynesian or Melanesian society is very dificult to achieve given the need to observe cultural obligations.

The Europeans were however correct in their view that the Samoan political entity was not conducive to fast decision making and therefore was out of step with the modern industrialised society of the period. This is nowhere more apparent than in Stevenson’s descriptive passage concerning the war of 1893.

“there was nothing left but to fall back on an "Election according to the laws and customs of Samoa" - by the arbitration of rifle bullets and blackened faces. …... Mata'afa lay in Malie. He had an armed picket at a ford some two miles from Apia, where they sat in a prodigious state of vigilance and glee; and his whole troop, although not above 500 strong, appeared animated with the most warlike spirit..

103

The process of gathering a royal army in Samoa is cumbrous and dilatory in the extreme. There is here none of the expedition of the fiery cross and the bale fire; but every step is diplomatic. Each village, with a great expense of eloquence, has to be wiled with promises and spurred by threats; and the greater chieftains make stipulations where they will march. Tamasese, son to the late German puppet and heir of his ambitions, demanded the vice- kingship as the price of his accession, though I am assured that he demanded it in vain. The various provinces returned various and unsatisfactory answers. Atua was off and on A'ana was on and off; Savai'i would not move; Tuamasaga was divided; Tutuila recalcitrant; and for long the king sat almost solitary under the windy palms of Mulinu'u. It seemed indeed as if the war was off, and the whole archipelago unanimous (in the native phrase) to sit still and plant taro.

But at last, in the first days of July, Atua began to come in. Boats arrived, thirty and fifty strong a drum and a very ill-played bugle giving time to the oarsmen, the whole crew uttering at intervals a savage howl; and on the decked foresheets of the boat the village champion (the taupou), frantically capering and dancing.

War, to the Samoan of mature years, is often an unpleasant necessity. To the young boy it is a heaven of immediate pleasures, as well as an opportunity of ultimate glory. Women march with the troops, even the Taupou-sa or Sacred Maid of the village, accompanies her father in the field to carry cartridges and bring him water to drink; and their bright eyes are ready to `rain influence' and reward valour.

On Saturday, July 8, by the early morning, the troops began to file westward from Apia, and about noon found themselves face to face with the lines of Mata'afa in the German plantation of Vaitele. The armies immediately fraternized, kava was made by the ladies, as who should say tea, at home, and partaken by the braves with many truculent expressions. One chief on the king's side, revolted by the extent of these familiarities, began to beat his followers with a staff. But both parties were still intermingled between the lines, and the chiefs on either side conversing, and even embracing, at the moment when an accidental, or perhaps a treacherous shot precipitated the engagement. I cannot find there was any decisive difference in the numbers of actually under fire; but the Mataafas appear to have been ill-posted and ill- led. Twice their flank was turned, their line enfiladed, and themselves driven with a loss of about thirty, from two successive cattle walls. A third wall afforded them a more effectual shelter, and night closed on the field of battle without further advantage. All night the Royal troops hailed volleys of bullets, at this obstacle. With the earliest light, a charge proved it to be quite deserted, and from further down the coast smoke was seen rising from the houses of Malie. Mata'afa had precipitately fled, destroying behind him the village which, for two years he had been raising and beautifying.” (Stephenson, 1893)

The above passage by Stevenson illustrates that the decision making process in Samoa was bereft of any alacrity. It prevented quick action being taken. This gave the impression to Europeans that no decisions were or could be made. Certainly the 104 whole bargaining and consensus process was too time consuming for any European of the early 20th century to contemplate. To their eyes it was archaic and ineffective and in need of change.

After the arrival of the missionaries and European traders, vast plantations producing copra and cotton were developed for export, and Apia soon became a major commercial centre in the South Pacific. The missionaries set about making Christians out of the Samoans. Unknowingly they also destabilised the fabric of the Samoan society. They transformed the nature of chiefly authority.

“Overall, Christianity had a levelling effect. It replaced the ideological justification for attributing great powers to a few great chiefs and redefined chiefly power as a secular political authority, reducing the crucial distinction between ali'i and tulāfale… Without the ideological justification to bloodlines which linked men and women to gods, the criteria for succession became more complicated … But conversely, military prowess, once a vital criterion which presumably could modify all others became redundant” (Meleisea 1987, p14).

While the colonial powers were striving for a centralised Samoan authority in the 19th century they were in effect being undermined by their own religions. Moreover, the religions began a process of divorcing Samoan’s from the land. Land was gifted to the churches. Alienation of land had previously been a foreign concept to Samoa. With religion came commerce as John Williams, writing in 1837 remarked:

the Samoan islanders have nothing to dispose of but a little cinet, and small quantities of tortoise-shell. In a few years, however, should our labours be successful, they will be taught to prepare hundreds of tons of cocoanut oil, and large quantities of arrow-root annually; to manufacture sugar; to cultivate their land; and to supply our shipping with provisions. Thus, wherever the Missionary goes, new channels are cut for the streams of commerce; and to me it is most surprising that any individual at all interested in the commercial prosperity of his country can be otherwise than a warm friend to the Missionary cause. (Watson 1918, p36).

While the missionaries assisted the Samoans they also accepted their patronage. “Chieftainship represented the protection, patronage and power which the mission needed to open heathen lands…Even if it meant bargaining with the Devil, the mission had to start off by courting chiefly favour”. (Davidson, 1970, p 75).

In the 1860s came traders whose names are still remembered with respect and are evident in Samoa today. “In 1861 Andrew and Charles Mc Farland commenced business, and in the same year Samuel Dean. In 1867 came Charles Netzler, and in 1868 August Nelson. The sole export of the group at this time was coconut oil.” (Watson, 1918, p 45). The missionaries were not always on friendly terms with the traders as “the missionary taught the native that cloth or coin were better payment for produce than beads or tobacco” (Watson 1918, 47). The missionaries managed to convert the spoken Samoan language to writing and to teach the written language to the natives. They were also able to improve the native way of life particularly in regard to health. They converted a great number of 105

Samoans to Christianity by making nominal conversion as easy as possible. “When asked by Malietoa which acts were forbidden by Jehovah, Williams named only warfare and the rudest of traditional songs and dances. Consequently, the form of conversion devised by Williams in 1832… was simply a public declaration of Christian adherence or intention” (Davidson, 1970, p 74).

The missionaries had changed Samoa. They had introduced a new all powerful God, they had introduced a new class to society (the church), they had upset the traditional role of chiefly power in Samoan society, they had started the process of alienation of Samoan’s from the land and they had brought capitalism to a traditional society. They profoundly influenced the history and culture of Samoa.

GERMAN AND NEW ZEALAND ADMINISTRATIONS

By the late 1800s, internal strife amongst the Samoan chiefs, and power struggles between the then present opposing colonial powers of Germany, America and Britain, led to a period of instability. However, by 1899, after a treaty was signed by the three colonial powers, Western Samoa was annexed by Germany. The German protectorate was seen more by the Samoans as insurance against outside attack rather than an occupation. At the outbreak of World War 1 the Crown “was said to hold 103,000 acres (14 per cent of the total area of the dependency). Europeans held about 40,000 acres of freehold (5.5 per cent) and some hundreds of acres of native leaseholds. The remainder (about 580, 000 acres) of native land was vested in the Crown as trustee”. (Stanner, 1953. p 295). The coming of the Europeans had seen the Samoans effectively alienated from large tracts of their land.

The country prospered until Germany's expulsion by New Zealand forces at the outbreak of World War One. Under neither administration were the Samoans convinced that their highly decentralised system of government was unworkable or inferior.

New Zealand administered tenuously after the Germans departed, but Samoan discontent, headed by the Mau movement, pitted leading Samoans (and local Europeans) against the New Zealand administration. This situation prevailed from 1926 to 1949. The problems were brought about by political dissatisfaction and the paternalistic policies of the Richardson administration. Brigadier George Spafford Richardson took over as administrator in 1923. The Western Samoa Amendment Act of 1923 had given scant concessions to the Samoans and local Europeans for a greater role in government. The Legislative Council was still only an advisory body.

Richardson was determined to reform the land tenure system in Samoa. He wanted to encourage the work ethic in Samoans and also increase the amount of native land under cultivation. Native land was classified as cultivated or unused. Every taxpayer was to be allocated a five acre parcel from the unused land in addition to a quarter acre block in the village. When the five acre block was cultivated an application could be made for an additional five acre section.

There was some initial enthusiasm for the new scheme and as the matai were responsible for the land allocation it did not outwardly conflict with cultural mores. But this enthusiasm evaporated as surveying problems emerged. “Discontent was 106 also sparked off by a decision of the Land and Titles Commission that surveying and registration of land held under customary tenure must be compulsory. The intention was for the gradual systemisation of what was seen as a chaotic land tenure system.” (Meleisea 1987, p136). This decision created significant discontent as did Richardson’s summary use of the Samoan Offenders Ordinance of 1922 to banish leaders for offences that in Samoan culture seemed trivial. Banishment had previously been exercised by Samoans and the new Ordinance removed these powers. The introduction of a medical tax likewise upset Samoans as they considered it unfair.

On 15 October 1926 resentment came to a head at a public meeting at the Apia market hall. After a second public meeting of over 600 residents Richardson wrote a threatening letter to the organisers. Richardson did not relent and used banishment orders indiscriminately. Locals and part Europeans may have led the Mau movement but it was also an attempt by Samoans to resist Richardson’s challenge to their traditional institutions. As with most popular movements, the more the authorities used the Offenders Ordinance to punish the Mau the more it grew in strength and the more followers it received. Hundreds were arrested and jailed.

Eventually Richardson left Samoa on 8 April 1928 but his successor Colonel Stephen S. Allen did not fare any better. The same basic paternalistic policies persisted with the Mau being imprisoned and on 28 December 1929 New Zealand police opened fire on an unarmed procession. It was not until the Labour Party electoral victory in New Zealand in 1936 that any reconciliation occurred. The new Labour government repealed the anti-Mau legislation and allowed the return of Mau leaders.

Meleisea (1987) contends the Mau perceived the above as a triumph. They continued to assert Samoan values and culture over those of the Europeans. What is clear is that the Mau movement was a rejection of external control like many others in the colonial era. It was however more importantly an assertion of traditional authority and the Samoan polity over that of the Europeans. Samoans continued to believe in their own systems. New Zealand continued to administer Samoa until the desire for self government led to a referendum in 1961. In January 1962, after overwhelming support for freedom from foreign rule, Western Samoa became the first independent island nation in the South Pacific.

What religion and the colonial powers did achieve however was the instilling of a belief that capitalism (in terms of modernisation) was the way forward for Samoa. Alienation of land was also permissible under certain circumstances (for religious purposes and for development).

SOCIETY AND RELIGION

The basis for the organisation of Samoa society (fa’a-Samoa) is the ‘āiga or extended family that is headed by at least one matai (male or female) who holds the title that identifies the family. There are two distinct types of matai titles, the alii or chief title and the tulafale or orator chief title as indicated earlier. Individual status is based on family prestige and community status is reflected in village assets and services. The traditional Samoan village is organised according to matai, the 107 aualuma (daughters of the village), the faletua ma tausi (wives of the matai), the aumaga (untitled men) and tamaiti (children).

Religion is one of the most important aspects of Samoan culture, to the extent that it is incorporated in Samoa's motto: "Samoa is founded on God". Over 90 per cent of the people are strong adherents to Christianity. In 1830 John Williams of the London Missionary Society arrived at Sapapalii in his ship the Messenger of Peace, with eight Tahitian and Raratongan teachers. Here he was met by Malietoa Vainu'upo, a direct descendent of the recipient of Nafanua's prophesy. When Williams returned to Samoa in 1832 he found that Malietoa had managed to obtain, through battle, the title tafa'iafa (Four-In-One), which made him the highest ranking chief in Samoa and that he had also become a Christian. The eight teachers had also been well looked after and were sent out to spread the word through the rest of Samoa. Before long hymn books and prayer books and been printed in Samoan and in 1848, the first Samoan version of the New Testament was printed, followed by a Samoan version of the Old Testament in 1855.

In many villages there are two or three churches of different denominations but some villages restrict the number of denominations. When the missionaries first arrived, payments of coconut oil were made in public to the churches. Samoan families used to compete with one another to see who could give the most, and although donations now tend to be of a monetary nature this practice still continues. There is still competition to see which village can build the most impressive church, pay the minister the most, provide the best house for the minister etcetera. As a result the churches and to a lesser extent the houses of the pastors tend to be the grandest buildings encountered in any village. It is not uncommon to see a village with limited running water, poor education and health facilities but with a massive church. In other locations the signs of village over-extension are evident, with large churches showing obvious signs of decay in villages that are unable to maintain the structures.

Picture 1: An Impressive Church on Savai’i, Samoa

Church attendance is very high, and on Sunday hundreds of people are seen walking to and from church in their Sunday best. The writer has observed some Samoans who go two or three times to church on a Sunday. There is usually a morning 108 session followed by a traditional Sunday feast (tonei), rest and the maybe more church. On Sundays, Samoa is covered in smoke from the umu fires.

Western religion has also brought with it social mores that today impact on the health of the population. While churches in the West have adapted to changing circumstances, those in the Pacific to a large extent have resisted change. In Samoa, the matai system and the church have reinforced each other to maintain the status quo. The result is that issues of sexual health cannot be explained in public. Access to condoms and the pill are virtually restricted to married couples especially on the island of Savai’i where there are no chemist shops and the Planned Parenthood Association is less active. It is the local health centre that usually distributes contraceptives and young unmarried people are not inclined to use these services. Nurses are not always discrete and sometimes actively implement religious dogma in respect to unmarried persons especially females. The AIDS message as an example is diluted to the point where most viewers of the TV Samoa advertisements would not understand how AIDS is contracted. Crude birth rates are high as a result of teenage pregnancies, poor access to birth control options and imposition of religious doctrine.

Samoan village communities often build their own churches, water system and health centres. Thus the fa’a-Samoa based on the matai system is akin to a social security system. The village always ensures that those in need are cared for. This is evident in the popular Samoan proverb, O le ala i le pule o le tautua which means, the path to power is through service. “The affective ties inherent in the fa’a-Samoa are maintained by a social cage comprised of various sanctions, rites and rituals. This keeps the individual in awe of and subservient to important elements of fa’a-Samoa” (Lati 2000, p73). People are expected to abide by stringently enforced formal and informal rites and practices. One of these is fa’aaloalo or respect. People are expected to give utmost respect to their peers and most importantly their superiors. It especially relates to respect for ones elders and consequent rendering of humble service. Children are constantly directed by elders and are required to have a submissive bearing in their (elders) presence.

Another aspect of fa’a-Samoa that promotes control is the lāuga. This has various meanings depending on the setting. In church it is similar to a sermon but in the fono it refers to traditional oratory. In the fono it emphasises traditional and eternal values and hierarchies. Thus the lāuga is used to confirm the order and ranking of matai titles and villages. These are said to be immutable.

Religion and culture are interchangeable in Samoan village life. The life of people revolves around their obligations to mea faalelotu (concerns of the church) and mea faalenuu (concerns of the village). Major issues for most village people are acquisition of resources to contribute money or in kind to the demands of the church and village. Hence religion is a two edged sword. It is integral to the fa’a-Samoa system which is the fabric that holds Samoan society together while simultaneously being an impediment to better sexual health and also being a significant drain of cash resources. Writers have often mused on the question of, “what if all the funds poured into churches and church related activities had been channelled to education, health or other development activities”? 109

Socio economic changes are however forcing changes in the fa’a-Samoa system. The cash economy is drawing people to Apia in search of work. This in turn is destroying the village structure. A more educated population is less inclined to follow the rigid fa’a-Samoa principles and women are opting out of the komiti tumama (village health committee). The health committee traditionally tries to ensure that all mothers become members and that all children are registered for health programs. It also conducts inspections of houses, toilets and kitchens together with the district nurse. It pressures families to improve hygienic standards but in doing so may alienate those it is there to serve.

THE ROLE OF HISTORY AND CULTURE IN SAMOAN DEVELOPMENT

As far as the development of Samoa is concerned, the salient points from history and culture are that continued strong traditional (including religious) systems pervade society and are inherently undemocratic (in western terms); their seeming incompatibility with a western economic and legal system, and the inability of village people to evade the restrictions and responsibilities placed upon them by the traditional system.

Fa’a-Samoa and Individual Rights

In Samoa, traditional systems affect the legal system where village law and that of the west have an uneasy coexistence. Fa’a Samoa clearly conflicts with the western legal system inherited from the New Zealand administration. “In Samoa, independence provided the country with two systems of legitimacy: the matai and a set of Western liberal principles such as individual rights, religious freedom, and equality under the law” (Meleisea, 2000, p191).

The fa’a-Samoa system impinges on individual rights. For example, on 17 October 1998, Salamumu village burned down the house of a village family because they refused to obey a decree whereby the village only permitted the Methodist religion. The family was attacked, the father severely beaten up and the house burned to the ground because they promoted another religion in the village. Some of the attackers, who were subsequently brought before a court, were from the victims’ extended family. They indicated that they were forced to participate as it was the will of the village fono.

Other conflicts between fa’a-Samoa and the western legal system relate to the concept of meaalofa (giving). In western terms especially at elections this could be interpreted as bribery but under fa’a Samoa it is a gesture or affirmation of status. This led fa’a-Samoa into direct conflict with the western legal system and resulted in numerous court cases and a decision that meaalofais an offence at election time but at other times it is alright. (See Ioane 1983, p 524).

In an example of power, the Head of State, His Highness Malietoa Tanumafifi II who holds one of the highest matai titles, found some fault with a couple living in his home village. The matai decreed that they must leave the village and their house be destroyed. Despite court attempts they were evicted and the house razed by the village.

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In the March 2001 election, Taimalelagi Naotala a businessman from the village of Mulifanua stood for election in the Aiga -i-le Tai seat against four others. He stood in the election against the wishes of the local village fono. They had wanted the HRRP (government candidate) Vaaatiuola Lautolo Misi to win against the SNDP (opposition candidate). The existence of multiple candidates split the vote and in a first past the post election system, resulted in the government candidate being beaten. The matai council met immediately after the election and declared a “mu le foaga”. This punishment required Naotala and the matai who supported him in the election to leave the village within 21 days. The punishment not only includes ostracism (expunging that person/s from the village memory) but also setting on fire of the alleged offenders home and belongings and even causing the death of those who may object. The local Samoa Observer newspaper decried the decision in a front page article describing it as a “barbaric penalty.” (Samoa Observer 2001, p6). Once again the decision resulted in the businessman seeking legal advice. Fa’a-Samoa and the European legal system were again in conflict.

As might be deduced these actions are inherently undemocratic in western terms. Some writers have argued that as the matai represent the family group, it is the group that makes the decision. This assertion belies the fact that there is a hierarchy of matai and often a few or even one individual in effect makes the decision. As an example Tuimaleali’ifano Morgan makes this point when discussing the infamous case of matai political squabbling at Falelatai village. He points out that the eviction of Keilani Togoai and his wife Mary from the village was precipitated by an argument with Alaisea, the wife of the chairman of the village council (Nanai Faitala). Nanai bided his time and eventually had Togoa’i evicted from the village. Tuimaleali’ifano gives a detailed account of the intrigue and relates that while the council made the decision it was clearly Nanai who orchestrated it in a fit of peek. “In terms of the right of free expression of views, the criterion for democracy was met, but inside this consultative process kin connections dictated the outcome” (Morgan 2000, p181).

Indeed the influence of the matai is pervasive in Samoa. When independence was grated to Samoa in 1962 it was expected to preserve the Samoan culture and tradition by entrenching the Samoan matai system in the constitution. Only matai could vote, stand for or be elected to Parliament. Universal suffrage was approved in 1990 under a constitutional amendment. Far from reducing matai power the amendment was “paradoxically an attempt to preserve the status and significance of the chieftaincy, by preventing the devaluation that was resulting from the proliferation of multiple (title) holders and the corrosive inter-family disputes that accompanied this proliferation” (Macpherson 1997, pp41-42).

Fa’a Samoa requires that village people subscribe to village norms. To move outside these parameters, invites harsh censure. This situation has led to a very high teenage suicide rate in Samoa where disaffected children rebel against the imposition of strict laws. For instance, the Sar requires all village people to pray at around 7pm. This religious restriction/imposition however becomes farcical in that there are often more villagers guarding the roads to stop traffic entering the village during the Sar (and ensuring young villagers do not leave) than could possibly be left to pray. Individual rights are subservient to those of the village. The need for and observance of group decision making continues both at the village and public service level. 111

The Attraction of Being a Matai

The attraction of being a matai cannot be ignored in Samoa. Despite protestations to the contrary by the young Samoan elite, most aspire to the power and position a matai title bestows. As Stanner (1953, p287) points out “If you are not a matai in Samoa you are not much…Every matai is an aspirant for social and political recognition”. If a title is offered it is very seldom refused. To do so would offend the village if nothing else. There are numerous examples the writer could provide to illustrate the pervasive effects of the matai system. The following example serves to illustrate its effects on society:

A Samoan residing in American Samoa comes home to his village in Vivase with funds to rebuild his mother’s (extended family) house. Preparations have been made for the rebuilding such as cutting down all the surrounding trees etcetera. Upon returning home he is offered a matai title in the village of his ancestors on the large island of Savai’i. He accepts. As a result a feast must be held and other costs met. The money is all spent on the title acquisition. The family is however happy as the son has the title. The house remains in need of repair.

The Matai System and Jealousy

As matai titles are sought after they also engender petty jealousies and rivalries. As an example of the churlishness that often pertains to matai status the following account from the Sunday Observer (2002, p1) has few equals:

The returning MP from Faasaleleago No. 2 Leanapapa Laki has a bone to pick with the Cabinet Secretary, Simon Potoi. Yesterday he told Parliament Mr Potoi should be taught a lesson. “We have to correct this untitled Cabinet Secretary”, Leanapapa said. (The issue arose over the incorrect delivery of a letter to Mr Leanapapa by staff of the Cabinet Secretary). …Asked for a comment, Mr Potoi said angrily the MP, “is cheeky”. “Who is he to tell me I’m untitled? My titles are bigger than his. Mind you that, the angry sounding Mr Potoi said, ”One of my titles is Vaai in Asau”.

As a further example of these petty feuds, Morgan (2003, p 3) cites the case of a Samoan faife’au (pastor) who had to attend his brother’s funeral. “His brother is a matai. The title the deceased held is also held by another man from another family branch … (This) matai is now a senior matai and there is an uneasy feeling that (he) will try and prevent the burial of the deceased on chiefly burial grounds on the ground that the deceased’s family tried to subvert the burial of their father on the same burial site”. The point here is that the senior matai sees it as his duty to avenge the past by threatening the burial.

Tradition and Land Ownership

Traditional systems also affect land ownership. As Olson points out, ”the principal means of regulating custom in Samoa has been and continues to be through state court adjudication of conflicts over customary land and chiefly titles... This occurred 112 principally through the court’s privileging principles of English law in confirming asserted land rights generally considered unenforceable at the time of Samoa’s political partition” (Olson, 1997, p155). This situation resulted from the colonial powers attempting to create political stability in Samoa and a central government. In response to widespread claims by foreigners over Samoan land the Final Act of Berlin (Article IV, section 1 of 1889 was signed by the United States, Germany and Great Britain. The Act established a Land Commission and Supreme Court to adjudicate claims to Samoan lands by expatriates. The Court effectively established the extent of freehold and customary lands in Samoa. In this respect:

“Title, as used by Samoa’s courts, refers to the authority vested by extended families and descent groups in the formal political leaders, or matai. Formal administrative authority, or pule, over land within Samoan custom, as generally recognised by the courts, vests, or inheres, in the corresponding matai title. But both the matai title and the land associated with the title vest in the corresponding extended family, aiga, or the broader descent group, Sa. Thus regulation of land rights associated with matai titles, the political authority attached to them, as well as the regulation of title succession, directly affect the local and state regulation of customary land in Samoa”. (Olson, 1997, p155-156).

The above situation is of importance because it demonstrates that historical events have re-shaped custom. If anything this reshaping has provided a better platform (a clear land rights system) for development in Samoa than might otherwise have been the case. Nevertheless customary land ownership is still a major development issue in Samoa. As the Land and Titles Court decides ownership of disputed land based on matai title, ownership of the title becomes imperative in order to retain or attain land. Court decisions are not subject to appeal. The court is heavily influenced by custom and by the recommendations of the local fono. Historically, the Court did not register Customary Lands per se, but instead registered the matai titles. As Va’a points out, “yes, there are disputes galore, and I think this is due to the fact that ownership of land comes with possession of matai titles. Also, matai titles confer a kind of prestige to the holders, especially in the ambience of the practice of Samoan culture here and overseas” (Va’a 2003, p5).

More recently, the Court has begun formal registration of titles to and of leases of Customary Lands. This is changing the relationship of the people to the land. Land is effectively being privatised.

Capitalism via the cash economy is encouraging more independent use of land, and the modified form of land tenure is allowing Customary Lands to be treated as the private property of the individual/matai. Today the matai often assigns land-use rights to heads of households, and thereafter, exerts virtually no influence over their use of the land, permitting individualized economic effort through the growth and sale of such crops. Similarly, few fono now attempt to regulate the use of village and district lands cleared and brought into use through individual efforts. The Samoan is being alienated from the land with communal use of land being replaced by individual use and quasi-private property.

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Population growth has resulted in overcrowding and people are leaving the coastal villages to build family dwellings in the inland garden plots which they have worked. It also is now common for the matai to establish and manage plantations on land over which they exercise pule, paying wages to the aiga members who work the land. The government and some matai are leasing timber rights to foreign timber companies, especially on the island of Savai’i.

The above trends are producing a category of land, that is technically Customary Land, but which is highly fragmented, is sometimes heavily impacted by timber removal, and is treated as Freehold. This class of land is a source of much insecurity, and litigation, especially when the matai attempt to regain control. (See Omeara 1987, p 74-113 & Runeborg 1980).

Tradition and the Public Service

In the public service, traditional systems also affect operations. There is no clear separation in Samoa culture between work and non work areas. ”Salaried work in both private and public organisations is always embedded and subservant to social obligations that are rooted outside the work space… Tautua (service) still requires that one’s own resources are placed at the disposal of one’s family “ (Macpherson 2000, p 28). “Thus, a person is culturally bound to act outside the western work ethic in order to fulfil his primary cultural obligations” (Bhim, 2005, p 8).

The above situation results in high absenteeism in the public service due to cultural obligations being observed. There is also a lack of any real incentive to be promoted (other than to secure a matai title) as the additional money will be consumed by cultural obligation. There is also a disincentive to pursue a Western work ethic as the rewards are minimal. A subordinate will never make a decision as he/she is not empowered to do so. Moreover the matai system simply does not equip them to undertake such a role as they are obliged by custom to be subservient.

It is virtually impossible to dismiss a matai unless it is for reasons of criminal offence. “Titled public servants enjoy power which derives from their status as a matai” (Macpherson, 2000, p32). The status of a matai, particularly if he or she is near retirement, is such that other ways have to found for their removal. This is ensured by the fa’a-Samoa concept of fa’aaloalo or respect. Options such as contract consultancies to provide a graceful exit have been attempted. More usually they stay on until retirement or death and the system suffers as a result. Most have extra curricular activities to which they attend during working hours and, as is usually the case, their position permits them to take advantage of donor funds to attend numerous overseas conferences and collect per diems in United States dollars.

The result of the matai system is that there is often a paucity of real management at senior levels and a high effective absenteeism in the public service and scant opportunity for new recruits to move up the hierarchy. Absenteeism is further increased as officers have to perform duties required under the fa’a-Samoa, in respect to births, deaths, marriages and matai title bestowal. This situation has served to produce a moribund public service that is very hierarchical.

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Is the Matai System Undemocratic and Does It Stifle Development?

The matai system is inherently undemocratic in western terms. It is a system that provides for an elite to govern a country at the possible expense of the people. It provides for promotion on the basis of status not performance. It provides for an elite to effectively control large areas of Samoa and treat those lands as their own. It inculcates a village legal system that is clearly undemocratic, indeed autocratic, where the ordinary citizen has few if any rights or redress from biased decisions. The foregoing analysis provides examples of all these assertions. Macpherson (2000, p28) suggests that “the social values and practices that underlie the good governance agenda are not central to Samoan culture; in fact, they conflict with some central values” As such, the matai could be seen as an undemocratic institution.

Others, would say that stability could have been achieved without the matai and there is no excuse for individual rights being subjugated. For example, “when one realizes that around 94% of all matai are male, the system does not appear to be democratic in relation to women's involvement in local or national government”. Banani (1999, p 1). Lawson (1996) also provides views that highlight the undemocratic nature of the matai system.

Still others would argue that the matai system is democratic. Fido (1995, p10) emphasizes that, “The matai does not rule like a dictator as some Western observers have suggested but rather his Mana originates from his descendants ‘Suli’ or heirs to that specific matai title. There is (in theory) mutual respect and harmony between the matai and the descendants to the title”. The process is seen as democratic as the matai is “elected” by his extended family to represent them in the national elections. In many cases of course there is no election but rather appointment. Henderson (2003 p 228) indicates “It should be acknowledged that it can be argued that the Samoan system 'enhances', rather than restricts democracy. This is because matai are held accountable to the extended families they are responsible for, and which selects them for their leadership role. Nevertheless cases of matai loosing their authority for non - performance are rare”.

What these commentators who suggest that the matai system is democratic fail to adequately explain, is the way once elected, some matai proceed to perform their roles. Some matai perform in an autocratic manner and there is an inability of the village resident to do anything about the situation.

However the matai system also holds the fabric of Samoan society together. A fact understood and supported by New Zealand prior to independence being granted. The colonial power aided and abetted the matai retain power in order to secure stability. The 1962 “constitution by and large was expected to preserve the Samoan culture and tradition by entrenching the Samoan matai system“ (Bhim, 2005, p3). Therefore the situation is not so clear, to rid Samoa of the matai might end in social anarchy. Even if the matai system is undemocratic are the infringements on individual rights outweighed by the success in operating a stable nation? This of course is a matter of debate. Some would point to the fact that Samoa leads the Pacific and the situation of the Solomon Islands as justification for the matai retention.

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It may also be that the matai has protected Samoa from unbridled development and globalisation. The fact that traditional and political power reside with the matai may have made it more difficult for foreign business interests to take hold in Samoa. This would however appear to be an incorrect assumption as there are over 20,000 matai and so there is plenty of scope for collusion with foreign investors. The main reason why Samoa has, to date, escaped foreign investors seems to be its location and the relative costs of transportation for goods and airfares for tourists. Again, however, the advent of world terrorism has provided Samoa with a niche market for tourism and foreign investors are now involved in a number of hotel projects in Samoa.

In other respects the matai are definitely the guardians of Samoan culture and Fa’a Samoa. They have through the political process been able to chart a development course for Samoa which to date has not seen it succumb to the global onslaught of “Americanisation”. The matai have maintained and fostered Samoan culture at every opportunity in education and religion. They have maintained strict Samoan codes of conduct on television for example. Whether this will, in the longer term, be sufficient to maintain Samoan culture remains questionable.

As seen earlier in this chapter the matai are also deeply involved in the land use problem in Samoa. It can be suggested that as the matai attempt to secure village lands, they effectively lock those lands up to development. But is it true? The answer, both “yes” and “no”. Certainly as, indicated earlier, a modified form of land tenure has developed that allows Customary Lands to be treated as the private property of the individual or matai. Land rights are often assigned to a family by the matai. The land is treated as freehold but legally it is not. The result is insecurity and litigation. While land may be “allocated” or “assigned” to families the matai can withdraw that privilege. If the matai is against a development taking place on there allocated land, then there will be no development, at least there will be no development while a consensus is reached. That can take years. Outside Apia, the matai still effectively control the village lands and investors find it difficult to secure such lands for development. The matai still however develop small guest houses or fales to obtain income from tourists. There is little large scale agriculture and a lot of land lies fallow. The usual reason for failing to utilize the land is a lack of funds rather than a desire by the matai to stop development15.

In Apia there is a shortage of land for development. However there has been substantial development over the last ten years. New shops and office buildings have changed a sleepy village into a bustling town. It is usually the matai who have the prime land and eventually it is developed by the matai. In the process the matai generate funds to meet their customary obligations and maintain their status.

Certainly, in the villages the matai system acts to stifle foreign investment by controlling access to land. The matai system, however, probably does not affect agricultural development as the villagers themselves also do not have the funds to

15 The writer spoke with numerous matai, business persons and religious leaders on Apolu and Savai’i during a two year period in the late 1990s and was told that most wanted to develop their traditional lands but did not have the funds available. Customary responsibilities usually consumed any available funds. As the next chapter indicates mativa (lack of money) is a perennial problem in Samoa. 116 engage in large scale production. In fact the matai system and fa’a Samoa may have actually stimulated agricultural development. See Chapter 10.

SUMMARY

In summary, the history, culture and religion of Samoa continue to influence its destiny. They clearly influence the development process as many of the old systems and mores remain intact and impact upon development and development initiatives.

Macpherson (1997, p 45) identifies that “it is significant that the shortage of human resources is created in the first place by the exodus of those Samoans born and raised in Samoa”. Bhim (2005, p4) indicates this migration relates, in part, to the matai system. A growing number of young Western educated Samoans, for example, are challenging the matai system’s legitimacy….The migration of these Samoans, in addition to professional reasons, has also been linked to the matai system”. Indeed, Macpherson (2000, 28) suggests that “the social values and practices which underlie the ‘good Governance’ agenda are not central to Samoan culture; in fact, they conflict with central values”.

Today however, it is evident that the socio-cultural and religious systems of the past are starting to disintegrate under the pressure of capitalism and globalisation. As Bhim (2005, p5) attests “Pacific Islanders are questioning the special privileges accorded to traditional leaders”. The western law in Samoa has set itself the task of defining the safe parameters in which fa’a-Samoa might operate. In doing so each decision of the Court effectively subjugates fa’a-Samoa to western ideas. Fa’a- Samoa is certainly less pervasive at the centre (Apia) than on the periphery (village level). This can be illustrated simply by comparing the village land situation where there is strong matai control to the private ownership of land in Apia. In the villages, the Sar (nightly prayer period) is strictly observed but in Apia the matai have failed to maintain it in most locations despite repeated attempts. This point was emphasised by Shankman as far back as 1976 where he indicated “the attenuation of agriculture and the importance of migration and remittances have had an adverse effect on fa’a- Samoa…patterns of authority and redistribution within the aiga have now been modified” (Shankman, 1976, p90). Over time therefore it can be predicted that fa’a- Samoa will have less and less impact on the development process and outcomes.

The above situation of course is not unique to Samoa. Other Pacific Islands face a similar fate. Belief in modernisation has costs that are now only beginning to be realised by these island nations. In PNG for example Kernung laments land alienation - ”We are slowly becoming a people who have nothing to call home” (Sullivan, 2002, p 7) and Kukari warns:

Indigenous Papua New Guineans (have been) socialised into the modern development discourse, embraced and faithfully participated in it since the colonial era without any in-depth knowledge and understanding of its psyche and idiosyncrasies. Their faith in modern development and its promises has convinced them and their political leaders that their welfare, longevity and the development of their villages and communities depend on the exploitation of their natural resources, their land and the modernisation of their subsistence 117

economies. In pursuing these beliefs, however, they have not only found themselves locked in behaviour patterns and a mindset that impose long-term costs for short-term gains, but have also abandoned their cultures and philosophy of the land in preference to modern development ideology” (in Sullivan, 2002, pp 7-8)

There is no doubt however that Samoan history and culture are not the determinants of its development possibilities. History, culture and religion have served to merely inhibit and constrain the pace of development. While history and culture militate against effective administration via the matai and religious leaders, they do not negate the possibility of sustainable development. Samoan history shows how society has moved from an ordered subsistence state to one where capitalism is accepted, in fact espoused. A belief in capitalism (or at least its technology and expressions of wealth) has been inculcated into Samoan society. As the ADB concludes, “The Samoan family…. is being transformed from extended to a more nuclear model, and from independent subsistence to market transactions and economic interdependence. As is also common in the Pacific, Samoan society is adjusting to the needs of a modernising economy” (ADB July 2002, p 39). Modernisation is occurring and culture is changing.

Limited alienation of land has also been accepted. Samoan’s have, as with other Polynesian and Melanesian cultures tried to graft modernisation on to village life. Some imagine village life miraculously enhanced by advanced technology. “Yet all the mod-cons are the final bloom of deep ideological change, somewhere in the course of which earnest facilitators and flush international bankers arrive to press their needs and bolster flagging enthusiasm. The process is subtle and cumulative and somewhere down the line requires more land and more autonomy than people ever realised they would cede” (Sullivan, 2002, p 8).

As Landes (2000, p 3) suggests,”… culture does not stand alone. Economic analysis cherishes the illusion that one good reason should be enough, but the determinants of complex processes are invariably plural and interrelated”. While culture and history should be taken seriously it is equally important to place these values in the larger socio-political context of Samoa.

In regard to the above, “economists such as Sen, Kuran, Abraham and Platteau, Klamer and Alkire show that incorporating cultural notions within an economic framework provides opportunities for new ways of linking economic and social thought, that go beyond simplistic notions of culture as a constraint on Development” (Rao and Walton, 2004, p15.1). Again however Rao and Walton note that “culture is part of the story - part of the formation of agency, of effective markets and institutions – but is often left out” (Rao and Walton, ibid)

There is no doubt that history and culture matter either as inhibitors or perhaps (as Sen 1999 sees it) as sculptors of development with a human face. The fact remains however that in most South Pacific countries, western style modernisation is subjugating traditional cultures. Activity is concentrated on culture preservation rather than how culture might assist in the development of a modern utopia.

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The next chapter will demonstrate Samoa’s commitment to modernisation and its capacity to sustain development, at least in the short to medium term, regardless of the existence of the matai, religion and other cultural mores. History however shows that Samoans do not want a situation where it is a matter of culture versus progress, they instead want a situation where it is “culture and progress”16. They seek to maintain their culture and simultaneously develop their country. It is a daunting task for any nation, especially one as small as Samoa, to stand up to the ideological juggernaut that is the cash economy and capitalism.

16 For a discussion on this subject see Sullivan (ed), Culture and Progress, Divine Word University Press, 2002. p 5-34 119

CHAPTER 6 THE STATE OF DEVELOPMENT OF SAMOA

This chapter seeks to analyse the current state of development in Samoa to ascertain whether there is anything unique that would inhibit or engender its further progress and/or determine the country’s capacity for sustainable development. It presents a contextual analysis of Samoan development.

This section provides data on the state of development in terms of numerous economic and social indicators. By reviewing these economic and social development indicators it is possible to assess the current level of development as well as assess possible future repercussions (for development). It is also possible to define with some accuracy, if in the future, low status in one or more of the indicators will act to inhibit development. If such inhibitors can be overcome, then it stands to reason (by reverse logic) that state of development does not impact significantly on future development or its sustainability.

The above analysis does not make any value judgements on development. It does not imply that there is some pervasive concept that if a country is poor it is somehow its fault or as Harrison (2000) argues the difference is cultural but can be remedied or as Herrnstein and Murray (1996) argued that the difference is genetic. Nor does it accept a “view from the bottom approach” as espoused by Scott (1999). The analysis does not assign blame or responsibility but merely reviews state of development to determine if there are any inherent inhibitors to development (defined previously as sustainable development).

OVERVIEW OF SAMOA

Samoa is a small country in the South Pacific that has been independent since 1962. It consists of a group of islands located between latitudes 13 and 15 south and longitudes 168 and 173 west. It consists of two main volcanic islands, Upolu and Savai’i and several smaller islands, two of which are inhabited. The capital and business centre of Samoa is Apia which is located on the island of Upolu with two smaller commercial centres located on Savai’i. The land area of Samoa is 2,935 sq. km and the terrain is mountainous. The climate is tropical with wet and dry seasons and subject to cyclonic activity. The mean daily temperature is 27C and humidity 17 averages 80 per cent. In 2001 Samoa had a population of 176,710 with a natural growth rate of 2.4 per cent.

Officially the people are mainly of Polynesian origin (92.5 per cent), with 7 per cent Euronesians (persons of European and Polynesian blood) and Europeans 0.4 per cent. (CIA 2003). However this is not quite correct as, at the turn of the century, hundreds of Chinese and Melanesian labourers were brought in to Samoa to work on plantations. As Watson (1918) records:

17 2001 Samoa census 120

The Samoan in his own surroundings makes an indifferent hired man, and in consequence indentured Chinese and Melanesian plantation labour has been introduced into Upolu and to a small extent in Savai’i. In August 1914 there were some 2,200 Chinese labourers… The Melanesians number 600, mostly Solomon Islanders. (Watson 1918, p 14)

New Zealand, as the colonial administrator, metered out discrimination against the Chinese by passing an Act of Parliament in 1921 that prohibited sexual intercourse between Chinese and Samoans. (See Field 2002). Many of the Chinese and Melanesian labourers remained in Samoa and have married into Samoan families. Descendants of these labourers are however regarded (in statistics) as Samoan not Chinese or Melanesian18.

Most people live on the narrow coastal plain with 30 per cent of the population now living in Apia. The need for employment, the loss of normal income due to failure of cash crops in rural areas, the effects of natural disasters such as cyclones and taro blight, and the increased education have all contributed to increased urban drift. Urbanisation is a major contributor to the significant societal change occurring within the country. The fa’a-Samoa (Samoan Custom), however, still plays a very important role in the lives of Samoan people especially on the less developed island of Savai’i. It involves the formalised giving and receiving of goods and services and is built around the aiga (extended family). The aiga is headed by a matai (chief) who directs the economic, social and political affairs of the family. Family members are required to support the matai through tautua (service).

There is an increase in the number of motor vehicles and increased demand for commercially produced or imported foodstuffs. Schools are becoming overcrowded and it is common to have 50 or more children in a class. Substandard housing and the impact of an expanding urban population are significant factors in the degradation of waste management and environmental conditions. As countries such as New Zealand and Australia increasingly restrict migration, there will be more people wishing to enter the workforce in Samoa. As Morgan (2003) indicates:

I don’t think Samoa is a beacon of hope. If anything it is a beacon for successfully sending its people outside and emptying the countryside… The 1100 New Zealand annual (immigration) quota has been oversubscribed by as much as four to one for the past 10 years….Many ordinary Samoans see the future in terms of leaving, or getting out of the country

In 1989 the economy of Samoa underwent a series of severe economic shocks that resulted in chronic balance of payments problems. Significant deficits were experienced in the years 1991-1994. However, buoyancy in tourism, a recovery in export earnings and a slower growth in imports all have assisted a turn around in economic outlook where in 1996/97 a small budget surplus of around ST$20 million was expected. Since that time, deficit financing has continued from ST$12.9 million in 1998 to a rate of ST$17.7 million in 2002 (ADB 2002, p282). This situation

18 For an example of this statistical bias see the story of Fualosa at http://www.xmission.com/~hunter/samoa.html (Accessed 9 November 2003) 121 continues to place increasing strain on the economy. By the end of 2002” inflation was at 8.1 percent, some four percentage points higher than 2001….Samoa’s industrial sector also recorded negative growth in 2002” (Pareti 2003, p2).

THE SOCIETY

As seen in the previous chapter, Samoa is still a society that is steeped in history and tradition. It clearly wants to modernise its economy and participate in the perceived fruits of capitalism as evinced by the Samoan government’s acceptance and implementation of World Bank, IMF, WTO and other economic policies and structural adjustment prescriptions19. However it is attempting to do so while at the same time maintaining its traditions and culture.

Samoa clings to fa’a-Samoa, the matai system and its belief in the Christian religion. Village people continue to contribute to the Aumaga (the male youth who serve the village matai), general village activities, the women’s committee and the church. (ADB, Nov 2002,p 5). Samoan’s still believe in fa’alavelave (obligations to the church and village) and continually provide support in kind and/or cash. The ADB report above suggested there was, ”a need for families to prioritize their spending for education instead of fa’alavelave” (ADB Nov 2002, p14). This recommendation received a stinging attack:

…her [ADB report writer] views represent those of palagis (westerners) who do not depend on the social networks as Samoans. Also her knowledge of traditional economics is severely lacking because fa’alavelave is a means of economic investment. They create goodwill which in the end promotes economic interests (Va’a 2003,p7)

The ADB report also indicated that the unemployed, especially the youth and school dropouts, are resorting to crime, prostitution and drugs. Mativa (lack of money) was the most common, local word used to describe hardship… and the people associated hardship with the breakdown of family unity and values. (p4). Most people consulted perceived that hardship had worsened over the last five years (p5). The ADB report concluded that “Communities have always taken care of all their members, sharing food and goods between the richer and poorer members. But this traditional system is strained by modernisation – the need for cash, shift away from subsistence farming, growing population and movement of people to towns” (p3). In addition there was less respect for village authorities and parents, limited land cultivation due to lack of able bodies men to work on the plantations, continued land disputes, rising school drop out rates. In respect to less respect for authority “modernisation, particularly the increased exposure of children to TV, radio, and newspapers, was also seen as causing increased disobedience to village authorities and parents” (p 8).

Samoa now has largely succumbed to “commoditisation”, as subsistence is giving way to the cash economy. For example in the education sector, cash is required for school fees, lunch money and bus fares for students. As the ADB reports, people in Samoa are facing hardship in both rural and urban areas. “In the rural areas, they

19 See George Firth, The Impact of Globalisation on the Pacific Islands, International Labour OFiice, Geneva, April 2005 122 are generally the people who live inland and have limited or no access to markets…, safe water supply, communication facilities, and other basic services. In the urban areas they are people who live on leased land without enough space to grow crops, on flood prone areas, or on traditional lands but with very little or no access to services “(ADB Nov 2002,p7).

Another phenomenon of Samoan society is the propensity of people towards ostentatious expressions of village status. For example despite the obvious hardship in villages no expense is spared in constructing churches or providing houses for the pastors. As Va’a sees it:

If church members want to have nice expensive houses at Malua, that is their prerogative. It’s a matter of congregational pride. No congregation wants to be outdone by another when it comes to things like this: conference accommodation. It is healthy competition. Churches, religion, whatever, is an integral part of Samoan life from time immemorial. Take away religion and you take away an integral part of Samoan personality. (Va’a, 2003,p6).

As Va’a sees it the costs are worth the rewards. Others (like the ADB) would see a need for balance.

Samoan society is changing and adopting capitalist principles and a cash economy. Simultaneously it continues to try and maintain tradition and culture. This attempt to maintain culture has clear costs in terms of education, health and economic outcomes. Cash is channelled towards traditional responsibilities at the expense of education, health, transport, communications and economic development. But this “diversion” of funds has not stopped development. Society has progressed with improving social and economic indicators as will be seen hereunder.

Given as Meleisea (2000, p193) describes it “Samoans are living in two worlds” what effect does this have on Samoa’s development prospects? In terms of Samoan society, it has developed a very strong culture and tradition. The earlier chapter on Samoan history demonstrates the strength of these attributes. While it is clear that Samoan culture as evinced through fa’a Samoa and the matai system remain pervasive in Samoa, they do not prohibit development. For example, Samoa has shown, in terms of human development indicators, that it can achieve results. In 2002 it rated 60th out of 151 countries in terms of the UNDP, Human Development Index (HDI)20. The HDI is a composite index measuring average achievement in three basic dimensions of human development – a long and healthy life, knowledge and a decent standard of living.

Samoa has consistently improved it ranking over the last 10 years as the table hereunder indicates. The current state of cultural development in Samoa, clearly does not prohibit development. In fact a case can be advanced that it is Samoan culture that has assisted Samoa improve its ranking on the HDI.

20 See http://globalis.gvu.unu.edu/indicator_detail.cfm?IndicatorID=15&Country=WS (Accessed 3 June 2005) 123

Table 4 UNDP Human Development Index for Samoa

Year 1995 2000 2002 Human Development Index (Index) 0.741 0.762 0.769

Source: UNDP data http://globalis.gvu.unu.edu/indicator_detail.cfm?IndicatorID=15&Country=WS

THE ECONOMY

The economy of Samoa has "long been characterised by low productivity, low growth and a dominant public sector." (Government of Samoa 1997, p13). Three decades of development plans, sectoral strategies, technical assistance and aid funded capital projects have failed to induce significant economic growth. The country remains dependent on foreign aid, foreign loans and remittances from expatriate Samoans.

The Government has sought to promote the private sector and to this end has withdrawn from some activities all together, has contracted out some services and has sought to reduce the size of the public sector. Management reforms such as Performance Budgeting have also been introduced to the public sector.

The economy however is still recovering from the four most recent disasters:

Cyclones Ofa Reconstruction of cyclone-damaged buildings and infrastructure after and Val the cyclones of 1990 and 1991 was complete but then cyclone Heta hit in 2004 creating further destruction. The volume of subsistence production is almost back to normal and cash crop production (with the exception of taro) is well advanced. The forestry and fisheries sectors are recovering more slowly. There is also evidence that tourism infrastructure has not been replaced. Hotel rooms in several Savai’i resorts were not immediately rebuilt due to oversupply of accommodation and possibly a lack of capital. Hotels and guest houses were however under construction in 2005. Taro leaf blight Recovery from the cyclones was in progress when the country's major food crop and export earner, taro, was struck with taro leaf blight. The disease effectively wiped out production from 1993 onwards and despite all attempts has not been eradicated. Commercial supplies of taro are now increasing but may never resume their pre-eminence as the staple subsistence food crop. Taro that is being grown is predominantly "European" taro. It is an imported strain more resistant to disease but apparently not considered as nice to eat by Samoans. Farmers have substituted taamu, yams and bananas. The government forecasts, "a permanently increased monetisation of the agriculture sector and increased dependency on cheap imported foods” (Government of Samoa 1997, p14) Indebtedness of The Government assumed responsibility for debt servicing for the PAL national airline PAL (Polynesian Airlines Ltd.), allowing the new company to commence operations with a clean balance sheet. PAL had incurred very substantial debts and the government was forced to inject capital and restructure the company. Debt servicing absorbed 3.5 per cent of GDP and about 6.5 per cent of Government expenditure in 1996/97 and continues as a drain on government revenues in 2005.

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"Agriculture, including forestry and fishing, is the most important sector of the economy and accounts for over one half of the country's' employment and domestic product. Close to 90 per cent of Samoa's exports is based on agriculture. The majority of the population practices subsistence agriculture, which contributes about 40 per cent of the GDP. The manufacturing sector accounts for only 15 per cent of the GDP (See Table 5).

The country also faces development constraints similar to other Pacific Island nations in respect to "its limited natural resource base, small domestic market and limited scope for economies of scale, isolation from major international markets, and the increasingly competitive international environment for tourism and investments.” (Department of Health 1997, p3).

The impact of above economic shocks and natural constraints resulted in poor economic performance between 1990 and early 1995. The aggregate increase in real Gross Domestic Product (GDP) over the period 1989 to 1996 amounted to 1.6 per cent ... with an overall decline in real per capita incomes of around 2 per cent over the period, from $908 in 1989 to $890 in 1996.” (Department of Health 1997, p4). Table 5 Gross Domestic Product 1985 – 2002 ($ Thousand – at Constant 1984 / 1994 Prices) 1985 1990 1995 1998 1999 2000 2001 2002

GDP by industrial origin 192.0 182.6 532.1 589.2 604.4 646.3 686.2 698.6

Agriculture 129.5 129.1 124.6 125.0 119.3 110.7 Mining ------Manufacturing 95.7 82.3 83.4 89.5 100.4 95.8 Electricity, gas and water 15.2 16.8 16.3 17.6 20.7 24.7 Construction 35.9 37.6 38.9 47.2 49.1 40.4 Trade 75.0 98.2 105.3 114.6 124.6 136.9 Transport and 50.1 66.5 70.7 78.4 88.0 93.9 communications Finance 28.6 38.8 40.2 42.2 46.1 50.9 Public administration 46.7 59.5 63.6 67.5 70.6 75.2 Others 58.2 63.6 64.8 67.9 71.6 74.3 Less: Imputed bank 2.7 3.2 3.4 3.7 4.2 4.1 service charge Source: Key Indicators of Developing Asian and Pacific Countries, The World Bank, 2003

Table 6 Gross Domestic Product at market prices by Industry (constant 94 prices) - '000 Tala Sector 1996 1997 1998 1999 2000 2001 2 2002 1 Agriculture 89,566 77,344 75,813 74,907 75,338 66,117 60,091 Fishing 44,002 47,504 53,263 49,659 49,648 53,139 50,577 Food & 29,674 29,477 24,165 24,322 23,333 22,564 25,617 Beverage manufacturing Other 70,619 64,746 58,157 59,109 66,216 77,802 70,170 manufacturing Construction 36,961 39,481 37,627 38,860 47,203 49,139 40,367 Electricity & 16,307 16,891 16,755 16,338 17,639 20,667 24,669 Water Commerce 72,750 79,413 85,505 92,350 100,805 109,350 120,399 125

Hotels, 13,238 12,656 12,672 12,984 13,783 15,293 16,531 restaurants Transport & 57,384 59,652 66,530 70,724 78,404 87,954 93,914 communications Public 50,066 54,713 59,491 63,551 67,541 70,605 75,235 administration Finance & 32,739 34,942 38,819 40,155 42,239 46,117 50,920 Business service Less: Enterprise -2,835 -2,862 -3,154 -3,407 -3,729 -4,169 -4,144 share of FISIM Ownership of 20,806 21,225 21,653 22,089 22,534 22,988 23,452 dwelling Personal & 39,571 40,252 41,917 42,722 45,380 48,631 50,818 other dwellings Value Added at 570,848 575,435 589,214 604,363 646,334 686,631 698,617 Market Prices Source: Statistical Services Unit, Samoa Ministry of Finance, April 2004.

TRADE AND BALANCE OF PAYMENTS

Samoa's balance of payments deteriorated markedly between 1991 and 1994. From an overall positive balance of $30.3 million in 1990 there was a decline to $3.4 million in 1991 followed by significant deficits until 1994. In 1997 exports jumped due to a large increase in export of fish. Tourism buoyancy and slower growth in imports helped create a small surplus in 1995 and a $27.1 million surplus in 1997. Table 7 refers.

The data in Table 7 are however quite suspect as the 1990-1996 data conflict markedly with data subsequently represented by the Central Bank of Samoa and IMF Staff in the IMF Staff Country Report No 99/28, April 1999. The reasons for these discrepancies may in part be attributable to use of different series, exchange rate regimes and exclusion of valuation changes in foreign reserves. Both data sets however depict a balance of payments deterioration up to 1994 and a subsequent recovery. By 2002 the Current Account Balance was slightly in credit at US$4.9 million after a deficit of US$6.5 million in 200121.

Table 7 Comparative Trade Data 1990-1997 (ST$ Million) EXPORTS 1990 1991 1992 1993 1994 1995 1996 1997 Coconut Oil 4.168 0.022 0.697 0.0 0.0 8.042 6.82 7.316 Coconut Cream 5.576 5.274 4.852 3.464 4.519 4.843 4.92 5.164 Copra 1.101 0.0 0.0 0.0 0.058 2.193 4.07 8.528 Copra Meal 0.375 0.0 0.008 0.0 0.0 0.364 0.62 0.586 Taro 3.502 6.878 4.696 9.509 0.158 0.162 0.10 0.10 Others 5.772 3.341 4.096 3.538 4.167 6.070 8.29 18.686 TOTAL EXPORTS 20.494 15.515 14.349 16.511 8.902 21.674 24.82 40.390 IMPORTS 193.42 225.35 271.34 263.70 202.96 228.05 243.72 243.0 TRADE BALANCE -172.926 -209.84 -256.99 -247.19 -194.06 -206.38 -218.9 NET SERVICES 46.11 41.40 41.80 32.66 65.06 80.76 105.57 NET TRANSFERS 91.96 74.35 107.01 80.45 83.39 86.90 88.07`

21 Source of Data - Key Indicators of Developing Asian and Pacific Countries, The World Bank, 2003 126

CURRENT -34.856 -94,085 -108.18 -134.08 -45.608 -38.716 -25.26 ACCOUNT BALANCE CAPITAL 65.150 97.460 87.880 113.35 30.430 46.820 38.96 ACCOUNT (Net) OVERALL 30.294 3.375 -20.30 -20.73 -15.178 8.104 13.7 27.1 BALANCE (Change in NFA) Source: CBSI Research Department and Treasury Department estimates. 1997 figures Treasury Department of Samoa and Fund staff estimates cited in IMF Staff Country Report No 99/28, April 1999, p 22 & 26

REMITTANCES

Private remittances are a crucial element in the balance of payments and the economy. The heavy reliance on remittances and donor development assistance places the economy at considerable risk. Remittances may eventually dry up22 as second and third generation expatriate Samoans lose their family links with Samoa and continued substantial levels of aid cannot be guaranteed. It is in partial acknowledgment of this risk that the Government of Samoa has pursued policies of fiscal consolidation, public sector reform, corporatisation, deregulation and liberalisation.

Figure 1: Private Remittances

Source: Selected Economic Indicators, Central Bank of Samoa, April 2004

EXTERNAL DEBT

The outstanding external debt at the end of 1996 stood at approximately $378 million or a staggering 90 per cent of GDP. The debt service ratio would be intolerable except for the favourable borrowing from international agencies such as the Asian Development Bank, World Bank and EIB. "In 1996 debt servicing costs amounted to

22 Data from the Samoan Budget 2004/05 show however that remittances continue to increase probably due to continued migration of Samoan’s to New Zealand, the United States and Australia. 127

$11.5 million or some 47 per cent of merchandise export revenue but only 4.5 per cent of total export revenues from goods, services and private transfers.” (Department of Health 1997, p9).

What the above data show is that there is a balance of trade problem in Samoa but that this is largely negated by aid and

INCOME AND EMPLOYMENT

In an agrarian society with a large subsistence sector, the concept of employment creates statistical difficulties. The 1991 census in Samoa attempted to solve this problem by categorising people as economically active or inactive. As a result it concluded that there was a national unemployment rate of only 2 per cent. (Department of Statistics 1991, p 34). Of the employed population only about a third claimed to be in paid work or to have a job although not at work at the time of the census. The majority worked primarily to grow, gather or catch food to eat. Table 8 below refers.

Table 8 The Employed Population by Work Category and Sex 1991

Category Males Females

No. per cent No. per cent Worked Primarily to 12284 32 6398 36 Earn Money Had Paid Job but not at 450 1 143 1 Work Worked Primarily to 25506 67 11186 63 Grow, Gather or Catch Food Total 38240 100 17727 100 Source: Report of the Census of Population and Housing, 1991, p 35

The above figures of course tend to obscure the real level of unemployment. The census report indicates for example that, "each person aged 10 years and above was asked a series of questions about activities in the past week. On the basis of his/her response, each person was classified as economically active or inactive. Economically active people were subclassed into employed and unemployed. For the employed population additional questions were asked on days worked, industry." (Department of Statistics 1991, p 33). The problem with this interpretation is that many children would be classed as performing work. For example, street sellers are economically active but in effect they are not employed. Also it hides the non- employed teenage problem where there are simply no paid jobs available.

A better indication of the extent of unemployment/underemployment is provided in a survey of youth in Apia. The survey found that of youth in the 15 to 24 age group in Apia 3607 or 24.97 per cent out of a total of 14440 were not in full time employment or in full time school. (See Department of Statistics & Ministry of Youth Sports and Cultural Affairs 1996, Table 14). Youth unemployment is of increasing concern since 128 the, "number of young people entering the labour force each year is greater than the number of new jobs being created.” (Department of Health, 1997, p 9).

The main employers in Samoa are the Public Service with an establishment of approximately 3,800 in 1997 and the Yazaki factory with almost 2700 workers. The Yazaki workforce is notable however for its gender imbalance with 85 per cent of staff being female. Many of Yazaki's workers therefore would be on the minimum hourly rate for Samoa of ST$1.25.

The 1994 Business Activity Survey analysed 567 enterprises employing a total of 7643 people. The average salary paid was $4,100 for the smaller firms (more than 5 employees) and $5,600 for the larger firms. These low salary rates have however failed to attract new businesses to Samoa. Developments such as the proposed $250 million Marriott Hotel timeshare have so far failed to materialise despite strong government support and inclusion in economic strategy papers. (Government of Samoa, 1995, p14-15).

Another problem that faces Samoa is the type of income being received. "Up to 50 per cent of household incomes are said to be made up of remitted money from overseas.” (Department of Statistics & Ministry of Youth Sports and Cultural Affairs 1996, p21). According to a study by Ahlburg (1991), receipt of remittances is said to discourage labour force participation and keep the recipient at a standard of living determined by the remitter.

TOURISM AND AGRICULTURE

By 2003 tourism in Samoa had finally recovered from the effects of the two cyclones in the early 1990s. There had been little redevelopment of tourism resorts especially on Savai’i up to 1999. Consequently the standard of accommodation has declined overall. Since that time numerous small fales (open sided houses) have opened up but again these face real pressures with the global downturn in travel and tourism.

With the financial problems experienced by Polynesian Airlines in the early 1990s there was little possibility of the airline significantly improving air services to Samoa or ticket prices dropping. This situation changed however with Polynesian recording a profit of ST$4.1 million in 1999 (after debt transfer to the Government). (Prime Minister’s Speech to Polynesian Airlines 40th Birthday Dinner, Apia, Samoa, 30 April 2000). Polynesian was to commence direct flights from Sydney to Apia in October 2000 in a code share arrangement with QANTAS and purchased a new Boeing 737- 800 but direct flights never eventuated. Air New Zealand, in late 1997, commenced an additional flight to Samoa from Auckland each week. This improved connections somewhat but mainly for Samoans resident in New Zealand. Regardless, there is an oversupply of accommodation with most hotels on Savai’i reporting very low occupancy rates. For example, in December 1997 both Vaisala and Stevenson's hotels in Savai’i were offering half price accommodation to attract visitors. In 2002 and 2003 the oversupply remained with Stevenson’s being almost deserted. Polynesian again recorded heavy losses and again had to be bailed out by the government. Yet again in 2005 the Samoan Government had to invest funds in Polynesian Airlines to keep it afloat.

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In 1999 total visitors increased to 84,124 which was an increase of 14.9 per cent since 1996. By 2002 visitor numbers had reached 88,971 and by 2003 had reached 92,48623. Figures 14 and 15 hereunder show that tourism is increasing both in visitor numbers and total income. This data however can be deceptive as many tourists are in fact Samoan émigré.

Figure 14 - Tourist Arrivals in Samoa 2002-2004

Figure 15 - Earnings from Tourism 2002-2004

Source: Selected Economic Indicators, Central Bank of Samoa, April 2004 There have been some positive developments in the eco-tourism area with Eco-Tour Samoa recording some good results from overseas advertising. Eco Tour Samoa is also developing new products to attract visitors. For instance, an environmentally

23 Data from Ministry of Finance, Statistical Services Division, June 2004 130 friendly Village 2000 was proposed. This is aimed to attract overseas visitors while simultaneously assisting the village environment through recycling of all waste materials.

Agriculture by 2003 was only just recovering from the taro blight that devastated local taro production. While other varieties were planted, first shipments were not exported until 2003. Figure 7 indicates the food production per head of population is still declining despite significant increases in coconut by-product, seafood and beef production. This is largely due to the low level of taro exports.

Agricultural production has however contributed to deforestation. Five private sawmills operate in Samoa and they harvest about 16,000 cubic metres of timber per annum. "This level of output is far above estimated sustainable yield of the resource.” (Government of Samoa 1998, p2). An audit of the Western Samoa- Farming Systems Project stated that, “Of relevance to the WSFSP (Phase 2) is the already recognised non-sustainable level of deforestation, partially due to non- sustainable forestry practices and partially due to past expanding agricultural practices. Farmers need to be aware of the impact that current agricultural practices can have on the natural resource base of Samoa.” (Brown 1996, p9). The report also recommended that an environmental audit of the agricultural sector and a national environmental audit be undertaken. Government has not taken up this challenge. Such an audit would of course identify the significant deforestation and environmental damage caused by the advent of the government backed beef cattle industry.

The Government however prepared an agricultural sector study "Strategy for Growth and Diversification of the Agricultural Sector 1997-2000" that, inter alia, identified major policy issues and supported sustainability through quarantine and disease/pest control systems. It did not adequately address environmental issues. Some crop diversification has started to appear in exports. Kava exports of over $1 million occurred in 1995 and 1996. Crop research has seen two new varieties of taro (taro fili and goldfinger) released which are expected to eventually reach the export market. With the importation of 3000 head of genetically superior beef cattle, government has laid the ground work for a productive beef cattle industry.” (Government of Samoa 1998, p11). “Commercial fishing is presently the fastest growing industry in terms of production and export potential.” (Government of Samoa 1998, p13). As of April 2004 fresh fish, remained the largest export earner, contributing 29 percent of total export receipts24.

There are however few controls over how many Samoans enter the fishing market and, as such, the sustainability of this industry is questionable. Both tourism and agriculture show signs of improvement but whether such improvements can be sustained in the long term remains to be seen.

24 Source: Selected Economic Indicators, Central Bank of Samoa, April 2004 131

Table 9 Fish Exports (value $m) 1995 1996 Jan-Sept 1997 0.434 2.287 6.92 Source: Government of Samoa, Strengthening the Partnership, A Statement of Economic Strategy 1998-1999, Apia, March 1998, p16

PUBLIC SECTOR REFORM

Samoa suffers from over-bureaucratisation. The systems and procedures within the Public Service are antiquated and serve more to keep staff employed than productive. The respective roles of the Public Service Commission and the Treasury are outdated and highly centralised.

A public sector reform process has commenced wherein public sector downsizing of up to 20 per cent will occur; performance budgeting will be fully introduced; amendments to the PSC Act and Regulations will provide for devolution of human resources matters to departmental heads; performance management targets will be established for the Executive Service and a results based culture emphasised and departmental strategic planning will be further strengthened

While all the above initiatives seem appropriate, the pace of introduction has been painstakingly slow with the various agencies showing little enthusiasm for relinquishing control and power. Without top-level co-ordination and direction of the process, the anticipated results may not be forthcoming. It is not readily apparent who is driving the process; it appears to be left to the various agencies to take the initiative. The recent purported announcement by the new Chairman of the PSC that no devolution of personnel functions would occur before the year 2001 adds further cause for concern. It is within this context that the AusAID funded Public Service Commission Institutional Strengthening Project must operate and achieve results.

DEVELOPMENT AND THE ECONOMY

The Treasury Department forecast an overall real growth of 5.5 per cent in 1996/97. This forecast seemed to be overly optimistic given economic circumstances. In fact, this high rate of growth was achieved. Treasury then predicted a real per capita GDP increase of 10 per cent in the three years 1998-2000 and this also was achieved as Table 10 demonstrates. Table 10 Samoa GDP Series 1997 1998 1999 2000 2001 2002 GDP at market 191,741,000 175,462,000 prices (current US$) GDP growth (annual 2.7 1.6 5.3 7.3 6.2 1.8 per cent) Source: “Selected Economic Indicators, November 2000”, in World Development Indicators database & Samoa Treasury Department Economic statements at http://www.tradeinvestsamoa.ws/, accessed 30/10/02 & Key Indicators of Developing Asian and Pacific Countries, World Bank, 2003

The Treasury admits however that, "merchandise exports are expected to grow faster than imports but as the latter are an order of magnitude greater, the trade deficit will 132 continue to grow.” (Government of Samoa 1996, p18). The Treasury also admits that, "the tourism industry is suffering from overcapacity with respect to accommodation at present, and from the erosion of airline capacity caused by the indebtedness of PAL.” (Government of Samoa 1996, p16).

The real picture in Samoa is that the economy is improving but only slowly. There is a widening trade deficit and a reduction in real production per head of population. The country is being kept afloat by aid and remittances. Treasury indicated in 1998 that "Remittances are forecast to continue to increase at a trend rate of around 3 per cent per annum whilst gross tourism revenues are expected to increase by around 7.5 per cent per annum." (Government of Samoa 1998, p18). Both inputs have improved over time but have been offset to some extent by disappointing agricultural exports.

There are major problems in the health and education sectors that will and are impacting on the workforce. There is a paucity of skilled labour in the trades and computing areas. There are also major environmental problems in respect to water supply, deforestation, pollution and destruction of fish habitat. Fish habitat is being destroyed by pollution run off from the land, destruction of mangrove swamps and coral reefs. Reefs are still being decimated to provide coral for road surfaces (although this is illegal in Samoa), by fishermen using poisons to catch fish that also kill the coral and by the use of explosives to catch fish. Thus long term environmental degradation poses a direct threat to subsistence livelihood of much of the Samoan population. The Government has yet to submit legislation on National Environmental Policies and the draft legislation only covers four of the twelve environmental areas identified for attention in-the National Environmental and Development Management Strategies (NEMS).

What the foregoing analysis of the Samoan economy shows is that Samoa is dependent on aid and remittances for survival and that it has many development challenges. Samoa has opportunities for further development in fisheries, tourism and agriculture. Samoa has the ability to undertake this development despite the reliance on aid and remittances. As Ratha (2003, Chapter 7) suggests remittances are an important and growing source of development finance. Shankman (1976, p 85) indicates that remittances and migration “offer a partial solution to the problem of underdevelopment for families and individuals”. However, he points out that dependence on migration and remittances is also symptomatic of continuing undedevelopment”. His view was not however shared by Pitt (1970, pp185-186) who agrued that at the national level there are monetary and non-monetary benefits dervived from remittances and migration such as skills acquired abroad, the employment of otherwise unemployed Samoans and as a safety value for young men. Bertram (1999) indicates that MIRAB economies are not about to disappear in the short term. As such, Samoa can be reasonably assured that remittances and aid will continue and probably increase. Remittances provide Samoa with a large and less volatile development resource that official aid and as Samoa has developed, since Shankman’s comments in 1976, his assertions would appear to be incorrect.

In relation to economic development Samoa has already achieved substantial development during the last ten years. “According to a recent Asian Development Bank Report, from 1995-2002 the average annual change in real GDP for Samoa is 133

4.4%, with Kiribati at 4.6%; Tuvalu at 4.3%; Cook Islands at 3.0%; Fiji at 2.4%; Vanuatu at 0.8%; and PNG at -0.1%. This achievement for Samoa is laudable considering the lower rates in the past years” (Telefoni, 2004, p3). The picture is really one of a “developing country” not that of an “undeveloped country”.

SAMOA POLITICAL SITUATION

The Constitution of Samoa adopted in 1962 introduced a system of matai suffrage. The Constitution of Samoa restricts eligibility for election to those who hold a matai title. This was based on the premise that the matai was elected by and spoke for all family members. Two of the seats are reserved for individual voters perceived to be outside the village system. A matai title is bestowed as an honour by the family group on a deserving person within the group. Matai’s can be male or female and may be elected by family members or inherit the title. Each family group has its own title/s, some being more prestigious than others. The list of possible candidates is therefore restricted to these matai. There are some 362 villages and approximately 18,000 matai in Samoa.

While Samoa has participatory democracy this democracy is not universal. As the matai are usually male, this limits women's participation in the national decision making process. "To date there have only been five women members of parliament. The first woman cabinet minister being appointed in 1991.” (UNICEF 1997,p14). In addition those outside the matai system are restricted in their opportunities to be elected to Parliament.

While Samoa has had the same stable Human Rights Protection Party (HRPP) government since 1982, there are nevertheless problems emerging. The concept of accountability is seldom upheld. There is very little official response to public criticism. There seems to be a concerted effort to ignore the press and hope the problems will go away. One case in point is the operation of TV Samoa. TV Samoa is the national television station and it is generally accepted that it is abysmally run. For instance there is no regular programming, movies are stopped mid viewing, the news times vary daily, the content of programming is a exceptionally poor even given the limited budget of the organisation, announcements of program changes are often not provided etcetera. Despite a constant barrage of criticism in the newspapers, management and the Minister responsible do not respond in any way. Ministers accused of mishandling portfolios and involvement in corrupt practices, avoid the consequences under the law via virtue of political patronage or simply by admission and then suggesting what happened was in the national interest.

Access to the government run media is effectively not available to the Opposition. "The leader of the opposition SNDP, Tuiatua Tupua Tamasese is taking legal action against the government for refusing him access to the public owned media. Neither his views are broadcast on TV Samoa or Radio 2AP nor are they published in the Savali newspaper.” (Sunday Samoan, 1997, p1-2). Concomitantly in 1997, the government through the then Deputy Prime Minister produced three one and a half hour political interviews aired on the government media in defence of its economic management. This was at a time when the traditional chiefs through the Tumua and Pule ma Aiga organisations were planning a protest march that was held on 29 October 1997. 134

Press freedom is dubious. The, now deceased, Prime Minister Eti Alasana threatened newspapers with closure for printing stories that criticised the government (the government characterised these as defamatory material calculated to cause civil unrest) and successfully took legal action against the editor of The Observer newspaper for defamation. The FM radio station, Magic FM, stopped broadcasting local news for a period due to threats of legal action. The new Prime Minister, Tuilaepa Malielegaoi, while less conservative, still effectively maintains control of all government media.

The current situation is indicative of a position where the matai, the churches and fa’a-Samoa are still in the ascendancy. They have tried to accommodate democracy and modernisation by permitting universal voting but restricting seats in Parliament to the establishment (the matai). This accommodation has however led to problems with splitting of matai titles so that more candidates can stand. This has affected land title issues. The cash economy has also had a impact with titles being effectively purchased though candidate largesse.

In the political arena as in other areas of Samoan life there is still strong control being exercised by the establishment (See Lawson 1996). Whether this control is calculated to maintain the traditional power and privilege of the indigenous elite as Lawson suggests or preserve culture and tradition is open to debate. However whatever the justification for the control, it is showing signs of fracture. Tensions between fa’a-Samoa and western notions of self interest are impacting on politics. In 1991 these tensions resulted in universal suffrage be enacted. Education and health requirements have necessitated the populace having disposable cash. Politicians, in turn, have to respond to these demands if they are to retain power. (See ADB 2003). Moreover in an increasingly educated electorate, the people are able to articulate their demands.

In general, then there is a stable political system in Samoa that is conducive to development . There is also a political commitment in Samoa to development but on Samoan terms. Samoans want to retain their culture, fa’a Samoa and the matai system. There is nothing intrinsically preventing Samoa proceeding along such a development path. It may well be a slower path to development but Samoa has nevertheless made advances. Whether Samoa will be successful in retaining its culture in the face of globalisation, remains debatable. If it is successful, it may become a model for other developing countries for the type of development espoused by Sen (1999) .

DEMOGRAPHIC TRENDS

Population Growth Rate

Samoa currently has an estimated 176,700 people and an annual population growth rate of 0.5 per cent. This growth rate is however artificially low due to the effects of a net loss of citizens through immigration. The natural growth rate in 1991 of 2.4 per cent gives a more accurate picture of underlying population trends. Indeed, there is evidence that the actual population growth rate between 1991 and 1996 was 2.4 per cent that represented the first significant increase in population since 1991. (Department of Health 1996, p5). 135

Migration has played a crucial role in reducing what has been considered excessive and unsustainable population growth. The international migration rate is estimated to be 22.8/1000 population and this has maintained the real population growth at rate 0.5 per cent since 1986. The scale of immigration from Samoa can be demonstrated by the fact that there, ”were only some 6000 Samoans resident in New Zealand in 1961, by 1991 there were 86,000” (Hooper 1998, p22). Other significant populations are now located in American Samoa, the United States and Australia.

The population is considered relatively young with 40.5 per cent below the age of 15 years and only 5.1 per cent over the age of 65 years as indicated in the 2001 Samoa census. The percentage over 65 is however slowly increasing.

Age - Sex Distribution

Samoa has a high ratio of males to females with 109 males per 100 females at birth (2001 Samoa census). There is some suggestion that this may, in part, result from outward migration of more females than males. This suggestion is not however supported by Immigration officials at the New Zealand High Commission in Apia (the largest recipient of Samoan immigrants). No gender statistics are available to verify the assertion. Moreover, the sex ratio at birth is 112 males to 100 females (Samoa 2001 census) and hence migration is not a factor.

Rural - Urban Drift

Samoa has a mobile population in terms of both immigration and relocations within the country. There has been a clear trend to urbanisation and attraction to Apia in search of work and education. People have been drawn from the largely subsistence agriculture centres of Savai’i and South and East Upolu. The Samoa 2001 census indicates that 22 per cent of the population is now living in urban areas.

SAMOA AND POPULATION PROSPECTS

The basic indicators for the population in terms of the WHO strategy for health for all by the year 2000 are set out in the table hereunder and reflect the fact that Samoa is a less developed country. Table 11 WHO Health Status Targets

Indicator Samoa WHO Target

Life Expectancy at 69.5 Above 60 years Birth(years) Under 5 Mortality Rate 71 Below 70 per 1000 live births Infant Mortality Rate 58 Below 50 per 1000 live births Source: World Health Organisation, The World Health Report 1997 - Statistics, Geneva, 1997 & Country Strategy and Program Update 2003-05, ADB, Manila, 2002

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There are however significant variations in the published figures which in part reflect the sources from which data were obtained. As an example UNICEF (1997, p64) published figures indicate Samoa has an Under 5 mortality rate of 54 in 1995, and a total fertility rate of 4.0 (as against 4.76 in the 1991 census). The UNICEF figures appear to be incorrect and do not match census and/or Department of Health figures. The WHO itself has published vastly differing figures for infant mortality. While the 1997 report cited above shows the rate at 58 per thousand, figures published in 1993 show, "the infant mortality rate dropped from 35.0 per 1000 live births in 1985 to 24.9 per 1000 live births in 1989.” (WHO 1993, p147). Again the 1993 figures appear to be incorrect. The latest data available is from the 2001 Samoa census where the infant mortality rate for males is stated as 19.5 and that for females as 19 per 1000 live births. These data infer that infant mortality is decreasing in Samoa.

Looking at the data in terms of Samoan development, it is not a picture of Sub Saharan Africa. Health indicators are improving in Samoa. Samoa is developing as measured by the UNDP HDI.

In terms of population, there is only a small increase in Samoan population due to migration. This is not producing impossible demands on the government for infrastructure and public services. The current population environment is conducive to development. Should, however, Samoan migration access to other countries cease, the birth rate would certainly put great pressure on the government in respect to public services. It could curtail development and put Samoa in a poverty trap.

HEALTH OF THE POPULATION

There has been a concerted effort to improve health planning and administration. A National Health Sector Strategic Plan has been produced by the Department of Health that emphasises, inter alia, provision of a quality health system focused on preventive and primary health care. Health development efforts have been concentrated on primary healthcare activities, especially disease prevention.

Samoa is fortunate in some respects in having a significant community infrastructure emphasising health. Village based Women's Committees are being encouraged to promote health issues. These organisations have been instrumental in construction and maintenance of numerous District Health Centres. While the Committees can assist in improving health care, they can also act as a significant deterrent and a catalyst for disproportionate use of high cost hospital services.

The Women's Committees often indulge in ritualistic and conformist practices that alienate certain people, they also may charge non-members significant fees to use the health facilities. This in turn leads to people attending the main hospitals where such practices/charges are non-existent. "In one health centre it was noted that the fee for non-committee members is five times that of committee members. It was suggested that non-committee members were actively turned away before they can reach the health professionals. Confrontations occur between the nursing staff and the committee members stationed at the hospitals to collect the fees.” (AusAID 1997, p15). This gives rise to the ironic situation, where it is often cheaper for non- committee member patients to pay the cost of transportation to the Apia (or Tuasivi) hospital, where they have only to pay the government fees.” (World Bank 1993, p19). 137

The need for reliable statistical data to facilitate planning, access and evaluation of health care data is obvious given the above inconsistent published indicators. This is being addressed by implementation of a computerised Health Information System for the nation and by the introduction of National Health Cards. The health status of the people of Samoa has not shown any marked changes in the past few years. The disease pattern in Samoa is in transition with diseases associated with a western lifestyle now predominant. Heart disease, diabetes, and cancer have replaced infectious diseases as the prime health problems. This results, in part, from the success of immunisation schemes covering childhood diseases and tuberculosis. immunisation coverage for "all six common childhood diseases remained in the nineties with vaccination against tuberculosis at 97 per cent.” (Department of Health, 1995, p52).

As the Samoan diet changes to include more Western foods this also impacts on disease prevalence. In 2001 the main causes of hospital mortality were lifestyle diseases as indicated in Table 12 below. As the table relates to the direct cause of death, it obscures some underlying trends. For example, the incidence of septicaemia obscures the fact that the underlying cause of some of these deaths was most probably cancer/diabetes. The ICD 1989 figures obscure the fact that many of these deaths are related to youth suicide. A 1991 report by WHO adviser Dr. Naotaka Shinfuku, indicated that "in spite of the seemingly peaceful environment, Samoa has one of the highest suicide rates among young males in the world.” (WHO 19921, 1). There have been a total number of 317 paraquat suicides from 1973- 1994 and 546 attempted suicides between 1982 and 1994. (WHO 1991, p5 & Department of Health 1995, p45).

This high incidence of youth suicide is generally attributed to socio cultural and economic issues facing Samoan youth. Bowles indicated that "we were entertaining the idea that it was a peri-urban problem, that people had left the traditional villages for the town and were at a loose end. That to some extent has been supported. But we temper the information by the fact that a lot of it is unreliable.” (SPC 1985, p40). Other partly complementary theories include parent child conflict, where it is suggested that according to Samoan values it is unacceptable to express anger towards authority/parents.

The result of the above may be for the child to express resistance, withdrawal and sullenness. These are seen as culturally acceptable ways for children to express dissatisfaction. In unfavourable circumstances this may lead to suicide. Another variation on the theory suggests that there are limited opportunities for upward mobility in Samoa and this generates a measure of frustration in youth. (Hezel, Ruberstein & White eds 1985). Other contributing reasons for youth suicide include pressures exerted under the fa’a-Samoa system especially in respect to unmarried females who become pregnant. Regardless of the reasons, Samoa faces a significant problem with youth suicide.

Table 12 Leading Causes of Mortality Mortality cause 1995 1996 1999 2000 2001 Diseases of circulatory system 69 84 60 55 60 Certain conditions originating in the perinatal period 26 55 22 29 17 Diseases of the respiratory system 29 39 22 47 26 138

Infectious & parasitic diseases 22 26 21 23 22 Endocrine, nutritional & metabolic diseases & immunity disorders 19 26 19 23 14 Injury & poisoning 21 26 19 15 19 Diseases of the digestive system 21 23 20 16 15 Symptoms, signs and ill-defined conditions 16 18 7 11 7 Neoplasm's (cancer) 38 17 6 14 12 Diseases of the skin and subcutaneous tissue 3 2 2 6 5 Other factors influencing health status and contact with health services 28 12 ...... Diseases of the nervous system and sense organs 3 9 13 9 5 Diseases of the genitourinary system 13 6 12 11 10 Diseases of the blood and blood-forming organs 1 3 12 1 2 Complications of pregnancy, childbirth and the puerperium 2 3 1 4 3 Congenital anomalies 6 2 7 4 4 Diseases of the musculoskeletal system and connective tissue ... 1 ... 3 1 Total 317 352 243 271 225 Source : Ministry of Health, Dec 17, 2003

More detailed data obtained in 1999 (Table 13) indicate that there is a considerable problem with infant mortality in Samoa with 13 per cent of deaths occurring at the main hospital relating to infants under one year old.

Table 13 Causes of Death: Patients Admitted to TTM hospital, 1998 (by age-group & ICD 10 chapter)

ICD Chapter ICD Code <1 yr 1-4 5-9 10-14 15-19 20+ Total Range yrs yrs yrs yrs yrs 1 Certain infectious and parasitic diseases A00 B99 2 2 2 1 1 10 18 2 Neoplasms C00 D48 0 0 0 0 0 11 11 3 Diseases of the blood and blood forming organs D50 D89 0 0 0 0 0 4 4 and immune mechanism 4 Endocrine, nutritional and metabolic diseases E00 E90 0 0 0 0 0 10 10 5 Mental and behavioural disorders F00 F99 0 0 0 0 0 0 0 6 Diseases of the nervous system G00 G99 1 0 1 0 0 3 5 7 Diseases of the eye and adnexa H00 H59 0 0 0 0 0 0 0 8 Diseases of the ear and mastoid process H60 H95 0 0 0 0 0 0 0 9 Diseases of the circulatory system I00 I99 1 1 0 0 0 49 51 10 Diseases of the respiratory system J00 J99 2 0 1 1 1 12 17 11 Diseases of the digestive system K00 K93 0 1 0 0 0 9 10 12 Diseases of the skin and subcutaneous tissue L00 L99 0 0 0 0 0 5 5 13 Diseases of the musculoskeletal system and M00 M99 0 0 0 0 0 2 2 connective tissue 14 Diseases of the genitourinary system N00 N99 0 0 0 0 0 8 8 15 Pregnancy, childbirth and the puerperium O00 O99 0 0 0 0 0 1 1 16 Certain conditions originating in the perinatal P00 P96 16 0 0 0 0 0 16 period 17 Congenital malformations, deformations and Q00 Q99 1 0 0 0 0 0 1 chromosomal abnormalities 18 Symptoms, signs and abnormal clinical and R00 R99 0 1 1 0 0 8 10 laboratory findings, not elsewhere classified

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19 Injury, poisoning and certain other S00 T98 1 0 2 1 0 11 15 consequences of external causes 20 External causes of morbidity and mortality V01 Y98 0 0 0 0 0 2 2 21 Factors influencing health status and contact Z00 Z99 0 0 0 0 0 0 0 with health services Total 24 5 7 3 2 145 186 Percent 12.9 2.7 3.8 1.6 1.1 78.0 100per cent Source: Extracted from Health Information System data by L. Matalavea, HRPIRD Division, Department of Health, Samoa, 15 June 1999

The above data show that there are approximately 13 per cent of deaths occurring in the main hospital in Samoa are in the under one year old age group.

In summary, the health of Samoans is improving in some areas and declining in others. Lifestyle diseases and youth suicide are major causes for concern. A question to be asked here is how has the modernisation process affected the health of Samoans? Increases in youth suicide have been attributed to the breakdown of traditional systems and the effects of modernisation on Samoan authority systems. Researchers have also examined the changing health status of Samoans undergoing modernisation. Biological change in response to modernisation is a factor of physical environment, cultural environment and the gene pool. Bindon (1991,p101-110) adopted a lifestyle incongruity model which predicts stress on the basis of a household trying to portray a higher lifestyle than they have the economic resources to support. Bindon found that lifestyle incongruity was highly predictive of blood pressure (higher lifestyle incongruity associated with higher systolic and diastolic blood pressure) for men over 55 years of age and that higher random blood glucose levels were associated with higher lifestyle incongruity. Put simply, modernisation is extracting a price in terms of the health of Samoans.

Food and Nutritional Status

A major increase in nutrition related non-communicable diseases (NCDs) has occurred in Samoa in the last 20 years. A high level of diabetes and hypertension has been found in adult Samoans. Between 1978 and 1991 the levels of diabetes rose sharply in both sexes both in urban and rural areas. Obesity is another NCD risk factor that has risen sharply during the same period. Figures 3 through 6 below illustrate the above problems. Figure 3

Percentage of Males with Diabetes in Samoa 1978 and 1991

1978 % 5 1991 0 Tuasivi Poutasi Apia

Source: World Health Organisation, Mission Report - National Diabetes and Non Communicable Diseases Survey, by Professor Paul Zimmet and Dr Gary Douse, June 1992, p18 140

Figure 4

Percentage of Females with Diabetes in Samoa 1978 and 1991

10 % 1978 5 1991 0 Tuasivi Pout asi A pia

Figure 5

Percentage of Males with Obesity in

Samoa 1978 and 1991

60 40 1978 20 1991 0 Tuasivi Poutasi Apia

Figure 6

Percentage of Females with Obesity in Samoa 1978 and 1991

100

% 50 1978 1991 0 Tuasivi Poutasi Apia

Source: World Health Organisation, Mission Report - National Diabetes and Non Communicable Diseases Survey, by Professor Paul Zimmet and Dr Gary Douse, June 1992, p18

As deaths from heart disease, stroke and diabetes increase, the burden of health care costs for both hospital based and outpatient treatment is rising concomitantly. The country also faces reduced worker productivity as skilled workers become incapacitated due to NCD complications. "The development of these NCDs is related 141 in part to the consumption of processed and high fat foods such as white bread, white flour products, white rice, canned meat and fish, high fat meats (turkey tails and mutton flaps), sugar, salt, soft drinks and alcohol beverages. Excessive consumption of these foods results in a diet high in fat, sugar and salt and low in fibre, vitamins and minerals. Stress, cigarette smoking and lack of exercise are additional factors associated with development of NCDs.” (National Food and Nutrition Council 1995, p4).

In respect to protein-energy malnutrition (PEM) there are no recent community data available. In the decade from 1969 to 1979 levels of PEM on Upolu rose substantially. In Apia, PEM rose from 3.4 per cent to 20 per cent. Recent data from the TTM Hospital Paediatric Ward show that the number of children admitted with PEM remained around 18-19 per cent over the period 1992 to 1994. As it might be expected that these represented the worst cases, these data cannot be inferred to represent the incidence of PEM in the general community. The data do however suggest that there remains a significant PEM problem in the general community.

Table 14 Children with PEM Admitted to the National Hospital

Year of Children with Mid & Children with Severe Total Admission Moderate PEM PEM 1992 15.4 3.6 19.0 1993 16.5 2.6 19.1 1994 15.6 2.2 17.8 Source: Nutrition Centre, Department of Health, Samoa

Local food production per head of population is decreasing as indicated in Figure 7 hereunder.

Figure 7

Food Production Index Per Head of Population in Samoa

120 110 100 90 80

Production Index 1961-63 1971-73 1981-83 1993

Source: FAO WAICENT Database, www:\\fao.org

The staple food crops of Samoa are taro, giant taro (taamu), yams, coconuts, bananas and breadfruit. These provide bulk of dietary energy and are also a good 142 source of protein, vitamins and minerals. Locally produced protein includes fish, other seafood, beef, chicken, pork and eggs. Livestock numbers have increased over recent years. Beef shows the largest increase and is likely to continue to increase given the domestic market. Fruit and vegetables are produced in Samoa with the main vegetables being dark green leafy varieties such as Chinese and standard cabbage, cucumber, lau pele, tomatoes (primarily cherry tomatoes), eggplants, sweet corn, standard and snake beans, green peppers and peanuts.

WATER SUPPLY AND QUALITY

The Water Supply Authority of Samoa has indicated that in 1996 water supply coverage stood at 90-95 per cent in Upolu Island and 70-75 per cent on Savai’i. Water supply on Savai’i was further improved in 1998 and beyond under a European Union project to improve access to water. Only three water supply sources are provided with slow sand filters, in addition to the standard treatment of sedimentation. These water sources are all located in the Upolu urban area: Alaoa, Malololelei and Fuluasou water reservoirs.

The quality of reticulated water in Samoa is a significant cause for concern. Samples taken for bacteriological analysis at the National Health Laboratory Division of the Department of Health show, "Coliforms Count: too numerous to count (TNTC), which in WHO standards for untreated water, far exceeds the coliforms presence limit of ten per millilitre of water.” (Department of Health 1997, p2).

Another problem is that water sampling is infrequent. For example in 1994 no sampling was performed in any rural water source in Upolu. In 1994 and 1995 no samples were taken from any water source in Savai’i. In 1996 most areas were not sampled and those that were tested were only tested once. The result is that there is very poor control over water quality and water quality remains a health problem.

Samoa had very low water charges - 12 sene per cubic metre. The Samoa Water Authority was unable to cover its costs and relied on a government subsidy equivalent to ST$300 per household in 1995/96. "At present water charges are unrelated to consumption, with the result that per capita water use in Samoa is one of the highest in the world. The Samoa Water Authority estimated that current per capita water use (in 1997) at 600-900 litres per day per person.” (Department of Health 1997, p7). The low water quality however makes consumers unwilling to pay realistic charges. Installation of water metres, with the aim of reducing per capita usage to 300 litres per day per person, has however had a dramatic effect on water usage.

PHYSICAL HEALTH INFRASTRUCTURE

The TTM Hospital with 251 beds, is the sole referral hospital for all curative health care services on Upolu. The fifteen health centres in the country are recorded as having a total of 287 beds (Department of Health 1996, p8) but this figure is highly misleading. This figure represents supposed bed capacity not actual beds. Most of these centres do not have beds and people bring in their own mattresses and lie on the floors. The 20 bed Tuasivi hospital, funded by Japanese aid, was however 143 opened on the island of Savai’i. Since the opening of the Tuasivi hospital there has been a reduction in the number of referrals to the TTM Hospital in Apia.

New Zealand Official Development Assistance (NZODA) has been available to the Government of Samoa for refurbishment and maintenance of the National Hospital. Funding under this project ceases in 1998. The Department of Health has prepared a maintenance plan for all facilities but has not sufficient resources to upgrade district hospitals to required levels let alone the country's health centres. As indicated earlier in this thesis, as the Women's Committees and villages often organised the construction of health centres, the responsibility for their maintenance, payment of electricity and telephone bills has long been a source of contention.

Medical equipment maintenance is a very significant problem with little or no preventive maintenance being undertaken within the hospital system. For many years facilities at Sataua district hospital were not operational and there was no running water available for deliveries or minor operations. The state of medical equipment repair has led to AusAID proposals to train maintenance staff. There are also problems with inaccuracy of laboratory tests and the general standards observed in the laboratories. AusAID support has also been offered in these areas. There are a large number of health centres in rural areas. These health centres are the basic unit of health care delivery in these areas. They are staffed by a team of registered and enrolled nurses and a doctor originally was supposed to make visits periodically and refer patients to the major hospitals for treatment but the system does not operate because of medical practitioner shortages.

The number of health centres is a real problem for the Department of Health. Firstly it has no real resources to maintain these facilities (even if they were deemed to be a departmental responsibility). As such the facilities continue to deteriorate. The Department cannot adequately staff or provide medical equipment to such facilities and as such, patients continue to gravitate to the two major hospitals. As indicated earlier, in some locations, the Women's Committee operations act to disenfranchise non-members from their right to health care in the health centres. Hence in locations, such as the Lalomanu District Hospital, the facility serves more as a base for the nurse who goes out into the community to deliver health services than it does as a district hospital. The fracility has no beds or patients in its wards.

In respect to the above, "the Government has resolved that the building of all new hospitals must be approved by Cabinet. This has been a positive factor in controlling the ad hoc building of health facilities. The Department of Health has also recognised in its strategic plan that a low bed occupancy rate suggests that there may be efficiency gains to be made in the hospital system.” (Department of Health,1996, p29). Department of Health only hints at its real concerns. It is fully aware of the inefficiency and costs occasioned by the disposition and number of health centres but it is also acutely aware that there is no political will to force through a rationalisation. As the evaluation indicates, "Local communities apply considerable pressure on their Government representative to staff these hospitals with qualified doctors and to build new facilities.” (Department of Health,1996, p29).

Samoa receives a continual flow of donated equipment both as a result of country request and donor initiation. It is hard to say "no" to donations but often these are not 144 in accord with health priorities. The view that some equipment is better than none prevails and politicians are quick to seize on the publicity opportunities donations present. All too often the equipment is either not utilised or under-utilised. This occurs as a result of inadequate management follow-up, lack of user expertise and/or no maintenance provision for the equipment. In a 1997 radio interview, Dr. Katrina Watson, an Australian gastroenterologist working in Samoa, indicated that packages containing donated endoscopes remained unopened for over 12 months because no user training was provided. (Watson, 1997).

In Samoa the Department of Health finances all public sector medical services through annual appropriations from Treasury. This creates a situation where managers do not see the need to effectively manage resources. Indeed while the department espouses the pre-eminence of preventive care in its policy documents it allocates approximately 75 per cent of its budget to curative services.

Furthermore, in Samoa it is donors who finance a significant portion of development programs and some of the more important recurrent expenditures. This table below clearly indicates the extent to which the Samoa health system depends on overseas assistance Table 15 Grant Aid to the Samoa Health System

Program/Item FY94 FY95 FY96 FY97 FY98 National Hospital Maintenance 484,496 523,717 599,093 101,574 567,124 Tuasivi Hospital 1,300,000 0 0 0 0 Medical Treatment Scheme 1,176,974 860,392 0 677,163 677,163 Medical Experts 0 0 561,862 101,574 67,716 High Dependency Unit 0 0 0 0 29,035 School of Nursing Facilities 0 0 1,048,505 380,860 527,238 MCH Family Planning 0 0 1,571,429 3,468,781 1,489,965 Primary Health Program 0 0 253,876 0 0 Health Information System 0 0 0 0 639,206 General Health Assistance 0 4,264,860 0 0 0 General Technical Assistance 69,214 0 0 0 0 Total Foreign Grant Aid 3,030,684 5,648,969 4,682,253 5,051,691 3,997,447 Government Health Expenditure 15.4 14.7 16.5 18.4 24.1 (in millions) Total Health Expenditure (in 18.4 20.4 21.2 23.5 28.1 millions) Foreign Aid as per cent of Total 16.3 27.9 22.2 21.7 14.2 Health Expenditure Source: The World Bank, Samoa Health Sector Review - Meeting the Challenges of Development, Report No 18100-WSO, Health Nutrition and Population Unit, East Asia and Pacific Region, 29 Nov 1998, p 10

The above data were provided to the World Bank by Samoa Treasury and the table actually substantially understates the extent of grant aid to Samoan health. It appears that Treasury data are only in respect to capital inputs through the grant scheme. The data do not reflect the adviser inputs, management costs etcetera for Projects. For instance, the Health Information System data supplied by Treasury relate to capital inputs whereas the total cost of the project was approximately A$2 million during 1997 and 1998. In respect to the High Dependency Unit (HDU) Project the data are erroneous and do not include capital costs of equipment supplied. 145

AusAID figures from its internal Management System (AMS) indicate the following HDU Project expenditures:

1993/94 A$307,005 1994/95 A$328,726 1995/96 A$ 60,860 1996/97 A$ 14,988 Total A$711,577

HEALTH SYSTEM STAFFING

There were 901 employees in the health system as of mid 1996. Nurses represent the largest single category of employee. There has been a significant number of health professionals trained to post graduate level. Since 1992 there have been 18 medical students who have commenced study at the Fiji School of Medicine under the WHO sponsored "Western Samoan Medical Doctors Human Resource Development Plan 1992-2006". Six will qualify as medical doctors by the end of 1997. Samoa faces problems in retaining medical practitioners as there is a significant loss of these professionals through migration. In addition this problem is made more acute by the fact that 41 per cent of the country's government doctors are at or above retirement age. (See Table 16 below). This is further exacerbated by the fact that 38 per cent of the country's private practitioners are also over the official retirement age of 55.

Table 16 Doctors in Government Service as at September 1997

Age Group Number. Percentage Cumulative per cent < 45 yrs 16 44 per cent 44 per cent

45-54 yrs 5 14 per cent 58 per cent

55-64yrs 7 19 per cent 78 per cent

65+yrs 8 22 per cent 100 per cent

36 100 per cent

Source: HRPIRD Division, Department of Health, Samoa, September 1997

Nurses are trained to diploma level by the Department of Health's School of Nursing/National University of Samoa, Faculty of Nursing. This is a four year course. An Advanced Diploma of Nursing and Enrolled Nurse Education Program are offered by the hospital based School of Nursing. Since 1990 sixty eight enrolled nurses have graduated from the enrolled nurse program. These advances have however been negated by the high attrition rate of registered nurses. There is also anecdotal evidence that there is a high absentee rate among nurses at certain health facilities.

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EDUCATION IN SAMOA

Primary education covers an eight year cycle divided into two three year sections: lower primary (years 1-3), middle primary (years 4-6) and upper primary (years 7-8) often referred to as intermediate level. A total of 157 primary schools is located throughout Samoa - 139 government, 16 mission and two private - with an enrolment of approximately 38,000 students (94.3 per cent of primary school age children). There are 25 junior secondary schools and 19 senior secondary schools. Tertiary institutions include the National University of Samoa, the University of the South Pacific School of Agriculture, Western Samoa Polytechnic, Western Samoa Teachers College and the Maritime Training Centre. There are also tertiary institutions managed by churches such as Theological Colleges and Technical Vocational Schools. Under the Education Amendment Act 1991-1992, all children between the ages of 5 and 14 years (or until completion of Year 8) are required to attend school unless exempted by the Director of Education.

Primary Schools

All government primary schools, except Malifa, are village owned and managed by school committees appointed by the relevant village council (Fono). The committee is responsible for school buildings, equipment and furniture, and collection and disbursement of school fees. Staff salaries, stationery and curriculum materials are provided by the Department of Education. The Malifa schools (Apia Lower, Apia Middle and Leifiifi Intermediate) are owned and managed by the Department and directly government funded. A portion of the fees paid by parents becomes a government levy. Total enrolment is currently approximately 4,500. Most primary schools are staffed by teachers who are Western Samoa Teachers College trained. Approximately 75 per cent are women. The overall primary teacher student ratio is 1:27. The eight year primary cycle culminates in the Year 8 National examination covering Samoan, English, mathematics, science and social studies. Except for Samoan examinations are conducted in English. Figure 8 hereunder depicts the education system in Samoa as at 1997. The system is in transition with policies being introduced to streamline examinations and subjects offered.

Figure 8 SAMOA EDUCATION SYSTEM

Education Category Years Institution/s Examination Sector Primary Lower Primary Years 1-3 157 Primary Schools Education Middle Primary Years 4-6 Upper Primary Years 7-8 Year 8 National (Intermediate Level) Examination Secondary Junior Secondary Years 9-11 25 Junior Secondary Junior Education Schools Secondary School Certificate Year 11 147

Senior Secondary Years 12-13 19 Senior Secondary Samoa School Schools Certificate Year 12

The Pacific Senior Secondary Certificate Year 13 Post Polytechnic Samoa Polytechnic Secondary Education Vocational Education Marine Training Centre, Theological Colleges, Technical Vocational Schools, WS Teachers College, School of Fine Arts, Department of Health’s School of Nursing University National University of Samoa (including Faculty of Nursing)

University of the South Pacific School of Agriculture Source: Compiled from information in Department of Education, Education Information 1996, Apia

Problems with the Primary School System

The following synopsis from Western Samoan Education Policies 1995-2005, highlights the problems being experienced in Samoan primary schools:

"School facilities are generally poor with equipment either non-existent or poorly maintained. Management and budgeting systems are not consistent across village schools and the Malifa schools and are generally inefficient. Curriculum materials and textbooks are generally not available or not available in the quantities required. Although most classroom teaching is in Samoan, the Year 8 examination is in English. The absence of a systematic bilingual methodology and teachers who lack bilingual facilities, mean that most students are linguistically disadvantaged. An over reliance on rote learning methods and a general lack of creativity in classroom approaches limit learning possibilities..... Numeracy and literacy skills in both Samoan and English are low, particularly among boys. Instructional times for various subject areas at the three primary levels are not clearly laid down, with the result that some teachers concentrate on subject areas with which they are most comfortable and neglect others. The overall teacher student ratio of 1:27 conceals extremes in class sizes of 60-70 in the Malifa schools and less than 10 in some rural schools. The former situation is where large numbers of 148

children sit on the floor in overcrowded classrooms.... There is a gender imbalance among principals, senior and classroom teachers, with women outnumbering men 4:1. The gender ratio in the inspectorate is the opposite with men outnumbering women 20:1.”(NZODA 1995, p16-17).

Secondary Schools

As depicted in Figure 8 secondary education in Samoa covers a five year cycle from Year 9 to Year 13. The cycle is divided into a three year junior secondary component and a two year senior secondary component. There are 22 junior secondary and three senior secondary schools within the government system. (These are supplemented by 18 private secondary schools). Two of the senior secondary schools, Avele and Vaipouli Colleges offer Years 9-13 programs while Samoa College offers a four year program that excludes Year 11.

Senior secondary schools are departmentally owned and operated. Entrance to these schools is generally based on results in the Year 8 National examination. There is however some discretion given in enrolment matters to the principals concerned and the Director of Education but only in respect to a limited number of places. Students with the highest marks go to Samoa College, the next group from the island of Savai’i go to Vaipouli and the third group (which used to consist of males only from Upolu go to Avele. About 360 students gain places in Senior Secondary schools each year. The rest (approximately 2000) are virtually consigned to junior secondary schools. These offer a three year program and are owned and managed by the districts in which they are located. Many primary school leavers opt out of the government system after primary school and enrol in one of the private secondary schools that offer the same program as government schools.

Most students attending government junior secondary school complete schooling at Year 11. A select few are offered places in Year 12 at Leifiifi junior secondary school, while others may enrol in senior secondary Mission schools. "Approximately 70 percent of the total age group is enrolled in the junior secondary years with about 60 percent completing Year 11. Approximately 25 percent of the total is enrolled in Years 12 and 13 with about 15 percent completing Year 13. Non government schools enrol approximately 40 percent of all junior secondary students and 65 percent of all senior secondary students.” (NZODA 1995, p22). Places in the private senior secondary schools are also at a premium. For instance, there was as of September 1997 an 18 month waiting list for entry to Robert Louis Stevenson Secondary School. This is despite the fact that the school itself was operating out of rented premises.

Problems with the Existing Secondary System

The Department of Education (NZODA 1995, p23-24) has identified the many problems with the current secondary school structure and operation. These include that the present dual-stream structure is inequitable and inefficient. Access to senior secondary education is limited and selective, with only about 25 percent of the age group receiving any senior secondary education and only about 15 percent completing Year 13. In addition, a disproportionate number of students gaining 149 access to government senior secondary schools are from Malifa schools, thereby advantaging urban over rural students.

Although girls as a group do better than boys at the Year 8 National Examination, because one in three government senior secondary schools (Aveli) was exclusively for male students, only half as many girls as boys gained access to places in senior schools. This has now been altered with Aveli being made coeducational. It remains to be seen if the imbalance will be fully rectified.

The junior secondary schools offer the vast majority of students, particularly rural students, inferior educational opportunities. Fifty percent of those who enter at Year 9 do not complete Year 11. Poor facilities and many inadequately trained teachers contribute to dissatisfaction with the junior secondary school system. Very few students who enter junior secondary schools are able to access government senior secondary schooling.

About 25 percent of the total age group do not proceed to Year 11. This represents a significant wastage of development potential among the youth of Samoa as employers prefer to employ students with senior secondary school education. The overall teacher-student ratio in the secondary system is 1:20 but this hides the fact that teacher allocation is poorly managed. In some schools teachers may teach as few asl4 hours per week or as many as 22. Class sizes vary widely depending on subject and school size.

The departure rate for teachers leaving the system is high due to poor salaries and working conditions. Nearly 50 percent of teachers in junior secondary schools are primary-only trained and for subjects such as English, Maths, the sciences and accounting there is a heavy reliance on expatriate teachers. Facilities such as libraries, science laboratories, home economics and industrial arts rooms are either non-existent or inadequate.

Student performance in the secondary school system is questionable. External examination results are more reflective of failure than success with a 30 percent Western Samoa School Certificate pass-rate and only 10 percent of Year 13 students gaining a Pacific Senior Secondary Certificate aggregate (12 or better) required to enter the National University of Samoa preparatory year.

The three external examinations in the five year program act to limit student opportunities and also tend to dominate classroom activities. The secondary system, akin to many elsewhere, is regarded as lacking relevance to village life and labour market needs with too much emphasis on the expectation of white collar jobs.

The Department acknowledges the education system is beset by a multitude of problems, has strategies to address them and is supported in this by donor agencies. In 1997 for example the Teachers College was merged with the National University of Samoa and training of teachers for special education was incorporated into the NUS curriculum. In addition a National Training Council has been established. It will however take many years of concerted effort to bring the system to acceptable standards.

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HEALTH, EDUCATION AND DEVELOPMENT

The foregoing analysis has shown that over the last ten years there has been significant improvements in health and education. Much of this improvement has occurred with the help of bilateral and multilateral aid donors. The situation in respect to health indicates Samoa is becoming more affluent with a consequent rise in lifestyle diseases such as diabetes and heart conditions. In education, new schools have been built and others have received major maintenance. New curricula have also been implemented.

The advances in health and education continue with additional aid and government resources being targeted at the sectors. As the Samoan Minister for Finance, Misa Telefoni, announced in his 2004/05 budget speech:

A total of $2.2 million has been provided as counterpart cost for the Health Sector Project funded by the World Bank. Under this program, a contract has now been awarded to a local firm to commence selective capital works on the Tupua Tamasese Meaole Hospital. This will involve refurbishment of the outpatient area, the operating theatre, and maternity ward. This will also include selected equipment for these facilities. This should improve substantially the quality of the building for improved services and health care.

Investment in education remains a priority area of development. The objective is to ensure all children receive good education through enhanced teacher quality and improved teaching materials and facilities. A good education system will generate people with appropriate knowledge and skills demanded by the private and public sectors. In support of ongoing development of this vital sector, a total of $52.0 million has been allocated, indicating an increase of $1.9 million over the 2003/04 allocation. The key measures proposed for 2004/05 (Telefoni 2004, pp4-5)

What the above shows is that Samoa is developing in terms of social infrastructure. As such. It would appear that there is nothing pertinent in Samoa’s current state of health or education development that would negatively influence its future development prospects. On the contrary, developments in health and education should support the future development of Samoa.

IMPACT OF THE STATE OF DEVELOPMENT OF SAMOA ON FUTURE DEVELOPMENT

Samoa is being managed better economically than most Pacific nations. This fact has been demonstrated earlier in this chapter in respect to increases in Samoan GDP relative to its neighbours. People are not starving, although many are malnourished. Most children do attend school, although the standard of schooling is not satisfactory. It is improving its health and education sectors. Under-employment and unemployment are real problems. Samoa has an opportunity to develop sustainable fishing and tourism. Some advances can also be made in agriculture. Samoa's relative location in the Pacific and attendant transportation problems however make any large manufacturing enterprise highly problematic. There seems 151 little possibility that in the short term, if ever, Samoa can become economically self- sufficient. Samoans do not live in absolute poverty but they reside on the precipice. They have the opportunity to move forward and slowly progress economically or slip backward to economic stagnation and real poverty.

The analysis in this chapter shows that culture, politics, and the economic, health, education situation in Samoa all impact upon development. At different times they may either help or hinder development. For example, Samoan culture is often seen as an inhibitor to development. Culture is seen as holding back change. However, culture may well have helped Samoa in terms of improving health and education outcomes. While culture dictates that decisions are made by consensus, once that consensus is reached it becomes inviolate. For example, if a decision is taken to immunise a village or villages, there will be a 100 per cent immunisation rate. Campaigns in Samoa by the WHO to eradicate filariasis in the 1990s were therefore very successful.

The keys to continued development appear to lie in continued remittances, aid, good fiscal management, reform of the public sector and prudent development of resources.

Certainly, the analysis shows that Samoa has numerous development challenges but these are not insurmountable. The state of Samoan development is not a determinant of Samoa’s long-term development prospects nor is it a determinant of the sustainability of that development. It merely represents the environment in which development may occur. It may inhibit future development but it will not prohibit such development. By examining development state in Samoa in terms of inhibitors, future development prospects do however become more crystalline.

It will become clear in this thesis that the prime determinants of development are not the history, culture or development state of the country but rather an innate desire of the people to modernise and the existence and implementation of sound macro and micro economic policies. While history, culture and state of development impact development they do not determine development outcomes. Moreover the above prime determinants of development are not adequately covered in any of the development theories that have been mentioned earlier. This proposition will be tested in respect to the outcomes of the AusAID projects to be reviewed later in this thesis. In Chapter 14 the results of aid projects will specifically be contrasted against development theory prescriptions. 152

CHAPTER 7 HISTORY OF FOREIGN AID TO SAMOA

This chapter is designed to explain the role aid plays in the Samoan economy and Samoan development. It describes the history of aid to Samoa and highlights why countries give aid to Samoa, who the major donors are and whether aid has had any positive results. It also looks at how Samoans view aid delivery. In doing so it will put the four case studies that follow into context.

AID TO SAMOA

Since its independence in 1962 Samoa has received aid from New Zealand. New Zealand has played a long and active role within the Pacific, particularly with the Cook Islands, Niue and Tokelau in terms of aid and remittances. In the mid 1980s New Zealand was still the primary aid donor. Gradually however Australia became the primary donor followed by Japan. Japan commenced aid funding to Samoa in 1977 and has at various times assumed the role of major grant aid donor. Table 17 hereunder shows the largest donors by aid volume

Table 17: DAC Data on Aid to Samoa Donor US$m Australia 7.0 Japan 7.0 New Zealand 5.0 IDA 2.9 EC 2.6 UNITA 1.2 United States 0.7 Germany 0.5 UNDP 0.4 Arab Agencies 0.4 Source: OECD (DAC Task Force on Donor Practices), 2002

The above DAC data conflict with those available from OECD (Table 18). These show different totals for the three major donors as the following table illustrates:

Table 18: OECD Data on aid to Samoa Year Japan Australia New Zealand 2003 5.76 9.56 1.32 2002 5.22 7.04 6.45 2001 22.23 8.76 4.16 2000 10.23 8.38 4.26 Source: http://www.oecd.org/dataoecd/50/16/5037775.htm

The tables above however do show that Australia, Japan and New Zealand are the preeminent donors. Multilateral agencies also have important roles to play. At times the Peoples Republic of China has also supported infrastructure projects in Samoa; most notably the Sports Stadium and Treasury Building in Samoa and in 2005 the Aquatic Centre.

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In 2004/05 External Grants reached ST$241,384,064 out of a total government revenue of ST$551,473,409. External grants increased by over ST$60 million from 2003/04 with most of this due to the new aquatic centre (Chinese aid) and proposed NUS/Polytechnic buildings under Japanese aid. Another way of looking at aid to Samoa is as a percentage of GNI. In Samoa this has varied as follows:

Table19 Aid as a Percentage of Samoan GNI 1998 1999 2000 16.2 9.6 11.6 Source: OECD (DAC Task Force on Donor Practices), 2002

Other sources indicate that aid represents 14 per cent of Samoan GDP25. As can be seen from the above grant situation aid plays an important role in Samoa although the country is not completely dependent upon foreign assistance.

WHY DO DONORS GIVE TO SAMOA?

As indicated in Chapter 1, issues of politics, trade and defence permeate Australian development cooperation with its neighbours. These issues are further highlighted by Wilkinson (1976), Babbage (1987), Bowman (1993), Mc Cawley and Phillips (1994) and Hamblin (1996).

With reference to Pacific Island Countries (PICs), the Australian government has stated: “Australia has long accepted a special responsibility to help the Pacific overcome the triple disadvantage of isolation, limited production bases and vulnerability to natural disasters” (AusAID, 1998 p2). This historical connection between Australia and the Pacific dates back over two hundred years, and includes the immigration of some 61,000 Pacific Islanders to Australia between 1868 and 1904 as part of, the ‘Melanesian labour trade’. Immigration over the years due to natural disasters, civil disturbances and predictions of long term global warming has fostered and consolidated this tie. At present relations between the Australia and the Pacific remain of significant importance for all parties, and it appears that they will continue to be so.

Aid to Samoa is provided as an instrument of foreign policy, trade, defence (in its wider sense) and also for its stated purpose humanitarian reasons. In addition donors give to Samoa as it tends it achieve results in excess of what might be achieved elsewhere in the Pacific.

In terms of aid as an instrument of foreign policy the use of money to secure agreements is not new. The recent Australian agreements with Naru and Papua New Guinea in respect to asylum seekers are well documented. See Chapter 4. Naru received direct financial assistance and Manus Province in PNG has received funding for primary and secondary schools and upgrade of naval facilities. Moreover, the support to secondary education contradicts the AusAID policy of only supporting development priorities detailed in the PNG Medium Term Development Strategy. That strategy targets primary schools not secondary school development. As a result the funds for Manus were channeled through the Department of Foreign Affairs (not AusAID) to the PNG Department of Foreign Affairs. Likewise Japan has

25 Samoa Country Program at http://www.ausaid.gov.au/country.cfm?CountryId=18 154 made no secret of using its government aid program to promote its own economic and political interests. (See Jarrett 1994, p195). Japan is the largest fishing nation in the region, and buys the majority of pacific island timber. “Since becoming an aid donor to the region in the mid 1070s, Japan has funneled the majority of its assistance to the fisheries sector” (Tarte 2000, p 395). Japan also continues to seek to influence Pacific Nations concerning relaxation of whaling restrictions. China paid PNG US$5 million as part of a deal to recognize it instead of Taiwan. (Standish 1999).

“Pacific Islanders, on a per capita basis, have perhaps greater representation in international organisations than anyone else in the world. In total, the 7.6 million people of the independent island states of the Pacific have more voting power in international for a like the General Assembly of the United Nations than the 3.5 billion people of China, India, Japan and the US combined” (Brown 2005, p5). Hence Samoa with its tiny population of under 200,000 is politically important as it vote might be influenced by provision of aid. Australia courts Samoan votes at international agencies. Most recently this was evident in respect to the appointment of Greg Irwin to the South Pacific Secretariat to the publicly voiced displeasure of Prime Minister Somare of PNG.

The key objective of Chinese aid to Samoa is again political. It seeks to counter the influence of Taiwan in the region. This rivalry between Taiwan and China is well documented with various countries in the region at times recognizing one or other country only to change recognition as the need arose. (Hill 1999, p2). In 2004 China was again trying to influence Vanuatu not to recognize Taiwan. Apparently Prime Minister Serge Vohor’s reason for breaking with Beijing was lack of aid (New York Times Nov 2005, p W1).

In terms of trade, Samoa has few resources of interest to donors other than fish but it imports a good deal of produce from Australia and New Zealand. Chapter 14 gives details of Samoa’s main export markets and import sources. Samoa is a small but important market for Australia and New Zealand produce and one where the balance of trade is heavily in the donors favour.

In respect to defence, Samoa is of little import militarily but it has assumed greater importance since terrorism became a global issue. The South Pacific in general “represents a potential springboard for illegal immigrants, terrorists, drugs, money laundering and organized crime” (Brown, 2005, p 5). Indeed Samoa has received funding support from the Australian Government to improve passport and immigration controls and policing. This was partly as a result of publicly reported sale of Samoan passports and Russian mafia money laundering via Samoan banks. In addition in a globalised world, Samoa is also important as a bulwark against disease and pandemics. An effectively functioning health system in Samoa will impact on the spread of HIV, SARS and similar diseases.

Lastly donors like to give to Samoa as it represents “best practice” in the Pacific. While donors (especially multilateral agencies) are reticent about providing grants or loans to PNG or the Solomon Islands for example they are eager to engage with Samoa. Samoa has its Strategy for Economic Reform, it has followed the World Bank prescripts for change. Donors like what they see in Samoa. The European 155

Union, Asian Development Bank, Australia and New Zealand have confidence in Samoa.26 AusAID categorizes Samoa as follows:

Through its positive policy action, Samoa has emerged as the leader of economic and public sector reform in the Pacific. The framework for economic and social development is set through the Samoan Government’s Strategy for Development of Samoa (2002-2004). The main thrust of the Australian aid program to Samoa is to help the government to implement key elements of its reform strategy..” 27

Samoa is also noted for having a good aid coordination system “that was recognised as such by Samoan domestic interests and by partner agencies. There was further recognition regionally of Samoan achievements in donor coordination”. (Delay 2002, p 13). In terms of donor coordination Samoa had two national committees; one for donor coordination and the other for national development planning. Between them, they focused donor assistance onto the objectives of the Strategy for Development of Samoa (SDS).

In addition to donors being impressed with Samoa, the aid coordination bodies in Samoa also know how to access aid. “The aid coordination function has developed strong knowledge of the various donor preferences and approaches and is able to target requests for assistance in ways which are helpful to both side of the partnership and which further sustain the sense of Samoan ownership” (Delay, ibid). While aid coordination is strong at the national level, sector performance is less advanced. The strongest sectors are education and health which is not surprising as they have received the bulk of New Zealand, World Bank and Australian aid.

WHAT DOES AID FUND?

To develop an understanding of the importance of aid it is necessary to examine both donor and recipient data.

Australian and New Zealand Aid

In the period 1981 to 1991 most of Australia’s aid to Samoa was directed to education, public administration, economic infrastructure and agriculture. Between 1981 and 1986 40-50 per cent of bilateral aid was allocated to economic infrastructure and between 10 and 20 per cent to education. Projects emphasized transport, communications, electrification and the provision of improved meteorological services, especially in cyclone prone areas. In the period 1986 to 1991 public administration and education received the greatest share of Australian aid. (See Jarrett 1994, p 45). Allocations to various sectors changed through the 1990s with education, health and infrastructure assuming greatest importance.

Currently, Australia’s Regional Aid Strategy (2005-2009) provides the framework for Australia’s regional aid interventions and has four key themes:

26 See EU Relations with Samoa at http://eurpoa.eu.int/comm/develo.../country; Samoa 2000: Building on Recent Reforms, ADB 2000 27 AusAID, Samoa: Leading Reform in the Pacific with Australian Assistance, http:// www.ausaid.gov.au/hottopics/pacific/samoa.cfm 156

1. Stronger broad based growth 2. More effective, accountable and democratic government 3. Improved law and justice and security 4. Enhanced service delivery

Australian and New Zealand aid to Samoa is directly linked to the key elements of Samoa’s national development strategy (the Strategy for the Development of Samoa, SDS 2005-07) and goal of economic independence. Moreover the governments of Australia, New Zealand and Samoa are preparing a Joint Aid Program Strategy (2005-07) to support of the SDS.

Priorities in the new Samoan SDS are quite different to those pursued in the early 1990s. It can be seen therefore that development priorities shift over time. There has been a progression from the basic infrastructure projects associated with cyclones and tree crop projects through to the Fisheries, Customs, Education and Health projects of today. Basically, as Government of Samoa priorities change so do the development projects. While priorities change, the bases for these changes are not well articulated. AusAID has done little to establish its raison d’être for development assistance in Samoa. This can be deduced given the brevity of the Samoa Country Strategy Paper, at only 2¼ pages of actual comment. There appears to be no comparable New Zealand government strategy paper in respect to Samoan development. The substantial AusAID development cooperation investment in Samoa would appear to rest on the above perfunctory analysis of sectoral development need or a complete Australian accord with the Samoan SDS.

In considering the above development co-operation relationship, it is important to remember that AusAID funds are grant funds not loans. As such the failure of any specific project may have scant impact on the public of Samoa taxes and fees will not necessarily rise. In the case of loan funds, the failure of a project has direct implications for public expenditure policy.

Annexes C and D respectively detail Australian and New Zealand aid activities in Samoa as at 2004/05. Australia and New Zealand concentrate on health and education, law and justice and public sector reform. There is intermittent involvement in agriculture and the environment.

Japanese Aid

Japanese grant aid to Samoa commenced in 1977 but no loan aid has been given to Samoa. Japanese aid has been directed at provision of a fisheries centre, fish markets. National University of Samoa, inter island ferry, airport upgrade, sea walls to protect against cyclones, construction of the National University of Samoa and Polytechnic buildings. Some aid has also been given the University of the South Pacific campus in Apia. Japanese government aid has been concentrated on public infrastructure Projects although there have been small investments in agriculture.

The development of port facilities is one of the most important issues in the Government of Samoa’s current national development plan. In this context, the Japanese Government has funded the construction of a new wharf to help reduce port congestion caused by the condition and size of the previous wharf. This is the 157 fourth grant aid project undertaken by the Japanese Government in the development of Apia Port.

Details of some recent projects funded by the Japanese Government appears hereunder:

Fiscal Year Grant Aid 1994 Rural Electrification Project Project for the Development of Rural Telecommunications Aid for Increased Food Production Grassroots Projects (4 projects) 1995 Project for Development of Rural Telecommunications Project for Upgrading of the National University of Samoa Grassroots Projects (4 projects) 1996 Project for Upgrading of the National University of Samoa Grassroots Projects (9 projects) 1997 Project for Construction of the Inter-Islands Navigation Vessel Supply of Equipment for Science Experiments to the National University of Samoa Grassroots Projects (10 projects) Aid for Increased Food Production 1998 Grassroots Projects (6 projects) Project for Upgrade of USP Net Communications 2001 The Project for the Second Development of Apia Port 2003 The Project for Upgrading and Extension of Samoa Polytechnic Source: Ministry of Foreign Affairs, Japan, http://www.mofa.go.jp/policy/oda/summary/1999/ap_oc01.html#WESTERN SAMOA

The table hereunder indicates the size of Japan’s grant aid to Samoa. The contribution in the late 1990s was around the $US 14 million per annum mark. Recent projects at the Apia Port and Polytechnic have sustained this level of investment into the new millennium.

Table 20 Japan's ODA Disbursements to Samoa Grants Year Total Grant Aid Technical Cooperation ($US million) 1994 18.50 4.23 22.73 1995 9.22 5.40 14.62 1996 10.02 4.28 14.30 1997 6.25 3.89 10.14 1998 10.42 4.39 14.81 Total 120.94 48.78 169.74 Source: Ministry of Foreign Affairs, Japan, http://www.mofa.go.jp/policy/oda/summary/1999/ap_oc01.html#WESTERN SAMOA 158

Japan also provides support for the Pacific Islands Forum of about US$400,000. Technical cooperation to Samoa from Japan is also considerable. For example in 1998 technical cooperation totaled US$4.39 million. For the period up to 31 December 1998 a cumulative total of US$48.78 million was provided to Samoa.

SAMOAN VIEW OF AID

In the 2004/05 Budget address of 31 May 2004 the Minister for Finance and Deputy Prime Minister, Hon Misa Telefoni indicated that Samoa had recorded average annual changes in real GDP of 4.4 per cent compared to Kiribati at 4.6 per cent, Tuvalu at 4.3 per cent, Cook Islands at 3 per cent, Fiji at 2.4 per cent, Vanuatu at 0.8 per cent and PNG at -0.1 per cent. He indicated that “this achievement for Samoa is laudable considering the lower rates in the past years” (Telefoni, 2004, p2).

Minister Telefoni also highlighted that while ordinary revenues for 2004/05 were estimated at ST$310 million (a 3 per cent increase over 2003/04), external grants had jumped by ST$60 million to ST$241.4 million. These external grants represent grant aid to Samoa. This statistic clearly emphasizes the role aid plays in the Samoan budget and development. Without aid and remittances Samoa would be in a perilous fiscal state.

The above fact is further highlighted by the role aid plays in government expenditures in Samoa. The Budget address provides a good illustration of this point. In education, Australian aid is funding a large part of the Ministry of Education Institutional Strengthening Project and the ADB is funding reconstruction of 19 selected schools. Another 10 year infrastructure development and pre-service teacher training plan is being negotiated with the ADB. Upgrading of the Polytechnic facilities, at a cost of US$13 million, is to commence in 2005 under Japanese Grant aid. The importance of aid to this sector is highlighted by Minister Telefoni when he declares, ”At this stage I would like to acknowledge ongoing support to this sector from other donors such as Australia, New Zealand, Japan, UNDP, UNESCO and the European Union” (Telefoni, 2004, p5).

In health the World Bank has provided US$8 million for the Health Sector Project, AusAID has funded the Health Information System Project and New Zealand a preventative heath project. Again the Minister in his address indicates” I would like to acknowledge the ongoing support provided by our development partners such as New Zealand, Australia, Japan, WHO and UNFPA to this vital sector” (Telefoni, 2004, p6). In the area of Infrastructure water projects are being supported by ADB loans; improved postal and telecommunications facilities by the World Bank; seawalls, roads and bridges by the World Bank. These are just a few of the examples of aid use that are scattered through the budget address text. Clearly the role of aid in Samoan development is substantial and is appreciated by the Samoan government.

A review of donor aid to the region recently found that “partner officials generally…were relatively high in praise for donor support and relatively unwilling to criticize it. This did not appear to represent a false position created by fear of losing aid. Instead it reflected a broadly supportive view of donors. The most common demand was for more aid (often literally more of the same) …” Delay (2002, p 9).

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AID BURDEN IN SAMOA

A question that arises in respect to aid relates to the burden that it may place on recipient governments in respect to meeting donor reporting expectations. Recipient governments have at times complained about the excessive demands on time related to implementation and monitoring requirements of projects; lack of fit with national priorities, frequently changing staff, unpredictable aid flows, differing requirements for each donor, inappropriate technical assistance, failure to understand local systems and culture, inappropriate project designs with limited local participation. (See Delay 2002, pp 9-11).

In respect to Samoa much of the aid is bilateral grant aid and this requires very little monitoring or reporting by the Government of Samoa. Aid funds in Samoa and elsewhere are managed according to the requirements of the donor. In respect to bilateral aid this is mostly delivered through contractors. These companies compete on either a restricted (donor country only) or international tender arrangement to manage the projects. The contractor then mobilizes a project team to deliver the project and manage the project funds. The contractor is responsible for complying with donor requirements for accountability of funds. For example Annual Plans and Monthly Technical and Financial Reports are prepared and submitted by the contractor on AusAID projects. The recipient government has no part to play in managing or expending donor funds. For multilateral projects however the situation is distinctly different. The recipient government manages the funds and pays the contractor undertaking the implementation. The recipient government also is responsible for choosing the successful contractor (subject to limited oversight from the donor). This provides opportunities for corruption within the recipient government agencies concerned. In Samoa, corruption is regarded by donors as being of only minor concern.

As the bulk of the aid to Samoa is bilateral, there is little opportunity for large scale inappropriate use of donor funds. Of course once projects are being implemented, there is always some room for waste of public moneys on unnecessary workshops and allowances for participants. In fact Samoa is one of the most “over- workshopped” countries with almost daily workshops occurring. Attendees of WHO workshops for example are paid allowances. Senior Samoan departmental officers also regularly spend a large portion of their year overseas and collect allowances in US$ from donors that often exceed their Samoan salaries. The results are waste of donor funds and poor management in the Samoan agencies by certain senior officials28.

Samoan officials generally do not see aid as a burden. “When questioned about the burdens deriving from administrative systems, partner officials generally felt little burden as the disbursement of aid and reporting involved was handled by consultants or contractors” (Delay 2002, p 9). Indeed, as Delay notes “respondents from Samoa generally spoke positively of their existing progress in gaining control of aid management: (Delay, 2002, p 12). In addition as indicated earlier.

28 The writer personally witnessed this situation in Samoa where donors competed for workshop attendees (rent a crowd), staff expected allowances even though workshops were held in Apia (their normal place of employment) and the absence of certain senior staff overseas for in excess of 100 elapsed in a year. 160

HOW FOREIGN AID FITS INTO THE ECONOMIC PROFILE OF SAMOA

Samoa’s macroeconomic performance is highly vulnerable to external factors including commodity prices, crop disease and natural catastrophes. As examples, copra prices fell markedly in the late 1990s, taro blight decimated the taro export industry and three cyclones (1990, 1991 and 2004) destroyed the cocoa export industry and severely affected other export crops.

In addition to the above problems, Samoa has a small population, a small local market and is remote from major markets (transport costs for exports are high). It runs a large trade deficit (ST$362.69 million in 2003) and export revenues are declining (a reduction of 4.4 per cent in 2003)29. It is reliant to a large extent on remittances and aid to survive. It is a classic MIRAB economy as defined by Bertram (1999, p 2). Development assistance to Samoa represents 14 per cent of GDP while remittances account for a further 20 per cent. With economic growth slowing in the period 2001-2005, an increasing population, a deterioration of traditional obligations, Samoa is challenged to meet its development needs30.

The Table hereunder illustrates the importance of aid to the Samoa economy.

Table 21 - Samoan Government Finance 199/00 – Dec 2003 (ST$ million) Provisional Actual Budget 99/00 00/01 01/02 02/03 03/04 Revenues and Grants 251.02 262.45 290.80 303.53 318.36 Revenues 194.40 197.36 198.67 229.36 251.38 External grants 56.62 65.09 92.13 74.17 66.98 Expenditure 256.21 280.77 308.56 309.07 332.43 Current 1 169.67 163.73 183.25 202.19 208.05 Development 2 67.14 103.11 104.21 86.89 93.48 Other (capital and net 19.41 13.93 21.10 19.99 30.91 lending) Current Balance 24.73 33.63 15.424 27.17 43.33 Overall Balance -5.19 -18.32 -17.76 -5.54 -14.08 1 Includes domestically financed development plans 2 Financed from external grants and loans Source: Samoan Ministry of Finance Estimates

RESULTS OF AID

Aid has certainly had an impact in budgetary terms. It has permitted the Samoan government to pursue many activities that it would not have otherwise bee able to fund.

It terms if specific projects donors suggest that their projects have been successful in Samoa. They continue to give new aid. As an example AusAID undertook a review of three rural sector projects in Samoa. It found that in all three projects have contributed to the development of Samoa’s rural sector over the past decade, and have assisted recovery from a series of natural or human –induced disasters”

29 See Samoa Economic Statement 2004/05 Budget , Government of Samoa, Apia, p 1 30 See http://www.auaid.gov.au/country/country.cfm?countryId=18. (Accessed 19 May 2005) 161

(AusAID 2000 p xvi). The Farming Systems Project has assisted in the introduction of an improved extension system that is servicing a large number of clients using farm groups as the point of contact. The Training Personnel in Livestock Project trained several Livestock Division staff but most of the staff left. As a result farmers were trained directly. The Fisheries Extension and Training Project substantially exceeded its targets in respect to creation of village fishery management plans and reserves. However the report notes that “at the end of the projects, the recovery of agriculture and fisheries from constraints they had faced in the 1990s was only partially complete” (AusAID 2002, p xiv) and that only “limited data were available from MAFF31 or project records to support the evaluation. None of the projects placed much emphasis on monitoring. This combined with the completion of the projects made it hard to assess income impacts objectively”(AusAID 2002, p xi).

The above is typical of donor projects where it is very difficult for reasons of incomplete data to assess results. In addition the task is made more difficult by adoption of project performance indicators that are so broad as to make it impossible to attribute any movements in the indicators to the delivery of the project. For example the Farming Systems Project had a project goal “to create increased rural opportunity and raise farm income in Samoa…” (AusAID 2002, p xi). No monitoring and evaluation systems were put in place to collect any data which might support this broad objective. Indeed it would be virtually impossible to attribute an increase in farm income to a single project as there are so many other variables to control.

Projects by the Japanese and Chinese in respect to island ferries, the National University and the Government Building were successful in that the infrastructure was produced but whether they were really sustainable is questionable. For example when the old ferry supplied by the Japanese became obsolescent the Samoan government simply sought and received a new ferry from the Japanese32.

So while donors suggest that their projects are successful and assist development in Samoa it is hard to assess results. Certainly as will be shown when looking at the Road Resealing Project in Chapters 12 and 13, the Samoan Government has demonstrated that aid is fungible. It does allow the Samoan government to divert funds away from sectors supported by aid.

There are other aspects to aid to Samoa that should be considered when looking at results. There is a tendency to look only at the direct impact of projects as per their objectives rather than the general impact of aid on the country. In respect to the general impact, there is the problem that Samoa has a heavy reliance on aid. Development assistance should be instrumental in moving Samoa out of poverty towards economic independence. That is, the aim of development assistance should be to make itself redundant. In Samoa however this has not occurred. Aid still represents a large proportion of Samoa’s budget.

When aid represents a large proportion of the budget recipient governments can be very vulnerable to the agendas of donor governments and agencies. For example cessation of Australian aid would have a noticeable impact on the Samoan budget. “increasingly donors are adopting more intrusive and interventionist aid policies in an

31 MAFF is the Ministry of Agriculture, Forests and Fisheries 32 JICA provided a new inter island ferry in 2004. 162 attempt to encourage reforms. A good example is PNG where Australia’s Enhanced Cooperation Program has been largely imposed on the country as evidenced by the successful legal challenge to its existence by Governor Wenge of Morobe Province. Samoa however is in a less vulnerable position as it has successfully implemented reforms required by donors.

Aid may also be assisting in increasing wealth disparities in recipient countries. It has been suggested that urban elites have overwhelmingly captured the benefits of resource flows, including aid flows”(Brown 2005 p9). As an example “even after subsistence production is taken into account, urban incomes are between 10 to 16 times higher than rural incomes” (Duncan & Chand, 2002, p 3). In Samoa there are disparities is income, health and education for the rural populace. But much of this is a factor of economics rather than discrimination. It is not economic for example to have hospitals and secondary schools in rural areas given the population size of Samoa. In road infrastructure there appears to be no discrimination. Rural areas in Samoa have a good sealed road network.

Aid is recognized as being fungible. It permits recipient governments to divert expenditure to other areas (often of less development importance) and in turn this provides opportunities for graft and corruption. Chapter 13 highlights how the Road Resealing and subsequent World Bank loan provided such opportunities. It also describes how Australian and other aid provided opportunities for Samoa to reallocate funds to less development orientated activities. In this respect aid to Samoa has encouraged an element of waste. In this respect a study by Knack (2001) concluded that high levels of aid actually increase corruption and the make the bureaucracy even more ineffective. Others have suggested that “aid supports large and inefficient governments that create a bad environment for economic activity” (Burnside & Dollar 2000, p 1). Again however Samoa seems to have effectively managed the bureaucracy. The Government of Samoa has pursued a reform agenda to create a more efficient, effective and accountable public sector. This has included restructuring central government agencies, and commercialising and privatising state-owned enterprises. The AusAID funded Public Sector Improvement Facility (PASIF) is the latest in a procession of public sector reform projects in Samoa.

Further, some suggest that aid “has rarely done anything that countries could not have done for themselves” (Bovard 1986, p1). While in one respect this is correct, it clearly misses the point that it can be done faster with the additional capital available to a government through aid. Samoa has achieved substantial improvements in education, health and infrastructure using aid as detailed earlier in this Chapter. Others suggest that aid has been agency driven and that the aid systems lack cohesion33. (ADEA 2001, p1). Certainly, cases of donor driven activity occur in aid delivery. However in Samoa aid is well coordinated as noted elsewhere in the Chapter and Samoa has a high degree of ownership.

In summary aid is welcomed by Samoa and equally donors are interested in the giving aid to Samoa as it tends to be more effectively used than in other South Pacific countries. In addition, countries give to Samoa for a range of less altruistic

33 See Lessons Learned from Twenty Years of Aid, Newsletter Vol 9 No 3, Association for the Development of Education in Africa, Paris, 2001 163 reasons highlighted above. The development of Samoa has, however, been assisted by the delivery of large scale aid but this itself creates problems for the future. Samoa is reliant on aid and remittances to survive. If either source is adversely affected, then Samoan development is at risk.

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CHAPTER 8 PRINCIPLES FOR EFFECTIVE AID DELIVERY

This chapter seeks to analyse AusAID project delivery in terms of the standard principles prescribed for delivering effective aid, AusAID’s own procedures and any divergence from these principles in practice. By identifying such divergences it may then be possible to ascertain what affects these have on the overall development process in Samoa. In particular, the question of whether AusAID procedures and project implementation practice lead to sustainable development will be addressed. If AusAID procedures actually prevent development from taking place then analysing AusAID projects to judge the efficacy of development process would be futile and lead to erroneous conclusions. The effect of AusAID procedures on development outcome is therefore one variant that must be eliminated/controlled in order for the review to have credence.

The influence exerted on development outcomes by AusAID project development and assessment procedures is analysed in terms of AusAID written procedures; DAC aid delivery principles; whether AusAID follows DAC and its own procedures; and the effects of AusAID modus operandi on stakeholders and recipient country development.

Given that Samoa has reached the ‘stage’ of development indicated in the preceding chapter, what principles should be adopted by donors to ensure effective aid provision? What benchmarks can AusAID use for example to determine whether its project based aid to Samoa has been effective and sustainable?

The Report of the Committee of Review 1997 (Simons Report) into the Australian Overseas Aid Program devotes a number of chapters to the issue of aid effectiveness. The Committee reported; “There appears to be little or no analysis in the project preparation path of the distributional impact of project proposals. Even where formal cost benefit analyses are prepared, AusAID does not appear to request any analysis of the likely distribution of project benefits among different economic groups with the recipient country” (CRAOAP 1997, p170). In addition, the report notes that, “cost effectiveness analysis seems to have been largely overlooked in AusAID’s project-preparation processes.” (CRAOAP 1997, p169)

The report identifies that almost any aid-supported activity in a developing country will bring about at least some development benefit but that this does not mean that all projects are successful. The Committee suggests that “the following core criteria for assessing project success set useful benchmarks for aid management which AusAID could use as a starting point in strengthening its activity analysis:

Relevance of the project objectives to development needs in-country, and to the goals of the aid program. Effectiveness in achieving the objectives of the project. Efficiency of inputs related to outputs. Were the given development benefits achieved at least cost, and were they worth the cost? Impact at the broader development level. Did the achievement of the immediate project objectives have the desired developmental impact at the broader level? Were there other, unforeseen or unplanned development impacts which also need to be considered? 165

Sustainability or durability of development benefits, in financial economic, social, institutional and environmental terms. Is there sufficient recipient commitment to the activity to sustain it? “(CRAOAP 1997, p 168).

In respect to project relevance, the Committee, however, points out, “Country strategies aimed at maximising poverty reduction through sustainable development should be prepared for all countries to which Australia provides bilateral aid… They should represent a jointly owned blueprint for Australian assistance.” (CRAOAP 1997, p 167). A Country Strategy Paper was belatedly issued, by AusAID, in respect of Samoa in December 1998 but it lacked detail and credibility. (See Summary of Findings, the Australian Samoa Relationship in this thesis). The Committee drew attention to the DAC Principles for Effective Aid to which Australia is a signatory. The above project evaluation criteria are largely those of the DAC (OECD 1992, p136- 137) but the DAC principles also include additional evaluation principles that are of importance. These include the concept that “both donors and recipients should be involved in the evaluation process. Since evaluation findings are relevant to both parties, evaluation terms of reference should address issues of concern to each partner and the evaluation should reflect their views of the effectiveness and impact of the activities concerned” (OECD 1992, p134).

The DAC principles also require that “an evaluation plan should be included at the time of programme design. It should be clearly determined from the outset against which objectives, standards and benchmarks the evaluation should take place. The need for baseline studies should be considered” (OECD 1992, p82). DAC members agreed to review their programs against the above criteria and adjust them accordingly. The DAC principles for effective development project management represent ”best practice” for the donor community in respect to delivery of development assistance. Given that Australia is a DAC member, AusAID should therefore have complied with the principles. As the Committee of Review report intimates AusAID’s Project evaluation processes are poor.

An examination of the effectiveness of specific projects in Samoa in successive chapters will, inter alia, reveal the perfunctory nature of AusAID’s project review process. Indeed it will reveal the difficulty in assessing the relevance and results of Samoan projects due to the lack of a credible country strategy paper for Samoa and the lack of benchmark data. AusAID’s process, as opposed to strategy, for evaluating projects in Samoa is ill-defined and poorly articulated. The following review of AusAID procedures identifies numerous deficiencies.

AUSAID PROJECT MONITORING AND EVALUATION SYSTEM

The AusAID Country Programs Operations Guide (CPOG) Volume 2 establishes the framework for project monitoring and evaluation. The manual has been rewritten partly as a result of the Simons Report on the Australian Overseas Aid Program and the Government’s response thereto. Comments contained in the Simon’s Report indicate that review of projects has been unsatisfactory and in turn this implies that the manual has not had sufficient impact to ensure that effective review of projects is undertaken. The Government has now stated that AusAID will “establish an Office of 166

Review and Evaluation to provide more frequent and transparent reporting on aid outcomes” (Downer 1997, p11).

While the manual has been revised, it nevertheless is worth consideration as it was the guide for monitoring and evaluation of all AusAID overseas aid Projects at the time the Samoan projects were executed. (Its successor “AusGUIDE” currently appears to be designed for AusAID rather than contractor use). In any case, all the Samoa projects to be reviewed in this thesis were subject to the provisions of the CPOG Manual. In addition review of the project monitoring and evaluation components of the manual will identify whether in the normal course of events Projects were monitored and evaluated according to its tenets.

Before any project commences, a Memorandum of Understanding (MOU) is supposed to be signed between the Australia and recipient governments. This agreement provides, inter alia, the basis for inputs from both governments (For example counterpart resources, tax/duty concessions). MOUs are often prepared however by staff who are unfamiliar with the project design document and are often perfunctory in nature. Commitment of the recipient government to counterpart funds, staffing and office space are routinely ignored during project implementation. Successive PNG governments have, for example, been notorious for failure to supply counterpart resources. In Samoa, there have also been substantial difficulties, with the Public Service Commission consistently failing to fulfil counterpart staffing requirements. As one example, the Health Information System Project had counterpart staffing stipulated in the MOU but this was never actually provided.

CPOG prescribed that the contractor prepares a Project Implementation Document (PID). The PID is supposed to include any adjustments required as a result of initial on-site experience. The PID should include any necessary adjustment to the original project design document (PDD). In reality it usually included only minor changes to the Project design. To do otherwise, for the contractor, was to invite lengthy delays in project implementation and hence delay project payments. This was especially so given the nature of Outputs Based contracts. In these projects the contractor was paid against agreed Outputs/Milestones. These were in theory, results based payments. These contracts differ from Inputs Based Contracts where the contractor was paid for inputs to the Project, for example, a stipulated number of adviser days per activity.

Outputs based contracts invite the contractor to get the job finished as soon as possible to achieve maximum profit. Outputs based contracts were/are supposed to stimulate contractor innovation but AusAID procedures and staff often prescribe activity in detail against the PID. AusAID staff often micro-manage pet projects where they scrutinize all inputs even though it is an outputs based contract. Hence in reality there is little flexibility actually evident in project delivery and innovation does not easily occur. In most outputs based contracts, contractors are keen to cut costs and supply resources strictly to the scope of the contract. Where AusAID staff is not engaged as micro-managers, there is scant examination of, or often capability resident within AusAID to effectively scrutinise Project detail. For example a contract may call for the installation of a computer Local Area Network (LAN). The contractor can install a LAN that meets the specification but provides no potential for any 167 expansion and/or does not provide options such as CD ROM drives on each PC.34 Hence while it complies with the specification, it is in essence unsustainable within a short time frame. In an Inputs based contract there is no imperative for the contractor to cut costs. In effect the recipient government often receives more assistance and a better product as a result.

Of course Inputs Based contracts also have deficiencies. These relate to the tendency of contractors to seek additional adviser time to complete activities thereby blowing out project costs and implementation schedules35. Again these problems relate, in reality, to the inability of AusAID to effectively monitor/evaluate Project activity.

Regardless of the deficiencies inherent in either project type, a PID is usually produced. It is interesting to note that the new AusGUIDE does not mention a PID but prefers to let project implementation occur solely through the mechanism of Annual Plans. Previously both PID’s and Annual Plans were prepared. AusAID staff however continues to require PIDs or PID-like documents for Projects despite the AusGUIDE procedures. (AusGuide 2000, p6). This document provides the blue print for all Project Activity. It lists all desired Costs, Outputs, Milestones and the Implementation schedule. It may not list all inputs (in the case of Outputs Based contracts).

Monthly and Six Monthly progress reports are required from the contractor. These reports chart activity progress and future implementation activity. They monitor activity far more than success. Hence they are ”accountability” driven rather than “success” driven. Much less attention is paid in these reports to assessment against baseline data and realisation of project objectives than is given to reporting against PID activity items. Reports need to have a greater focus on project outcomes but AusAID procedures unfortunately do not address this issue adequately. The Six Monthly report is usually prepared for the six-monthly Project Co-ordinating Committee (PCC) Meeting. This meeting reviews Project implementation against the PID.

PCCs are often of little value as AusAID does not react positively to recipient government suggestions and the recipient government often has transitory representation on PCCs and/or the level of representation is not conducive to effective decision making

In respect to the first dot point above, AusAID representatives often do not react positively to suggestions as they do not have the power to agree to recommendations. They may refer matters for Canberra consideration or they may act unilaterally (and negatively) and not in the spirit of development co-operation. The negative reaction may also be a result of not wanting to have to seek additional funds by way of Ministerial or other submission and to amend contracts36.

34 The AusAID Heath Information System Project in Samoa is a case in point where the LAN delivered met specification but provided no room for growth 35 Cited by AusAID staff as one reason for implementing outputs based contracts in the early 1990s. 36 I have witnessed these types of responses from AusAID staff during the last 15 years 168

In numerous cases, AusAID also appoints a Technical Assessment Group (TAG), more recently renamed as a Project Monitoring Group (PMG) or Independent Review Team (IRT). These persons are appointed independently to oversee Project Implementation and report on contractor/project performance. Again because of cost, AusAID often only appoints one person as the PMG. In many cases this person does not possess sufficient knowledge to adequately cover all aspects of Project activity. Hence PMGs tend to concentrate on their areas of expertise and in some cases solicit additional work for their own consultancies. (Evidence of such review activity being skewed exists in respect to the Immigration Project in PNG where some members of the Project Extension Review Team had a different agenda to that specified by AusAID).

While the PMG is assigned to provide AusAID with unbiased and professional monitoring/evaluation advice, in the real world, this does not happen. Advice is often focussed on the core competencies of the single PMG member or members, is often amended as a result of consultation with AusAID officials and may even be solicitous of additional work37.

When the Project is complete the contractor must prepare a Project Completion Report (PCR) that is presented to the last Project Co-ordinating Committee Meeting. This document reflects how the project was implemented against the PID and original Project Design as amended. While it does identify whether all activities were completed to the satisfaction of the recipient government its value as an evaluation document is questionable. Not many contractors are, for example, going to acknowledge that they managed a project poorly or that they failed to adequately implement a component/s of the Project. Not many recipient governments are going to suggest at the last PCC that the Project has not met expectations especially as in many cases the agency concerned is hoping for additional development assistance. It would hardly also be expected that the PMG would suggest that a project had not met objectives, when the PMG is charged with ensuring that the contractor meets project objectives. Hence the final PCC is often a perfunctory meeting at which all the parties agree that the Project has been successful. Probably the only element of any real use in the Completion Report is the section dealing with lessons learned. How useful this is depends on how well AusAID disseminates the information.

The ongoing monitoring of the Project also includes financial monitoring. This is achieved under the contract and the Annual Plan. Contractors are required to provide an Annual Plan for each project. This prescribes what will be spent and when. The Annual Plan of necessity is drawn from the PID.

CPOG also indicates that, “After Completion an ex-post Evaluation may be undertaken. The Evaluation describes the history of the project, outlines project achievements and their sustainability, and identifies lessons from Design and Implementation. AusAID’s independent analysis of PCRs and other project documentation may lead to lessons learned being recorded in the AusAID Lessons Database. The database provides the basis for feeding back into policy formulation and future project preparation” (AusAID 2000,p7). AusAID’s Lessons Learned Database is not however a repository for all lessons learned from projects. It is a

37 I have witnessed this situation on a number of projects over the last 15 years. For example a review of the Immigration and Citizenship Project in PNG. 169 quite incomplete record. Further, it is not mandatory for project design teams to identify in project designs that they have consulted the database. It is merely assumed. Designs continue therefore to suffer from perennial problems such as sustainability despite the topic being well catalogued in the Lessons Learned Database and ameliorative measures being well defined. (See 10 for an insight into how lessons learned failed to be incorporated into the Cocoa Rehabilitation and Expansion Project design).

AusAID provides the following example of how its monitoring and evaluation system is supposed to operate; Figure 9 Monitoring and Evaluation of Projects

Goal The impact the changed Ex-post Evaluation situation is having on the population and environment

Purpose The effectiveness with Effectiveness monitoring which the outputs are used (also called ongoing to satisfy the expressed evaluation) needs of the target population

Outputs The efficiency of project Input-Output Monitoring implementation performance. Activities The efficiency with which inputs with activities are translated into outputs Inputs

Source: AusAID, Country Programs Operations Guide, Volume 2, Management of Projects, Paragon Printers, Canberra, Volume 2, Chapter 2, p 17

AusAID indicates that an ex-post evaluation program is developed annually in consultation with the relevant post so that they and the recipient government are aware of the program and can plan accordingly. Evaluation studies usually involve tasks in Australia and in the recipient country.

In Australia the Australian team members examine and analyse relevant documents and prepare for the study in the recipient country. In the recipient country, the full team including members from the recipient government, conduct formal discussions, visit project locations, talk with direct beneficiaries and others with a stake in the Project, collect and analyse information and prepare a draft report. Field work in-country should be scheduled to cover aspects in an efficient and thorough way. (AusAID 2000, p7) 170

The fact is, however, (as will be seen from Samoan Projects reviewed) the recipient government often is not represented on such reviews even though this is prescribed in both AusAID and DAC procedures.

The problem for aid agencies in respect to monitoring and evaluation is that of cost. AusAID has historically not ensured that all projects have meaningful baseline studies conducted prior to commencement. It has also often provided very limited time for project evaluation. (The following case studies highlight these deficiencies). Both of the above facts limit the veracity and therefore value of monitoring and evaluation activity. It is clear from the CPOG (and AusGUIDE) that the intent of monitoring and evaluation is to ensure not only that the project has been implemented in an efficient and effective manner but also that project goals have been achieved.

According to AusAID the main purposes of monitoring are to:

make available timely and relevant information on project implementation which will support effective management decision making by all key stakeholders; promote discussion of project progress within AusAID, and with other stakeholders, and plan any required remedial action; contribute to accountability. AusAID managers need to know that activities are being implemented in accordance with memoranda of understanding, project documents and contracts, and are achieving their stated objectives; provide the main source of performance information for internal management and external reporting requirements; and influence policy. AusAID needs to know how well the policies and procedures governing the development cooperation program are working and whether modification is desirable or necessary.

Monitoring is undertaken throughout (and in some cases after) the implementation period. It is one of the keys to successful project implementation.

Source: http://www.ausaid.gov.au/ausguide/5stages/stage4/3-1.html

It is clear that the monitoring and evaluation process can only be successful if monitoring tasks are undertaken against the background of the original project objectives, outputs and activities. There is a need to justify why project outcomes sometimes differ so markedly from the original project design; if the lessons learned as per the Completion Report are recorded and widely disseminated; if Ex-post Evaluation studies are in fact conducted and lessons learned are disseminated to all concerned and recipient government personnel members of such reviews and if meaningful baseline data are available for comparison against project outcomes

AusAID procedures prescribe the intent but do not adequately define the prerequisites for monitoring. These are in fact better articulated in the DAC Principles for Effective Aid (1992) and the DAC document Harmonising Donor Practices for Effective Aid Delivery (2003).

Monitoring of projects, while important from aspects of contract compliance and financial and fiduciary control, is a fairly useless exercise if projects do not achieve 171 their long term development objectives. If they fail to be sustainable or do not deliver required benefits control mechanisms are of lessor import. It is imperative therefore that projects be seen not simply from the narrow PID (or Annual Plan) perspective but from the wider development program viewpoint. It is quite possible for projects to be delivered efficiently and effectively but completely fail in their development aims.

In respect of the overall effectiveness of AusAID projects in Samoa, the above discussion indicates that it is necessary to review the extent and detail of project monitoring; whether ex-post evaluation reports were ever prepared on such projects and whether sufficient base line data existed to undertake meaningful reviews. As indicated earlier, the DAC principles require that an evaluation plan should be included at the time of program design and that it should be clearly determined from the outset against which objectives, standards and benchmarks the evaluation should take place. The need for baseline studies should also be considered.

In terms of AusAID projects in Samoa it is necessary to establish not only whether ex-post evaluation of projects has taken place but also whether AusAID has produced evaluation plans for projects as part of the initial designs and undertaken any baseline studies to permit effective evaluation of project benefits

In other words has AusAID met its international obligations under DAC? The review of Samoan projects clearly identifies these weaknesses in the AusAID monitoring system.

AUSAID’S EVALUATION AND REVIEW REPORTS

It is informative to compare the findings of recent reviews of AusAID with the requirements for projects stipulated under DAC. Over the period 1992 to 1997 fourteen ex-post reviews of AusAID projects were conducted. The evaluations found that:

all of the Projects were successful, although some were more successful than others. All but one of the evaluations investigated the sustainability of the project over the medium to long term. Two projects were found to score highly in terms of long term sustainability, while three reports expressed concern about sustainability and the remainder of the projects were rated as moderately sustainable. (Mc Master, 1998, p4).

As sustainability is obviously a problem, particular attention will be paid to this aspect of Samoan AusAID projects evaluated in this thesis.

The evaluation summary also indicates that the evaluations were hampered by a:

lack of quantitative information on the actual project inputs, outputs and outcomes and a comparison of the achieved outcomes predicted in the project appraisal reports. Had the evaluation teams conducted an ex- post cost benefit analysis, the evaluations would have provided a more rigorous analysis of the degree of success of the projects as well as 172

more precise information on their economic rate of return on investment, and the financial benefits accruing to project beneficiaries.

In several evaluations, conducting a cost benefit analysis was difficult because of the lack of available quantitative information on which to base the analysis. This issue of data availability demonstrates the importance of establishing an effective project monitoring and evaluation system at the time of project design, as well as the value of undertaking the necessary base line studies, resource assessment surveys of the project area and establishing a socio economic database on the project participants (Mc Master 1998, p5).

In essence what Mc Master is pointing out is that, for the projects concerned, AusAID did not comply with the agreed DAC principles. These matters will be specifically treated in the review of the Samoan projects.

PROJECT SUSTAINABILITY

Project designs are supposed to provide for sustainability of outputs and this process is also assisted via the AusAID monitoring process. Often however projects fail despite provision for sustainability. In respect to the above, a review of ADB projects indicates that, “many PPTAs (project preparatory technical assistance) still fall short of their objective to provide successful project designs…. More time and financial resources need to be allocated to PPTA; these should pay off in term of more successful loan projects ..” (ADB 2000, p3). Moreover a review of ADB projects in Papua New Guinea highlights, “the importance of project design and proper implementation and monitoring arrangements that can be sustained beyond the provision of Bank financing as crucial requirements to successful project outcomes” (ADB 1995, para10). This situation is mirrored in AusAID project designs, where for reason of cost, designs are completed in too short a time frame and evaluation suffers from poor baseline data. Analysis of the Samoan projects hereafter attests to this assertion.

The above ADB study also highlights another issue that affects project sustainability; that of counterpart resources. It states, ”Despite general assurances, the necessary expenditures may not be forthcoming after loan closing for a number of reasons. In the public sector, frequent mention is made in evaluation reports of difficulties with government procurement and budget procedures, inappropriate staff deployment, low salaries and lack of other incentives. However, it is more often a problem of government priorities and of affordability” (ADB 1995, p23). Similar problems occur with AusAID projects as the original project Memoranda of Understanding are poorly drafted and are not seen as contracts but rather government intent. Monitoring will highlight the failures but AusAID procedures do not provide an effective mechanism for convincing or coercing recipient government compliance with MOUs38. PCC/PCG inputs have in this regard been shown to be failures.

38 This is one reason among many for the failure of aid to PNG and the need in 2004 for Australia to implement the Enhanced Co-operation Program i.e. PNG’s consistent failure to meet counterpart financial obligations. 173

RECIPIENT COUNTRY VIEW OF AUSAID PROCEDURES

It is pertinent to review AusAID procedures against the views of aid recipients. In this respect, discussions at a workshop on 18 June 1999, where Samoa representatives outlined some of the issues with the Australian Aid Program and those of other donors, is most instructive. Comments received were along the following lines:

Aino Mose Pouvi Sua, Secretary Ministry of Foreign Affairs indicated that Australian aid was not directed at infrastructure projects in Samoa. Other donors such as the European Union, Japan, the World Bank and ADB fulfilled this role. The Samoan experience is that donors meet their own guidelines. Even when Samoa tries to bring donors together they still want to do what they are comfortable with within their guidelines e.g. find one donor who would accept a report written by another donor. They will want to re-examine the issue. Hence donors, such as AusAID, by virtue of their own procedures delay and inhibit development activity.

At a regional level there is an attempt to co-ordinate donor inputs. AusAID is at the forefront of this movement. Nevertheless, reports do not always identify actual levels of skills transfer. Samoa does not want to slide into a situation where it is dependent on the skills of project consultants. The Australian Staffing Assistance Scheme and its New Zealand counterpart program were examples of placing people in line positions. These schemes did not transfer skills as expected. They created dependencies on overseas skills and engendered disharmony in the workplace where local staff were on vastly lower salaries. Hence an effective skills transfer mechanism is a significant problem for AusAID. This fails to be adequately addressed in AusAID procedures. Ms Noumea Simi, Assistant Secretary, Ministry of Foreign Affairs indicated (at the 1999 conference above) that, “in the last 10 years there have been very significant changes in the way we manage aid”. Ms Simi outlined the national aid coordination mechanism. She indicated that the Government had responsibility for co-ordination at the donor level as well as internally. She indicated the following position.

Donor Coordination

In the past this was managed for Samoa by UNDP and it prepared the documentation with little input from Samoa. This did not work very effectively as Samoan input was minimal and control was lost. Now Donor Sector Meetings (DSM) are being held. The DSM reviews the status of the sector and as a bonus, donors may seek to fill the gaps in sector development.

Project Cycle

The Samoan Government Manual on Project Planning and Programming stipulates how projects should be designed, implemented and monitored. (The manual however is more akin to the details in Treasury Regulations than a “user” document). The basic project coordination mechanism is as follows:

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Project Preparation and Management Cycle

Line Department prepares Project Identification Brief (PIB) Æ PIB scrutinised by Planning Division of Treasury Æ Treasury reviews attractiveness of Project and for Projects over ST$100,000 either concurs with Proposal or rejects it. (Projects under ST$100.000 that are accepted go directly to the to Aid Coordinating Committee (ACC) for funding) Æ Line Department prepares Project Proposal (PP) and submits this to Treasury Æ Treasury prepares Project appraisal Report and submits this to Cabinet Co- ordination Committee for consideration Æ Cabinet Coordinating Committee (CDC) Has representatives from all government examines Treasury report Departments and Corporations with PM as Chairperson Æ If approved, CDC refers Project to Aid Coordinating Committee (ACC) Æ ACC reviews project against donor ACC composed of Treasury, PSC, DFA requirements and seeks donor support and Public Works. PM is Chairperson. ACC can seek a donor for a project either on a case by case basis or through the regular high level donor meeting process. Æ Donor accepts Project and undertakes Study undertaken either by donor design study personnel or consultants.

Æ Project tendered Either by limited or open tender depending on donor agency Æ Tenders Evaluated Donor evaluates tender or in the case of Bank Projects by Samoa and endorsed Æ by the Bank Contractor awarded contract Æ Contractor prepares implementation document Æ Project Co-ordinating Committee formed Donor, PSC, Treasury, DFA, line to monitor the Project implementation. Department and contractor represented on PCC. This usually meets on a six 175

monthly basis. PCC or donor may Æ implement major project reviews where considered essential Line Department may implement Steering Committee to monitor the Project internally and donor may establish independent Project Monitoring mechanism to review progress Æ Line Department project progress reports CDC has four meetings per year. Each to the appropriate sector CDC meeting reviews a different sector Æ Usually the contractor is required to These are circulated within the line submit Monthly reports and develop Department and at least to the donor. In Annual Plans for the Project some cases copies are sent to other Samoan agencies. Æ A Project Completion report is prepared by the contractor and another by line Department.

What Ms Simi was highlighting was the fact that Samoa had moved from a passive recipient of aid to a position where it activively participates in aid deliberations. It owns and manages the aid process. Samoa determines where donors can assist with its development agenda. Samoa has (according to Ms Simi) moved from donor driven aid to ownership within its development policy framework. Of course while there has undoubtedly been some movement in ownership, Samoa like all South Pacific countries is an aid recipient and the donor can still elect not to support particular projects.

Project Co-ordination at Departmental Level

Co-ordination at the departmental level is weak. Many departmental heads would not be aware of the project cycle nor the extent of assistance available to specific sectors. DFA therefore has taken the sectoral approach to project management. Staff has responsibility for a particular sector and is aware of the extent of assistance to that sector from bilateral, multilateral and regional sources.

Ms Simi indicated that she favoured the AusAID Project Co-ordinating Committee (PCC) concept. This had been introduced to NZODA Projects. PSC, Treasury, DFA and the line Department are represented on the Committee. Other donors for the sector are invited to sit in on the meetings. The PCC meets about every 6 months and oversees project progress. The Polytechnic Project is an example where a joint PCC approach is operated. Both AusAID and NZODA were represented on the PCC. The Department of Health in its position paper for the Samoa Health Sector Donor Round Table Meeting on 30 June 1999 submitted that the sector should have a single PCC to oversee all health Projects and a single internal Steering Committee to oversee day to day project progress and ensure donor co-ordination. Clearly, sector co-ordination is a major problem for AusAID and other donors.

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The PCC can refer matters to the CDC for consideration. The reports going to the CDC on Project Progress are however a matter for concern. The reports (memos from Treasury) do not discuss the constraints faced by Projects and do not address the difficult issues. There is a need for a more appropriate review mechanism at this level. At the Project level there is also a problem of coordination at the departmental level. Projects want copies of reports that impact on their objectives. As an example, in health the HIS Project wants copies of WHO consultant reports that impact on data collection and system operation. In future DFA will obtain release clearance for donor reports and disseminate these to all interested parties. There is also a problem of PCC membership continuity. Members often do not attend or send the same representatives to consecutive meetings. Members must be able to clearly define their role and interests in being on the PCC if it is to succeed. Ms Simi suggested that one way to ensure attendance might be to produce agenda items for meetings that specifically required a response from specific members.

What the above comments demonstrate is that AusAID procedures (as well as those of other donors) have significant problems. There is room for significant improvement.

AUSAID PROCEDURES AND SAMOA DEVELOPMENT

As can be seen from the foregoing, AusAID has detailed development procedures but these are not necessarily conducive to effective project management or innovation. They are inadequate. There are basic flaws in the procedures that largely relate to:

Lack of a credible Country Strategy Paper for Samoa Procedures that inhibit design change and use of other donors’ reports Provision of adequate base-line data and verifiable indicators Inability of AusAID to undertake its own meaningful project evaluations and/or alternatively the AusAID tendency to micro-manage projects The existence of generally weak external monitoring regimes Failure to design projects according to DAC principles especially in respect to monitoring, (including production of detailed joint monitoring plans at project design stage) and sustainability Lack of effective skills transfer procedures Guarantees of recipient government commitment to counterpart resources

AusAID does not follow its own procedures or that of DAC in some cases. Recipient country participation in review activity is weak and specific evaluation plans are not produced at project design stage. There has however been a recognition within AusAID of the need to ensure project quality. Activity Quality Standards have also been released. The Quality Assurance Group within AusAID has issued papers on quality assurance and draft Quality Standards. These papers again define concepts and intent rather than process and outcome. An an example, the quality assurance paper reports that, “The QAG addresses this objective (improving quality) by assessing individual aid activities and using the outcomes to identify lessons learned for improving designs and implementation” (AusAID 2000, p8). The quality assurance paper fails to address the mechanism that will ensure lessons learned are in fact incorporated into new designs. 177

THE ISSUE OF GRANT AID

Another feature of Australian aid that must be considered is the issue of grant aid. Australian aid is delivered as grant aid and there is no loan component in the aid portfolio. This has two main problems. Firstly it gives the impression that aid is fungible as it permits countries to divert their own funds away from essential services to areas of lower priority. Secondly it permits donors to indulge in donor driven development activity.

Mosley (1987) pointed out that aid is fungible in that by supporting a project that the recipient government would otherwise have had to fund, a donor may enable the government to spend money on other activities that may in fact be of lower priority. As an example, developing country governments receiving loans for agriculture, education and health may reduce their own resources going to these sectors and use them elsewhere. Forster (1993, p14-15) found that foreign aid that entered Papua New Guinea (predominantly as Australian untied foreign grants and budget support) affected mainly recurrent expenditure. It found foreign aid to be fungible in that total government expenditure rose significantly less than the inflow of foreign aid. Pack & Pack (1993); Khilji & Zampelli (1994); Boone (1996) Feyzioglu et al. (1998) and Swaroop et al (1998 & 2000) establish that for all intents and purposes aid is highly fungible.

The World Bank highlights the problem with fungibility of aid. It states ”Too many developing country budgets have been devoted to activities that have no growth potential and no effect on poverty; wasteful and inefficient public enterprises, middle - class subsidies for fuel, electricity, and more, and spending that benefits mainly the rich, such as credit subsidies and free universities” (World Bank, 1998, p 20). The delivery of grant aid has the clear potential to allow diversion of funds to unproductive enterprise.

In respect to aid fungibility examples exist in Samoa where the Government has used its discretionary funds not to support project sustainability but rather for political and sometimes religious purpose. This was evident in the development of the new sports grounds and Fale Tatalo (worship centre) for politicians. Both of these initiatives were expensive and attracted negative comment. Neither can be seen as either economic or religious necessities. It is also seen in the use of grant funds for budget substitution. For instance New Zealand grant aid funds were used for many years to maintain the Tupua Tamaese Meaole (TTM) hospital in Apia with no maintenance budget being allocated by the Samoan Government. Similarly in PNG, AusAID funded additional medical supplies for the country. By 2003 PNG had stopped funding any medical supplies at all and was asking AusAID to fund all future supplies39. From 1975 until the mid 1980s AusAID provided budget aid to PNG and this was eventually changed to project aid. The reasons behind the change are well known and relate largely to waste of monies and corruption by PNG politicians and officials. Grant aid was wasted. Aid was used to prop up unsustainable/poorly managed government enterprises. When budget support stopped the dominoes began to fall. The Morauta and Somare governments have had to sell off non

39 A position acknowledged by the PNG Department of National Planning and Rural Development at meetings I attended. 178 performing assets. The PNG Banking Corporation was the first of these. (By contrast since its acquisition by Bank South Pacific the merged bank is recording record profits). The Madang Copra Mill was disposed of after continually losing money. Telikom PNG, PNG Power, Air Nuigini and the Harbours Board are all earmarked for disposal. PNG Power as an example is technically bankrupt, Air Nuigini has been in deep financial trouble, the Harbours Board is moribund and Telikom has been unable to extend services for years despite its monopoly.

As Hughes (2003, p 11) suggests, “treating aid funds contributed by Australian (and other) taxpayers as components of national revenues to be spent largely on consumption, seems natural to Pacific Governments”. The point that must be made is that while most aid is fungible to some extent World Bank (1998, p 20), grant aid may be even more fungible. As Hughes indicates it is seen as having no cost to the recipient country. Hence there is a tendency to transfer resources away from the sectors that obtain “free money”. Loans by contrast are seen to have a real cost and hence there is a tendency to try and at least obtain something for the money spent. Moreover many loans have conditionality attached. Subsequent tranches of the loan can only be drawn down if conditions are met. Hence there is both less opportunity and less desire on the part of recipient countries to divert funds away from sectors receiving loan aid. Grants by contrast rarely have conditionality attached. These issues were eluded to by the Committee of Review of AusAID which indicated that while grants “involve a higher degree of concessionality than loans and are sometimes favoured for this reason … The Committee believes that loan repayments can instil greater activity appraisal than grants, especially by recipient countries, and more local commitment, leading to a higher probability of success in activities supported”. (CRAOAP, 1997, p195).

In respect to donor-driven activity, grant aid permits projects to be “conceived designed and implemented by donors with little (and late) input from recipients and then delivered according to donor priorities that are not consonant with the recipient government’s expenditure priorities. This limits recipient government commitment to (or ownership of) the project and consequently its sustainability” Danielson, Hoebink & Mongula, 2002, p 161). The ADB (2000, p 16) considers that “aid programs in the Pacific remain largely donor-driven, are often uncoordinated, and place pressure on the absorptive capacities of PDMCs. This has led to a culture of aid-dependence for financing the capital budget and associated downstream problems, particularly inadequate recurrent budgeting for operations and maintenance”. In Africa the situation is no different with Lancaster (1999) concluding that aid became donor- driven, especially in the case of economic reform programs. As the Committee of Review points out however, grant aid exacerbates the problem.

AUSAID CULTURE

Organisational culture can be defined as the assumptions, values, behaviours, and artefacts that an organisation exhibits. However many would disagree with such a definition. Smircich (1983, pp 339-358) distinguished between culture as a variable, that is culture as something that the organisation has, and culture as a metaphor, that is culture is a way of understanding what organisation is. Martin (1992), for example, established three perspectives on organisation culture: (1) integration, characterised by homogeneity and collective-wide consensus of deep seated beliefs; 179

(2) differentiation, depicted as islands of subcultures often in conflict, harmony or indifference to each other;(3) fragmentation, defined as irreconcilable and coexisting tensions, ironies, and paradoxes that create ambiguity in organisational culture. Much of the literature on organisational culture in the 1990s acknowledged this complexity and multiplicity of meanings in organisational settings. Smircich (1983, 1995, pp 232-237) therefore suggested organisational culture research should focus not on what organisations accomplish but rather how organisation is accomplished.

In respect to AusAID culture the following analysis of culture will examine AusAID in terms of Martin’s three perspectives and also focus on how organisation is accomplished rather than its achievements.

The AusAID culture is one which typifies many international development organisations. It is a disparate organisation. It is decentralised between Canberra and its many overseas offices. It is further segregated into Country Desks and Contract Branch within Canberra and at the overseas office (Post) level between expatriate and local personnel. It can also be seen as an organisation segregated by policy and implementation perspectives between Canberra and Post. Recently moves were put in place to disband Desks in Canberra and replace with a sector approach. This move however seems to be a long term objective.

The above organisational design makes AusAID susceptible to internal conflict. There has for years been a Post and Canberra syndrome evident within the organisation. There were also conflicts between Post, Desk and Contracts Branch. Disagreements over implementation of contracts, contract amendments take a long time to be sorted out40. Contracts Branch was seen to be trespassing into areas of implementation rather than simply administrating contracts. There were also cases where posts felty that Contracts banch and the Desk had colluded to have a particular position approved by ausAID management. Posts were isolated from the decision making process. Posts collected information and the policy analysis was undertaken in Canberra.

In 2003 initiatives were commenced to decentralise AusAID still further by placing most contract functions with Posts, more policy responsibility and giving locally engaged personnel at Posts more authority to manage the aid portfolio. Previously such officers were effectively administrative assistants not managers. The above actions were in recognition of the need to reduce internal disputes and acknowledge the practical policy advice that could be drawn from Posts.

In respect to the roles for expatriates in overseas Posts, until the recent changes, these positions were the personification of development as seen from a Western viewpoint. Their existence was related the Western cultural assumptions, that expatriate personnel were necessary to effect development in “underdeveloped countries”. Localisation has demonstrated that there are local managers who can manage change effectively. Again, however AusAID still has not let its local

40 The writer has been involved in these negotiations over many years and on various AusAID projects 180 managers manage. They still defer to the expatriate for most decisions and more importantly their policy input is generally not sort or is ignored41.

In respect to policy advice, the situation reflects Martin’s differentiation perspective on organisational culture. There clearly are islands of subcultures often in conflict, harmony or indifference to each other within AusAID. At times there is outright dispute, at others there is an uneasy truce and sometimes there is good cooperation. Further, AusAID’s policy development must be seen in terms of its internal dissonance and partnership arrangements with recipient governments and development contractors.

In respect to internal dissonance, AusAID seeks both to obtain support for decisions, by investing in project reviews and also, at times, takes unilateral decisions without the necessary background knowledge. Like most organisations AusAID has some staff that “never make a decision” – they prefer to use review recommendations to justify operational decisions and policy positions. Others brief review teams and seek to have the review teams confirm the agreed position within AusAID – the review is merely a mechanism to give effect to views already held. There are others that fail to seek or heed advice. Sometimes they make correct decisions while more often they engender confusion and incredulity within their counterparts. There is nothing unique to AusAID in this operational aspect of large organisations.

What is unique about AusAID culture is that it purports to have development cooperation partnerships with recipient countries and with Australian Managing Contractors. Downer (2002) stated that:

Effective partnerships with developing countries are a central focus of Australia's aid. Country strategies are jointly developed with all major partner countries and form the basis for our assistance. They are informed by a country specific analysis of poverty and the most effective contributions that we can make to reduce it. Australia works within partner countries' broad development frameworks, coordinating our aid closely with that of other donors. We are also involved in working level partnerships with a range of international and community partners.

This statement is echoed in AusAID statements and reports. Most notably AusGuide states:

While AusAID remains accountable to the Minister and Parliament for the money it spends and the results achieved, it cannot deliver development outputs and outcomes without a partnership with key stakeholders.

The most important of these stakeholder groups can include the partner government and its implementing agencies; local communities and non- government organisations which represent them; other donors; contractors (including Australian non-government organisations); and Australia's

41 The writer has witnessed this in many meetings and in many discussions with locally engaged ausaId staff over a five year period in PNG. 181

Ambassador or High Commissioner and other Australian Government agencies in the country“ (AusGuide, Section 5, 2000)

In addition Australia has informed the OECD DAC that:

The aid program will be determined and implemented in partnership with developing countries. This will guarantee that the program remains focused on meeting the priority needs of partner countries. Our aid will also forge strategic partnerships with other key players in the development process – both in Australia and overseas. (AusAID 1999, p71)

Moreover, AusAID literature is full of titles like “Australia and Bangladesh - a thirty year partnership” (AusAID 2002). AusAID’s actions are often however indifferent to these “partnerships”. The most striking example is Australia’s relationship with PNG which is clearly built on aid. PNG however sees no real partnership being evident, while AusAID has said time and again that it values its development co-operation partnership with PNG. But it appears to have little idea of what partnership entails. (See Hamblin 1996, p37).

A relationship metaphor probably best illustrates the Australian concept of a partnership:

A true partnership is like a successful romantic relationship. Both partners have their own interests but commit to work together towards satisfying each other's needs and pursuing a shared agenda based on mutual understanding and respect within a long-term commitment. They may fight, but they stay together while they're fighting and try their best to work things out. The current partnership paradigm practiced by most donor agencies is more akin to cruising bars for the best one-night stand, with little understanding of the other's needs, no long-term commitment and a focus on self-interest only. Equalization of power relations, through enhanced capacities, can be crucial. True partnership cannot exist if there are fundamental inequalities in power relations. (Max 1999)

The Australian partnership with PNG is one built on self interest and unequal power relations. While the relationship with Samoa is more cordial (in part due to the better policy environment adopted by Samoa and the capacities of its administrative and negotiating personnel), Australia continues to drive the development agenda. Australia still picks and chooses the projects it will fund.

In terms of AusAID culture, it is also characterised by presentation of indifferent policy advice to its Minister. As an example AusAID obviously briefs government on the results of aid delivery and the status of government in PNG. These briefings leave a lot to be desired in terms of accuracy and sound advice if the outbursts from the Australian Foreign Minister and Prime Minister in September 2003 are any examples. Their statements inferred that Australian aid to PNG was being wasted by corrupt politicians in PNG. This led PNG Prime Minister Somare to declare that as Australian aid was delivered through AusAID controlled mechanisms and Australian Managing contractors then the ‘problem belong Australia not PNG’. The briefing should have emphasised clearly that it was not corruption of Australian aid per se but 182 the opportunity that such aid gave for PNG to divert its funds to other areas where corrupt politicians could get control of the PNG money that was the problem. Moreover, the Australian Prime Minister insisted in his letter to Somare delivered in 2nd week of September 2003 that Australia wanted to place public servants in line positions in government departments in PNG.

The above demand could not easily be accepted by a nationalist leader like Somare. He retorted on television that it strikes at the core issues of sovereignty. Thus a public debate over Australian aid to PNG ensued with Somare trying to whip up anti - colonial sentiment. Regardless of the rights or wrongs of the positions, the advice given to Howard by the Port Moresby Post (which includes AusAID) made an adroit politician like Howard look foolish. A better result could have been obtained if advice had been forthcoming to simply change the modus operandi of existing aid mechanisms like the Advisory Support Facility (ASF). The ASF places advisors in many PNG Departments and statutory agencies upon request by the agency and after an evaluation process is conducted to judge the assignment priority/importance. If by contrast advisors had been offered to agencies, they would have been immediately accepted and they could have given Australia de-facto control of the agencies concerned. After they were in position the matter of occupying in-line positions could have been pursued. Thus the advice provided to Australian politicians was poor and in the process the veneer of partnership was thrown out the window.

In looking for answers as to why the policy advice and perceptions of AusAID staff are substandard, it might be suggested that living within the rarefied atmosphere of diplomatic circles is the root cause. While this might provide some causation, there are other factors. Firstly AusAID has the vast majority of its staff in Canberra not overseas. Overseas staff is largely middle ranking officers rather than senior personnel. Only 12 Executive Level 2 staff is posted overseas but AusAID had 42 such officers in Canberra. There is only 2 Senior Executive Level staff overseas as against 13 in Canberra.

Table 22: AusAID Staff Distribution

Staff 1997 2001/02 In Canberra 447 449 Overseas 58 62 per cent Overseas 12.97 13.80 Source: Report of Committee of Review 1997, p 309 and AusAID Annual Report, 2001-2002 p 187

What the table above shows is that there has effectively been no increase in overseas staffing representation in AusAID since 1997. This is despite the observation by the Committee of Review that, “The Committee is doubtful that with 90 per cent of its staff based in Australia, AusAID can have the in-depth knowledge and local familiarity needed to target Australian aid effectively” (CRAOAP, 1997, p 316).

Moreover the AusAID culture is still essentially generalist in nature. This is despite the fact that the Committee of Review highlighted that, “There are few specialist staff in the organisation, and those that there are rarely work in the areas in which they 183 were trained. AusAID has not been able to draw on expert knowledge as easily as it needs to…….A judicious balance needs to be struck between the generalist administrator coordinating the implementation of aid programs and specialist advice” (CRAOAP, 1997, p311) and “The Agency needs to recruit and retain more specialists” (CRAOAP, 1997, p319). In regard to specialists there is a paucity of specialist economic thinkers in the organisation. As of October 2003 there were only two practising economists in AusAID. This situation may be the reason that AusAID has such difficulty in addressing economic development projects. It also tends to skew policy advice towards a concentration on the softer, less risky social development agenda which is better understood by generalist administrators.

Another problem with AusAID policy development is the lack of corporate memory in the organisation. The high staff attrition rates, constant posting and transfer of staff mean that there is little knowledge of past events or lessons learned. Policy is developed devoid of history and without requisite knowledge. The example cited above in respect to Papua New Guinea is an example of this type of presage policy development. The danger in high attrition rates and staff mobility was highlighted by the Committee of Review. It stated, ”The Committee is concerned about the extent of staff mobility in AusAID…the apparently high rate of turnover depletes corporate memory, diminishes country knowledge and expertise, and causes inefficiencies through the need to constantly retrain staff”. (CRAOAP, 1997, p311).

Moreover while AusAID spends around A$1.5 billion a year on development assistance it spent a mere A$196,376 on training its staff in contract, project and program management in 2001/01. (AusAID 2002, p187-191). This must be reconciled against the Committee of Review observation that, ”The skills, attributes and qualifications that are required of AusAID officers are considerable. The delivery of an effective aid program is dependent on the excellence of the people working on it, both AusAID staff and the contractors engaged by A said….AusAID needs to work constantly and consistently at upgrading staff skills. ”

Policy formulation relies on advice from overseas Posts. This advice is generated in large part by middle ranking public servants who have not necessarily the required experience in terms of country background, policy skills and/or academic credentials to adequately handle the task. Moreover, AusAIDs 2003 exercise to devolve most operational activity to Posts sees Canberra policy bureaucrats even further removed from operational reality and probably less able to engage and/or argue policy positions put by Post personnel. The lack of consultation with contract consultants in the field also impacts negatively on the quality of advice given to Canberra. In Canberra yet another set of policy machinations occur with officers in some cases developing policy in absentia.

In respect to AusAID’s partnership arrangements with Australian Managing Contractors these are encapsulated in the AusAID Contracts Charter (AusAID, 2003). This document indicates that AusAID will reduce micromanagement and align contracting payment structures with intended outputs, outcomes and milestones (p 2), and will be “professional, business like and outcomes oriented in its dealings with contractors…AusAID encourages contractors to raise project management issues….AusAID will respond constructively and promptly where such issues are raised in a timely and well analysed way” (p4). 184

While the above policy exists, in realty it is mostly rhetoric. From personal experience I would posit that AMCs would suggest that current contract arrangements (where most costs are reimbursables) leave insufficient profit for them to operate effectively. The result is a scramble for World Bank and ADB projects among AMCs and the possibility of project management and implementation of AusAID Projects deteriorating.

In respect to reducing micromanagement there is little evidence of this happening on AusAID projects. From my personal experience, there is a vast difference between World Bank and AusAID projects. The former provides Terms of Reference for assignments or project designs and allows the consultant to deliver the product. By contrast AusAID personnel at overseas Posts involve themselves in the delivery and implementation of the Project. The commitment to reduction of micromanagement seems to have extended only to reporting where monthly project reports have now largely been replaced by quarterly reporting. However this is of little consequence as the report is not exception based and has to catalogue 3 months history rather than one month. The resulting need to retain a collective three month historical record probably outweighs the advantages.

While the Charter professes that AusAID will respond quickly and professionally, this is seldom the case. There is often bureaucratic stasis on policy issues with junior staff sending submissions up the line for approval (or back to Canberra), a failure to engage with recipient government counterparts42 and subsequent delays as senior staff are too busy or travelling. There is often lack of understanding on the part of AusAID staff of the issues involved especially if they are technical in nature. There are no technical specialists in AusAID overseas. For example environmental questions are regularly referred back to Canberra for advice from the single AusAID environmental management professional in the organisation (She subsequently resigned in 2004). There are also, at times, ineffectual staff posted overseas who cannot deliver and are an impediment to development cooperation. These staff members are seldom if ever sent home because of the perceived embarrassment to the organisation and the legal difficulties involved in public service termination/demotion. Usually they are simply transferred to less sensitive areas within the country portfolio until their posting is complete. Many of the staff posted overseas have never implemented a development project, yet it is assumed that they can oversee such projects effectively.

The fundamental question as to why AusAID should be making the operational decisions in lieu of contracting specialists is seldom asked. The AusAID mantra is one where contractors implement as directed and AusAID manages. It is not a partnership. Contractors are not seen as partners and are routinely left out of so called “government to government discussions” that relate to the projects contractors are implementing. Contractors are viewed by certain AusAID staff as organisations/persons making exorbitant profits from aid. (This is a belief that is not supported by analysis of contractor financial reports). As the Committee of Review highlighted AusAID culture needs to change. There needs to be a more analytical approach to the task of aid policy, planning and delivery. This approach needs to include a continuous process of “contesting ideas, evaluation, feedback and

42 A fact highlighted in the Review of Australian Aid to PNG 2004. 185 learning”. (CRAOAP, 1997, p312). It also requires that an effective partnership be maintained with contractors who can provide, at least a portion of, the specialist advice so essential to sound AusAID development performance.

IMPACT OF AUSAID MODUS OPERANDI

The above deficiencies all impact, to some degree, on outcomes of aid projects in terms of both their conduct and sustainability. They stifle development through procedural inflexibility and delay innovation by failing to adequately record and adopt lessons learned. Failure to enter into binding contractual MOUs for counterpart resources also imperils project sustainability. These factors are however only inhibitors to development. They do not prohibit sustainable development. They may reduce or delay development activity but they will not prevent it.

Moreover it must be remembered that aid represents only a portion of total development outlays. Developing countries receive financial flows from numerous private and public sources. Private flows come from foreign direct investment (FDI) and capital markets, the latter being bank lending, bond financing and equity flows. Most official flows come from official development assistance (ODA). Figure 10 hereunder presents trends of different sources of financial flows to developing countries during the past decade. “It indicates that FDI used to be relatively less important as compared to official flows, before the early nineties. After 1993, however, both the share and the level of FDI grew substantially and it is now the dominant source of financial flows into developing countries” (Miyamoto 2003, p 2) .

Figure 10 Net Long-term Resource Flows to Developing Countries

This dominant investment in development (FDI and capital markets) is clearly not affected by AusAID operational problems.

In reviewing the nominated Samoan projects AusAID deficiencies will be assessed to determine the extent to which they affected project outcomes. For example, it would be difficult to analyse whether a project has been a success or otherwise if base-line data for comparison are not available.

There is however nothing within the AusAID procedures that would prejudice project outcomes to the extent that development would no longer be possible. AusAID procedures certainly tend to inhibit development but they do not prohibit development. 186

CHAPTER 9 CASE STUDY 1 - BUILDING INSPECTION UNIT PROJECT - PUBLIC WORKS DEPARTMENT

INTRODUCTION

Chapters 9 to 12 provide a review of selected completed Projects funded by AusAID in Samoa. Chapter 13 will provide an analysis of the findings of the review in respect to whether the projects delivered sustainable development outcomes or not. Consideration will also be given to whether development theory adequately explains the project outcomes.

PROJECT BACKGROUND

As a result of the devastating cyclones of 1990-91, there was a great deal of rebuilding work to be performed in Samoa in respect to residential, commercial, educational and religious buildings. Over A$2 million was donated by the Australian Government towards the purchase of building materials to assist in the reconstruction of primary schools. It was evident however that rebuilding represented only part of the requirement as there was a demonstrable need for increased security against similar environmental catastrophes.

The design for the Building Inspection Unit (BIU) Strengthening Project was prepared between May and August 1992. Implementation was to commence in November 1992 and scheduled for completion on 1 July 1995 at a cost of A$589,522. In February 1993 a Project Implementation Document was approved for the Project. In February 1995 an extension to the Project was approved until June 1996 due to delays in Public Works Department (PWD) staff recruitment, delays in procurement of construction materials and the recruitment of additional Project staff. The Project cost was increased to A$705,232. Two further contract amendments to cover additional school retrofitting were agreed and these brought the Project cost to A$825,47543.

The total cost of providing volunteers through Rotary Australia was estimated at A$400,000 (AusAID,1998, p3).

PROJECT OBJECTIVE

The Project Implementation Document (PID) for the Project states the objectives of the Project to be to develop and strengthen the institutional capabilities of the BIU within the Building Division of the PWD and to assist PWD efforts to ensure that construction and reconstruction of buildings, including primary schools, adheres to appropriate building standards to resist cyclone/earthquake damage (Overseas Service Bureau 1993, p18-19)

The project documents also suggest that another goal was less loss of life, injury and physical damage/destruction.

43 The cost of the Project is however recorded in the AusAID publication, Pacific Program Profiles, A.R. Mc Lean Printers, Oct 1997,Canberra,p26 as A$1,750,000 187

OUTPUTS

The Outputs from the Project were defined in the PID as Institutionalisation of revised work practices within the Building Inspection Unit, leading to increased productivity, a streamlining of building permit application procedures and increased services offered by the BIU staff to the wider community; enhanced Skills of Building Inspectors; increased awareness of builders, carpenters and village communities regarding the construction techniques and technology required to resist cyclone/earthquake damage; promotion of Building Inspectors as technical advisers/trainers providing services to the community during site inspection and permit appraisal and to increase the number of new and reconstructed buildings built to appropriate standards

As part of the Project six new Building Inspector positions were to be established and appropriately staffed; on the job training and formal short course training for inspectors was to be provided; a plan filing system/shelves for plans files was to be procured; an applications tracking database to be established and three twin cab vehicles with radio system were to be provided for Building Inspectors

The following activities were described as “Key Indicators” for the Project (Overseas Service Bureau 1992, p26)

Numbers of building permit applications Numbers of building permits issued Progress reports and completion summaries Reports on training activities/needs Levels of community co-operation and acceptance 142 damaged primary schools (400 classrooms) had to be repaired

PROJECT IMPACT AND DEVELOPMENT THEORY

In development impact terms, retrofitting of schools was a success. The inspection regime and the inculcation of standard cyclone resistant building techniques however appear to have been unsustainable.

In terms of development theory the project may be viewed in terms of classic dependency theory and paternalism. The cyclone wreaked havoc with school and other buildings; the well meaning westerners came in and fixed the buildings to their standards; using their materials and personnel and tried to teach the natives a few things about construction techniques. Interaction with the Samoan people was minimal. A few were trained as building inspectors and some probably benefited from information books produced by the project.

While the project can be viewed in this context, it can also be considered in terms of an expeditious response to a humanitarian crisis. The schools were partially destroyed and the objective was to fix them and ensure they withstood the elements better in the future. Modern construction techniques necessarily had to be employed. This technology at the time did not reside in Samoa. Materials also had to be imported as supply was severely disrupted in Samoa due to the cyclone and the call on the meagre stocks that existed for other (residential/office) uses. Use of timber from overseas for example did not bind Samoa to use the same sources again. The 188 construction techniques were imparted to local builders and thus, this did not represent the creation of dependency situation. Where dependency did arise is that some materials like specific bolts, screws, iron rods etcetera were not manufactured in Samoa. To replicate the cyclone proof buildings, these items had to be imported.

But what was the realistic alternative? Could the Australians build cyclone resistant buildings using village materials? Clearly not; nor could the Samoans. The expeditious answer was to use the technology the Australians had at their disposal. So while dependency may have resulted from the project it was not intentional and was probably unavoidable. In a perverse way, the dependency created by the project was probably less intrusive due to the failure of the project to inculcate/sustain new building practices and the inspection regime. Had these been effectively transferred, then use of imported materials would surely have increased even further.

While the project has some elements of dependency, this was not its intent. It provided an expeditious solution to an immediate humanitarian problem. As will be seen however, it failed to be sustainable in respect to inculcating better building techniques and inspection services.

PROJECT SETTING

At the commencement of the Project, the Building Inspection Unit had only one Chief Building Surveyor and 2 inspectors according to project design documents.. They were often seen as policing regulations rather than a source of advice. Staff from Architectural Division was carrying out inspections due to Building Inspection workload. Records and filing were not computerised. Only one hired vehicle (without a radio) was available to transport inspectors to sites and as a result much time was lost through transportation problems.

In addition to the above the public was not aware of the new building code that sought to “cyclone proof” buildings. Villagers did not have the materials and know how to construct buildings to the required cyclone standards. Building courses available at the Polytechnic were inappropriate as they pertained to outdated construction methods ,namely that techniques used would produce buildings that not withstand cyclone force winds. New standards based on Australian Building Codes were recommended for adoption. Buildings were to be retrofitted to comply with these standards. Much of the necessary material had to be imported. Importation was required for various reasons but mostly because the cyclone had created a demand for timber that could not be met locally and because steel based components could not economically be manufactured in Samoa.

Government duty on imported disaster resistant materials of between 20 and 60 per cent made repairs expensive for villages. The National Building Code and By Laws to require building inspections had not been promulgated. Four copies of all plans had to be submitted to the Building Inspection Unit.

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Project Implementation

The Project commenced in November 1992 with the arrival of the Australian Team Leader in Samoa. This was followed by the arrival of another team member in early 1993. By February 1993 the team members had prepared a Project Implementation Document (PID). Training of Samoan Building Inspectors commenced in July 1993 and the first Project trained Senior Building Inspector was appointed in May 1994. Another inspector was appointed in June 1994.

By September 1994 the Project had an additional two team members on-site and was at full strength. All these personnel were expatriate workers. Survey work was undertaken into the schools that had been reconstructed using materials purchased by the Government of Samoa using the initial A$2 million cyclone rehabilitation grant. The required materials were identified by the Project and procurement was to be handled under the AusAID Commodity Assistance Support Scheme (CASP).

CASP funded materials for repair of schools arrived late and hence construction was delayed. The Project documents do not indicate why the materials were delayed but the delay obviously resulted in expensive retrofitting of schools being necessary. The documents do indicate that some villages simply repaired schools using whatever materials and skills were available. While this was admirable it would not protect against future cyclones and might have caused loss of life.

Retro-fitting of an initial 95 schools started in January 1995. The Project was supported by 25 teams of Rotary volunteers from Australia. These volunteers greatly assisted the Project in raising the profile of the BIU as an advisory service as well as regulatory body. In addition volunteer involvement also assisted in the dissemination of user friendly information booklets on construction methods and techniques. The Project produced a booklet Sima Lelei (Good Concrete) and another called Fale Mautu (Permanent Buildings).

Project Impact

The Project resulted in 134 schools being retrofitted and cyclone proofed. It also significantly improved the image of the BIU. It helped inform the public of the need to have building plans recorded and approved. It emphasised the need for cyclone proof buildings and demonstrated to villages how this could be accomplished. The standard of building construction was improved as a result.

The size of the BIU was increased to four Building Inspectors and two Senior Building Inspectors. Vehicles provided under the Project provided a increased level of efficiency in undertaking inspections and productivity increased.

The Project redesigned the procedures for handling the building permit process and this also improved the efficiency of the Unit. Under the Project, a computerised inspection and permit tracking system was introduced and regular statistical reports produced. The system tracks the register number of applications, the number of permits issued and the number of buildings constructed without a permit. (See Annex D for details).

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Project Assessment by AusAID

AusAID commissioned an independent assessment of the Project as part of a Tonga and Samoa Cluster Evaluation. In all four projects were evaluated in Tonga and Samoa and the report submitted in November 1998. While the report does not indicate how much time was available for the evaluations, it does indicate that the four reviews took place in October- November 1998. Hence with four Projects to review the maximum time per project review was two weeks. The writer however met with the Team to provide them with a briefing on the Projects and is aware that the team only had around a week in Samoa to review both Projects.

The review concludes that the “Project achieved almost all of its objectives. It is considered a good development project and a worthwhile investment by Australia. Provided adequate recurrent cost funding is available, the project is likely to be sustainable, and its long term development impact is expected to be very substantial. The BIU is now a well trained unit within the PWD, and fulfils its role of ensuring that buildings are designed and constructed to the requirements of the NBC. Due to public awareness campaigns, and the literature distributed freely during the project, public awareness of the BIU’s role and the methods to be used for responsible building construction are well understood by the comm. The Project succeeded in retrofitting 134 primary schools to a standard ensuring increased protection against cyclones and earthquakes” (AusAID 1998, p2).

EVALUATION OF PROJECT

According to the Project documentation and the above assessment, the Project was a success. There is no doubt that the Project did deliver on many of its objectives.

Nevertheless the assessment by the evaluation team obviously had limitations because of the time constraints imposed by AusAID. In addition the evidence for some of its findings is not obvious. For example how did the team know that the public was aware of the role of the BIU? In addition the question arises both from Project documentation and the review as to just how sustainable the Project really has been.

Having regard to the above questions of sustainability and project deliverables, a meeting was held with Etuale Loane, Assistant Director Building, Parataiso Aaitui, Chief Building Inspector, Lasepi Te’o, Building Inspector on 23 September 1998.

The matters discussed focussed on Project objectives and sustainability particularly whether objectives been met and whether they sustainable. I was informed that the filing system installed by the Project consisted of shelves with plans/files kept in file order. File numbers are recorded on the computer and in a manual register. Why both systems run in tandem is not clear. There is no separate plan filing system as was envisaged under the original project design. During the Project plan filing was downgraded to a manual system. If, as happened in the Papua New Guinea Forestry Department, the office burned down all records would be destroyed. There is no system where approved plans are scanned to computer. There is no off site storage of copies. The current system can hardly be seen as a substantial improvement over the pre-project situation. See Picture 2 hereunder. 191

Picture 2- Current Plan Filing System

I was also advised that an applications tracking database exists and is well maintained. It is written in Microsoft Access and Excel and these are appropriate industry standards. The Building Inspector uses it and is well trained. This system does provide benefits over the old system as it indicates the stage to which an application has reached. Of course the benefits can only be realised if the information is used as a management tool. See Picture 3 hereunder

Picture 3 - PC Used for Tracking Database

Further, four copies of plans are still required. It is assumed that the original note in the Project documentation regarding the number of copies presumed that four was excessive. It probably is excessive as the owner receives a copy, the Fire Service 192 gets a copy (of office/warehouse plans) and Building Inspection needs a file copy. The other copy would seem superfluous but this is not a significant matter.

Booklets titled Sima Lelei and Fale Mantu produced by the Project are still available and handed out free to all clients and at seminars. No statistics are kept on booklet distribution. The mere fact that so many copies of the booklets remain in the PWD office from the original Project purchase indicates that either too many were purchased by the project, the distribution system is poor, the demand is weak or booklet promotion sub-optimal. A combination of all these factors is the most probable cause.

Statistics on application fees and approvals show that the unit is progressing well. Application numbers have increased along with revenue. This would tend to confirm that the regulatory role of the Building Inspection Unit is now understood by the populace. It is clear however that the fee structure needs review. Fees collected do not reflect cost of the service and have not been adjusted for years.

Building Inspection Unit management estimates that about 60 per cent plus of buildings are now cyclone proofed as against 15 per cent in 1998. There are no real data to support this assertion by PWD and this is a problem. Statistics for 1999 do not show any increase in extant building refurbishment. There have been no general surveys of buildings conducted and it is probable that the figure being quoted is more wishful thinking than fact. With cyclones a major hazard in Samoa, the section should be far more pro-active in assessing structures. The real test will come with the next major cyclone.

The lack of action in respect to retrofitting buildings is the result of a number of factors. These include the fact that new Building Codes have still not been approved, lack of transport and lack of management direction.

In respect to the three vehicles purchased under the Project, the situation is that two have been removed. The Assistant Director has one and the Minister has the other. In neither case is the transfer appropriate as it reduces unit efficiency. The Unit still has the rented car that the three new ones were supposed to replace. The rented one originally did not have a radio. The situation makes a mockery of the provision of vehicles. AusAID did pursue this issue with the PWD after the presentation of the Cluster Evaluation Report but the Department took no action. AusAID should have requested action via the Samoa Department of Foreign Affairs/Cabinet Coordinating Committee to have the vehicles reallocated. This is not to say that the Assistant Director and Minister should not have cars, just that they should not have the ones purchased with Project funds to ameliorate the Building Inspector mobility problems.

However, what the above highlights is the effect of Samoan culture on development. It is quite inconceivable in terms of Samoan culture for the workers to have vehicles when the matai do not. The Minister would have to a matai to be elected to parliament and the Assistant Director would likely be one as well given his position. Hence it was never likely that the vehicles would be retained by the Unit.

No vehicles have been replaced. They are now over 6 years old. The Assistant Director says that they are in good working order. When required PWD will seek 193 capital funds for replacement via CDC submission. This is regarded as a problem waiting to happen. There is a need to budget for planned replacement of capital items such as vehicles.

Architecture Section is still doing inspections “to help out”. One objective of the Project was to create a self contained inspection unit. This has not happened. Provided architectural staff has the requisite capacities and skills this may not be a problem. It does however raise the question of workload. If all inspector positions were filled would the section need support from architecture?

There are still six inspector positions. Not all are filled due to recent staff separations. The Inspection Unit is now combined with architecture and building maintenance in a single unit under the Assistant Director Building. This reorganisation has left the unit more devoid than ever of strategic management. The AusAID Cluster Evaluation report recommends that “funding for the six building inspector positions in the project design is not currently available. If the BIU is to function as intended, a full complement of inspectors is required” (AusAID 1998, p2).

Clearly, the fact that workload is so low would suggest that additional inspectors are not required unless additional advisory or other duties are undertaken. No real training has taken place since Project completion. All inspectors have been on the Polytechnic course but that is all. There has been no skills-upgrading for personnel. This is apparently due to budget constraints. Consideration could be given to Distance Education Courses such as Advanced Diploma of Building Inspection (Central Queensland University) for the Chief Building Inspector and Certificate IV Building (Open Learning Institute of TAFE QLD) and Advanced Certificate Building Construction (Open Training Services VIC) etcetera for building inspectors. These would cost much less than overseas scholarships. Equally short courses could be organised in-country on special topics. Drafting cadets could go on the Construction course at Polytechnic and then they could double as inspectors as necessary. There is no budget for training or for upgrade of the Chief Inspector’s qualifications. Again this situation exemplifies the lack of management direction and strategic thinking in the area.

It appears from discussions with the Chief Building Inspector that budgets are prepared without due consultation with the unit concerned. The Building Inspection Unit now has only limited input into its own budget preparation and it has to compete internally within the combined unit for funds. Immediate management in the unit is concerned with day-to-day operations while senior management is remote and concerned with a range of competing priorities.

Regarding the Building Inspector advisory role, the Assistant Director indicated that this is ongoing from the time client comes in he/she advised re application, standards and also advised at field inspection stage. It is clear from researching Project documents that this sort of activity is not what was envisaged by an advisory role. It still reflects control not advice. The Project wanted seminars conducted on building topics for clients. The seminars did not eventuate. The Chief Inspector has however attended seminars and given out booklets. The section needs a more pro-active strategy. They have gone back to their old sedentary ways. Again a lack of purpose and strategy is evident. 194

The “new” Building Code has still not been tabled in Parliament. It’ has now been in draft for at least 7 years. The Assistant Director indicated that he has tried to get the Code tabled but still has still not succeeded. The failure of the Code to be approved creates problems for the Health Department, Lands Department and Fire Services who need to use the Code to enforce improvements in standards. The Fire Service uses the draft code to insist on standards but it is doubtful that their decisions, based on the code, are legally enforceable.

Project Evaluation Plans/Baseline Studies

Evaluation for the project followed standard AusAID procedures with largely desk- based monitoring. The contractor prepared regular monthly reports, annual reports and a completion report. These addressed performance against activities in the Project Implementation Document. Some six years after project implementation an AusAID sponsored evaluation was conducted as described under Project sustainability below.

No effective baseline study of Building Inspection operations was conducted prior to Project implementation. Project documents reveal that “key indicators” included numbers of building permit applications, permits issued, reports on training activities, level of community cooperation etcetera but no agreed methodology for measuring these indicators was agreed on prior to project commencement. At project completion, for example, how was community cooperation to be measured and against what baseline? The Completion Report addresses performance in a perfunctory manner suggesting that the community is now aware of the Building Inspections functions etcetera etcetera. Given the fact that no credible baseline study was conducted, there was little else that the contractor could insert in the completion report.

In addition, there was no counterpart involvement evident in choosing or assessing indicators or in the eventual AusAID evaluation. The project did not follow the DAC project evaluation principles to which Australia is a signatory.

PROJECT SUSTAINABILITY

It is evident that the Project has engendered significant improvements. Schools were retrofitted, building inspectors trained, advisory booklets produced and public awareness of building requirements increased. But are the Project outcomes sustainable?

The AusAID Cluster Evaluation report suggests that the project is sustainable. It states that “The Project has achieved almost all of its objectives. It is considered a good development project and a worthwhile investment for Australia” (AusAID 1998, Section 4, p12)

The Cluster Evaluation also states that:

“For training provided under the Project to be sustainable, there needs to be budgetary provision for training upgrades within the framework of a training plan”, and 195

“Provided adequate recurrent cost funding is available, the project is likely to be sustainable and its long term development impact is expected to be very substantial” (AusAID 1998, p2 &12)

The problem is however that the unit continues to look at buildings the way it did ten years ago. Inspectors inspect to existing Samoan standards but they are not keeping up with overseas building standards/techniques etcetera. The unit has lost some of the mobility and efficiency generated under the Project with the removal of vehicles. It’s amalgamation with other units has further decreased its importance in a budgetary sense.

The Building Code still needs to be approved and promulgated. The Section needs to be more pro-active in its advisory role and funds need to be made available for this purpose. Vehicles need to be returned contemporaneous with introduction of increased inspection targets and/or an increase in advisory sessions. Building Inspection fees need to be reviewed. The section would benefit from development of a strategic plan that covers inter alia revenue projections, performance targets, training requirements and asset replacement. In this regard revenue remains almost static despite an obvious increase in building activity in Apia in 1999. Annex D provides data on Building Revenue collections for 1997/98 – 1998/99. The above situation of static revenue and asset depreciation is a clear warning sign for sustainability. With revenue so low and costs to provide services so high, the shortfall must be met by taxation or borrowing.

What the evaluation fails to deduce from the data is that the BIU is not progressing. What is being sustained, if anything, is the status quo. Sufficient funds for advisory and other services have not been provided since Project completion, no provision has been made for capital equipment and the section has no strategic direction. There are no plans to increase funding to the unit. With current funding, the level of service will only continue to deteriorate over time. It is clear therefore that the Project outcomes as far as Component 1, the Building Inspection Unit, is concerned are not sustainable in the long term.

An analysis of the budget for the area also demonstrates the problem of sustainability. There effectively has been a real reduction in funding for building services. This is clearly evident in relation to staff salaries where it is obvious that reduced numbers of inspectors are present. The budget again shows no evidence that vehicles provided under the Project will be replaced. All are being left to deteriorate with age and no progressive replacement of capital equipment is evident. Most vehicles will require replacement around the same time and the budget will not be able to sustain such demands. Cost recovery for services is also shown as largely static. This is not surprising when a review of Performance Indicators for the Output is undertaken. The 1997/98 budget estimates include a Performance Indicator of 400 Building Permits per year for the unit (Legislative Assembly of Samoa 1998, p182). The 1999/2000 budget estimates show the same Performance Indicator. (In fact, there were 511 Building Permits issued in 1997/98).

If there was only an average of 4 inspectors in the unit in 1997/98 and the annual inspection figure was 511, this equates to about 2.46 inspections per week per 196 inspector. By comparison building inspectors in Canberra perform around 7 final inspections for buildings each day and up to 15 inspections per day of footings, storm water etcetera inspections are included. This implies that inspectors have insufficient work or that they are not being as efficient as possible. If they have insufficient work and funds cannot be provided for officers to undertake advisory duties, then it is clear that the service is overstaffed for tasks undertaken. It is also clear that it is not performing the roles envisaged under the Project design and that there is no real performance based management in place.

Table 23: Department of Works Income/Expenditure 1996-2000 Output 6.0

Expenditure 1996-97 1997-98 1998-99 1999-00 Description Personnel 116,427 136,558 110,681 90,926 Operating 20,707 37,300 34,503 53,000 Capital 16,477 NIL NIL NIL Overheads 609 227,965 6,003 7,613 Cost N/A 60,000 65,000 65,000 Recoveries Total 154,220 401,822 151,187 151,539 Source: Legislative Assemble of Samoa, Approved Estimates of Receipts and Payment 1996/97-1999/2000

There is also little evidence to suggest that building standards are being maintained for domestic dwellings. The pictures hereunder suggest that standards for foundations may not be continually observed. Digital photographs of the dwelling were referred to the Australian Geomechanics Society for assessment. The Society pointed out that to appraise landslide risk an experienced engineer or engineering geologist would have to visit the site so that site features, geology, geomorphology and site performance could be assessed. The Deputy Chairman of the Society further advised that:

Nevertheless, matters that would need addressing would include the presence of the steeply faced material on the RHS which appears to be fill. This may pose a risk of landsliding to the area below the site (roadway and below). The LHS if this is a watercourse. Dry stone walls are not inherently a problem, particularly when terraced, stepping up the slope and of low height as they are. Clearly, if this is a watercourse, different rules apply” (Leventhal A, pers. comm.. 14 July 2000).

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Pictures 4 & 5 – Foundations of House Outside Apia

The location of and foundations for the above house raise some important questions. The Cluster Evaluation report states, ”the BIU is now a well trained unit within the PWD, and fulfils its role of ensuring that buildings are designed and constructed to the requirements of the NBC (National Building Code)” (AusAID 1998, p4). There 198 can be no valid basis for the Evaluation Report to make such a statement as it is evident from the report that the Evaluation Team did not inspect any of the dwellings approved by the BIU. Hence the Evaluation Team could not state with any certainty whether dwellings being approved in Samoa comply with structural integrity rules or otherwise.

PROJECT EFFICIENCY

In terms of cost efficiency, the project commenced in November 1992 and was scheduled for completion on 1July 1995 at a cost of A$589,522. In February 1995 an extension to the Project was approved until June 1996 due to delays in PWD staff recruitment, delays in procurement of construction materials and the recruitment of additional Project staff. The Project cost was increased to A$705,232. Thus cost increases of around A$115,000 were occasioned by a combination of poor project design, failure of counterparts to meet commitments and CASP inefficiency.

PROJECT EFFECTIVENESS

The project was effective in retrofitting schools and making them cyclone proof. This was largely the result of expatriate (Rotary volunteer) input. The training provided under the Project obviously had some impact on the quality of inspections undertaken and improved the overall professional competence of the inspectors.

There is however ample evidence to suggest that the benefits of the Project are not sustainable. Most notably the National Building Code has still not been enacted and this legislation forms the basis for most BIU activity. Budgets have been reduced, Project vehicles appropriated, no provision made for vehicle replacement, no ongoing training provided for inspectors, the effect of the advisory service has been diminished, it is doubtful that building standards are being maintained and it appears that performance based activity planning has been abrogated.

It is therefore considered that the Project has not been effective in delivering on its long term objectives. It has only limited sustainability. The short-term nature of the Project results raise serious questions about the concept of grant aid. It is clear that the funds provided by AusAID were treated by the Samoan Government (or at least some sections of it) as being without cost. The funds simply allowed the Government to retrofit schools and provide some training and vehicles to inspectors which otherwise would not have been repaired/procured. It was truly “windfall” aid. It is clear that there was no high level commitment to the Project objectives and since its completion everything has slowly been dismantled through poor administration and management malaise.

It is also apparent that AusAID needs to provide more time for Evaluation Teams to undertake meaningful reviews of Project results. In the case of the Building Inspection Unit, a thorough review of a sample of recently approved dwellings, office buildings etcetera should have been made to provide concrete evidence as to the standard of inspection activity in Samoa. Detailed analysis of the ratio of inspections to staff should also have been undertaken. The standard of advisory service should also have been reviewed. 199

It is worthy of note, in respect to building inspections, that standards do not remain static. They continually evolve. The standards proposed for the Samoan National Building Code may well now need review before enactment. As an example the Australian Standards in respect to Landslide Risk were revised as a result of the findings of the Thredbo Coroners inquest. The Institution of Engineers Australia and the Australian Geomechanics Society formed a task force to review Landslide and Hillside Construction Standards in Australia. The Taskforce concluded that existing standards and codes were not adequate and that guidelines should be developed for landslide hazard zoning for urban areas, roads and railways. The guideline would advise on where hazard zoning was needed, how zoning should be done and how to brief a consultant on what was required. Revised Landslide Risk Management Concepts and Guidelines were issued in March 2000 (Australian Geomechanics 2000, p51-923). This situation must be compared against that prevailing in Samoa where inspectors have to assess foundations etcetera based on a non-promulgated building code that is now over 10 years old.

In the above circumstances and with all the additional operational impediments described above it is difficult to see the BIU as anything other than a moribund organisation struggling to maintain the status quo. The AusAID Building Inspection Unit Project demonstrably failed to achieve its long-term objectives in terms of sustainability.

It is equally clear that the Samoan Government, or at least some elements of the administration, have not been committed to the objectives of the Project and have been prepared to stand by while Project achievements have been emasculated through a process of asset stripping, poor management and budget depletion.

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CHAPTER 10 CASE STUDY 2 - COCOA REHABILITATION AND EXPANSION PROJECT PHASE II

PROJECT BACKGROUND

In late 1978 the Cocoa Rehabilitation and Expansion Project commenced with a core staff located at the Nu’u Crop Research Station. The first phase of the Project concentrated on research to improve cocoa quality and yield. Key components of the Program were improved planting material, husbandry practices, agronomic trials, rehabilitation of existing plantings, strengthening of existing extension services and improved processing, storage and marketing.

“Criollo was the first variety of cocoa introduced into Western Samoa during the late nineteenth century from Java and Ceylon. However Criollo proved highly susceptible to disease and failed to thrive. Forastero, a more disease-resistant variety, was introduced later and through natural hybridization led to the Samoa Trinitario cocoa. Trinitario cocoa became well regarded on world markets as a cocoa of excellent flavour and commanded a premium 20-40 per cent above the world price for common bulk varieties. However this premium disappeared as the quality of Samoan cocoa declined”. (Andrews 1987,p 7). To improve the yield of cocoa the project introduced the Amelonado variety of cocoa.

HISTORY TO PHASE II

A major review was carried out in 1983 that recommended greater emphasis on rural extension, production and marketing aspects. The Government of Samoa subsequently requested further Australian assistance to the Project but it “continued on a holding or interim basis with reduced budgeting from various sources, until February 1988” (Hassall &Associates 1989, p1). Just why five years elapsed between submission of the report and GOS request is not clear from available Project papers.

Field level information gathered in 1988 highlighted that:

Staff turnover has been high. Of the 18 staff appointed only 7 remain. A revision of plantings under the farmer registration scheme suggests unrealistic assumptions… The estimates of area planted are now suggested to be 190 acres not 360 acres. Under the Cocoa Suspensory Loan 1200 acres are said to have been planted. Of the 290 projects of approximately 5 acres each, 217 are still in the scheme. Estimates of area planted should be treated with caution as they are based on visual assessment only. Recoveries for non-performers may be difficult as farmers regard all payments as a grant (Hassall &Associates 1988, p2).

The Draft Project Implementation Report of July 1988 discusses the Cocoa Suspensory Loan scheme in detail and notes that it was designed to assist village farmers plant up to 5 acres or more by providing them with funds to assist with labour for clearing, planting and maintenance. Inspections were to be carried out to determine how much of the money should be provided as a grant. The report indicates that the scheme was an unmitigated failure as farmers treated all the 201 money as a grant. The report states, ”if these inspections were carried out as per the original criteria, the majority of farmers would be required to pay most of the money back” (Hassall &Associates 1988, Appendix F-1,3). Anecdotal evidence supplied by agriculture staff indicates that some farmers simply planted twigs off cocoa trees to deceive inspectors and claim the “grant”.

As a result of the many problems with the first phase of the Project, the report recommended a changed emphasis for Phase II.

PROJECT OBJECTIVES OF PHASE II

The objectives for Phase II of the Project were designed to increase village incomes and foreign exchange through increased production and quality of cocoa. They included introduction of genetically superior planting material (Amelonado); improvements to methods of extending information to all cocoa growers; improvement of husbandry techniques for new and established plantations; development of improved methods of processing, storage, grading and marketing of cocoa; ensuring adequate supply of improved planting material; supporting a continuing program of applied research and assisting DAFF (Dept. of Agriculture, Forests and Fisheries) staff manage a cocoa program

There were four components to the Project:

Institutional strengthening Processing and marketing Research Extension

The cost of the Project was budgeted at A$1.963 million and it commenced on 15 February 1988 and was completed on 20 February 1991 at a final cost of A$2.249 million.

OUTPUTS

The outputs from each of the components were detailed in Chapter 2 of the Project Implementation Document Part B. (Hassall &Associates 1989, p6-22). (The terminology used in the document refers to components, component objectives, activities/tasks and results but the objectives are in large part outputs and activities). The “objectives” as outlined are:

Institutional Strengthening

To establish a system of project and base station management with set procedures identified and formalised in a manual and to identify counterpart training needs and implement a training program with overseas study.

Processing and Marketing

To define and implement changes to current marketing arrangements; assist the GOWS draw up new legislation and regulations for processing and marketing; define 202 and implement grading and quality standards; design fermentaries, driers and storage facilities, construct jointly with farmers pilot fermentary/driers to assist with rehabilitation of village level cocoa processing and upgrade inspection services by training staff and improving current systems

Research

To increase production of cocoa by introduction of superior planting material and improved husbandry by improvement of local Trinitario variety; introduction of hybrid crosses selected for resistance to Black Pod; planting material from overseas will be introduced to further broaden the genetic base for local breeding and establishment of nurseries at Nu’u, Nafanua, Salelologa, Assau to provide supplies of planting material for farmers.

Extension

To establish targets for each cocoa growing district and assigning these targets to respective Extension Officers; to introduce a Programming, Monitoring and Evaluation System (PMES) which sets tasks necessary to achieve targets and evaluates progress quarterly; for each EO to undertake regular visits to farmers and blocks. A computer program was to be installed for recording of farm and quarterly block visits; training of extension officers in cocoa technology and in extension skills was to be undertaken; training of farmers in improved cocoa management was also to take place. Information was also to be prepared ad distributed to farmers on cocoa management

The Fermentary Program was organised on a shared cost basis with farmers, village groups meeting half the costs. About 10-12 fermentaries were to be built and 15 fermenting boxes were to be built and distributed.

PROJECT IMPACT AND DEVELOPMENT THEORY

The Cocoa Rehabilitation and Expansion Project Phase II again demonstrates issues of dependency. Expertise was brought in to assist Samoans improve cocoa quality and production. Initially there was a dependence on foreign planting material. The Project however is not so much an example of dependency but rather culture clash. There was complete insensitivity to Samoan cocoa consumption and taste. A new Cocoa was imposed upon the Samoans in order to improve yield. The designers of the AusAID project paid scant attention to local conditions, to local society and to local culture.

Trinitario cocoa was the cocoa of choice grown in Samoa. Trinitario cocoa became well regarded on world markets as a cocoa of excellent flavour and commanded a premium 20-40 per cent above the world price for common bulk varieties. Quality however began to slip as did production. To improve the yield of cocoa the project introduced the Amelonado variety of cocoa. The Samoans did not like the bitter taste. The result was that farmers did not want to plant the new variety but the Project persisted with Amelonado, brushing aside local criticisms. Today no Amelonado is being planted. It was a case of the foreign experts supposedly 203 knowing best and trying to implement their program in a non receptive cultural context. The result was a long term failure of Samoa to accept the new variety.

In respect to the importance of culture, the ADB has since the late 1980s accepted its impact on project design. As Sullivan states, ”In early projects, relatively little account was taken of the preferences or value systems of affected communities. For example, in Vanuatu and Malaysia, we can visit unused fishing docks and fish auction markets built with ADB support in the early 1980s. Local fishers prefer to use historical landing sites that are closer to their homes and adapted to their traditional vessels and marketing practices. In Bhutan, completion of a livestock development project was delayed by five years because we underestimated the degree of religious objection in a Buddhist culture to building abattoirs. We learned through experience that overlooking cultural realities comes at the cost of project viability”. (Sullivan, 1999, p 1).

The ADB position is supported by World Bank studies that show that failure to consider the social and cultural context of a project invites inappropriate design and is ultimately likely to lead to ineffective projects. These studies “show that attention to issues of socio-cultural compatibility pays off in economic terms: an analysis of 57 World Bank projects revealed that the 30 socio-culturally compatible projects had an average rate of return at audit of 18.3 percent twice as high as the rate of return of the other 27 projects with serious socio-cultural incompatibilities” (Sullivan, 1999, p 2). These findings indicate that similarly designers of AusAID projects need to be cognisant of cultural values and preferences.

The project also demonstrates that donor co-ordination was a problem. On one hand the AusAID consultants had one solution to exporting cocoa while the ADB had an alternative view. The result was a waste of consultant time and public monies. It shows how, when the experts disagree, the recipient country is likely to sit back and take the best monetary offer. In this case the ADB support offer was preferred.

PROJECT SETTING

Part A of the PID is a review of the results of Phase 1 and a review of the current situation and issues that needed attention. Basically the report suggests that there were a litany of deficiencies with Phase I design and implementation. These included a loss of trained officers, non-filling of positions by GOS and the introduction of Amelonado cocoa which locals disliked. Planting figures were inflated and then only represented 65 per cent of the planting target. The central fermentary for Savai’i had not been built, the central dry processing facilities for cocoa did not eventuate, cocoa quality did not improve, pricing reviews were not carried out at frequent intervals, demonstration blocks were not maintained, no records of pod production or pod rot were maintained and tree losses were high (Hassall & Associates 1989, Part A, Appendix H.3–H.7).

Part A of the PID does however indicate one deficiency in the design for Phase II of the Project. It indicates that the project design “requires a joint Recurrent Cost account with a decreasing Australian input and the GOWS accepting full responsibility in Year 3…the joint account has allowed GOWS conditions of expenditure being placed on Australian funds.” (Hassall &Associates 1989, p1-2). 204

The document reveals that this situation had caused some confusion. More likely it engendered long delays in purchasing anything due to the antiquated tender procedures that exist in Samoa. For example, in 1999 the Minister was still head of the Tender Board and all capital expenditure had to be approved by the Board. If the Minister was away overseas no decisions could be made.

The PID Part B provides an overview of the situation in respect to each component prior to Project commencement.

The following is a synopsis of the situation.

Project Station Management

Prior to Project inception, project management was conducted through a specialised management unit within the Division of Research and Planning of the Department of Agriculture, Forests and Fisheries (DAFF) based at the Nu’u Crop Research Station. A procedures manual was not available. ”Under Stage 1 there had been little appropriate training of counterparts and Departmental staff” (Hassall &Associates 1989, Part A, p11)

Processing and Marketing

There had been a drastic decline in Cocoa production for export and also a decline in the quality of the export crop. This resulted in decreased prices. Numerous quality defects were noted in reports as well as the fact that the Cocoa Board was insolvent.

Research

Phase1 of the Project was directed at halting declining production and yields by introducing improved varieties of cocoa (such as Amelonado) and by introduction of improved husbandry practices. The introduction of Amelonado occurred in 1979 with the material being sourced from the Solomon Islands. Many local people expressed strong preference for the Koko Samoa. This was the traditional Trinitario variety. As a result there was only limited success in the introduction of Amelonado. Similarly introduction of improved clones failed with problems in achieving adequate budding strike and in propagation generally.

Trials did show that Amelonado provided superior yield and was more resistant to black pod. Other trials were conducted on fertilizer application rates, cocoa spacing, and pruning. Still other trials attempted to locate a replacement for Erythrina that was often used as a shade for cocoa. Extension

Phase 1 developed a specialised cocoa extension service that handled all cocoa extension work. It was planned that a cocoa Development Officer would look after four teams each comprised of a Cocoa officer and two assistants. A total of twelve staff were recruited and trained but by the end of 1983 only seven staff remained. By the end of 1987 when the specialised service was abandoned only 3 of the original staff remained.

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All functions (including cocoa support) carried out in the Districts were transferred to District Field Officers in 1987. Cocoa advice was also to be provided through a Training and Visit system. Blocks were to be visited at least once per month under Phase II and maintained.

PROJECT IMPLEMENTATION

Phase II of the Project was appraised in 1986. It was not until 14 February 1988, nearly two years later, that the project commenced. It was due to finish on 14 February 1991. This hiatus in activity between phases constantly occurs with AusAID projects. The project cycle is drawn out by administrative process and Project impetus is lost.

Part A of the PID was submitted in July 1988 but it was not till February 1989 that Part B was submitted – 12 months after the project commenced. This makes the PID virtually a history of the project rather than an implementation document. Five months later there was a Mid Term Review in July 1989. The Review was scheduled as part of the original design document. It is interesting to note however that at the stage of the Mid Term Review the PID had apparently not been approved by AusAID.

The Mid Term Review found numerous problems with the project implementation and as a result a revised PID was submitted in August 1989. This means that there was a gap between 14 February 1988 and August 1989 when there was no approved implementation strategy for the Project. This represented an 18 month period out of a three year project.

MID TERM REVIEW

The Mid Term Review indicated that, “The biggest single issue in the report which may limit the achievement of Project objectives, relates to the current lack of extension resources to cover aspects of cocoa production other than those preoccupying extension staff under the impetus of the Bonus Scheme. Processing, quality control and marketing still need considerable attention. The Review team believes the Project objectives are still sound and there is no reason to revise or delete them provided it is clear to all concerned that in essence they embrace all aspects of the cocoa industry chain in a balanced and rational manner. The Review Team cannot see how the Project can meet its objectives without more recognition of gender roles in the farming system, monitoring, reporting and meeting gender specific needs” (AusAID Pacific Regional Team, 1989,pii). The Review also identifies that a Social Scientist was supposed to provide an assessment of village socio- cultural systems and define the role of women in cocoa farming and processing. These provisions were not completed although the social scientist time inputs were complete.

In respect to gender issues, these were not mentioned in the Part A of the PID. In Part B, which followed the Review, a perfunctory statement was included under paragraph 4.3.2 Role of Women. It stated, “Many women are benefiting from the services offered either through their husbands, or as in some cases, joining in their own right. Through their husbands, or through the powerful village Women’s Committees they have an avenue for being involved in implementing planning and 206 monitoring. The role of women in cocoa processing is presently being explored as it is recognised that many of the more successful village developments projects have been women’s projects.” (AusAID Pacific Regional Team 1989, p39). Nothing else of consequence about women appears in the papers. In the Completion Report a statement appears, ”Future projects should insist on counterpart female extension staff to help in training women farmers. Expecting male extension workers to do this under present cultural restraints is not practical.” (Hassall & Associates 1991,p30). The fact that the contractor was warned about the problem 18 months before escapes analysis in the report.

The Mid Term Review detailed a raft of recommended changes to Components. These included an observation that there were no female extension officers in DAFF and the review states that this should be rectified. The Cocoa Regulations had been drafted by the Project but had not been approved by the Cocoa Board. A Study Tour for the Cocoa Board Secretary (who had no prior Cocoa experience), Senior Inspector and two DAFF Produce Inspectors was to be brought forward and early inputs for the Processing/Physical Marketing Specialist were recommended to move the approval process along.

An extra six month assignment to facilitate training and construction of pilot fermentaries was recommended. A Cocoa Plant Breeder was proposed to be contracted for a two week consultancy each year during 1991-1994 and then one week per year from 1994-1997 to assist DAFF with cocoa trials (fertilizer, breeding and selection) started under project . It was recommended that the Project fund Kirifi Pouono’s PhD at USP in Cocoa Breeding and Selection to ensure research sustainability at Nu’u

It was recommended that the Programming, Monitoring and Evaluation System (PMES) be expanded to include a full activity list of for cocoa production and the extension training needs to ensure the extension officer is able to prepare a balanced work program. Another recommendation was that the Project broaden its monitoring by collecting data from a representative sample of cocoa growers which will include farming systems, allocation of labour (by gender) cash flows, processing, yields and marketing by the producer.

The Mid Term Review also highlights cocoa quality/grading as an issue. It states, ”A consignment of 15 tons, selected and shipped in early 1989 as part fulfilment of a lucrative US$2000 per ton FOB contract with Nestle USA has been rejected on quality grounds. A further consignment of 75 tons yielded results as follows:

Under fermented 45 per cent Unfermented 24 per cent Well fermented 26 per cent Internal Mould 7 per cent Other defects 2 per cent Moisture 7 per cent

This result was poorer than the earlier 15 ton shipment and both are well below generally accepted international export standard.” (AusAID Pacific Regional Team 1989, p10). This situation led the Review to examine the Processing and Marketing 207

Component of the Project in more detail. It found that of the six tasks listed in the June 1989 Periodic Progress report by the contractor, all were in the Processing and Marketing Component.

Another task listed as well behind schedule was the building of fermentaries. The Mid Term Review (AusAID Pacific Regional Team 1989, p20) shows the following situation with regard to fermentaries:

Number Targeted Number Installed Savai’i Upolu Savai’i Upolu Pilot Fermentaries 9 6 2 1 Small Fermenting Boxes 9 6

The above performance was well below expectations.

The review also highlights other disturbing features of the Project implementation. Project Management was depicted as a problem. The review states, ”There is an apparent lack of access to the Project Director particularly during Calendar 1989. This includes both Project visits and accessibility in Australia. This needs to be corrected.” (AusAID Pacific Regional Team 1989, p47). Financial reporting was also considered lax.

The Mid Term review indicates that the availability of a Project/Station Procedures Manual is also important to facilitate project sustainability. A well written and comprehensive document was seen as assisting the local station manager and project co-ordinator to maintain consistency in management and control after February 1991. The Review notes, ”The project has been swept into the enthusiasm for planting new cocoa and this has been at the expense of servicing other farmers who have mature cocoa and are already producing” (AusAID Pacific Regional Team 1989, p47).

The Mid Term Review also examines the supervision of nurseries developed under the Project. It notes that the nursery at Salelologa was poorly supervised whilst the nursery at Asau was well run.

The review notes but does not draw conclusions concerning the Project performance indicators related to the goals of increasing village incomes and training extension staff. The review (AusAID Pacific Regional Team 1989, p4) reports the following:

Indicator Assessment of Progress Comment Per capita cocoa No baseline data on domestic Underlying situation consumption consumption. No sample continues to deteriorate survey carried out. with respect to exports Extension Staff Four courses held No assessment has been Training made of validity of courses or the resultant competency of staff

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What the review fails to identify is that it is impossible to calculate an increase in village incomes when there are no baseline data. The performance indicator is not measurable. In respect to extension training it is also clear that the assessment is based on courses delivered not staff competency. Again the performance indicator is inappropriate.

PROJECT COMPLETION REPORT

The Project Completion Report was submitted in February 1991. It acknowledges that Cyclone Ofa had a devastating affect on the cocoa industry. “Damage to trees and plantations has been considerable resulting from initial defoliation and trees being blown over, and from the now obvious dieback due to post-cyclone stress” (Hassall and Associates 1991, p v). It explains however that replanting of both newly planted cocoa and old cocoa blocks should be carried out in 1991.

The Report proceeds to justify the Project on economic rate of return despite the 1990 cyclone setback. It states, “Evaluation of the project using current and expected achievements shows a FIRR of 16.8 percent which is a good return for a rural development project of this kind. This is achieved even when using pessimistic price projections, a high attrition rate for cocoa plantings under the bonus scheme (due to cyclone Ofa and grower neglect), full cash costing of labour inputs and conservative yield projections….Increased production as a direct result of the Project will be 1,200 tonnes per annum over the next decade valued at WS$2.5 million” (Hassall and Associates 1991, p v).

The Completion Report advises that 9 fermentary processing units were built and a cocoa manual produced. The Impact Study Mid Term report however sheds further light on the fermentaries. It states, ”An inspection of seven of the eight cocoa fermentary /dryer units constructed by the Western Samoa Cocoa Project Phase II on growers premises was carried out by the sociologist. Only three units have ever been used and of these one (at the Iva cooperative in Savai’i) has been used since cyclone Ofa (Shedden Agribusiness 1991, p1). The independent report advises that the reasons for the situation are, ”units damaged by the cyclone have not been repaired, there was little cocoa to dry, co-operatives have been disbanded or reduced in numbers and single owners are unsure on what conditions to allow other growers to utilise fermenting/drying units on their land” (Shedden Agribusiness 1991, p1).

The Completion Report says, ”A major effort to improve processing and marketing resulted, very early in the project period, in;(1) legislation and regulations, and agreement, to change the Cocoa Board from a marketing and processing organisation to a regulatory Board; and (ii) the privatisation of processing, marketing and export cocoa. This policy was subsequently changed through the intervention of the ADB Program Loan in 1989 which gained GOWS agreement to abolish the Cocoa Board and transfer regulatory and monitoring (price, quality etcetera) to Government.” (Hassall and Associates 1991, p5).

A farm development monitoring system was organised and data entered into a computer program but the Completion Report indicates, ”The program is not fully operational because the operators of the program are not fully trained” (Hassall and Associates 1991, p6).

Other data of note in the Completion Report include newly arrived extension staff had received cocoa technical training, and that further training will be required; most cocoa trials were incomplete at time of project cessation. Others such as the NKP trial were shelved due to operator/owner indecision, lack of trial site etcetera. The Report also notes that the estimated increase in jobs is 240 on a full time equivalent basis (but there were no supporting data provided to indicate how this figure was calculated). A return of $49 per day for cocoa farmers was shown (but this only occurred if prices held).

The Completion Report shows 13 nurseries were established and 1.4 million seedlings were distributed. While the Completion Report indicates that 1,130 hectares were planted out of a planned 1,200 hectares under the Project, the Impact Study Mid Term report identifies that of the cocoa seedlings distributed, “61,534 seedlings distributed were Amelonado and only 6157 were Trinitario. To accommodate grower preference the majority propagated from now on will be Trinitario.” (Hassall and Associates 1991, p6).

PROJECT IMPACT

It would be easy to criticise the project as there is almost no trace of it to be found in Samoa. After cyclone Val in 1991 cocoa never recovered as an export crop. Today Samoa imports cocoa – a far cry from the projections detailed in the project documents.

To better understand the Project outcomes a meeting was held with Paul Tomane, Principal Farming Systems Officer; Faamanu Lui Station Manager; Apluu Pepe, Chief Extension Officer and Frank Fong, Economist44.

I posed a number of questions regarding the Project to the officers. The responses are summarised below.

Faamanu indicated that none of the fermentaries constructed under the Project was still operating. The only one still in existence was at Nuu but its construction pre- dated the Project. He indicated that the cocoa Plant Breeder, Dr Tan left in 1994 and was not replaced. Dr Eddie Chan however unofficially assumed the role (another Australian aid project officer) until 1997 when he departed. There is no one monitoring cocoa trials as the trials were never really completed and just faded out. Apulu Pepe indicted that farmers wanted their land back as no income was being derived from the land and trial blocks were destroyed. He indicated that the Project

44 Meeting of 24 November 1998 at 2pm at Department of Agriculture with Paul Tomane Principal Farming Systems Officer, Faamanu Lui Station Manager, Apluu Pepe Chief Extension Officer and Frank Fong Economist 210 and Station Procedures manual still existed. He had a copy somewhere but could not locate it during the interview. I showed him the Project Cocoa production projections and he just laughed. It was clear from his demeanour that he felt that the projections were wishful thinking and far too optimistic.

Alulu indicated that the fermentaries were a failure as they were predicated on a farmer having 5 acres of land. Most had much less and were not entitled to obtain a fermentary as a result. To use one they had to band together. When this happened squabbles developed about location and access to land where the fermentary was constructed etcetera. As export interest dried up so did need for fermentaries. I spoke to Alulu about the farm development monitoring system that was supposed to see data entered into a computer. He had never heard of it and indicated that it certainly did not exist now.

Faamanu indicated that the real impetus to cocoa planting came from the bonus scheme (the Cocoa Suspensory Loan Scheme) . When this ceased after 3 years and farmers no longer obtained payment for planting cocoa, interest in cocoa evaporated. The cyclone also affected the plants. This was combined with high local price compared to export price. A small cup of cocoa domestically cost ST$3 -3.5 compared to ST$2 per pound on the export market. In addition the creation of Cocoa Board killed interest from the large players such as WSTEC etcetera in export. There was simply too much regulation and too many administrative costs45. They moved into cattle etcetera and cleared the cocoa plantations. The demise of Cocoa Board was too little too late. After the cyclone, farmers wanted immediate returns. They wanted food, and they were not interested in long term crops. Most seedlings at the nurseries grew too large and eventually were destroyed. The nursery at Asau (the best managed according to the Project) was closed due to poor soil conditions. Nuu, Salelologa and still remain.

The argument re Amelonado and Trinitario continues. Faamanu indicated that tests showed consumers could not tell the difference between varieties when consumed. Alulu indicated the seeds from Amelonado are smaller than and not as good as Trinitario. Farmers now have their own little fermenting boxes and sell to the local market. See Picture 6 hereunder with Department of Agriculture now only producing Koko Samoa seedlings for sale.

45 There was a 7 per cent FOB tax imposed on cocoa in excess of WST$800 per tonne. See Andrews 1987,p viii. 211

Picture 6 - Koko Samoa seedlings at Department of Agriculture

Cocoa is actually imported by Wilex and CCK Ltd etcetera from Solomon Islands, PNG and Fiji now according to Faamanu. Interest is however picking up with 10,000 plants sold in 1997/8. Selling them assures more farmer interest in crop production. Almost all (over 95 per cent were Trinitario variety).

Alulu indicated that trials had both negative and positive results. Revised spacing recommendations for cocoa plants were devised. Natives proved to be the best shade trees and a spacing formula was determined. On the negative side experiments on intercropping of cocoa led to the introduction of the Lucenea plant (a legume) which is now regarded as a noxious weed.

Paul Tomane indicated that the PMES was not expanded to include a full activity list for cocoa production. As he was not in the position at the time he does not know why. He did however believe that the EOs had a balanced work program.

Subsequent to the above meeting, discussions were held with Mr Leniu Simi Moors, General Manager of Western Samoa Trust Estates Corporation (WSTEC)46. WSTEC was the major producer of cocoa in Samoa before the cyclones hit. It never replanted the cocoa after the cyclones. It is important therefore to understand why it decided not to reinvest in cocoa. Surely if the supposed cocoa export returns described in the Project were correct, replanting of cocoa would have been of paramount importance.

Mr Moors indicated that by around 1989 WSTEC had loans totalling ST$27 million from the World Bank, ABD and other lenders. The money had been spent on cocoa

46 Meeting with Mr Leniu Simi Moors, General Manager of Western Samoa Trust Estates Corporation (WSTEC) on 15 December 1998 212 and banana production. The total outstanding was increasing at a rate of ST$5 million per year. The cyclone hit and destroyed almost all WSTEC crops and buildings. The government took over the WSTEC debts but required WSTEC to hand over all but one plantation at Mulifanua in return. Around seven eighths of the land was transferred to the Government. WSTEC sold the land in order to pay staff it could not lay off. It could not afford the redundancy pay. Most staff is now however retrenched/retired.

The Government created the Samoa Land Corporation to manage the land. It has tried to rent out the land in 10-20 acre blocks to recover the $27 million. This has not worked and villagers simply squat on the land. Meanwhile the land remains largely unproductive.

WSTEC had 2000 cattle running on Mulifanua in 1997 but only 280 were left by 1998. All had been stolen and sold by local villagers. The 7000 acre estate now has only 46 staff and mainly has coconuts, copra and cattle. It returns a very moderate profit in the range of ST$10,000-20,000 per year. In 1997/98 however it lost substantial money due to its participation in a chicken production project.

I asked Mr Moors about Koko Samoa versus Amelonado. He indicated that it was not correct to say they were the same. WSTEC still had some cocoa that it produced for the local market on a 400 acre block. He said that the Koko Samoa was sweet in taste compared to the bitter tasting Solomons version. WSTEC had to mix the two types in order to sell Amelonado. Even on the overseas market Koko Samoa had always brought a higher price than Amelonado. This was despite the smaller bean size of Koko Samoa. (The writer notes that Alulu had indicated the opposite).

Wilex Samoa47 had approached WSTEC regarding going into cocoa production again. WSTEC is however not interested in going into it again unless it has sufficient capital (ST$3.5 million) to ensure staff are hired and consequently beans are not poached. WSTEC would probably rent land to Wilex for the purpose if Wilex wanted to pursue production.

In 1996 WSTEC put forward a proposal to develop the plantation. It was approved by the Samoan Cabinet Development Committee but donors were not interested (probably due to WSTEC history and fate of past development efforts).

The WSTEC Business Development Plan (WSTEC 2000, p14) called, inter alia, for ST$200,000 for a cocoa/coffee dryer to be upgraded and transferred to Mulifanua. It also stated that 80 acres of cocoa were in reasonable condition and another 2000 acres could be rehabilitated. The cost of this exercise was estimated at ST$120,000. In the event no funds were forthcoming. It emphasises once again the lack of coordination in agriculture. There is a dryer sitting at the Department of Agriculture unused. Funds are not available to get cocoa production moving again. Even if they were the Samoa Land Corporation’s lack of control over its lands has led, according to Moors, to attempted squatting and theft on WSTEC lands and demands that land be returned to villagers. Even if cocoa production increased there is no guarantee that it would not be stolen.

47 Wilex Samoa produces chocolate for the local and export markets. It imports cocoa from other Pacific islands. 213

EVALUATION OF PROJECT

As indicated earlier in this thesis, it would be easy to dismiss the project as an abject failure as there is virtually nothing to show for its inputs. Such an assessment would however be quite unfair and at best perfunctory. To properly evaluate this Project it is necessary to quarantine the effects of the two cyclones and establish if the Project would have succeeded had they not occurred. This is a difficult task as the effects of the cyclones on farmers, WSTEC and their creditors cannot be gauged with precision. Nevertheless some salient points can be drawn from the Project documents and meetings with cocoa officials and producers.

The mid-term review clearly indicates that the Project had a management problem. This was not so much evident in Samoa as in direction from the contractor in Australia. The lax financial reporting and non-availability of the Project Director were a manifestation of part time Project Directors. Often AusAID has required contractors to provide project management out of “management overheads” contained in Projects. The contractor is not specifically paid for Project Director inputs and as a result did not always apply appropriate rigour to the task. This often resulted in a situation where there was no real supervision of field staff or appreciation of the project. The project documents strongly imply that the Cocoa Rehabilitation Project was one such case. (It is pleasing to note that in recent tenders AusAID has been directly paying contractors for Project Director inputs).

The Review notes that, ”The project has been swept into the enthusiasm for planting new cocoa and this has been at the expense of servicing other farmers who have mature cocoa and are already producing” (WSTEC 2000, p47). This appears to be a valid criticism of the Project as comments in the Completion Report concentrate on cocoa plantings rather than other aspects of the Project.

Indeed, a FIRR of 16.8 percent at outset appears to represent, ”appraisal optimism”. Some authorities habitually use a 2 per cent point premium on the test discount rate to allow for this factor. The need for this premium is demonstrated by the review of World Bank projects in 1991 (The World Bank 1990 & 1991) that found that the realised rates of return were considerably lower than those estimated at appraisal. The review attributed the under-return to factors such as overestimation of benefits, under-estimation of costs and project extensions. Another factor that appears to have influenced the projected FIRR is the export potential of the crop. Sudgen (1987) highlighted this possibility when he coined the term” elasticity pessimism” 214 which relates to the tendency of economists to underestimate elasticities of supply and demand.

The Completion Report advises that 9 fermentary processing units were built and a cocoa manual produced. The Impact Study Mid Term Report however provides further information on the fermentaries. It states,” An inspection of seven of the eight cocoa fermentary /dryer units constructed by the Western Samoa Cocoa Project Phase II on growers premises was carried out by the sociologist. Only three units have ever been used and of these one (at the Iva cooperative in Savai’i) has been used since cyclone Ofa (Shedden Agribusiness 1991, p1).

The independent Impact Study Mid Term Report advises that the reasons for the above situation were, ”units damaged by the cyclone have not been repaired, there was little cocoa to dry, co-operatives have been disbanded or reduced in numbers and single owners are unsure on what conditions to allow other growers to utilise fermenting/ drying units on their land. If these circumstances existed just 4 months after submission of the Completion Report, the cocoa production prognosis included in that Report is very hard to justify. It seems to have been more a case of wishful thinking than fact. It also demonstrates that the bases for establishing and locating cocoa fermenting/drying units were conceptually flawed.

The Completion Report indicates that a major effort to improve processing and marketing resulted, very early in the project period, in;(1) legislation and regulations, and agreement, to change the Cocoa Board from a marketing and processing organisation to a regulatory Board; and (ii) the privatisation of processing, marketing and exporting of cocoa. This policy was subsequently changed through the intervention of the ADB Program Loan in 1989 which gained GOWS agreement to abolish the Cocoa Board and transfer regulatory and monitoring (price, quality etcetera) to Government. The Project amended the legislation and regulations and product exporter guidelines but these were never enacted due to Asian Development Bank intervention. This aspect of the Project clearly shows a total lack of communication between AusAID and the ADB. As the Project never really addressed the issue in reports it also demonstrates a contemporaneous lack of Project direction. This entire Project input provided no tangible benefit. It was clearly a failure.

In addressing Project Goals, the Completion Report indicates that a goal of the project was to increase village incomes and foreign exchange earnings through increased production of cocoa. It states, “The indicators of progress towards achieving this goal were: (i) per capita income from cocoa (ii) export earnings and (iii) per capita cocoa consumption. By February 1991 however exports were still in decline and there certainly were no baseline figures for farmer income. It had estimates of cocoa consumption in Samoa that indicated national consumption was 2210 tonnes but how these estimates were to be applied to gauging project success is unclear. In any case the Project could not assess income increases. Two of the objectives were simply not measurable.

There was however evidence that per capita incomes from export of cocoa would not increase as a result of the Project. The Project Marketing Economist reported that the “average price paid for a bag (of Koko Samoa) weighing 223 grams (at Apia 215

Market) was ST$2.33, equivalent to ST$10.45 per kilo or ST$10,457 per tonne. At these prices export quality cocoa cannot compete” (Hassall and Associates 1991,p 17). (Export prices were approximately one third of these rates during the same period). By May 2000 the average price for 280 grams of cocoa at the Apia market was $ST648 and hence the disparity between local prices and export prices has grown even wider. It was clear that with local prices so high no one would choose to export cocoa. In such circumstances it is difficult to comprehend how the Project could realistically predict increased exports especially as they had no concrete data on the size of the local market nor how much cocoa it could absorb and the project was aware that Samoan cocoa was discounted in the overseas market because of deteriorating quality (Hassall and Associates 1991, p5).

The charts below provide data on the export and local prices of cocoa since 1990.

Figure 11: Export and Samoa Prices for Cocoa

6000

5000

4000

3000 Export Price Samoan Price 2000

1000

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Export Price 1269 1196 1098 1117 1392 1435 1457 1618 1675 1202 Samoan Price 4021 5651 Source: Compiled from ICCO Monthly and Annual Averages of Daily Prices of Cocoa Beans, Jan 1971- Sept 1999, http://icco.og/prices/pricesave.htm; IMF Samoa Statistical Appendix, IMF Staff Country Report No 99/28 April 1999 and actual purchase price of sample cocoa at Apia market 1999 .

48 Survey conducted and sample weighed by writer and confirmed by Nutrition Section, Department of Health Samoa on 14 May 2000 216

Figure 12: Cocoa Prices and Production 1960-1997

Source: ICCO Statistics, http://icco.og/prices/pricesave.htm 217

The Project documents similarly purport a return of $49 per day for cocoa farmers as a direct result of the Project implementation. This was only valid however if prices held (Appendix 13 Table 3 of Completion Report refers). The figures are misleading as the $49 relates to years 15 – 20 of the cocoa processing process. Returns in Year 6 are less than half that rate and only then if hybrids are used. Costs per hectare for disease control were also not defined clearly in determining these figures. The figures were clearly too optimistic.

The only indicator that could be measured effectively was export earnings and this showed a reduction rather than improvement in export outcomes. These figures show that the Project did not achieve an increase in exports as predicted. Figure 13 below provides evidence of the continued decline.

Figure 13 - Samoa Cocoa Exports 1962-1995

6000 5000 TO 4000 NS 3000 2000 1000 0 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995

Source: Final Report of the Processing and Marketing Specialist and Marketing Specialist, 1991 pp2 and Samoa Central Bank December 1995 Quarterly Bulletin, Table B-5

Indeed since 1995, the Samoa Central Bank (1998) has indicated that there has been no export of cocoa. Instead Samoa imports cocoa to satisfy demand from companies like Wilex that produce chocolate products.

A farm development monitoring system was organised and data entered into a computer program but the Completion Report indicates that the program was not fully operational because the operators of the program were not fully trained. Again this situation is an indictment of project management. Even if counterpart staff changed during the duration of the Project handover procedures should have been in place. If staff resigned the Project should have raised the issue and tried to ensure early replacement. Project documents do not raise the issue.

Most cocoa trials were incomplete at time of project cessation. Others such as the NKP trial were shelved due to operator/owner indecision, lack of trial site etcetera. From discussions with Faamanu of the Department of Agriculture it is evident that cocoa trials were never continued to finality and no recorded results exist. It is also clear that some of the plots survived and this in turn resulted in the requests from landholders to retrieve their land to grow cash crops. This would generally imply that the Department failed to accord any priority to the follow-up management process. It also probably indicates that the Department would have similarly failed to manage the process had the cyclones not arrived. The Research Component was a failure and probably would have been so irrespective of the cyclones.

The cocoa plantations were either destroyed in the cyclone or not subsequently maintained. It also seems obvious that the Project stubbornly persisted with 218 introduction of Amelonado regardless of the impact its non-acceptance would have on project outcomes. It demonstrates a situation where the consultants failed to effectively consult and pursued their own objectives to the detriment of the Project.

The Project received two budget increases totalling approximately A$280,000. These covered activities such as institutional strengthening (extra 6 months for Station Management Advisor at a cost of $64,000 in 1990, extra month for Marketing advisor A$20,000) and an Impact Study for A$70,000 and incorporation of improved fermenting and drying procedures into the extension program. It is difficult to deduce whether this was an inefficient use of funds or not. Clearly better procedures were required and the extension service was the appropriate delivery vehicle. Institutional Strengthening was an obvious requirement and should probably have been supported in the circumstances. The real inefficiencies lay not in budget increase but poor project design and management.

Phase II of the Project was appraised in 1986 but it was not until 14 February 1988, nearly two years later, that the project commenced. Part A of the PID was submitted in July 1988 but it was not February 1989 that Part B was submitted – 12 months after the project commenced. This makes the PID virtually a history of the project rather than an implementation document. Five months later there was a Mid Term Review in July 1989 but at that stage the PID had apparently still not been approved by AusAID. The Mid Term Review found numerous problems with the project implementation and as a result a revised PID was submitted in August 1989. This means that there was a gap between 14 February 1988 and August 1989 when there was no approved implementation strategy for the Project. This represented a period of half the project.

The Project quite clearly was at risk from the start as it depended on a two year old Project Design and it had no approved strategy/implementation document for most of its existence. The gap between project design and commencement was too long and this was compounded by an inability to produce a PID until a further 18 months had elapsed. The project was simply being implemented blindly. It also demonstrates a lamentable lack of understanding of PID importance by both the contractor and AusAID.

In summary, the Project failed to meet objectives. Many of its constituent components failed to produce desired results and in numerous cases estimates of production were far too optimistic. Management and consultation were poor. In respect to cocoa type, consultants failed to heed warnings about producer and consumer demand/taste. The result was a less satisfactory outcome than should have been the case. Project management was insufficient, project design and the PID were ineffective and this compounded by the impact of cyclones made the inputs unsustainable. Project implementation was neither efficient nor effective.

Project Evaluation Plans/Baseline Studies

Project Implementation Document. A Mid Term Review of the Project was conducted because of serious implementation difficulties.

As has already been indicated earlier in this thesis, the Mid Term review criticized the Project for not having conducted a baseline study to determine domestic cocoa consumption. Projections for production and export have also been criticized in this thesis. Further, it was impossible to verify an increase in village incomes when no income survey was conducted prior to project commencement/ at project commencement. Given cocoa failed to remain an export commodity income increase can however be assumed as zero.

In respect to training of extension staff, the Mid Term Review notes that no assessment had been made on the validity or resultant competency of staff. No attempt was made to judge performance but if it had been attempted it would have only been a symbolic gesture. As the PID did not provide for an agreed set of measurement criteria to validate the effectiveness of training there was no possibility of accurately measuring performance improvement.

The Completion Report therefore had to address performance by referring to activity completion and volumes rather competencies and effects. For example, it reported that 13 nurseries were completed and 1.4 million seedlings distributed. There is for example no assessment of quality improvement in cocoa produced.

In addition, there was no counterpart involvement evident in choosing or assessing indicators or as a member on the Mid Term Review. The project did not follow the DAC project evaluation principles to which Australia is a signatory.

COMPARISON WITH PNG COCOA QUALITY IMPROVEMENT PROJECT

It is interesting to compare the Samoa Project with the subsequent PNG Cocoa Quality Improvement Project. Both projects had substantial research and extension components and both had similar implementation problems. This similarity provides an indication of what may have transpired with the Samoan project had the cyclones not hit the country.

Cocoa production had varied widely in PNG with a slump in 1994-95 was followed by high production and exports in 1996. According to the Cocoa Quality Improvement Project design document PNG’s cocoa industry expanded rapidly in the 1960s but since then had deteriorated considerably. Land tenure problems, aging plants, poor management, inadequate extension services, disease outbreaks and insufficient research contributed to the industry problems. Quality was reported to be declining, threatening the position of PNG in the world market. The cocoa produced in PNG was nonetheless of high quality and commanded a premium. This situation mirrors that of Samoa at the commencement of its cocoa project.

A request was made by the PNG government to AusAID in January 1987 for assistance in undertaking a cocoa quality improvement project. The project was to include three components, with the following objectives and outputs:

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1. Research to improve cocoa quality through applied research into fermentation and drying; a fully-equipped laboratory with sensory evaluation and processing facilities and trained staff to allow sustainability for quality monitoring and research; a practical research program to develop a processing system which improves cocoa quality and is suitable for use by both smallholders and plantations; and a laboratory-scale processing system suitable for assessing the quality of small samples of experimental cocoa from breeding trials.

2. Extension, Information and Training to establish a support system for extension, information and training to assist the Cocoa Board and the existing provincial extension services in improving cocoa quality; cocoa extension resource base and mobile extension unit; material and equipment for extension and training activities; an information system for recording field activities and extension planning; and training modules to cover the training needs of farmers, DPI and Cocoa Board staff and quality assessors.

3. Project Management totalling around 87 months of adviser input.

The design document indicated a total project cost of $3.9 million, of which Australian inputs were expected to cost $3.4 million. A project extension in 1994 budgeted additional costs of about $900,000. In addition to continuing the extension component, the project extension was to centre on research relating to: (i) minibox fermentation and solar, sun and hot air drying; (ii) assessment of genotype quality; (iii) microbiology of cocoa fermentation; and (iv) environmental effects and fermentation method on flavour characteristics. Again the research and extension components had many characteristics in common with its Samoan counterpart.

An independent review of the Project found that three aspects of PNG project design were less than optimal:

(i) insufficient consultation was undertaken with exporters, resulting in a research direction in the early project period that did not focus on key quality issues; (ii) the extension component was introduced in the PID with limited analysis and justification. It introduced a new approach to cocoa extension (through the Cocoa Board) with no institutional analysis or indication of how it could be institutionalised; and (iii) there is little discussion of monitoring and evaluation in the design documents (AusAID, 1998, p10). Similar deficiencies are found in the Samoa Project with the Project pursuing development of a cocoa type that did not meet local farmer and consumer taste.

Technology Transfer and Adoption

The review concluded that, “It is difficult to assess the extent of technology transfer under the project since no survey or evaluation has been undertaken, for example of extension or training effectiveness.” (AusAID 1998, p11).

In relation to the minibox fermenters, a rapid appraisal survey of four of the 30 trial units indicated a potentially major demand for the technology in East New Britain. The respondents stated that a high proportion of the growers in their villages wish to 221 purchase the equipment, whether or not credit is available. Four fermentary operators interviewed during post-evaluation had highly positive attitudes towards the boxes and driers. However, the review noted, “in addition to perceived operational benefits, their attitudes may be affected by the fact that the trial driers were donated to the growers, and that maintenance is carried out by the CCRI.” (AusAID 1998, p16).

It was also noted that growers in Bougainville are using a new locally produced fermentary developed under the Bougainville Copra and Cocoa Dryer Rehabilitation Project. It is of special note that some of the consultants on the earlier Samoa project are on the Bougainville project. Hence the effectiveness of the Samoa fermenting boxes is questionable. The issues of maintenance, and location of the fermentaries in Samoa might well have further severely limited their effectiveness. As with PNG the initial fermentaries in Samoa were effectively provided free as there was no way to recoup the Project outlays. The data also imply that as with PNG their uptake could have been slow where farmers had to pay for the equipment.

The review found that, “overall, it is difficult to assess the impact of the extension component of the project. An impressive number of publications were produced and a large number of people attended training courses. It has to be assumed that this has had positive impact, though experience from other extension projects in PNG suggests that the impact on the industry may be limited.” (AusAID 1998, p19). This same situation existed with the Samoa Project, where there were no baseline data for review of the effectiveness of training.

In keeping with AusAID guidelines, the PNG project was required to collect gender- specific baseline data. This was either not undertaken or not published. The project was intended to increase opportunities for participation by women in the ownership of tree crops and fermentaries due to emphasis being given to women in the extension process. However, “there is no indication of how this emphasis was to be achieved or whether it was realised in practice.” (AusAID 1998, p22). Again this situation is paralleled in the Samoa project where little if any attention was directed at women cocoa producers.

Lessons Learned with the PNG Project

The review highlighted, inter alia, the following lessons learned (AusAID 1998, p25- 27) with the Project. It is disappointing to see that most of the lessons learned were already evident in the failure of the Samoa Project some years previously. Obviously these lessons were not learned by the PNG Cocoa Design Team, AusAID or the contractor. a. Research Flexibility Applied research project components should include adequate industry consultation in their design and implementation. Such consultation should include all sectors of the industry which may be affected by the research. Research program flexibility is likely to be a key determinant of project impact and should be built into design

222 b. Extension Program Design The extension program was effective, but was not institutionalised. This has resulted in a loss of momentum after the end of the extension component in December 1995 c. Baseline and Monitoring Studies Limited information is available on smallholder cocoa production and processing. In the case of CQIP, it would have been beneficial in relation to project design and implementation if, at least, a baseline and an impact survey had been undertaken.

Research projects directed at smallholders should be designed on the basis of detailed knowledge of the farming system, including such aspects as labour inputs, time allocation preference, gender division of labour and income and perceived constraints to production, credit and marketing. Where such data are inadequate, resources should be made available to conduct surveys, at least at rapid appraisal level and preferably using participatory appraisal. d. Training Training course reports should be prepared on all or most training activities. These might include course content, attendance by gender and (at least) an end-of-course self-evaluation. e. Fermentaries The trial solar driers in East New Britain are installed by CCRI staff at no cost to the smallholders. In a smallholder context, this confers a major potential benefit on individuals. Consideration should be given to requiring payment for the test driers. Costs could be discounted and/or deferred in return for collaboration in the testing program. This would provide information on financial performance and the demand for commercial units as well as on technical performance.

Maintenance is also provided free of charge. This represents a minor input but may contribute to the enthusiastic use of the driers and to a false expectation of the likely uptake of the technology. It also precludes assessment of the likely level of maintenance under commercial conditions.

Where new technology developed under a project is trialled under smallholder conditions, consideration should be given to requiring some level of payment for the asset capital and operating costs, on a subsidised or deferred basis if necessary.

SUBSEQUENT ACTIONS OF GOVERNMENT OF SAMOA

While the above review may tend to suggest that the Project may at least have had some positive effects except for the cyclones, further research hereunder casts doubt on this assumption.

While the Project did not increase production of cocoa, the subsequent actions of the Samoan Government and AusAID not to proceed with further cocoa rehabilitation projects is puzzling. The Project did demonstrate that cocoa production could be effectively increased (if not exported). There is an obvious domestic and international market for the commodity. Agriculture is seen as a vitally important export earner in Samoa. It has far less attraction to thieves than the cattle industry 223 where WSTEC’s herd has suffered catastrophic decline from 2000 to 280 due to rustling. Hence the decision not to reinvest in cocoa is interesting.

A meeting was held with Ms Noumea Simi of the Department of Foreign Affairs Samoa on 11 May 2000 regarding the above question. (The Department handles all aspects of the development cooperation relationship). Ms Simi indicated that she had contacted the Director of Agriculture after receipt of my initial communication regarding the matter. She had not received a clear response regarding the reason why no support request was made to rehabilitate cocoa after the cyclones. She suggested I contact Mr Ken Newton who was Project Manager for Stage 1 of the Cocoa Project. The fact that the Samoan aid coordination agency (Foreign Affairs) had no knowledge of why there was no request for more donor support for cocoa highlights that at the toime Samoa was a “taker” of aid. There was not sufficient development policy and strategy being generated by Samoa. Aid was donor driven and the donors were interested in reconstruction not agriculture at the time.

A meeting was subsequently arranged for 23 May 2000 with Mr Newton who was more forthcoming regarding the reasons for cocoa’s demise. He now occupied the position of Managing Director of CCK Ltd, the sole coffee buyer in the country and also a large cocoa buyer. He indicted that there was a prevailing view within political circles that Samoa knew how to grow cocoa and research was a waste of time. This was very evident even before the cyclones. The Canberra team sent to assess the Project had, in his view, been swayed by these political critics and Phase 2 of the Project therefore concentrated on increased cocoa production to the detriment of research. He indicated that there were no real basic data on cocoa production in Samoa and research was imperative. In his opinion, the cyclones provided a good excuse to stop the research effort completely. A lot of disease resistant material had been assembled through research and cessation of the research meant that all was lost and it was a tremendous waste.

Mr Newton indicated that the same problem had occurred with coffee, where Robusta coffee was introduced. To combat coffee rust, South American clones were introduced and several plots of rust resistant coffee were produced. These were subsequently bull-dozed when the Department changed priorities. Yet, an article in the Samoa Observer in May 2000 on the economy suggested introduction of rust resistant coffee. It had all been done before but the research was lost. Cocoa met the same fate.

Mr Newton suggested that inputs needed to be sustained and strategic thinking improved. He compared Samoa to PNG where the cocoa industry had flourished. He stressed that no conditions had changed in the international market for cocoa. Koka Samoa could still be sold at a 10-12 per cent premium on the world market. He indicated that no one had any real idea of local consumption patterns for cocoa and how much the local market could absorb. The consultants making predictions on export potential for cocoa would likewise have little idea. Mr Newton had made some broad calculations that around 2500 tonne was consumed locally at a time when 300 tonne was exported. He emphasised that cocoa was very popular locally and that it substituted for imported coffee and tea. Hence it had a significant impact on both imports and exports.

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What the above implies is that the Project calculations for expected exports were suspect as the absorptive capacity of the local market was not known; the effect of the price differential between domestic and overseas markets was also not addressed in calculations; the research component of the Project was probably negatively impacted by political consideration as was any future request for assistance and the Department obviously had competing interests at play that made development of strategic planning problematic

A review of Department of Agriculture income and expenditure for cocoa production also sheds very little light on the priority attached to cocoa. It is extremely difficult to undertake due to the fact that much of the Cocoa Project activity spilled across numerous of the Department’s Outputs. An analysis of Budget Output 5.1 Crop Development, Breeding, Multiplication and Supply of Planting Material is however enlightening as detailed hereunder.

Table 24: Department of Agriculture Income/Expenditure 1996-2000 Output 5.1

Expenditure 1996-97 1997-98 1998-99 1999-00 Description Personnel 183,733 576,334 385,348 431,015 Operating 148,123 318,208 291,532 377,810 Capital NIL 500 29,860 50,000 Overheads 13,475 99,681 18,063 40,908 Cost 20,000 8,000 15,000 Recoveries Total 345,331 994,722 724,803 899,733 Source: Legislative Assemble of Samoa, Approved Estimates of Receipts and Payment 1996/97-1999/2000

Other than showing some interesting fluctuations in overheads, the above figures indicate a substantial increase in resources for the activities. An analysis of the performance measures for Output 5.1 included in the budget papers for 1997/98 to 1999/2000 however shows a clear decline in the prominence of cocoa as an agricultural commodity. The 1997/98 budget papers list a performance measure for Output 5.1 as “Establish a Cocoa Nursery for 74,000 seedlings at the Nafanua Horticultural Centre; Establish organic grown demonstration Plots.” (Legislative Assembly of Samoa 1998, p19). This same indicator appeared in the 1998/99 estimate papers. By 1999/2000 however the performance measures were revised to read, ”Develop and maintain cocoa seedling nursery (20,000 seedlings).”(Legislative Assembly of Samoa, 1998, p15). Cocoa production and any thought of export potential have disappeared from the Department of Agriculture agenda.

In the above circumstances the strategies of the Department for Agriculture appear in need of some urgent re-evaluation. It would seem that under the prevailing planning regime there was little chance that the research components of the Project would yield any tangible results. It is also evident that the contractor’s determination to introduce Amelonado cocoa at the expense of Koko Samoa also contributed to poor results. Other failures existed with fermentary location and ownership arrangements that effectively destroyed their viability. The total lack of coordination between the ADB and AusAID in respect to cocoa marketing arrangements consigned this Project component to predictable failure. In essence these major problems would, in all 225 probability, have meant that the Project would not have achieved its objectives even if the cyclones had not intervened.

THE INFLUENCE OF CULTURE AND FA’A-SAMOA

What the above analysis shows is that smallholders generally were slow to establish the new plantings of Amelonado cocoa despite the favourable returns which they offer. Even under the Cocoa Rehabilitation Project, Stage 1 planting targets were well behind estimates. “Planting targets for the project were 500 acres in 1980 and 100 acres per year thereafter. However actual plantings are far behind this schedule with only an estimated 500 acres of Amelonado cocoa planted by the end of 1983. (Andrews 1987, p20). The reason for this slowness is partly attributable to Samoan culture.

Andrews suggests that “The slowness of farmers to establish Amelonado cocoa plantings and adopt the improved cultivation practices is often seen as due to the general conservatism of farmers – a reflection of a general belief of fa’a-Samoa, that is, satisfaction with a way of things as they are and a corresponding unwillingness to change”. (ibid). Under the fa’a-Samoa system “Family members who farm the customary land have traditionally functioned as share croppers on village plantations. The accumulation of wealth is difficult to achieve in a society with an ethic of communal living and consequently the motivation for increasing production and productivity is believed to be limited”. (Andrews,1987, p21). This view was shared by the South Pacific Agricultural Survey (Ward and Proctor cited in ADB 1985) which found that motivational constraints were so substantial that Samoan society appeared to have reached a temporary or semi-permanent plateau of satisfaction.

Other commentators however disagreed that fa’a-Samoa restricted development of export crops. Pitt (1978), cited in ADB (1985) found that there were many matais who enhanced their reputations and prestige by successful cash cropping.

What is not clear in Samoa, even today with a weakened fa’a-Samoa, is whether the objective function of the smallholder is to maximise family income. Mellor (1969) indicated in this regard that the aim of the subsistence farmer is to maximise his family’s happiness which is a function not only of income but also of leisure.

This framework can be applied to cocoa production. “Farm management decisions are determined by the weights farmer’s attached to leisure and the material goods that may be earned through the sale of cocoa” (Andrews 1987p18).

On numerous visits to Samoa I have witnessed the capitalist and subsistence economies clash. On one hand the farmer only wants to produce as much as he needs, especially on Savai’i where options for export or sale are limited. But he is also in constant need of cash for meaalofa (gifts), taumafataga (feasts) and children’s education. It is a paradox that it is the Samoan culture, through fa’a-Samoa, that dictates his duty to village and church and that this in turn now drives him into the capitalist economy to seek cash for expenses. The net long term result of this may be the destruction of fa’a-Samoa by the capitalist economy.

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It is worth considering here why the farmer cannot simply provide services or production in lieu of cash and gifts. Again this is rooted in the concept of fa’a-Samoa. Meaalofa is accorded high status in the fa’a-Samoa value system. Visitors to Samoa have often been amazed at the Samoan willingness to give and “find the exchange of gifts in Samoan society… a most bewildering business” (Irwin, 1965,p73). It is bewildering as it is “one of the essential cornerstones of fa’a-Samoa, and all Samoans are expected by custom to observe with fortitude its various rules and usages” (Ioane 1983,p 522). For the giver, it is an affirmation of his/her mana, or high status in the eyes of the receiver, as well as the community at large, whose members form a captive audience for the village drama. To the recipient the meaalofa could be seen as the giver’s recognition of his/her own status, and in some cases, an expression of alofa ‘love’ and high personal regard” (ibid,p524). As such it is incumbent on the farmer to give as much as possible. As Booth recounts “a collection was taken for the Pastor’s monthly salary … The total came to $3,200…There are people here who have a monthly salary of $200 and give the pastor half of that” (Booth, 1987,p458). In any village those with high status try hard to maintain that position by giving meaalofa and those of lower status (like the farmer) always strive to improve their position by doing the same. “Rivalry is common. Few Samoans who practice fa’a-Samoa opt out of this race” (ibid).

In conclusion while Samoan farmers might have preferred to stay with the old subsistence model of farming, it is perhaps the fa’a-Samoa system itself that has pushed them into cash cropping. So it may well be that, far from hindering development (of which it is persistently accused), fa’a-Samoa may in fact have stimulated development in the agriculture sector.

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CHAPTER 11 CASE STUDY 3 – WESTERN SAMOA FIRE SERVICE (WSFS) UPGRADE

PROJECT BACKGROUND

The original request for assistance for the Fire Service of Samoa was made in February 1991. The request was for a new fire-fighting vehicle that was required to supplement the existing fleet of obsolete and unreliable vehicles. An initial appraisal of the fire service indicated that it had great difficulty operating and maintaining any equipment and that supply of a vehicle would not solve its operational problems. More substantial action was required. A complete project was proposed that would see the upgrade of the entire fire service including its headquarters, staffing, equipment and training.

Indeed the above situation had been known since 1978 when Commander Clarkson (1978) of the New Zealand Fire Service produced a report for the Ministry of Foreign Affairs New Zealand. This occurred as a result of a request for technical assistance under the Samoa/New Zealand Bilateral Aid Program. The Clarkson Report provided a comprehensive statement of the extent of Fire Service problems. In 1989 the General Manager of Austral Specialised Vehicles (NZ) produced a document that sought to revitalise the Samoa Fire Service by addressing most of the issues noted in the Clarkson Report. The document made recommendations concerning:

Administration Equipment Appliances New Fire Station Fire safety and legislation Staffing Training Funding including a levy on fire and motor vehicle insurance Recurrent and capital cost projections

The Austral document states under Part 1.3 “of this date there is no effective fire protection in the township of Apia” (Austral Special Vehicles per. comm.1989). The document also sheds light on the parlous financial state of the Fire Service. It provides an estimate of annual funds to operate the fire service. ST$241,000 per annum was estimated but as of 1992 the budget for the Fire Service was still only ST$129,000 of which ST$93,000 (or 72 per cent) was allocated to staffing.

In February 1992 (12 months after the initial request) a Project Design Document (PDD) was prepared by the Pacific Regional Team of AusAID. This document indicated the sorry state of the fire service, poor staffing, lack of staff fitness, poor salaries, poor hydrant marking and water supply. It proposed a three year project in financial years 1992/93 and 93/94 to build a fire station, purchase equipment, train staff and audit progress.

The Project commenced in January 1993 and the Completion Report was submitted in January 1996. It cost approximately A$3.4 million.

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PROJECT OBJECTIVES

A Project Implementation Document (PID) in June 1993, recommended minor changes to the PDD with the exception of more training. (It is noted here that from initial request to PID preparation 2.3 years had elapsed). The PID proposed a two year project over the period 1993-1995. It commented that:

“The current situation, which is worse than at the time of the Austral Report 1989, clearly indicates that in Apia, the Fire Service operating with the present level of appliances and equipment, combined with lack of training and experience, cannot be expected to be an effective organisation.” (OPCV 1998, p18).

The PID (OPCV 1998, p33-36) stated that the Project objective would be the establishment of a Fire Service to a standard expected of a port city the size of Apia.

PROJECT OUTPUTS

Specifically, the Project outputs would include:

A new fire station with all essential facilities and accommodation for staff, appliances, equipment, maintenance and training An operational fleet of new and upgraded appliances designed and constructed specifically for Apia A suitable appliance and equipment testing and maintenance program appropriately trained staff with high morale, confidence and capability amendment of the Fire Service Ordinance and fire safety procedures and institution of an improved inspections system A back-up system for appliances, equipment and building repair and maintenance Development of the auxiliary fire fighter contingent as an effective component of the fire fighting complement appropriate funding, both in terms of recurrent and capital budgets, to absolutely ensure the on-going efficiency of the service and to provide for plant and equipment replacement An effective method of continual monitoring preferably in conjunction with an Australian Fire Service Organisation

The PID provided for an Australian based Project Director to manage the operational aspects of the Project and institutional changes out of management overhead. Performance indicators in the PID were stated as the establishment of a sustainable standard of fire protection and fire safety. It suggested that as the pre-project situation was basically that there was no fire service, Project achievements could easily be gauged against the zero situation.

PROJECT IMPLEMENTATION

The Project commenced in September 1992 and the PID was accepted by AusAID in August 1993. The Memorandum of Understanding (MOU) between the Australian 229 and Samoan governments was only signed in April 1994 (18 months after Project inception).

By April 1994, however, the project was under review for lack of progress. An independent report was commissioned in view of ”perceived slow progress on the institutional development of the WSFS and the frustration of the Project Staff in attempting to resolve the matter”. (MDG 1994, p16). The report also indicates that the contractor advised “as a result of institutional development activities being the responsibility of a non-funded Project Director visiting the country on a short term basis twice per year, heavy reliance has had to be placed on the Team Leader Training whose primary role is training.” (MDG 1994, p5). Basically there was not enough input to effect institutional change. The report indicated that the position was largely funded out of management overheads

The Review also indicates that the “Project is somewhat unconventional in that the lead-consultant does not have any personnel assigned to the project and all members of the Project Team including the Project Director, are drawn from associated organisations …”(MDG 1994, p14). The question arises as to how a contract could be awarded to a company that has no real input to the Project (not even that of an unfunded Project Director). The report says that the answer lies in the fact that the PMC had to be experienced in activities in Western Samoa and AusAID project procedures. (This would seem a poor rationale and one that effectively rewards those companies already in the “system’).

In analysing the reasons for lack of progress the Report indicates (MDG 1994, p17) in respect to WSFS staffing that some officers are not suited to their positions; the lack of any trained staff to take up senior positions in the WSFS; the lack of discipline in the WSFS; the inability of the WSFS in its present form to enforce Standard Operational Procedures; the poor aptitude and ability of some staff to handle theoretical and practical training in fire fighting techniques and the lack of suitable criteria for recruitment and selection of staff

The Review identifies that the Ministry of Transport (to which the WSFS was responsible) examined several responses to the above problems but nothing was resolved (partly because staffing matters really resided with the Public Service Commission). In any case, the lack of action resulted in some acrimony between the Ministry and the Project staff.

The Review concluded that institutional development aspects were hindered by Samoan bureaucracy. It recommended transfer of Fire Service to the Department of Police and Prisons, 3 months in-country work for Project Director to facilitate the above, two months short term training input, adding 12 months to the Project completion date and training for the Chief Fire Officer in Australia.

The Project Draft Annual Plan 1994/95 (OPVC 1994, p6) finds that the Fire Service was transferred to Police and 8 of the original 14 firefighters left by June 1994 due to resignation, retirement and non willingness to move outside WS Public Service. By August 1994 all officers except one had left the service. So the Project had to commence the training exercise again. There were also extensive delays in 230 completing the design, specification and tendering for construction of the new fire station. No reasons were advanced in the report for these delays.

COMPLETION REPORT

The Draft Completion Report for the Project indicates that the Project was a great success. It indicates that because of delays in site selection for construction of new Fire Station, the trainers would only have 2-3 months in-situ. The Project was extended for another three months to cover this problem. By November 1995 the project was complete and the Project Director was to review progress in 1996. The Report states:

The Western Samoa Fire Service Project has established a benchmark in terms of rebuilding a fire service from a zero base. By Any yardstick the progress that the new service has made since its formation in July 1994 clearly demonstrates the effectiveness of the project inputs. The credibility and public confidence in the service is returning and the level of public safety in Apia and the surrounding districts has improved dramatically.

The overall efficiency of the Project can best be demonstrated by the achievement, in a very difficult and demanding operating environment, of all the designed inputs in a timely and cost effective manner” (OPCV 1996, p6-7).

The report also indicates that sustainability will only be achieved “if the organisation is able to develop sufficient technical capability and professional expertise to effectively perform all of the functions required under the provisions of the western Samoa Fire Service Act 1994." (OPCV 1996, p7). It reports that “currently the only officer with any leadership skills is the Chief Fire Officer however, his operational experience as a fire service officer is extremely limited. None of the other officers in the service have any previous experience and have only recently been able to operate out of the new Fire Station which was occupied in May 1995” (OPCV 1996, p7-8).

The report suggests provision of additional assistance during 1996 due to the above circumstances. Attachment 1.3 of the report (which summarises Component Objectives and Outputs) indicates however that all verifiable outputs have been met. Further, the report (OPCV 1996, p9) identifies a number of lessons learned from the Project experience. These included the initial in-country visit by the Project Design Team needed to be longer to gain a clearer picture of the quality of existing staff; the original design document underestimates the personnel inputs required; the project time frame of two years was inadequate to build a Fire Station and conduct the necessary institutional strengthening tasks; an additional phase of Building design and construction and an institutional strengthening review should have been included prior to the training component commencing and the conditions of the MOU were poorly drafted by the GOA and not met by the Government of Samoa.

In November 1995 when the last of the Australian training officers departed a number of milestones was agreed to try and measure future progress. In April 1996 a review 231 of these milestones took place. The review found that vehicle and equipment maintenance were working well. A number of faults were identified with building maintenance but these were quickly rectified. The Fire Service Advisory Committee (which is the link between the business community and the Fire Service) had been meeting since 1994 in the absence of a legislative framework. The Fire Service Regulations were still to be passed. Staffing was again a problem with 3 firefighters leaving and only a few reliable volunteers remaining. The position of Assistant Chief Fire Officer had not been filled as no other officer had sufficient merit to be promoted. The Fire Safety Officer was working well but for the service to survive another officer needed to be trained in the duties. It was agreed that a new staffing proposal be submitted to the Police Commissioner to lift Force strength to 21 officers (from the existing 18). The Chief Fire Officer indicated that he would like to recruit at least one female fire-fighter.

The report indicates that the 1995/96 budget had been submitted which sought increased funds and provision for new uniforms and overseas travel. The Fire Service Regulations were with the Attorney General’s Department after being approved by the Police Commissioner. The Chief Fire Officer was reluctant to introduce any fee for service charging without the Regulations. The report finds that this” is costing the service a great deal of revenue generating capacity particularly in the building plans approval process” (Mearns 1996, p12).

The report recommended recruitment of six new cadet firefighters, a four week Fire Safety Course be delivered in Apia, a four week Officer Development course be delivered in Apia, two staff of WSFS be trained in Melbourne in 1996 (one for 6 weeks on Fire Safety and the Captain of the volunteer section for 3 weeks to overview sister systems), additional inputs to the Fire Station for further windows, replacement of rusted ceiling fans etcetera.

MEETINGS WITH THE FIRE SERVICE

A meeting was held on 11 September 1998 in the Fire Station with the Chief Fire Officer, Manu Falaula and Acting Assistant Chief Fire Officer, Tony Hill. Mr Hill is also Captain of the volunteer fire force.

At the meeting many of the issues that arose from reading the project documentation were discussed. These included that vehicle maintenance is being regularly conducted every three months. There is a maintenance schedule. The air compressor was repaired and staff uniforms were replaced in 1998. Building maintenance is good with paths, windows etcetera fixed. Ceiling fans have however not been replaced by rust proof versions. These replacements need to be put in the budget for the Fire Service.

A Fire Service Advisory Committee was established under the new Fire Service Orders 1998. It has however not been activated. It was renamed the Fire Service Board. This body needs to be made operational and relevant. Fire Hydrant flow tests have not been carried out as per the Review Document 94. The Assistant Chief Fire Officer says there is test equipment but he does not know how to use it. He also indicted that when water meters were installed at the Fire Station this restricted water flow and these need to be removed. 232

The Fire Service staffing has grown from 18 permanent staff and 12 volunteers to 28 permanent staff and 20 volunteers. The positions of Fire Safety Officer and Assistant Chief Fire Officer are actually filled but there is a nominal vacancy in the Assistant Chief Fire Officer position. A female was employed in the service as recommended in the Project reports. The five officers who transferred from the old service are reported by the Chief Fire Officer to be improving. It is noted however that one of the officers concerned was demoted due to work related problems.

Monthly and weekly reports are being sent to the Police Commissioner. These standard reports are retained in date order and are filed appropriately. Building inspections are being carried out regularly and building plans are being scrutinised by the service. It appears however that support has to be given to the officer concerned in respect to the appropriateness of fire prevention facilities installed in buildings. There is a tendency for building owners and contractors to seek certificates when plans do not meet fire service standards. This is not an unusual situation and merely implies that the officer must be given management support as appropriate.

The Service advised that the Building Code had still not been approved. It appears however that the Service uses the draft code as if it was approved when inspecting buildings.

The salary structure of the service has been reviewed twice since the Service was placed under the Police Commissioner. There does not appear to be any pay disparity between the Service and Police.

The public education program continues with schools who now come to the Fire station. This saves Fire Officer travel time etcetera. The program also occurs as a result of the Fire Service involvement with fire evacuation plans for major office complexes and the conduct of drills. The Fire Service has prepared plans for USP, Department of Health, Government Building, BOC Gases, etcetera.

Discussions were held with the Training Officer, Mr Max Tuatagaloa. He indicted that he regularly conducted training courses and practical exercises for staff. He regularly held courses on hose drill, fire extinguishing methods etcetera. He had standard modules prepared and provided staff with handouts etcetera.

THE MAIN PROBLEMS

The main problems encountered within the Fire Service seem to be a derivative of fact that the Service falls under the Police, Prisons and Fire Services Department. It was placed there in an effort to give it the management direction it lacked under the Department of Transport. In terms of the Project outcomes this worked very satisfactorily. In terms of future direction etcetera the situation needs attention. The Service needs more autonomy if it is to find direction and grow into a vibrant force.

It is perhaps ironic that the transfer of the Fire Service to the Police in order to provide some management direction should some years later act to constrict its operations. It is nevertheless understandable.

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The Fire Service has been completely absorbed into the police portfolio. For example, the Fire Service mail is directed through the police department and the Commissioner answers Fire Service correspondence and/or refers it to Police administration for response. A case in point is the current AusAID review of the Fire Service Project where the letter was referred to Police administration for response. The Fire Service does not always nominate who should attend training sessions, seminars etcetera. Or alternatively they are advised of the nominee. The Fire Service does not prepare or manage its own budget and communication with other agencies is through the Commissioner of Police

The above are only a few of the constraints the Service faces. The result these restrictions have in the long run deprived it of many of the rigours of management. As a result administrative accountability and strategic planning are lacking.

RECOMMENDATIONS FOR IMPROVEMENT

The Service needs to be released from many of the current operational restrictions and the Chief Fire Officer needs to assume control over his budget and operations (as would any other Divisional Director in any other government Department). This is in line with the Treasury strategy of devolution of control to what it terms “Output Managers”.

Most importantly the Service needs to prepare a Strategic Plan. As of December 1999 its strategic outlook is limited to the suggestion that the fire service be extended to Savai’i. This same proposal has been on the table since 1990. The current and expected effects of El Nino imply that more consideration needs to be given to fighting rural bush fires. The appropriateness of current appliances to city and rural fire fighting needs to be considered. For instance, some of the current appliances are more appropriate to fighting rural blazes than to operation in the narrow streets of Apia.

The Strategic Plan must properly define Fire Service objectives, its coverage area, the disposition of its resources and its future financial requirements. The document moreover must provide strategies for:

activation of the Fire Service Board the orderly replacement of existing fire appliances the upgrade/extension of services to locations outside Apia purchase/replacement of fire fighter accoutrements training of staff based on skills requirements and staff assessment

The Strategic Plan needs to be approved by the Commissioner of Police and submitted to the Treasury for endorsement and inclusion of funds in future years appropriations. However without a formal request for development of a plan from above, it is not likely that one will be developed. The cultural system in Samoa is such as to discourage initiative. Children go to school and learn by rote and staff respond to direction (See Chapter 6). There is no reward for being proactive but rather suspicion is generated. It is the matai’s/management’s role to require a plan to be developed.

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The Fire Service Advisory Committee established under the Fire Service Orders 1998 needs to be made operational and relevant.

The Building Code has still not been considered by Parliament. The lack of this code puts constraints on various Departments, including Lands, Health and the Fire Service. Discussions with Public Works Department indicate that it has been unsuccessful in having the revised code considered by Government. There needs to be a joint agency submission on the need to enact this legislation.

SUBSEQUENT MEETING WITH ALAN MEARNS

A meeting was held with Mr Alan Mearns the past Director of the Western Samoa Fire Service Upgrade Project. This meeting took place during his visit to Apia on 20- 25 September 1998. He had recently retired but was still very interested in the development of the Samoa Fire Service. The Project and its outcomes were discussed.

Mr Mearns agreed with observations that while much had been achieved with the Fire Service upgrade there needed to be a renewed management effort to ensure sustainability of the service. For example, there needed to be a separation of administrative responsibilities between the Police and Fire Service. He agreed that the Chief Fire officer had to prepare and manage his own budget (which had been the case during the Project); and a Strategic Plan needed to be prepared for the Fire Service that included provision for replacement of current capital assets such as fire appliances, plant and equipment; a strategy for expansion/development of the Service at least to Savai’i was required and performance monitoring measures needed to be implemented.

During his visit Mr Mearns offered to assist the Fire Service prepare the draft Strategic Plan. This plan was subsequently discussed at a meeting among the Chief Fire Officer, Captain Hill and myself on 13 October 1998. It was agreed that the plan would be modified to include benchmark data on performance indicators and targets for improvement. The plan would be submitted to the Police Commissioner for endorsement by the end of October 1998. The Plan did not materialise due to lack of action by the Fire Service.

EVALUATION OF THE PROJECT

The Project papers readily show that a lot was achieved by the Project. There is a demonstrable and effective fire service in Apia. It is also evident from the Project papers that delays occurred in Project implementation which were caused in part by poor project preparation and design.

The papers indicate that the failure to effectively organise a site and construction caused delays that seriously affected training efforts. The inability of the Samoan agencies to rectify staffing issues also resulted in an eventual complete retraining exercise. These failures were attributable to the Samoan Government, the Government of Australia as well as the contractor.

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Tender conditions for the Project that resulted in a prime contractor with no staff on the Project were clearly inappropriate. The AusAID concept that the contractor would cover Project Director costs out of management overheads represents false economy. As a contractor does not receive a monetary payment for Project Director input the contractor is reluctant to do too much as it eats into profit. It is clear that an in-country Australian Team Leader should have been appointed to manage the Project as well as a Project Director in Australia who had substantial management input to the project. The lesson to be learnt is that management costs are real and consequently a Project Director’s involvement should always be explicit and costed.

Project Assessment by AusAID

AusAID commissioned an independent assessment of the Project as part of a Tonga and Samoa Cluster Evaluation. In all, four projects were evaluated in Tonga and Samoa and the report submitted in November 1998. While the report does not indicate how much time was available for the evaluations, it does indicate that the four reviews took place in October- November 1998. Hence with four Projects to review the maximum time per project review was two weeks. I however met with the Team to provide them with a briefing on the Projects and was aware that the team only had around a week in Samoa to review both Projects.

The Review concluded that, “This was a highly successful development project and is considered a sound investment by Australia. The project achieved all of its objectives. The project assisted the Fire Service to improve the efficiency of its management, its operational procedures and the overall skill level of all personnel. It also provided for significantly upgraded facilities and equipment.” (AusAID 1999, p38).

The project review also highlighted that an important factor in project sustainability would be availability of appropriate levels of recurrent funding. This matter was raised with the review team by the writer. In consequence, the review summary states that, “Adequate budgets will need to be provided for operations and maintenance… Central to this is the issue of asset maintenance, both the physical items built or supplied and the human capital development…In all four projects the equipment supplied by Australia will have to be effectively maintained and in some cases upgraded. to realize their benefits. Of particular concern for the long term sustainability of projects in the South Pacific is the under-financing of recurrent costs…AusAID needs to address the question of recurrent funding for specific projects/sectors such as infrastructure, education and health.” (AusAID 1999, p2&3).

Further, the review also identified that, “there needs to be a fundamental shift in the approach to project and program design. This includes improved risk analysis in program design and greater attention to project duration, project size, operations and maintenance capacity, and the rationale for the project in the overall recipient Government’s investment plan” (AusAID 1999, p2&3). In addition the review highlighted that, ”AusAID project designs should incorporate sufficient monitoring and review mechanisms in order to provide early advice on the best way of making quick shifts in project inputs, institutional organisation or objectives” (AusAID 1999, p5).

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The review team in effect indicated that project designs paid little attention to sustainability or recipient government commitment and were constrained by internal AusAID design principles and procedures.

PROJECT EFFICIENCY

It is clear that despite the best efforts of the project personnel the inherent design problems made efficient delivery of the project objectives impossible. The Project incurred both cost and time overruns. These are addressed in detail in the AusAID review. Some of these overruns could have been avoided while others are probably common to all development cooperation projects. For example, a swift response to personnel/management issues cannot realistically be expected in a developing country. It is very ambitious to try and change salary scales in a country such as Samoa with an entrenched conservative Public Service Commission which has its own set of management difficulties.

The Project could have been made more efficient if a more detailed design had been prepared. It could have been more efficient if a site selection, tendering and construction component had been inserted in the Project preparatory to any training taking place. It is highly questionable, however, whether a review of staffing prior to project commencement would have resulted in any efficiency gains. The review would probably have been of short duration, due to cost factors, and hence have failed to demonstrate establishment and personnel weaknesses.

The Project cost the Australian government approximately A$2.6 million. This included an additional A$122,000 recommended by the project review team. Most of these costs were directly related to poor project design eg further training and institutional development, revisions to project management and extension of the completion date by one year. Hence it can be argued that the deficiencies in the initial project design engendered additional costs of around A$100,000. This was clearly not efficient project development practice.

PROJECT EFFECTIVENESS

The Project was definitely effective in that a large number of its objectives were met. The Project developed a Fire Service that is proud of its achievements and professionalism; equipment is adequate and the Fire Station, appliances and equipment are well maintained. (See Pictures 7 -10 below). There is no doubt that the people of Apia have benefited from the Project. This is evident every time there is a fire. Annex C provides a copy of a standard Fire Service report to the Commissioner. It is also evident, but less conspicuous, in terms of the low numbers of fires as a result of an effective building inspection program. Building evacuation planning and school visits also complement this scenario.

There are to be sure some anomalies in the project documentation. Forinstance, the Project Completion Report recommends provision of additional assistance, reinforcing of training etcetera during 1996 but Attachment 1.3 of the same report (which summarises Component Objectives and Outputs) indicates that all verifiable outputs have been met. This situation shows the ineffectiveness of non-specific outputs such as “training supplied”. Thus it does not matter that all those who 237 received training left the fire service. This type of output permits contractors to meet the scope of services but fail to deliver on the intent of the original output. It is a natural tendency of any contractor to write a completion report that emphasises performance rather than admit failures. In many instances therefore it would be far more effective for AusAID to commission an independent project completion review that would assess whether all deliverables had been met. Final project payment could be withheld until an agreed deficiency in project deliverables was rectified.

Pictures 7& 8 - Apia Fire Station

Project Evaluation Plans/Baseline Studies

Evaluation for the project followed standard AusAID procedures with largely desk- based monitoring. The contractor prepared regular monthly reports, annual reports and a completion report. These addressed performance against activities in the Project Implementation Document. A Mid Term Review of the Project was conducted because of serious implementation difficulties. Some four years after project 238 implementation an AusAID sponsored evaluation was conducted as described earlier in this section.

As has already been indicated earlier in this thesis, the Mid Term review effectively changed the implementation strategy for the project. Milestones/performance indicators were only really agreed in November 1995 when the training officers departed. The April 1996 review of these milestones showed that most had been achieved while others were still outstanding. Comments on funds for provision of new uniforms being in the budget proved to be misguided as when appropriated the funds were used elsewhere. As the record shows, it took the Fire Service several more years to finally obtain their uniforms. Hence even the milestone review mechanism had limitations.

The project design indicated that there was basically no effective fire service in Samoa and hence it assumed a zero baseline. It regarded all activity as improvement. This of course was not strictly correct and resulted in no attempt being made to calculate actual improvement in fire safety, property saved etcetera. the AusAID review accepts the project design view and notes that “While it was not possible to calculate the economic internal rate of return for the project, …, it is evident that there are substantial benefits being achieved” (AusAID 1999, 45).

The Completion Report therefore addresses performance by referring to activity completion (For example, fire appliances supplied, fire station built, greater interaction with public etcetera). It does however refer to staff competencies and effects. Staff training is assumed to, lead to quality service provision. In large part I agree with the conclusions reached but not the mode of analysis.

Again, there was no counterpart involvement evident in choosing or assessing indicators, as a member on the Mid Term Review or the subsequent AusAID sponsored review. The project did not follow the DAC project evaluation principles to which Australia is a signatory.

PROJECT SUSTAINABILITY

The Project Completion Report indicates that sustainability will only be achieved “if the organisation is able to develop sufficient technical capability and professional expertise to effectively perform all of the functions required under the provisions of the Western Samoa Fire Service Act 1994".(AusAID 1999, p7). It goes on to say “currently the only officer with any leadership skills is the Chief Fire Officer, however his operational experience as a fire service officer is extremely limited. None of the other officers in the service have any previous experience and have only recently been able to operate out of the new Fire Station which was occupied in May 1995” (AusAID 1999, p7)

The above statement shows the fragility of the Project results. The Project could have been a disaster with the Fire Service in management disarray and staff ill trained for their positions. As it happens the dedication of the a few officers and the training imparted by the Project has seen the Fire Service retain a high degree of professionalism.

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Problems however persist in respect to Project sustainability. In its present state the Fire Service is in a maintenance mode and is in danger of losing sustainability. This danger was recognised in the 1994 Project Review where it recommended AusAID monitor progress on ”the provision of adequate budgets and plans for long term operations and sustainability of the WSFS” (AusAID 1999, p38) and again in the Completion Report where it states that a major Project risk/weakness is ”the availability of sufficient Government Funding to sustain the current operational capacity of the new service.” (OPCV 1996, p8)

Funding for the Service has increased substantially since 1996/97. These increases however have largely been related to increased staff and new uniforms. There has been almost no cost recovery for services and almost no provision for new capital equipment.

Table 25: Fire Service Income/Expenditure 1996-2000

Expenditure 1996-97 1997-98 1998-99 1999-00 Description Personnel 116,357 211,676 285,636 235,614 Operating 200,000 90,950 286,750 260,000 Capital NIL NIL 2,000 NIL Overheads NIL 163,801 204,066 200,676 Cost NIL NIL 15,000 Recoveries Total 316,357 466,427 778,452 696,381 Source: Legislative Assemble of Samoa, Approved Estimates of Receipts and Payment 1996/97- 1999/2000 and Treasury Department fax of 17 September 1998 to the writer.

There has been no overseas training since the Project was completed. Links with the Metropolitan Fire Brigade (MFB) in Melbourne have not been maintained and free training offered by the MFB has not been taken up due to budget problems. Charges for services have not been reassessed for years. No fire levy has been placed on commercial properties to help pay for the fire service. No arrangements have been made with insurers to help pay for the fire service. No real liaison mechanism currently exists between the Fire Service and its commercial clients. The “new” Building Code has still not been enacted and the bases for any regulatory inspections by the Fire Service are therefore legally suspect.

The above situation is in marked contrast to that prescribed under the ADB procedures where a financial plan is proposed to ensure there will be adequate funds to finance project expenditures. For indirectly productive projects (such as the fire service) the ADB stipulates that ”steps should be taken to ensure that the government commits adequate funds for operational purposes…The fiscal impact calculations should be linked to policy discussions over the scale of user charges, operators fees and tax revenues” ADB1997, p41). It is clear that this level of analytical rigour has not been applied to the Fire Service. Fees and charges have been ignored and now imperil Project sustainability.

The main problem for sustainability of the service relates to provision for new capital equipment. (See Pictures 7 through 10 to access the problem). No provision has been made in estimates for replacement of any fire appliances. When new 240 appliances have to be purchased how will they be funded? It would appear likely that donor funds will once again be sought. In such circumstances the Fire Services Project, while clearly beneficial, cannot be regarded as sustainable.

Picture 9 – Apia Fire Service Vehicle

Picture 10 – Fire Service Vehicles

CHAPTER 12 CASE STUDY 4 - ROAD RESEALING PROJECT - PUBLIC WORKS DEPARTMENT

PROJECT OBJECTIVES

The objectives of this project were to reseal approximately 224 km of main rural highways; to assist in the development of a Road Maintenance Unit compete with all necessary equipment and plant and with trained experienced staff; to provide all necessary training in road maintenance procedures and in equipment operation and maintenance; to assist in implementing a road maintenance management system and to provide training in quarry development and operation and in the production of aggregates

OUTPUTS

The Project was designed to reseal and reconstruct 200kms of main rural highways and other roads over a 5 year period. A Road Maintenance Unit was to be established, equipment and plant provided through PWD and staff trained at all levels. Training was also to be provided in road maintenance reconstruction, quality control and resealing operations. Also training was to be provided for equipment operation and maintenance. A rural road asset register was to be established and appraisal methodology for condition rating instituted. Training was also to be provided in quarry development and operation of crushing equipment to produce road base and sealing aggregates

PROJECT IMPACT AND DEVELOPMENT THEORY

This project could easily be seen as one where aid created long term dependency. Samoa wanted bitumen roads and Australian aid provided them. More latterly the World Bank funded further road maintenance and upgrade. Samoa is indebted to aid. It is perhaps the dependency on aid that creates the biggest problems and challenges for Samoa.

The challenge is to use aid effectively. The problem is that aid often creates a fungibility problem. As the donor aims to increase funds to a specific sector, such as Infrastructure, the recipient government responds by shifting funding away from that sector. The analysis of the road resealing project clearly shows that from being an example of classic dependency, the Project is a classic example of aid fungibility. Samoa simply moved resources out of the sector, failed to live up to counterpart commitments and reallocated funds to areas of its choosing that, in general, were probably less productive economically.

The problem for Samoa is that if it treats all aid projects as fungible, it will become dependent of aid.

PROJECT SETTING

The delivery of infrastructure and utility services in Samoa is almost entirely within the public sector. The Public Works Department (PWD) is responsible for all primary and secondary roads (566 km in length, of which 87 per cent is paved, coastal 242 structures, and public buildings. Village communities are responsible for maintaining about 1,500km of village access and plantation roads with technical assistance from the PWD.

A decision was made by AusAID to fund bitumen pavement and miscellaneous equipment items through the provision of an Accountable Cash Grant. Accordingly a total of ST$891,700 was transferred by AusAID to the Samoan Treasury for the implementation of the Resealing of Rural Highways

Treasury was responsible for monitoring expenditure by the PWD against the grant and submission of regular project acquittal reports. The initial feasibility report for the Project states that, “We strongly recommend that prior to committing funds to rehabilitate the road network to a maintainable state, that guarantees be effected from the Government of Western Samoa to institutionalise the establishment, funding and operation of a dedicated road maintenance unit”. (Cardno & Davies 1989, p2) The initial feasibility report was compiled between 4 and 14 December 1988 (8 working days maximum).

Project started in May 1990 and was supposed to be complete by December 1992. The project was officially completed in March 1995 but in reality the departure of the last long term adviser in December 1994 marked conclusion of activity. Cost of the Project was A$3.47 million. Details of the roads to be repaired under the Project appear in the following plans.

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PROJECT IMPLEMENTATION

The implementation of the Project was chequered to say the least. A litany of problems is recorded in the Quarterly Reports.

The Quarterly Report for September 1990 (Cardno & Davies 1990, p8) states “No genuine PWD counterpart staff are allocated to the Project. The positions of Chief Engineering Officer and Quarry Manager within PWD are currently vacant and with the current freeze on appointment of public service staff cannot be filled” .

Report No 4 (Cardno & Davies 1991, p1) states, “Certain constraints that might arise and affect the successful performance of the project were identified in the Design Document. Unfortunately, many of these related to budgeting, staffing and setting of priorities by the PWD did become constraints.” It also states,”With the problems limiting progress identified, it has been possible to arrive at solutions which will re- establish the primary project objectives with some alteration in emphasis i.e emphasis will be on the establishment of a sustainable dedicated Road Maintenance Unit, carrying out planned and programmed operations on the scheduled lengths of road, rather than resealing stated lengths of road. The other project objectives ….remain” .

The recommendations contained in Report No.4 were, inter alia, that the project objectives remain, except that emphasis should be on the establishment of a dedicated Road Rehabilitation/Resealing Unit integrated into the management structure of the PWD and sustainable into the future. It should have its complement of dedicated plant and be capable of carrying out repair works and minor rehabilitation as well as having the full resealing capability. This emphasis should be carried through to successful resealing of planned and scheduled sections of road, rather than on the actual number of kilometres sealed. Technical assistance to the project should be expanded to include a full time Project Manager, firstly for one year and extended for two years if required. Training should be expanded to include courses in cost management with the COSMIC system and on-the-job plant operation

Report No 5 (Cardno & Davies 1991, p2) notes that, “construction work is being awarded to local contractors without the benefit of technical specifications and quality control criteria. There is no pavement design and pavement strength testing carried out and hence bitumen seal is being employed on substandard work. This will lead to premature failure and require costly repairs.

Report No 6 (Cardno & Davies 1991, p2) notes, ”Inadequate equipment servicing in the field and lack of supervision of such servicing and maintenance is a major constraint to effective plant utilisation and physical output

Report No 7 (Cardno & Davies 1992, p1) states “Requests for reconstruction and rehabilitation of roads other than those on the original program continue to create management problems in terms of priority allocation. It also states, ”As yet there has been no official assignment of counterpart staff to the project. Sustainability of the project works relies heavily upon this fact. Combined with this is the general deficiency of middle management staff within the civil maintenance section and the 246 consequent pressures to utilise RRP management staff in other areas” (Cardno & Davies 1992, p2).

Report No 8 (Cardno & Davies 1992, p2) states that, “additional works for the reconstruction and sealing adjacent to Apia Market and Beach road and Fugalei Street intersection were directed during the period. ….Apart from the diversion away from scheduled works, such additional projects undertaken in this manner place an unreasonable workload on project staff”

Report no 12 (Cardno & Davies 1993, p2) advised that, “Certain items of plant have remained unserviceable for six months or longer”.

Report No 14 (Cardno & Davies 1993, p1) indicates that for the quarter, ”Works undertaken by the Road Resealing Team during the period were the West Coast Road – prime, seal and reseal (Programmed); Centre Cross Is Road – reseal and drainage repairs (programmed); Fergal Road extension – seal (unprogrammed); Defence Houses Access – seal ( unprogrammed); Beach Road (Reclamation) – seal (unprogrammed); and Vaitele Tua – seal (unprogrammed)

There was clearly more unprogrammed work than there was programmed work undertaken.

The Report also identifies that “further delays in awarding a contract for resealing works on the South Coast Road Savai’i have occurred with the result that the successful tenderer for the second tender has indicated that he is unable to undertake the works as he has now demobilised from Savai’i..” (Cardno & Davies 1993, p1).

Report No 16 (Cardno & Davies 1994, p1) indicates that “a significant quantity of equipment (spare parts) was approved for procurement during the period to ensure that the road rehabilitation and maintenance equipment operating under the project was fully serviceable before the end of the Project. Repairs to the Dyco line marker were completed after being unserviceable for 18 months.

Report 16 (Cardno & Davies 1994, p2) states, “The completion of the Project Manager’s assignment (2.5 Years) without him being able to hand over to trained counterpart will mean that a large number of reporting/planning procedures used will be lost. The project director was endeavouring to transfer some of these responsibilities and reporting system over to the Construction Engineer and the Road Resealing Project Overseer.

With the end of the project very imminent, PWD has realised that they do not have in place, or at least have not had long enough, sufficient trained counterpart staff who will be able to continue the project’s activities after the Australian experts depart. This has prompted some urgency in assigning staff and also in requesting AIDAB to provide an extension to staff inputs to provide training to counterpart staff that are only now being assigned”.

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PROJECT EVALUATION PLANS/BASELINE STUDIES

Evaluation for the project followed standard AusAID procedures with largely desk- based monitoring. The contractor prepared regular monthly reports throughout the life of the project, annual reports and a completion report. These addressed performance against activities in the Project Implementation Document. During the project life two reviews of the project were undertaken by AusAID. These resulted in more time and funds being allocated to the Project.

Originally the outputs for the project were defined in terms of length of rural highways and roads resealed and reconstructed, provision of training and establishment of a rural road maintenance unit. As Quarterly Reports illustrate project implementation difficulties requires a redefinition of project goals. Emphasis was placed on carrying out planned and programmed operations on scheduled lengths of road rather than resealing stated lengths of road.

This project typifies what can happen when no effective baseline studies are conducted at or before project commencement. Documents reveal that a key objective of the project was to reseal approximately 224 km of road in 2½ years. This had to be changed mid-project as it was not feasible due to inability of the Samoan Department of Works to deliver on counterpart resources/activity. A sound baseline study or even a more detailed feasibility study (only 8 working days allocated) would have educed that the target was not attainable. After 4¾ years and a lot more expenditure than originally planned the project finally achieved the target of 220km of road resealed. The Completion Report addresses performance difficulties due to project design problems (For example the absence of an in-situ Project Manager). It emphasizes the constant problems with supply and diversion of counterpart resources identified in its Quarterly Reports. It also demonstrates the inability for project designs to be easily changed once a project has commenced. Major reviews seem to be the only way to achieve design changes. That is, the implementing contractor in conjunction with AusAID Post and the recipient do not effect substantial changes to a project. Changes require consideration and approval from AusAID Canberra. It is clear that more devolution of project management is required.

There was no evidence of counterpart involvement in either of the two project reviews. There was certainly no counterpart participation in defining the baseline indicators as no such study was undertaken. The DAC project evaluation principles to which Australia is a signatory were not observed.

PROJECT COMPLETION REPORT

The draft project completion report (August 1995) notes again the lack of technical staff assigned to the project to act as counterparts as a factor in the extended duration of the Project. Cyclones, diversion of resources to other road construction and PWD inability to meet its initial rehabilitation commitments all are listed as causes of delay. Surprisingly plant maintenance and spare parts shortages listed in all previous reports are omitted as contributing factors.

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The Report concludes that, “provided there is ongoing support to the road maintenance activities from the PWD senior management and adequate funding is provided, the improved capability of the PWD to sustain and prolong the life of the road network is sustainable” (Cardno & Davies 1995, p3). The justification for this conclusion is not clear given the counterpart problem and the fact that throughout the Project funding was a problem and cause of delay. (It seems more a case of wishful thinking than a likely outcome).

The Report indicates that the second review of the Project (September 1992) indicated that ‘there was significant success in setting up and operation of the Road Resealing Team and considerable improvement in the length of road rehabilitated and resealed.” (Cardno & Davies 1995, p6). The review recommended, “in view of the significant momentum achieved with the project, that the project be granted a two year extension of GoA involvement. In this time it is expected that the original target of resealing approximately 220km of rural main roads will be achieved, ensuring that the road asset itself will have been maintained and a competent Road Resealing Team formed” (Cardno & Davies 1995, p7). These recommendations were aimed at constructing the required length of road and training a resealing team. They were however directed only at producing required Project outputs. Roadwork might be completed and training supplied but the underlying development issue remained unresolved, namely that there was no sustainability evident in the request for the two year extension. The extension failed to address the core problem of counterpart commitment. PWD never exhibited real commitment to the project and no additional funds were allocated in government budgets for road resealing/repairs. In fact aid funds were fungible.

The Completion Report notes that there was early acknowledgement of the need for a full time Project Manager in-situ. “It was clearly seen at the time of the May 1991 project review that because of the relatively limited inputs of the Project Manager allowed under the project, he had limited ability to address diversions… In his absence technical supervisors were unable to resist the exertion of continued outside influence on the resealing Project in the first 12 months to undertake other tasks” (Cardno & Davies 1995, p13). This matter clearly indicates two failures. Firstly there was a failure of in Project design. A part time project manager should not have been included in the design. This situation may well have arisen given the very short time that AusAID allocated and continues to allocate to the design of projects, despite its endorsement of DAC project preparation guidelines. Another factor was probably cost and the tendency of design teams to design projects to AusAID budgets rather than development outcome. Secondly, the situation indicates that the AusAID tendering and contract system (as detailed in CPOG) was not designed to permit flexibility. It took over 12 months for the system to accept the obvious that a full time project manager was required. . The Report notes that, “Since the departure of the long term advisers …progress reports have ceased but there is evidence that records are still being maintained in accordance with the procedures established.” (Cardno & Davies 1995, p14). It also reports,” Of the two clerical staff trained in the costing system, one has resigned and the other one was on temporary suspension for disciplinary reasons. For this reason there have been no cost records maintained since January 1995” (Cardno & Davies 249

1995, p16). Again this observation highlights that PWD had no commitment to the Project and it would not be sustainable.

The Completion Report states, ”A road register for rural highways has been established and an appraisal methodology for maintenance needs has been instituted under the project, but after the transfer of the Road Resealing Unit Counterpart Manager to serve as Assistant Director of Works, nobody was available to be trained in maintaining the register or carry out road condition assessments” (Cardno & Davies 1995, p16). Again this situation shows a failure on the part of both the PWD and the Project in regard to succession planning and clearly resulted in a lack of project sustainability.

In the assessment of the project impact, the contractors state that Objective 4 was to, “Assist in implementing a road maintenance management system” (Cardno & Davies 1995, p17). They consider they met this objective by the following - “Rural road asset register established and appraisal methodology for condition rating instituted. A Roadworks Costing system was established.” (Cardno & Davies 1995, p17). Clearly these systems were established but they were not sustained. Again the contractor has focussed its evaluation of the project on outputs rather than development outcome. A rural road asset register was established and an appraisal methodology for condition rating was compiled but was it was continually used thereafter. The inputs and outputs did not result in desired development outcomes. Samoa did not effectively manage its road asset and undertake competent regular road resealing as the meeting detailed hereunder with Faaloga Josefa Falaniko identifies. The project simply provided a positive transient input to the Samoan transport network.

In respect to survey training for staff in the Civil Survey and Design cell of the PWD the Completion Report concludes that a basic level of competency in road design was achieved during the limited program. Staff attached to the road design group lacked the basic understanding of road design and had limited exposure to computers. Further training for key staff will be required. Again a sub-standard result was achieved.

In summary there were a myriad of problems with Project implementation. Most were specified in reports by the contractor.

MEETING WITH FAALOGA JOSEFA FALANIKO

In order to more fully understand the Project circumstances and results a meeting was held with Faaloga Josefa Falaniko, the Assistant Director Engineering, Public Works Department on 16 February 1999.

The Assistant Director Indicated that it was confirmed that pavement design and strength testing are being carried out now and thus premature failure and repairs are less likely. There is an equipment servicing schedule (a Monthly Service Schedule) but this is constrained by lack of spares and funds. The only training that takes place is an in-house program. There is no Polytechnic Course available and no overseas training has taken place. No distance education program has been considered. No funds were allocated for training up to and including the 1998/99 budget, although in 250

1999/2000 the Chief Engineer asked unit heads to include training requests in proposed budgets.

He also indicated that the road maintenance costing system (Maximo) installed under the Project has been phased out as the computers are old, no back-up exists for the software. PWD is trying to get a new system but none currently operates. The design staff has an old system called CIVILCAT which is still used but out of date.

The Assistant Director also advised that in 1996/97 $2.8 million was requested for capital works/equipment. This was cut to $100,000 in the government budget process. In 1997/98 $1.8 million was requested and this was cut to $300,000 by government. Second hand engines etcetera for machinery were procured. Maintenance funds requirements have been highlighted since 1996 but funds were not forthcoming until 1998/99 when funds for 40km of resealing in Savai’i and 40k m in Upolu were allocated. There is a periodic maintenance program in place for roads based on age/quality etcetera. There is an inspection program around Upolu to check road deterioration. For instance, in 1999 funds were set aside to reseal the road near the hydro power station.

He indicated that there is a major crushing plant near Alafua that produces more than required. Balance is sold commercially. Plant condition is fair as it was commissioned in 1992. Funds are needed to purchase spare parts. There are three contractors who also supply crushed rock. The Division has one Pentium PC, 2 x 386 PCs and one 286 PC. It has a HP laser and an old Oki matrix printer. The LAN is inoperative. There is, in addition to the operable PCs, an old laser, two VDUs and a 286 PC that are inoperable.

The above highlights the fact that the project did not result in sustainable road management in Samoa

PROJECT EVALUATION

The Draft Completion Report presents a list of achievements for the Project. These include resealing 200km of road, establishment of a substantial quarry operation and crushing plant, training of staff in resealing and maintenance techniques, establishment of a contract process for minor works, initiation of testing procedures for road pavements and development of a basic road maintenance costing system.

The data obtained from the PWD above shows that formal staff training has largely ceased and the road maintenance costing system has been phased out. The report itself acknowledges that the testing procedures are being flouted when it states, ”Suitable testing procedures for road pavements have been developed and were being used on a regular basis. There is every indication that this is not now being enforced” (Cardno & Davies 1995, p19). The quarry and crushing plant operations and productivity gains seem to have been largely sustained although the lack of any capital investment must be seen as a threat.

The Completion Report (Cardno & Davies 1995, p19) however places considerable blame on the PWD for lack of Project efficiency and effectiveness. It reports that there has been very little improvement in efficiency of management and planning at 251 middle management level because there has been a shortage of such staff within PWD; no middle level management staff engineers or technical staff were assigned to the Civil Road Maintenance or Quarry Operations during the Project. It also highlights that staff assistance personnel have completed their assignments and national staff is fulfilling in-line management roles, staff is seeking direct involvement in the project implementation, albeit too late. It emphasises that resources, both plant and labour were diverted to other activities; a lack of local budget support to hire labour; a lack of counterpart staff; a lack of budget for fuel and other consumables and a lack of delivery of bitumen

It acknowledges that “efficiency in terms of output of road resealed and/or rehabilitated is poor given the 5 year time frame for project implementation” (Cardno & Davies 1995, p19). In respect to effectiveness the Report draws the general conclusion that the Project was effective in achieving most of the goals originally established albeit in a longer time frame. It states, ”In terms of physical output it would not be unreasonable to expect a greater length of road to be achieved on a yearly basis, up to the original estimate of 80 km per year. However the output in terms of road resealing does not acknowledge the preliminary work that has been required in terms of patching and general reconstruction of the roads. This work was to be undertaken by PWD outside the scope of the project, but as PWD Civil Maintenance Section did not have the capacity to perform in this area, the Road Resealing Project had to assume responsibility for this work also" (Cardno & Davies 1995, p18).

It becomes clear on careful analysis, however, that the Project was beset by inefficiencies. Some of these problems relate to poor project design including the capacity of the PWD to deliver on inputs, and should have been investigated. Many problems were caused by the failure of the counterpart organisation to perform its allotted roles. But was this the fault of the PWD? In respect to management problems the answer is probably, “yes” but in respect to staffing and funds these resources were outside its control. The Public Service Commission and Treasury Department had responsibility for these resources. Thus it can be deduced that the Government of Samoa failed to provide the agreed counterpart resources.

In respect to Project effectiveness, it is evident that 200km of quality roads were constructed as the pictures below indicate. These roads are still in acceptable condition in most parts but are starting to deteriorate.

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Picture 11 & 12 - Rural Roads, Apolu

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A Quarry and Crushing operation was established. A Road Maintenance Unit was established and equipment supplied. Staff received training in road maintenance procedures and assistance was given to establish a road maintenance system.

The situation depicted by the contractors is that they met the scope of Project deliverables even if it took them several years longer than intended due to counterpart problems and natural disasters (cyclones). Conversely it can be argued that implementation of the Project was neither efficient nor effective. There were many inefficiencies caused by not having a full time Team Leader in country. It is evident that any substantial analysis of PWD capability would have indicated at Project preparation stage that the PWD could not deliver on its allotted role. This raises questions about the design of the Project in 8 working days. It is quite evident that the design was flawed and this engendered significant delays and unnecessary problems for the contractor.

The contractor must however bear some responsibility for inefficiencies. Delays in local tender procedures, non-supply of materials, lack of counterparts to train, unserviceable plant, diversion of resources and out of scope activities should have been managed by the contractor. These are exigencies of Projects in a developing country. Faster and more effective action could have been taken in concert with AusAID.

For example why were not strong representations made to AusAID by the contractor to purchase required items directly instead of using the Samoa Tenders Board which was a known blockage point a grant for supplies should not have been made but rather kept as project funds administered by contractor. The contractor, for example, requested AusAID to provide an extension to staff inputs to provide training to counterpart staff who were only just being assigned. This however was after 2.5 years of the Project life. More effective representations needed to be made to the Government of Samoa much earlier to ensure allocation of staff or if not the Project be suspended.

In respect to effectiveness, it can be suggested that while the letter of the contract was observed its intent was ignored. In every Project there are really two essential elements. Firstly there are the direct Project deliverables and secondly there is the need to ensure Project sustainability. The Project failed to provide for future sustainability of its outputs.

PROJECT SUSTAINABILITY

There are numerous areas where Project sustainability is suspect or not evident. In the assessment of the project impact, the contractors state that Objective 4 was to, assist in implementing a road maintenance management system. They assess performance as “Rural road asset register established and appraisal methodology for condition rating instituted. A Roadworks Costing system was established.” (Cardno & Davies 1995, p7). Clearly they were established but they were not sustained.

In respect to survey training of staff in civil survey and design cell of PWD the Completion Report concludes that a basic level of competency in road design was achieved during the limited program. Staff attached to the road design group lacked 254 the basic understanding of road design and had limited exposure to computers. Further training for key staff will be required. Clearly the unit still does not have a reasonable computer system and software, they still have not had required training in road design.

In respect to funding, it was not until 1999 that the Government provided funds to villages to repair roads. An analysis of budget for the area is also revealing in respect to issues of sustainability.

Table 26: Department of Works Income/Expenditure 1996/97-1999/00 Outputs 3.0–3.8 Road Asset Management, Maintenance, Rehabilitation & Capital Works

Expenditure 1996-97 1997-98 1998-99 1999-00 Description Personnel 1,973,648 393,973 399,445 465,748 Operating 13,995,495 6,941,885 9,128,392 6,803,141 Capital Costs 295,816 300,000 NIL NIL Overheads 31,214 3,533,455 4,556,485 4,755,278 Cost N/A 630,366 249,612 239,190 Recoveries Total 16,296,173 11,169,313 14,084,322 12,024,167 Source: Data collated from Legislative Assembly of Samoa, Approved Estimates of Receipts and Payment 1996/97-1999/00

The above figures show that since the Project was completed in 1995 there has been a significant reduction in funds allocated to road maintenance around 25 per cent not allowing for inflationary factors. The figures give further credence to statements by the Assistant Director engineering that expenditure on capital equipment has been minute.

If Performance Measures are compared against the above budgets there is a gradual reduction in road maintenance activity over the three year period. Table 27 demonstrates this trend.

Table 27: Road Infrastructure Maintenance 1997-2000

Item Description 1997-98 1998-99 1999-00 Repair Potholes 3930m2 5800m2 4028m2 Grading/Repairing Road 48km 45km 19km Shoulder Grade/Repair Gravel Road 37.6km 87km 57km Repair Bridges/fords 27structures 35 structures 4 structures Chip Sealing asphalt 98.7km 70km 13km Road Works 9.4km 31.2km 33.3km Capital Works 17.7km 17.07km 3.5km sealed road sealed road

The above data are indicative of a situation where the Samoan government has permitted a run-down in capital assets. This in turn demonstrates that the AusAID Project objective, “to assist in the development of a Road Maintenance Unit compete 255 with all necessary equipment and plant and with trained experienced staff” was clearly not sustainable.

Indeed, the Government of Samoa has implicitly acknowledged this fact by seeking funds from The World Bank for yet another road asset management project (The Government had already received assistance through an IDA Emergency Road Rehabilitation Project that completed in 1997). The new Samoa Infrastructure Asset Management Project is jointly funded by the IDA at $US14.2 million, an AusAID Grant of US$1.3 million and the Government of Samoa $US2.3 million. The new Project has two components that relate to roads. These are replacement of inadequate bridges, periodic road maintenance, road safety and pedestrian facilities… and institutional strengthening, implementing reforms in the PWD to improve business practices, …, implementation of asset management of roads…49

Sector background information for the project states that, “The roads now need a systematic basis for programming maintenance and improvements..”50. This provides clear evidence that the AusAID Project objectives were not sustainable. The Project failed in its endeavours, “To provide all necessary training in road maintenance procedures and in equipment operation and maintenance” and ”assist in implementing a road maintenance management system”.

In an interesting assessment The World Bank suggests, ”Both the road and airport infrastructure components have a very high likelihood of being sustainable, with their future preservation underpinned by the infrastructure asset management systems being introduced and the performance budgeting system in place“51.

Obviously the Bank did not look too closely at the results of the AusAID Project where the road maintenance costing system (Maximo) installed under the Project was phased out as the computers were old, no back-up existed for the software and it was out of date or the design operation where an old system called CIVILCAT barely persists. The World Bank analysis is perfunctory as it fails to investigate the history of the Government’s failure to maintain capital equipment and make any provision for its replacement. There is in fact a prima facie case that the Government funds its road assets and maintenance out of donor funds and soft loans and has no real commitment to its sustainability. It could well be described as a case of aid fungibility, where donor funds permit the recipient country to divert funds from road maintenance to other and possibly less development oriented activities.

The above assertion may seem harsh but it is supported by other facts. There has been no commitment to provision of adequate staffing or training for the road maintenance facility. The PWD has been unable to obtain required staff and has been unable to obtain funds for necessary training. The result is that the standard of repair work on roads has been superficial and a waste of public funds.

The picture below demonstrates the standard of road maintenance work in central Apia. After months of drainage work, installation of grates in the roadway, main

49 The World Bank, http://www.worldbank.org/pics/pid/ws52293.txt, pp1-3, (Accessed 19 Feb 1999). 50 ibid, p1 51 ibid,p2 256

Beach Road was finally resurfaced. The road then deteriorated in less than two weeks to the state depicted in the picture.

Picture 13 – Example of Main Beach Road, Apia Repairs

The situation regarding road maintenance is not new. A UNDP report states, ”There has been a widespread tendency for grant aid to be viewed as costless, leading to insufficient concern directed towards maintenance expenditures. These problems have been compounded by the fact that the ability to proceed with projects has been the main determinant of the size of investment expenditure, rather than the sustainability of the maintenance and operation expenditures that the projects imply.” (UNDP 1998, p51).

The Road Rehabilitation Project provides a perfect example of this mentality. It also demonstrates that donors continue to fail to heed “lessons learned”. They continue to disregard maintenance capacities/costs and continue to push project expenditures. The World Bank is particularly vulnerable to this criticism in that its own analysis of past projects identified that:

”Faced with low implementation capacity and pressure to move the money, aid agencies have a long history of attempting to cocoon their projects using free-standing technical assistance, independent project implementation units, and foreign experts – rather than trying to improve the institutional environment for service provision” and

“Consider Tanzania, where donors poured a colossal $2 billion into building roads over 20 years. Did the road network improve? No. For lack of maintenance, roads often deteriorated faster than they could be built.” (The World Bank 1998, p1 &22). 257

In conclusion it is apparent that the project delivered short term benefits in terms of staff training and computerised systems; produced medium term benefits in terms of plant and equipment provision and 200 km of bitumen road and provided medium to long term benefits in quarry operation and gravel production

The Project however was not conducted efficiently and while it could be construed as effective in delivery of outputs, this was not really the case. Institutional strengthening of the Public Works Department was not sustainable, the road maintenance system failed to be sustained and an adequate provision for capital equipment was never made.

The new World Bank Project demonstrates that there was no sustainability to the AusAID Project. The difference this time is that the funding is largely via loans not grants and as such costs will largely be met by the taxpayer. What should have been conducted is a financial and economic analysis of the proposed Project. Then questions regarding probability of project sustainability and likely economic impact would have been addressed. In terms of the AusAID project it is evident that the economic impact of the Project was not seriously considered in that its objectives related to resealing approximately 224 km of main rural highways, assisting in the development of a Road Maintenance Unit and provision of all necessary training in road maintenance. Nowhere was there consideration of the economic impact of bitumen roads on villages and industry and ongoing maintenance costs.

In terms of the types of Samoan exports and a related need for fast transport, the advent of bitumen roads may have had little impact. Certainly in respect to health, the advent of bitumen roads resulted in a shift from clinic based attendance to villagers presenting at main hospitals for medical attention. This has had mostly negative effects in that costly local clinics remain but with a diminished clientele and high cost hospital resources are devoted to many minor patient complaints. In respect to mobility, the Project had obvious benefits in that travelling times between villages were reduced substantially. In terms of economic impact, whether the AusAID and World Bank Projects should have proceeded is debatable. The World Bank’s Statement that its Project objective is to, ”support basic changes in the role of Government in the management and provision of public infrastructure assets which are vital to the island country’s economy..” 52needs to be thoroughly tested.

Both the Australian and World Bank Projects also demonstrate that Samoan commitment of counterpart resources was lacking. Commitment of human and financial resources for maintenance was minimal and non consistent with Australian expectations. The Samoan government simply used its available funds elsewhere. It viewed Australian grant aid as having no cost. Samoa got something for nothing and sustainability was not of paramount importance. Australian aid was fungible.

52 The World Bank, Http://www.worldbank.org/pics/ws52293.txt, 19 February 1999,p1 258

CHAPTER 13 SUMMARY OF CASE STUDY FINDINGS

This Chapter attempts to draw together the results of the analysis of the preceding case studies. It catalogues the consistent deficiencies in project delivery/systems and makes some conclusions in terms of the definition of project “success” adopted for this thesis, as to whether or not any project was truly sustainable.

AID DELIVERY

This thesis has analysed the implementation and results of four development projects (case studies) with a view to ascertaining how successful the projects have been in achieving their stated objectives and how sustainable the outcomes have been.

The analysis has shown that conduct of Projects has been anything but uniform.

EFFICIENCY OF DELIVERY

In all Projects examined there have been inefficiencies in delivery of outputs and cost and time overruns. Evidence exists as to lack of management input by contractors; poor on-site management by contract staff; failure/inability of Samoan counterpart agencies to provide required resources; inept personnel and dysfunctional procedures in Samoan agencies and poorly articulated projects.

Lack of Management Input by Contractors

The Fire Service Project provides evidence of a situation where the contractor had no internal staff on the Project and the Project Director only visiting the Project twice per year. Costly reviews were necessary to rectify the situation and ensure effective project management.

Poor On-Site Management By Contract Staff

The Road Resealing Project provides a demonstration of ineffective on-site management where issues regarding allocation of counterparts for training, staffing levels and diversion of resources for other tasks failed to be adequately addressed. This is not to suggest that on-site management could have necessarily ameliorated the problems but that action taken was incompatible with the problems encountered. Again the result was costly reviews, cost and time overruns.

Failure of Samoan Counterparts to Provide Required Resources

In a number of the projects Samoan counterpart agencies were unable to supply agreed resources. In the case of the Road Resealing Project plant remained unserviceable, positions were not filled and crushed rock not delivered on time. The Building Inspection and Fire Service Projects staffing was again a problem with inappropriate staffing and/or vacant positions being common.

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Inept Samoan Personnel and Dysfunctional Procedures

The Fire Service Project suffered most from the standard of officer proposed for training. The fact that staff was unfit to perform fire service roles resulted in a complete retraining exercise with a new group of staff. Convoluted procedures followed to organise tenders severely affected the Road Resealing Project performance. The fact that Projects could be commenced only to find that required staffing was not available due to a freeze on recruitment ordered by the Public Service Commission also demonstrated just how dysfunctional Project establishment procedures were.

Poorly Articulated Projects

A number of the Projects were poorly articulated, with outputs being changed mid Project. The Road Resealing Project outputs were changed mid Project and by its conclusion it was difficult to establish exactly what the revised objectives and outputs were supposed to be. The Cocoa Rehabilitation Project commenced with a definite predilection for the introduction of Amelonado cocoa. By the end of the Project this concept had evaporated and renewed emphasis was placed on improvement of the local Trinitario variety.

THE ROOT CAUSES OF INEFFICIENCY

The above inefficiencies resulted in most cases from systemic problems within the Samoan bureaucracy, the failure of AusAID to allocate sufficient time and resources to Project Design and a lack of any real AusAID input on the ground in Samoa.

Systemic Problems with the Samoan Bureaucracy

One of the biggest problems facing projects in Samoa has been the lack of coordination between the Department of Foreign Affairs, the Treasury Department, the Public Service Commission and the line agency.

Usually these agencies are all supposed to be represented on the Project Coordinating Committee for a Project. This is because most Projects have implications for budgets and staffing and are the subject of a Memorandum of Understanding (MOU) between the Australian and Samoan Governments. Yet as is indicated in the Road Resealing and other Projects, PCCs are poorly attended by these bodies. It is rare to have all parties attend a meeting and it is even more unusual to have the same personnel attend two consecutive meetings. Often staff with no prior subject knowledge is sent to meetings, more as minute takers than participants. Representatives from policy departments often have no power to make decisions even if they do try to participate. Moreover AusAID regularly receives requests for enhancements and changes to outputs and often ignores these requests or simply rejects them outright as outside project scope. In such circumstances, the value of the PCC process becomes highly questionable, as does the so called “development partnership” approach.

The PSC and Treasury often sign off on the resources required for Projects and Samoa enters into a MOU with Australia. When Project implementation commences 260 the reality of the resource requirements becomes evident and line agencies often find it difficult if not impossible, to secure the required resources. This happens for two reasons. Firstly, the agencies concerned do not always have staff with sufficient experience to evaluate the effects of the Project on budgets/staffing. Hence perfunctory evaluations occur and belatedly the effects are seen. Secondly, the PSC in particular has in the past acted as a brake on public service expansion. Thus even though it is party to the MOU process it fails to deliver on agreements. Proposals from line Departments are simply ignored and/or continuously lost. The PSC has often not undertaken proper analytical evaluation of proposals and on occasions has reorganised departmental structures with little or no input from the line Departments concerned. Moreover poor analysis of reclassification and position creation proposals has led to a situation where classification of positions is largely based on a hierarchy of Departments rather than work value. For instance, Treasury often has similar positions to other Departments but staff are paid more.

The above facts are more or less acknowledged by Samoa and are evidenced in the present AusAID, PSC Institutional Strengthening Project. Actual examples of PSC obfuscation exist with such Projects as the Samoa Health Information System Project where a restructure proposal for the HRPIRD Division remained largely incomplete three years after original submission and after supply of numerous copies of the proposal (at various PCCs) to PSC representatives.

Insufficient Time Allocated to Project Design

The average time for design for the above Projects was around 7 working days. For example, the Road Resealing Project design was allocated 10 elapsed days and the Fire Service Project design was 7 elapsed days. The cost of the Road Resealing Project was A$3.47 million originally and took five years to complete and the Fire Service Project cost A$2.6 million over a three year period. The cost of a 10 day assignment for a design team of two at A$700 per day plus allowances and accommodation is around A$20,000. This represents about 0.57 per cent of the cost of the Project. The problem is that almost everything that happens in the Project thereafter is predicated on the validity of the original design. As has been indicated earlier in this thesis, AusAID procedures make it difficult for AMCs to change a design at PID stage. Further, there is also no incentive for an AMC to pursue such changes as it delays project start up and associated payments. The cost of mid term reviews for the Projects above effectively doubled the cost of design of the Projects but could not undo the mistakes that had occurred. Hence in each case significant Project extensions and additional costs were incurred.

The need for more effort in Project design was known to AusAID. While there is no category of “project design“ in the old AusAID Lessons Learned database, a review of AusAID documentation soon located evidence. A review of Indonesian Projects, for example, suggests, “There is a clear message on timing that comes from an examination of AusAID’s documentation and discussion with field staff and others in the eastern islands. This is that more time is required for activities than we usually allow. … It is easy to suggest that ‘time is money’ and that therefore more time on project design, for instance, means greater overall project costs. This need not necessarily be the case. Well designed projects can save money in the long term by being more acceptable to implementing agencies and communities and by being 261 more focussed on the development issues at hand” (AusAID 1998, p23). Another review document suggests that a specific project failed because “insufficient time and resources were allocated to the investigation of the area and the formulation of the project design and appraisal. The result was a technically good design but a gross underestimation of project costs, benefits and completion time. The addition of a more comprehensive design phase would have identified problems, contained costs and reduced delays.” (Mc Master 1996, p14).

The Samoa Fire Service completion report also emphasises the lacuna in the Project Design. It states, “the initial in-country visit by the Project design team needed to be longer in order for a clearer picture to have emerged about the quality of existing staff to effectively operate the fire service pending the construction of the new fire station. The original design document underestimated the personnel inputs required and the degree of difficulty for one Australian Fire Officer in trying to manage all in-country activities on his own. … ” (OPCV 1996, p9). The AusAID Lessons Learned Database however fails to record the above as a lesson learned.

The Project problems were not confined to design, they were also inherent in the preparation of the Project MOU. The Project completion Report states, ”The conditions of the MOU were poorly and far too generally drafted by the GOA, and were not met by the Government of Western Samoa or the Ministry responsible for the fire service during 1993/9. A more detailed and specific MOU should have been in place prior to fielding project personnel” (OPCV 1996, p9). This fact is also evident in the Road Resealing Project where counterpart funds were not supplied, personnel and equipment not delivered on time etcetera. It is also interesting to note that a review of the AusAID Lessons Learned Database failed to find to above reference or indeed any reference to MOU preparation as a Project problem.

It is generally the AusAID Post personnel who prepare the Project MOUs, undertake negotiation and arrange signature. It seems to have escaped AusAID that these MOUs are in reality a contract for services to be rendered and for “sub-contract inputs” by the recipient government. AusAID tends to put most of its energy into concluding contracts with the Australian contractor rather than the recipient Government. It would therefore seem prudent that AusAID treat the MOUs as contracts and have services and scope properly specified. In this respect it may be appropriate to have draft MOUs prepared as part of Project Design process. This would ensure that all required counterpart inputs were recorded.

The above clearly demonstrates are number of points. These include cost savings and efficiencies can be realised if sufficient consideration is given to development of an effective Project design; AusAID needs to provide Design Teams with more time to develop such designs; the AusAID Lessons Learned Database is far from a complete repository of lessons learned and a “Project Design” category would be a useful addition and project MOUs need to be more detailed and clearly specify counterpart inputs.

Insufficient AusAID Input to Project Activity in Samoa

One of the problems with the AusAID program in Samoa, is that as the organisation only has one Australian officer at the High Commission in Apia, there is insufficient 262 time for that officer to be adequately informed about the progress of all Australian aid activity in the country. Often the only direct input from the officer is via Project Co- ordinating Group meetings which occur at six monthly intervals.

Much of the detailed monitoring activity is left to locally employed personnel who are often spouses of Australians in country or are Samoans. Some of these officers have been quite well qualified and dedicated while others have been less so. In any case they lack the power to make decisions and have to refer matters up the line. If the matter can be construed as a policy issue it inevitably is referred back to Canberra for comment/advice. This hierarchical structure prevents decisions being taken quickly.

Lack of Recipient Government Participation in Project Design

Another failure in the design process for AusAID projects is the lack of ownership of those projects by the recipient agency and Government. Usually Projects are designed in response to a development cooperation request by a developing country. These requests are usually fairly general in nature in view of the resources available in the recipient country to compile detailed requests and as the exact nature and scope of a problem may not be apparent. As one example, the Samoa Fire Service project commenced as a request for a fire appliance.

As has been seen above, AusAID usually sends in a Pre-Feasibility Team and then a Design Team to scope and design the Project. Recipient agency and government input into this process is usually perfunctory. There are four reasons for this situation. Firstly, there are often no suitable staff immediately available who could provide any real input into such a process and Design Teams are simply supplied with a local liaison officer who organises meetings.

Secondly the aim of the process is to obtain the financial support, so there is a tendency not to argue with foreign Project Design Team experts (and in any case the necessary analytical expertise may not reside in the line agency). Thirdly, in some agencies counterpart staff have seen it all before, are disenchanted with the fact that counterpart input is often ignored and simply choose not to provide input. Lastly, the Design Teams are often so busy trying to design the Project in the allocated timeframe that their liaison with agency staff is limited to interviews and an exit meeting where a draft Aide Memoire may be presented.

In Samoa there are examples of agencies where input has been ignored. In the initial design for the Samoa Health Project input from the HRPIRD Division (Policy Division) was ignored by the Design Team. This led to rejection of the Design by the Department, a costly redesign and another six months added to the Project cycle. An apposite remark was made by one former Department of Health staff member at seeing yet another design team commence work - “another three wise men”.53

The problem of lack of counterpart input to the Design Process is not new. There are many such lessons in the AusAID review literature. Lesson ID 8 in the AusAID Lessons Learned Database, for example, states, ”Recipient counterpart

53 Comment by Tipasa Me, former Chief Health Planner, Department of Health Samoa 263 organisations must be involved in project design and in the management decisions if a project is to have any chance of being sustained after the project period. In the design of the Northern Samar Project there was no significant involvement of Philippines line agencies in the formulation of the project. As such, the Project was perceived by Philippines counterpart agencies to be an ‘Australian Project’. This caused significant management problems and posed serious questions for overall sustainability of the project initiatives….”54.

Further to the above, the DAC agreements to which AusAID is party also prescribe ”while Project financing decisions are taken jointly by donors and recipients, responsibility for project identification, design and implementation rests with the recipient. Strengthening the capacity of recipient countries through training and institutional development for project appraisal, design and management including budgeting and auditing, is an important objective for donor/recipient technical cooperation” (OECD, 1992, p33). While probably the DAC is referring to loan rather than grant aid, the concept of design input remains poignant and valid.

The lack of counterpart input often results, as shown above, in extensive redesign being necessary and/or other government agencies not being committed to the Project and its attendant counterpart inputs. This has been common is Samoa where required funds have not always been forthcoming from Treasury and the Public Service Commission has ignored staffing requirements.

AusAID has simply not learned its lessons in respect to Project Design. Too little input comes from the recipient agency and government.

Bidder On-Site Inspections

Another factor that impacts on Project success is that to cut costs, bidders are now not always visiting Project sites prior to bidding. This is often the case where AusAID one step bidding is proposed. Bidders often only have a month to prepare a bid and cannot afford the time to visit a site. As such bidder responses are more aligned to the design than the current on site circumstances. This is particularly relevant where it is over a year from Project design to tender. For example, the Cocoa Rehabilitation and Expansion Project Phase 11, Project appraisal took place in 1996 but the Project did not commence until February 1988.

If bidders undertook detailed on site inspections some of the problems with designs would become apparent and tender responses could address these issues. For example on the PNG Immigration and Citizenship Project, the design made no allowance for the existence of PC networks in the Department of Foreign Affairs and Trade. The result was a project where two disparate systems resulted and no integration of computing on a departmental basis occurred. This resulted in more complex maintenance arrangements occurring and an inability to transfer data among systems.

54 www.ausaid.gov.au, AusAID Lessons Learned Database, Keyword “Counterparts”, Lesson ID 8 264

EFFECTIVENESS OF DELIVERY

All the Projects reviewed delivered some benefits to the recipients even if in some cases they were transitory. So one could conclude that they were effective and “all aid is good aid”. This however would be to miss the real issue of whether the delivery of aid met project objectives.

It is considered that the foregoing analysis of the Projects shows that they were only partially effective. Some failed to achieve desired outcomes, in some the outcomes could not be realistically measured and all suffered from sustainability issues.

Failure to Achieve Desired Outcomes

The Cocoa Rehabilitation Project Phase 2, failed to achieve most of its desired objectives of introduction of genetically superior planting material; improvements to methods of extending information to all cocoa growers; improvement of husbandry techniques for new and established plantations; development of improved methods of processing, storage, grading and marketing of cocoa; ensuring adequate supply of improved planting material; supporting a continuing program of applied research and assisting DAFF (Dept. of Agriculture, Forests and Fisheries) staff, manage a cocoa program.

Moreover it failed in its stated goal to “increase village incomes and foreign exchange earnings through increased production of cocoa.” (Hassall and Associates 1991, p5).

While a new type of cocoa was introduced, it was not accepted and today only Koko Samoa is being planted. Those cocoa farmers that remain, do not receive new information on cocoa and the extension program has been curtailed. Processing, storage and grading improvements for cocoa are non existent. Even if the cyclones had not arrived, evidence strongly suggests that the Projects processing efforts would have failed due to poor siting and ownership issues. Marketing initiatives would have been thwarted by Asian Development Bank activity. Supplies of improved planting material did not eventuate as villagers preferred the recognised Koko Samoa.

The research that took place was also of questionable value. Some research resulted in release of noxious plants that are now subject of eradication exercises. No test plots yielded any results. Those remaining after the cyclone were left to deteriorate by Department of Agriculture and this is probably testament to their real sustainability. The fact that Agriculture never tried to rehabilitate the cocoa program and never sought donor funds for such a process shows that the desired institutional strengthening in the Department never eventuated.

The financial bases for the Project, in respect to possible export potential were premised on imprecise domestic consumption figures and disregarded evidence of high local prices, and were highly suspect. Increases proposed for production probably could never have been achieved within proposed time frames. All the above evidence strongly suggests that the Project would not have met objectives or been sustainable even if the cyclone had not occurred.

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A similar but less obvious situation occurred with the Road Resealing Project where objectives were changed during the Project to meet conditions. The initial objectives could not be met as the Project Design was inappropriate. In the Building Inspection Unit project the quality of inspections probably has returned to pre-project standards and the concept of the unit having a technical advisory assistance role vis a vis a regulatory outlook has disappeared.

Sustainability of Projects

All projects suffered from sustainability issues. There are three aspects of asset sustainability worthy of mention. Firstly, there is physical infrastructure (fixed assets) such as roads and bridges. Secondly, there is plant and equipment, such as vehicles, road making machinery, fermentation boxes, fire appliances etcetera. Thirdly, there is human resources and intellectual assets such as technically qualified and experienced staff, information and management systems etcetera

The Projects examined were all ineffective in delivering sustainability in one or more of the above asset sustainability categories. The Road Resealing Project is the classic case of physical infrastructure not being maintained and the road asset deteriorating. It also demonstrates failure to maintain plant, where adequate provision for capital equipment replacement has not been made in budgets. Technical skills have also been left to deteriorate with no further training supplied since the Project as the road maintenance work in Picture 13 shows.

The Building Inspection Unit Project failed to sustain intellectual systems where the standards of building construction established under the Project have been allowed to degenerate to the level shown in Pictures 4 and 5. In addition, plant and equipment have been appropriated by officers outside the Project purview and no provision made for capital item replacement.

The Cocoa Rehabilitation Project suffered from the complete destruction of all fermentaries, run down of human resources with no further training supplied, manuals lost and no attempt made to rehabilitate demonstration/research blocks. Obviously the cyclone played a part in this destruction but as has been demonstrated the degradation would most likely have occurred anyway because of ineffective Project design/philosophy.

The Fire Service Project shows the most promise of sustainability. Physical infrastructure has been very well maintained as the Pictures 7-10 indicate. Plant and Equipment have in some cases been updated and are well maintained. Training has continued albeit with no overseas twinning arrangements. Despite efforts however the Service still has no Strategic Plan for development and no provision for replacement of capital equipment (fire appliances) exists.

As sustainability is central to project success, a brief analysis of the reasons for the above failures is warranted. The answer to these failures lies in AusAID policy. A recent review indicates, ”aid theory has always stressed the importance of recipient financial commitment to individual aid Projects. In reality this doctrine has failed both in theory and in practice, largely because of a simple lack of funds….Donors may have to be prepared to finance i) a larger proportion of project costs during the 266 investment stage and ii) subsequent aspects of the recipients’ asset maintenance and related governance improvement programs.” (AusAID, 1999, p2). It proceeds to identify that ”Samoa does not have the revenue to provide for adequate maintenance of its overall level of assets, much of which have been supplied by Australia.” AusAID, 1999, p48) and “the lack of donor funded maintenance for major infrastructure in the South Pacific is a false saving since, inevitably, full replacement costs have to be funded” (AusAID, 1999, p5).

The above report provides the clearest example available of why sustainability of the reviewed projects was suspect. AusAID through its approved Project designs would not countenance payment of recurrent costs after Project completion. It wanted counterpart funds. It wanted Samoa to meet the maintenance costs. Samoa like so many other South Pacific countries simply chose to let the assets run down and then seek new donor funds for more assets. The Road Rehabilitation Project is a perfect example of this process.

In terms of sustainability of outputs, it can be seen that most projects have been ineffective. Responsibility for these failures lies jointly with the Samoan and Australian governments in that neither exhibited a commitment to asset maintenance.

It is noted that AusAID, as at September 2000, had not radically changed its stance of investing in sustainability. It prescribed that “the design team should prepare a sustainability strategy matrix in a participatory way with the major stakeholders…plus a worked example for asset maintenance.” (AusAID 2000,p10). This matrix however must be seen in terms of Country Strategy Papers where the emphasis is on recipient countries meeting counterpart maintenance/funding requirements rather than strategies to ensure effective sustainability AusAID meeting some of the costs. For example AusAID suggests that Country Strategy Papers should consider, “assessing the Partner Government’s capacity to meet recurrent cost financing requirements … assessing the track record of government agencies in meeting their counterpart funding commitments.” (AusAID 2000, p11). The clear implication is that if countries fail to meet counterpart funding requirements projects/programs should not proceed. In other words the process is designed to demonstrate the sustainability problem rather than offer a solution.

It is emphasised here that in looking at project sustainability, this thesis is not trying to address the wider issue of whether development can really be sustainable in a country reliant on aid and remittances for survival. The thesis looks only at government to government project sustainability commitments and presupposes that should development continue in Samoa its reliance on outside assistance would diminish.

Inability to Measure Quality of Projects Outputs

In assessing effectiveness it is necessary not just to look at outputs but rather performance indicators. Some of the Projects reviewed had performance indicators that were so broad as to not be realistically measurable. For instance, the goal of the Cocoa Rehabilitation Project to increase village incomes and foreign exchange earnings through increased production of cocoa was never a realistic performance 267 measure as village incomes are derived from many sources and there was no baseline or other study to determine actual incomes at the start of the Project.

Imprecise objectives such as, “provide the necessary training in road maintenance procedures and in equipment operation and maintenance” in the Road Resealing Project permitted assessments like “training provided in road maintenance reconstruction, quality control and resealing operations. Also training provided for equipment operation and maintenance.” (Cardno & Davies 1995, p17). These objectives fail completely to address the issue of quality of the services provided and the retention level/capacities of staff after training was supplied did skill levels improve? The result is that while objectives were met, delivery may not have been effective.

Again the Cocoa Rehabilitation Project shows similar flaws. A new marketing and pricing system was developed but this was undercut by Asian Development Bank activity that saw a different model adopted. Objectives were met the systems were developed but the input was ineffective as it was not adopted.

The Building Inspection Unit Project had also had similar problems in that while standards were imposed the legislative basis for these still does not exist. The revised legislation still has not been passed 4 years after project conclusion.

The Fire Service again stands out as the Project with measurable objectives. It’s Logframe includes a set of verifiable indicators. For example Component 1 objectives were to “specify, procure, coordinate and commission equipment and materials essential to the operation of the WSFS” and the Verifiable Output is recorded as ”Appropriate equipment and materials supplied and commissioned within the required timeframe and within the contract budget (Attachment 1.5)“ (Cardno & Davies 1995, Attachment 1.3). Such an output allows consideration of both efficiency and effectiveness issues.

Joint Project Evaluations

One issue that arises in assessing Project effectiveness is that of joint evaluations of Projects. The DAC provides that “An evaluation plan should be included at the time of programme design. It should be clearly determined from the outset against which objectives, standards and benchmarks the valuation should take place. The need for baseline studies should be considered. Whenever possible both donors and recipients should be involved in the evaluation process.” (OECD 1992, p82).

The above statement identifies the need for joint review of programs. It in fact specifies that for Project activity as distinct from program activity, ”An evaluation plan, including the definition of the broad cope of the evaluation, timing, designation of responsibility and provision of necessary funding should be built into the project design.” (OECD 1992, p44). The fact is that the projects reviewed did not provide for any joint reviews. When progress reviews were undertaken, they were undertaken because the Projects were in difficulty and they were conducted by AusAID consultants. (The reviews were also conducted in the most part without the benefit of any baseline data or verifiable performance indicators). The reviews were neither programmed nor joint in nature. Even the ex-post facto Tonga and Samoa 268

Cluster Evaluation was undertaken by two AusAID consultants with no formal representation from either recipient government.

Had joint reviews been conducted some of the problems with counterpart resources/commitment may have been overcome much earlier in the Project cycle. This make may have engendered additional effectiveness into Project inputs.

Feedback from Earlier Experience

Both AusAID and DAC literature suggest that it is essential to build into the project design, lessons learned from previous activity. AusAID has its Lessons Learned Database but, as has been demonstrated, it is not a comprehensive list of lessons learned. Moreover there are no references included in any of the Project Designs to the said database. Nor do any of the reviews reference the database when they point out Project deficiencies.

The problems identified with the projects reviewed are not new and even if the AusAID database was not accessed, the issues are addressed in ADB project evaluation literature. The latest of these recommends for example that the bank, “obtain full participation of staff at all levels, as well as that of the community, in the design and implementation of projects, and to ensure adequate monitoring of project implementation based on appropriate performance indicators.” (ADB 1999, p20).

It is clear from analysis in this thesis that the projects under review exhibited many of the problems of past projects and that the lessons had not been learned. Designs did not reflect lessons learned or standards required under DAC.

Had the designs been checked against an effective lessons learned database many of their lacunae would have been obvious. The Project reviews likewise should have examined the lessons leaned data before attempting the analysis. Had this been done many of the sustainability problems of the Projects would have been addressed. As it is, the failure to use the lessons learned data adversely affected Project effectiveness.

Cultural Issues

It is clear that cultural issues did affect project outcomes. Cultural issues noticeably affected the Cocoa Rehabilitation and Expansion project. The fact that consultants persisted with Solomon Island clones instead of using the local Koko Samoa variety of cocoa as favoured by growers showed an ignorance of cultural mores and was clearly detrimental to the project. The failure to discern that it would be inappropriate for workers to have new vehicles while the matai did not was also a clear cultural oversight on the Building Inspection Project.

The Fire Service Project outcomes were not sustainable, in part, due to the failure to include development of a strategic plan for the Service in the Project Design. The result is that the Service still has no strategic plan due to cultural issues. There was a view on the part of the design team and contractors that the Fire Service would prepare its own strategic plan after the project ceased. No allowance was made for the fact that the Fire Service resided within the Police Ministry. As such it would have 269 to be requested by the Police to prepare such a paper. To prepare and submit the strategy in advance of a request could well be seen as impudent by sections of Samoan society.

There would undoubtedly be cultural issues inherent in the coordination failures between government departments such as Foreign Affairs, Treasury and the Public Service Commission. There was clearly no rapport between the Public Service Commission and Treasury 55and both were headed by matai.

In respect to the Road Resealing Project, there was a naïve view by AusAID that the roads would be maintained after completion. The Samoan Government never appropriated funds for that purpose. The roads effectively were ring roads around Samoa’s two main islands. As such, their completion affected most matai in the country as the bulk of the population reside in coastal villages. Effectively, the project was allowing the matai to deliver benefit and meet obligations in their villages. In the circumstances the matai would be insistent on the project whether or not the Government (who of course are constituted of matai) could ever provide counterpart funds for maintenance. It is not therefore unreasonable to suggest that culture played a part in the project concept and was probably responsible for its eventual lack of sustainability. The matai would take the roads now and worry about maintenance at a later time.

Cultural issues can have profound impact on project outcomes and project designs need, of necessity, to be cognisant of the issue. More attention needs to be devoted to the issue in AusAID project designs. While cultural issues are important for Project outcomes, this thesis highlights the fact that they do not prohibit development. They may well constrain development if not effectively addressed in project designs but they do not prevent it taking place.

PROJECT IMPACT ON ECONOMIC WELFARE OF CITIZENS

On this measure of project success, prescribed by the ADB, most of the projects failed to deliver. The cocoa rehabilitation project certainly had no long term impact on the economic welfare of citizens. In fact there is evidence to suggest it had the opposite effect. Certainly the demonstration blocks wasted arable land (in that their purpose was never realised) and were eventually repossessed by farmers. If it is considered that the project failed to be sustained, then the issue of opportunities foregone can be contemplated. This would suggest that if the money spent on the project had been diverted to other sectors, the impact on the economic welfare of citizens would have been higher. This of course is problematic, in that is supposes that the other sector would have been managed more effectively.

In respect to the Road Resealing Project, one of its objectives was obviously to reseal roads. Although not stated in the Project objectives, the implicit assumption in the project is that it would support basic changes in the role of Government in the management and provision of public infrastructure assets which are vital to the island

55 The writer witnessed this during meetings concerning the Health Information System Project in Samoa in the late 1990s. 270 country’s economy. This assumption is made explicit in the subsequent World Bank roads project. 56

As stated earlier in this thesis, in terms of the types of Samoan exports and a related need for fast transport, the advent of bitumen roads has had little impact. Certainly agricultural export statistics for the last ten years are static with exception of fisheries. The fishing fleet is however predominantly Apia based and hence rural roads have no bearing on performance. In terms of the economic welfare of citizens, the advent of bitumen roads resulted in a shift from clinic based attendance to villagers presenting at main hospitals for medical attention. This has had mostly negative effects in that costly local clinics remain but with a diminished clientele and high cost hospital resources are devoted to many minor patient complaints. Hence the project probably had a net negative effect on the economic welfare of Samoans.

In respect to mobility, the Project had obvious benefits in that travelling times between villages were reduced substantially. This may have had some benefits for education but this was probably minimal, given the nature of village based primary schools and the fact that students often reside with family/relatives in order to attend secondary schools.

In respect to the Building Inspection Unit Project, the impact should have been to improve the quality of buildings constructed and thereby reduce the consequences of natural disasters like cyclones etcetera. The evidence presented in this thesis suggests that inspections are not uniform and quality has not improved to the extent anticipated. This in turn suggests that the project has had very little impact on the economic welfare of citizens. Certainly insurance costs have not been reduced and if another cyclone arrives it could still have devastating effects.

The Fire Service project has probably had the most noticeable effect on the economic welfare of citizens. The development of an effective fire service, as evinced via its monthly reports, demonstrates that property has been saved. This translates in economic returns for the property owner and insurance companies and the wider community. Moreover the fire service showed its capacities to provide economic returns in the bushfires of 1999. When it was called in the fight the 1999 bushfires it was to extinguish them in a few days. This was after local resident attempts had failed and the fires had been burning for many days. The result showed that the fire service was directly responsible for saving property and improved economic outcomes.

In terms of the economic welfare of citizens success measure, all projects with exception of the Fire Service Project, failed to deliver desired results. Impacts were, at best, minimal.

PROJECT OUTCOMES AND OPPORTUNITIES FOREGONE

Even with the above exigencies, three of the above Projects achieved some success. The fourth Project, the Cocoa Rehabilitation Project probably would have achieved a

56 The World Bank, http://www.wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2003/04/23/000094946_0304090 402246/Rendered/PDF/multi0page.pdf, Accessed 28 August 2003,p1 271 lesser but still evident impact had the cyclones not intervened. No project was, however, sustainable and thus in terms of the definition of success adopted in this thesis no project was actually successful.

Some of the funds applied to the projects were clearly used inefficiently due to the exigencies of project design, participation and management outlined in the preceding review. In terms of opportunities foregone, these funds could have been better applied. The grant assistance could have been used more efficiently and effectively had there been better planning and policy cohesion by the Samoan Government and AusAID. Given that the Projects reviewed were seen, at the time, as a priority by the Samoan government, it is difficult however to suggest that any project should have been cancelled and funds allocated to other areas.

The major opportunity foregone appears to be in respect of the Cocoa Rehabilitation Project where the inputs failed to be followed up with more support. In a location such as Samoa natural disasters must be expected. To allocate significant resources to a range of research and other inputs and then fail to support a subsequent project resurrection can only be classed as an opportunity foregone. The Project monies were indeed wasted. Would for example the Australian government fail to assist banana farmers in North Queensland if a cyclone totally destroyed all crops? Certainly there would be support given in various ways to resurrect the industry. In Samoa the cocoa export industry was not given another chance. This “one strike and you are out” philosophy was intentionally or unintentionally pursued by the Samoan Government and AusAID was acquiescent. In either case, the scattergun approach to finding winning projects was hardly a recipe for sound economic management.

The Fire Service Project and the Road Rehabilitation Project both show aspects of aid fungibility. The Fire Service Project shows that there has been no effective planning for service expansion or fire appliance replacement. The Road Rehabilitation Project showed lack of commitment to all facets of road maintenance (from rock crushers to maintenance funding). If there were insufficient funds to support counterpart commitments, the situation could be accepted. In both cases however Samoa actively diverted funds away from the areas supported by aid. For example, money for fire officer uniforms disappeared into the Police budget for some years and road maintenance funds were cut. Australia’s grant aid was clearly fungible.

AUSAID RHETORIC?

In an analysis of its aid Program, AusAID delineated actions it had taken to improve quality and design of its programs and projects.

AusAID indicates that in January 1998, the Agency established the Office of Program Review and Evaluation (OPRE) to provide more frequent and transparent reporting on aid outcomes. “The effect of this change has been to support an increased focus on front-end design, quality assurance, performance information and ongoing monitoring, consistent with the widespread shift in donor’s evaluation thinking over the past few years towards quality at entry.” (AusAID 1999, p73).

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As part of AusAID’s commitment to improving quality of the program, a Quality Assurance Group (QAG) has also been established. The QAG is “initially focussing on the design, preparation and early implementation phases of projects, but is also addressing quality through continuous improvement to operational policy and practices.” (AusAID 1999, p73). The document proceeds to indicate that AusAID is placing increasing emphasis and resources on improving the quality of front-end design, setting clear objectives and performance indicators, monitoring and implementation and feeding back refinements during the life of aid activities.

In terms of what has been investigated and analysed in this thesis the above initiatives are extremely appropriate. The real test however is whether the report to DAC is mere rhetoric or results in substantial changes to the way AusAID undertakes Projects. The jury is still out on this issue but to date the results are mixed.

For example the new AusGUIDE clearly stipulates that:

“The feasibility/design study (FDS) requires a team of specialists to visit the partner country and undertake detailed investigations in the field …Adequate time in the country is essential. A FDS can take up to several weeks or months.” (AusAID 2000, p5).

In 2000 two project designs were undertaken in Samoa. One was the Police Project and the other was for an Immigration Project. The Scoping Mission for the Police Project had an elapsed duration of 14 days and the Design Mission for the Immigration Project was proposed as 22 days of which only 11 were allocated for field study in Samoa. Both were too short to understand the situation and develop comprehensive designs. These lessons have obviously not yet been learned.

On the positive side, the Lessons Learned Database has been reviewed and the new AKWa database produced. This is a substantial improvement on the old system with appropriate search topics being included. A site is also supposedly being developed on which reports of evaluations and reviews will be placed. In addition AusGUIDE now prescribes the following in respect to project design:

“One of the necessary elements of analysis prior to project design is the recognition of the experience obtained in similar projects and activities in the past…. This section should include information on…..previous and concurrent AusAID projects in the technical field or sector, notably those in the country concerned….Design Teams must consult AusAID’s Lessons database.” (AusAID 2000, p13).

Other positive steps by AusAID include the evaluation program for 1998-99 provided for an examination of the implications of recurrent cost financing, in particular how sustainability is affected by weak counterpart funding capacity. Also the new AusGUIDE prescribes that project preparation “involve the partner government and target population in assessing and designing a viable project to meet their needs" (AusAID 2000, p2) and sufficient time be devoted to Project Designs. AusAID has also ensured that there is now recipient government representation on the Technical Assessment Panels (TAPs) evaluating tenders for contracts. Quality Assurance 273

Group seminars/training sessions now take place to which both AusAID Post and AMC project implementation staff are required to attend.

In respect to the latter point above, it was evident from one such meeting I attended in July 2001 that QAG pursues an agenda based on Project implementation theory that is not subscribed to by many of the practitioners of aid delivery (both AusAID Post and AMC). It is also clear that AusAID staff in central office do not subscribe to many of the QAG project concepts (For example, limiting Logframes to two pages). Hence until AusAID has one voice in terms of project sustainability concepts/policy the value of QAG is limited.

All the above initiatives are valuable but their true importance lies in their adoption and use. It will be interesting to see if AusAID will ensure future Project Designs are improved based on past lessons, reviews and AusGUIDE or whether these databases and documents remain primarily the bailiwick of academic researchers.

HOW DOES THE ABOVE ANALYSIS COMPARE WITH WORLD BANK FINDINGS?

In a major review of aid delivery and effectiveness, the World Bank (1998) indicated that foreign aid had at times been a spectacular success and at other times, an abject failure. The review arrived at a number of findings relevant to the Project portfolio being reviewed in this thesis. These included financial aid works in a good policy environment; the value of development projects is to strengthen institutions and policies so that services can be effectively delivered; an active civil society improves public services and an analytical work of donor agencies has been shown to improve the probability of success

Good Policy Environment

In respect to the projects under review, in no case was there a good sector policy environment at project commencement. Indeed it can be suggested that, with the possible exception of the Fire Services Upgrade Project, the projects failed to achieve any discernable improvement in the policy environment during their implementation. For instance, road maintenance funds dried up, fees for building approvals have not been adequately adjusted, Building Regulations have not been enacted and no measurable performance based strategic plans for development of services exist. In other words, a poor policy sector policy environment for the projects engendered only modest returns.

These conclusions give rise to a need to modify and embellish the findings of the World Bank, where it states, ”in countries with good macroeconomic management and efficient public institutions, projects were 86 percent successful, with much higher rates of return. In countries with weak policies and institutions, the corresponding figure is a measly 48 percent. “ (The World Bank 1998, p15). While macro policies are important so are sector policies. If countries do not have good sector policies, project results will not be optimum and the World Bank finding needs to reflect this more clearly when it talks about good policies and institutions. These findings regarding a good policy environment are however hardly surprising as good policy invites change and improvement whereas poor policy usually results in maintenance of the status quo and serves entrenched interests. It is self-evident that 274 most developing countries have a poor policy environment. If it were otherwise they would not need assistance.

The important point to be gleaned from this review is that if a good sector policy environment can be developed by a Project, it has a greater chance of success and sustainability. It is possible to develop an island of opportunity in a sea of mediocrity. This is even more evident where a good macro policy environment already exists.

Strengthening of Institutions

In respect to strengthening of the institutions in which the Projects resided, a similar situation exists. All have policy vacuums. The situation is only now being addressed by the imposition of “Output Based” budgeting by the Treasury Department. As this review indicates elsewhere however, many of the outputs are static from year to year, are not measurable and are in need of urgent review to make organisations more accountable.

The projects under review did not, again with the exception of the Fire Services Upgrade Project, support a participatory approach. The Cocoa Rehabilitation Project neglected to address the issue of gender and female growers. The Building Services project did not succeed, long term, in pursuing a pro-active approach to public awareness of building codes. Funds for road maintenance for rural roads took years to be provided. Only the Fire Services Upgrade Project managed to recruit female staff as projected and develop a cadre of auxiliary firemen (from the public) to assist full time staff. Management of the Building Inspection Unit has been effectively downgraded and the Fire Service Commissioner still does not have control of his own budget.

Improvement of Public Services Delivery

The World Bank concluded that the best aid projects “support initiatives that change the way the public sector does business.” (The World Bank 1998, p3). In terms of the projects reviewed, the Cocoa Rehabilitation and Road Resealing Project had no effect on the way the Samoan Public Service did business. The Building Licensing Project had limited effect, while the Fire Services Upgrade Project had the most impact. It is interesting to note that the overall success and impact of the projects was in similar proportion.

Importance of Analytical Work

It is evident from the research in this thesis that analytical work conducted prior to project commencement pays dividends. The World Bank shares this view. It states, ”analytical work of donor agencies, such as the World Bank, has been shown to increase the probability of success of public projects. In one study an additional $10,000 in analytical work returned $80,000 in stronger benefits from projects.” (The World Bank 1988, p22). These findings lead to the inescapable conclusion that more time needs to be devoted to the design of AusAID projects if greater success and sustainability are to be attained.

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The World Bank findings would therefore appear to hold true for the Samoan Projects reviewed. While the above conditions assist project success they are not the sole determinants. This review clearly indicates that Projects can achieve results in the absence of such conditions.

Developing the best cocoa clones, building the best road system, developing new building standards or a new fire station is pointless unless the institutional capacity exists to maintain and develop the initiatives. Project sustainability is the key to success and is at the heart of the problems associated with the projects under review. All projects suffered from “crises of sustainability”. Some suffered far worse than others. AusAID has financed crop production, new roads etcetera but failed to see that aid is fungible. In the case of the Road Rehabilitation Project aid has only expanded the Samoan Government’s budget and has not “stuck”.

The Projects reviewed should serve as a salutary lesson for AusAID not to proceed with Projects in sectors where institutions and policies are weak. These need reform prior to, or at least as part of, project inception. Sufficient time needs to be devoted to Project design, Project review needs to be strengthened and real performance indicators set for Project objectives.

The foregoing analysis demonstrates that AusAID policies and prodecures do impact upon project outcomes and sustainability. However, what has also been demonstrated is that AusAID policies and procedures, alone, do not prohibit development.

THEORETICAL PERSPECTIVES

The foregoing analysis shows why the AusAID projects reviewed did not engender sustainable development. The analysis of the AusAID projects in Samoa will be now examined to consider what it highlights concerning the efficacy of development theories.

The analysis shows that the projects were not sustainable and resulted only in transitory benefits to Samoa. The main conclusion that can be drawn from the analysis in terms of development theory is that there is a lacuna in modernisation theory. For, while AusAID has pursued (or more likely unwittingly followed) a variant of modernisation theory, the projects did not engender development (as defined in this thesis). Theoretically, the application of capital and other resources to development should have resulted in development. Yet the development was only transitory and is regarded as unsustainable.

A case can be advanced for dependency theory (as discussed in Chapter 3) being applicable to the Samoa situation, but the theory is again found wanting as an explanation for development or lack thereof. While the projects did not bring development, the country during the same period nevertheless showed signs of sustained development. For example Samoa evinced improved social and economic indicators as demonstrated in Tables 3-7. In terms of globalisation theory, it is clear that development projects can fail for reasons completely extraneous to the global environment. While the global trade environment certainly affects development potential and outcome, it is not the sole or even prime determinant of development. 276

Samoa might be regarded as an “ideal type” by some post structuralists, but its future is nevertheless heavily dependent on the global trade environment. Globalisation cannot be ignored.

The above perspectives are explored in more detail hereunder.

AusAID and Modernisation Theory

The AusAID implied view of Samoa seems similar to that of Rostow’s economic theory of modernisation. There is a suggestion that Samoa is still a traditional society but preconditions for take off are imminent. Growth is becoming the aim of the society. AusAID’s view seems to be that aid projects can engender societal change and Samoa will develop accordingly. While modernisation theorists were convinced that history could be repeated, and developing countries could industrialise in the same way that the West, AusAID clearly sees development in Samoa in terms of trade and social progress. There is no attempt at industrialisation.

As seen in the Cocoa Rehabilitation and Expansion project, the process seems to rely on a belief that increased production will be translated into increased exports and greater income for Samoa. The impact of domestic consumption on the export objective is not well articulated. The other projects reviewed in this thesis are socioeconomic infrastructure related. The view here seems to be that improved infrastructure equates to modernity and this will somehow be translated into economic and social development. This theme continues today in Samoa with an AusAID concentration on social infrastructure projects, in governance, police, immigration, health and education.

The analysis of the projects shows however that while the theory may have been applied, the projects failed to deliver on sustained development. It is clear that domestic considerations have to be taken into account not just those related to export of products or development of infrastructure. Good sector policies were absent, commitment of management and individuals was poor and macro policies did not support provision of maintenance funds.

Sector policies in agriculture were in disarray. Samoan schemes to promote cocoa expansion by paying farmers to plant cocoa were never going to succeed as they relied on individual honesty and permitted collusion between farmers and officials of the Agriculture Department. The AusAID project was the successor to this home grown intervention and tried to better protect the Australian investment. The result was however a lot of training and production of plant material that the Samoan farmers did not want. If sector policy would have been stronger the project would never have embarked on production of Amelonado cocoa but rather concentrated on the preferred Trinitario variety. Fermentaries would have been sited on community land not private locations and have been managed appropriately etc. The other projects investigated show similar poor sector management regimes i.e. lack of clear management direction, poor planning and no provision for future capital costs. At the macro level oversight of the projects was poor. There was no effective policy review mechanism to consider the success or otherwise of the Projects and provide for future investment in sustainability. The Project Co-ordinating Group meetings (Government to Government meetings) were simply perfunctory. 277

The above factors led directly to non-sustainability of the projects. Unless these issues are resolved, countries will not develop. Development is not the orderly process depicted by modernisation theorists, it is constant perturbation and collision with opposing forces. There is no guarantee of development success.

Applicability of Dependency Theory

While AusAID may have applied an underlying variant of modernisation theory to its project interventions, it is evident that the application of money to the development task did not result in sustainable development. It resulted in transient improvement in development indicators. Moreover it was this application of funds that in part generated the demand for more funds (by way of maintenance/sustainability). This was especially so in respect to the road rehabilitation and fire service projects. It could be argued therefore that the development projects actually engendered a degree of dependency in Samoa. This theme is echoed by Dr Patrick Laplange who conducted a seven year study of foreign aid delivery in the South Pacific. He indicated that during the 1995/96 financial year, Australia gave $134 million in aid to island governments throughout the South Pacific region. He reported that foreign aid is often used by these governments to bolster the public service, which is the least productive economic sector. Dr Laplagne stated, ”As the public service grows, people start leaving their villages, where they may have been producing tradeable goods, to seek government jobs in the city…Public saving tends to decrease in such nations as foreign aid increases.” (Laplange 1997, p9).

The view that aid directly creates dependency is however wrong. In the first instance above, while it is certainly true that the Projects increased the need for maintenance funding, they should also have had development benefits that outweighed and in some regards assisted in the provision of the additional funding required. For example had the stated objectives of the road rehabilitation project been achieved, then industry would have directly benefited and production/exports increased. This in turn should have generated extra income and by default, tax revenue. This tax revenue could have been used for road maintenance. In terms of the fire service project had the incidence and effects of fires been reduced, then there would have been a direct benefit to industry and the general public resulting in additional investment capital availability. In reality therefore it was not the application of donor money that created dependence but rather poor implementation of projects that failed to meet their objectives.

In respect to the latter point made by Laplange, the fact that public service institutions became bloated, is the result of poor macro and micro economic management in the countries concerned i.e. misallocation of resources. Hence dependency was engendered by the recipient countries themselves rather than the existence of aid. Aid may have been the catalyst but it was not responsible for the outcome. No one forced the countries concerned to increase their public sector employment. It happened because of poor planning and in some cases for purposes of a culture of nepotism. Once again however, this situation demonstrates that money is not the determinant of development.

Samoa might also be considered to provide a classical example of dependency theory in terms of north-south trade. It only has a few agricultural products to export 278 and appears dependent on the north for its survival. But the world is more complicated than that. Firstly one of Samoa’s major exports was/is taro. This is primarily exported to the South Pacific region (rather than the north). Up until the taro blight infestation Samoa had a thriving market which in 2003 is being re- established using new taro varieties. Tuna is exported to American Samoa/Japan at premium rates and it would be hard to suggest that fishermen and investors are not making good money from the industry. Tourism is a growth industry where Samoa competes on the world market. Samoa however has an ecotourism niche market where it can set rates that are attractive to visitors but also represent a good return on investment. Further, Samoa has developed a lucrative coconut cream export market in Australia and Papua New Guinea. It is clear that there are regional and specific niche market issues that are reflected in Samoan trade. It is not representative of classical dependency.

Similar criticisms might also be made of dependent development and “world systems” prescriptions of Samoa. Is Samoa being somehow kept in check by developed nations; being allowed only limited development as Wallerstein would suggest? Well possibly. The project reviews show that development could have been sustained except for poor policies at the national and sectoral level. So, dependent development was not an immediate issue of concern. Moreover, the greatest impediments to Samoan trade expansion, seem to be Samoa’s relative size, location and lack of natural resources and up until recently poor macro and micro economic policies (as demonstrated above). The constraints faced are largely internal not external. While these facts are evident, a review of Samoa’s exported goods (Figure 20) shows that it has three major trading partners i.e. United States, Australia and New Zealand. These represent the centre and regions in terms of dependent development theory. But is Samoa “dependent“ on these countries for development?

The answer to the above question is inherent in globalisation. Samoa is not dependent on its current trading partners. It can change its partners over time and will do so if other markets are more stable or economically beneficial. In 2003 for example it commenced export of garments to Germany.

While dependency theory certainly highlights problems in the development process, it does not adequately explain the conditions for development. It fails to identify the true determinants of development.

Applicability of Globalisation Theory

Globalisation theory it is often described as an economic phenomenon, involving the increasing interaction or integration of national economic systems through the growth of international trade, investment and capital flows. The projects concerned are largely targeted at social not economic development and hence shed only limited light on the theory’s applicability. In respect to the cocoa rehabilitation project, however, it is clear that it was domestic market prices and poorly articulated agricultural policy that resulted in its demise not global phenomena. Global conditions did not influence decisions not to invest in project maintenance. These decisions were directly attributable to domestic economic policy and political considerations not international trade and globalisation issues. As indicated in earlier chapters while globalisation effects change it is not the determinant of development. 279

In respect to trade, the cocoa project shows that even where opportunities exist, there is no guarantee that such opportunities will be realised. Moreover, there are clear impediments to international trade expansion by Samoa. As a small Pacific island country, Samoa has few natural resources and its remoteness means that transport costs are excessive. High technology initiatives such as that of the Japanese Yazaki company have continued to struggle despite government incentives and low wage structures. Opportunities for development are basically limited to fishing, tourism and agriculture. While some expansion is still possible in these sectors, there is little possibility that the country could expand these sectors to the point where exports would exceed imports. It will still be reliant on remittances from Samoan’s overseas. This situation indicates that even if countries are connected to the globalised world there is no guarantee of development if they are prohibited by geography, climate, location and natural resources from fully participating in globalised trade.

A convincing case can in fact be made that countries such as Samoa are more at risk of stimulating imports in a globalised environment and further destablising import/export parities. The mere fact that Samoan’s are connected to the world wide web ensures that they are now aware of all the new goods available overseas. This in turn stimulates demand. In Samoa today there is a raft of new imports but basically the same exports. Many new electronic products (computers, CD’s, DVD’s, TV’s, refrigerators) and status products such as motor vehicles are being imported. But there is no likelihood of any local manufacturing of these products.

Further, as Marshall points out “To be sure, technological change and the resulting new standards of competition are at the heart of the development dilemma confronting many countries especially those in the Third World” (Marshall, 1996, p 878). However he proceeds to indicate that “whole areas of the economy within countries, like the provision of health services or of education, remain removed from global competition” (Marshall, 1996, p 880). Moreover, Marshall argues that there is scant evidence for the position that transnational capitalism has replaced moribund national economic formations. He suggests” much of the evidence marshalled by globalisation scholars points to increasing regionalisation rather than to genuine globalisation” (Marshall, 1996, p 895).

What becomes clear is that while globalisation is a fact (despite arguments over its form and extent, whether it is unique to the current time period etc), its impact is not all-pervasive. As such, it cannot be regarded as the prime determinant of development but rather only an important consideration. If a country is not “tuned in” to globalisation it has few opportunities for development but even if it is tuned in, there is no guarantee of development success. Globalisation per se does not engender development. It merely provides the milieu and opportunities for development.

Applicability of Post Structuralism

In terms of the post structuralism debate, Samoa, for some, might be an “ideal type”. It offers its citizens most of the benefits of social development (good law and order situation; improving health and education systems; linkage into the globalised world through the internet, resident UN agencies etc.) and improving economic conditions 280 and poverty reduction. At the same time Samoa has, so far, retained its cultural institutions such as the fa’a-Samoa, matai and church authority.

Samoa has embraced the new but steadfastly sought to retain the past. As the analysis of Samoan history and state of development shows however, this ideal type has a limited lifespan. It is clear that globalisation will eventually destroy much of the fabric of Samoan traditional society. (See Hyndman 1988,1994). This can be seen from the situation in other South Pacific countries like Papua New Guinea where traditional chiefly control has all but disappeared, languages are facing extinction and cultural mores are now being disregarded. There is a sense of inevitability that to be connected to the global world ultimately implies that a new set social and economic mores will have to be adopted. These mores are however not yet clearly defined or indeed understood.

Samoa might, prima facie, be a model for Sen’s (1999) view of post structuralism. It appears to demonstrate a net improvement in human life and liberty that are not intrinsically linked to GNP and GDP improvements. Generally speaking the people of Samoa are happy and have incomes far less than those in the West. On closer observation however it must be concluded that Samoans yearn for more, they want much of what the West has to offer57. This fact is amply demonstrated by Samoan migration patterns to the United States, New Zealand and Australia. Samoa’s culture is under siege both from its émigré and the globalised world that surrounds it and enters every home, every night, in electronic form. Samoan culture will inevitably succumb to globalisation pressures.

Alternatively, if Seigal’s (1998) hypothesis of post structuralism holds true and there is a “counterproductivity” of growth, human needs may eventually be satiated. The only development that might occur under this scenario is social development – economic development will be redundant. But the review of projects in Samoa casts significant doubt on satiation of needs. It is evident that not all countries will be able to produce all the goods that they need. If a country has no iron ore it cannot produce steel and unless Seigal suggests the world revert to the stone age, steel will still be essential. If a country has no land suitable for taro cultivation it will be costly to grow it, and therefore it would appear that trade remains an imperative. This is so even in a utopian world where each country has sufficient funds to purchase all that it needs. Given the above situation, trade and therefore economics will continue to play important roles and the concept of development (at least under its increased income from trade mantra) will persist. Seigal’s other option is for people to live with less - only consume what they actually need. This is a noble objective but one that human greed and avarice have shown time and again will not succeed. Philosophical utopias advanced under Ghandi, Nehru/Marxism have all succumbed to the human need for more and more. The only times where people have been willing to consume less are when this has been forced on them through war or depression and they were certainly not happy about it. Per capita consumption will only decrease when the finite limits of production are reached.

57 Christine Mc Murray (2001) p1, supports the view t the young want western comsumer products. While Hau’ofa (1994) pp155-156 , Cole (1999) p 53 and Ward (1997) support the view that the Pacific has adopted western style development. 281

Given the human perchance for invention the finite limit of production would still appear to be some way off. In the meantime, there is a need to assist countries improve living standards and it is therefore essential to understand what engenders today’s development.

Economic Theories Relating to Samoan Development

The traits accorded to MIRAB economies (Chapter 3) are well known and clearly exist. This question arises as to whether these traits prevent development or not. The ADB has recently suggested that while MIRAB economies might be constrained by their geographical isolation, this does not prevent their development. “Many problems appear to be exaggerated and their adverse economic consequences arise not from the natural features of islands, but rather, from ill advised policies that purport to address them” (ADB, 2004, p38). The ADB highlights that “many small countries from a variety of cultural, economic, political, and geographic settings (e.g. Bermuda, Iceland, Mauritius, and Norfolk Island) have recorded success in overcoming these disadvantages” (ADB, 2004, p39). The ADB findings are also supported by other studies by Easterly and Kraay (1999) and Armstrong and Read (1998, p 563-585).

Others suggest that “it is the scale, complexity and scope of technological change that is undermining national economies dependent on the sale of one or two products – and not necessarily a distinctive ‘globalisation process’ that is marginalising certain economies” (Marshall, 1996, p 887).

Samoa, has classic MIRAB traits. It is dependent on aid and remittances, has few natural resources, a very limited range of export products, high transportation costs and a small local market. However, Samoa has developed despite is MIRAB status. It has made a noticeable advancement in its standard of living since the early 1990s. Its health and education facilities and services have improved and roads have been built as indicated in Chapter 6. It is clear therefore that while the MIRAB model may highlight impediments to development, it does not provide answers as to why some MIRAB states develop while others do not.

At best, it can be said that while development theories inform the debate, they fail to adequately explain the development process in the region.

THE TRUE DETERMINANTS OF SUSTAINABLE DEVELOPMENT

From the above analysis of the projects and associated theory, it appears that there is a need for the following conditions in order that development benefits are sustained. The conditions include presence of good macro policies; sound sector policies and real commitment of the people to development.

If the above conditions are not met then development will not be sustained despite the availability of capital; the availability of expertise; access to trade opportunities; existence of global communications; availability of required technology and /or there being a professed desire to develop.

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Presence of Good Macro Policies

If there are not sound macroeconomic and social policies at the national level opportunities for development will be dissipated. There has to be clear development strategies enunciated and implemented in respect to macroeconomic reform and a concomitant social reform agenda. For instance, in respect to Macroeconomic reform, stabilisation of inflation rates, improving financial regulation and supervision, engendering fiscal stability by concentrating on institutionalizing fiscal discipline, improving the efficiency and equity of tax collection, and modifying institutional arrangements to deal with increasingly decentralized national systems58. In terms of a social agenda issues like economic equality for women, child labour, mental health, guns, pornography, prostitution need consideration.

The Cocoa Rehabilitation and Expansion Project Phase II case study earlier in this thesis demonstrates that unless there are clear consistent policies waste will occur. The review highlighted in this regard that there was no real commitment evident at the national level in respect to export/marketing of agricultural products. Opposing donor views on marketing cocoa existed and there was no effective coordination of policy. Opportunities were subjugated to political expediency. Effectively the Samoan government was chasing donor funds rather than establishing sound marketing policies. The result was that the project was effectively abandoned after the cyclones and no revival of cocoa as an export crop was attempted. In respect to the Road Resealing Project, again it was evident that national policy was to divert funds away from maintenance and subsequently chase World Bank loans to cover maintenance deficiencies. This demonstrates either particularly poor macro economic policy or that Samoa simply cannot afford its current infrastructure. In either case it hinders overall development.

In a similar vein, a good example of poor macro economic and social policies exists in Papua New Guinea where the instability of government has seen Ministers and Departmental heads changed constantly. The result is that few clear coherent macro economic or social policies are ever devised, let alone implemented. The complete lack of focus impacts negatively on development performance.

Sound Sector Policies

A similar situation applies to sector policies. Countries with poor macro economic and social policies invariably have poor sector policies. This is evident with the projects reviewed. Sector policies for agriculture were poor with policies not objectively analysed. For example, the Samoan government wanted to stimulate cocoa production and its initial solution was the pay farmers for planting new cocoa seedlings. A simple solution whereby farmers would receive a payment for each extra seedling planted. But the process was poorly orchestrated and provided opportunities for corruption. Numerous farmers (in league with agriculture officials) saw opportunities for fast money. Farmers simply snipped branches off cocoa trees and put them in the ground. Officials counted the so called new seedlings and paid the farmers. The result was a gross waste of public monies and very little achieved in terms of extra output.

58 See Gonzalez, Jose Antonio, Vittorio Corbo, Anne O. Krueger, and Aaron Tornell, (eds) Latin American Macroeconomic Reforms: The Second Stage, University of Chicago Press, Chicago, 2003 283

In respect to the Fire Service, years after project completion there is still no strategic plan for development of the service and consequently no consideration of or provision for future capital costs. There is still no fire service on Savai’i. In respect to transport strategy, Samoa has returned to the World Bank for loan funds to maintain roads and infrastructure supported under the Australian aid program. Clearly maintenance funds for roads have not been adequate and the sustainability strategy inherent in the AusAID project was never followed. Sector policy is simply to seek funds, while the macro economic policy is to borrow from international institutions. In respect to the Building Inspection Unit project, sector policies remain poorly articulated and there is doubt over compliance. Sector management has allowed assets to be stripped from the project beneficiaries and beneficiaries have been marginalised in the process.

Real Commitment of the People to Development

Commitment to development must come from both public servants and the general public. In this respect most institutional strengthening emphasis on the public service is usually directed at training, bloated sector wage bills, overstaffing and inadequate technical qualifications, poor career paths, organisational structures, functional duplication etcetera. However the issue of commitment is rarely considered.

Development specialists can attest to the fact that where projects are within the civil service, the first year of project life invariably is occupied in trying to convince public servants that the project will benefit them and not see them retrenched. In such circumstances, if the public servants are not convinced then they can and do actively frustrate the project implementation. In contrast where public servants actively support projects and the development process, implementation is easier/faster and the results are usually more sustainable. As an example a common impediment to development projects in Samoa has been the role played by the Public Service Commission (PSC). Often there has been agreement to provide additional staff as part of the government to government MOU process associated with new projects. The PSC however has sometimes been reluctant to create new positions due to staff ceilings and individual officer obfuscation. Real commitment of public servants to the development process is therefore essential for development to take place.

In respect to public commitment to development, the principle of participation derives from an acceptance that people are at the heart of development. They are not only the ultimate beneficiaries but also the agents of development. People can participate in development through groups or associations (NGOs, political parties, church groups, trade unions etcetera) or as individuals (through voting, letters to the editor, participation in rallies, television/radio interviews etcetera). At the grass roots level, participation implies that government structures are flexible enough to provide beneficiaries (the people) with an opportunity to comment upon and improve the design of pubic programs. This type of ownership will enhance the results. Participation (real commitment) is usually assumed and very little done to promote the concept. Much is said about participatory development processes but in most cases this is mere lip service. Community participation is usually peripheral to the objectives of aid recipient governments. While consultation (informing the community of project /policy objectives) occurs, the views of the community are rarely heard and seldom coherently articulated. This is however a mistake as community commitment 284 to the development process is vital for sustainable solutions. By way of an example, in PNG if personal computers are put into the hospital environment they become attractive items and will sooner or later they will be stolen by rascals59. Public servants and security guards often abet the rascal activity. By contrast, in the rural environment, if an aid post radio system is installed, it is valued by the community as it will bring urgent medical assistance and can be used for other communications. These radio systems are usually left intact as the community is committed to their retention.

Put simply if public servants and recipient communities are not convinced of the need for development/projects, then this lack of support will eventually translate into development not being sustained.

SUMMARY

It appears that for sustainable development to occur there needs to be a presence of good macro policies, sound sector policies and real commitment of the people to development. Governments really have to be committed to development not simply pay it lip service. They have to be willing to undertake reforms. In respect to development theories they inform the debate over development but no theory adequately explains the development process. All theories have lacunae.

59 The writer has witnessed all computers being stolen from the Port Moresby Private Hospital and from the Material and Child Health Section of the Port Moresby General Hospital.

CHAPTER 14 ADVANCING THE DEBATE OVER DEVELOPMENT THEORY

The intent of this thesis is to review the sustainability of Australian development aid to Samoa. As such the thesis largely pertains to the practice of development. A secondary objective of the thesis was to examine the applicability of development theory to the practice of development. It examineed whether development theories really depict the development process or whether they fail to identify the real bases for development.

This chapter summarises the issues of concern with development theory as evinced in the Samoan case studies and posits a possible alternative theory of development.

ADVANCING THE DEVELOPMENT DEBATE

The world has witnessed over recent decades development progress that has been unprecedented in human history. In the early 1950s, when large-scale development assistance began, most people outside the developed countries lived as they had always lived, scraping by on the edge of subsistence, with little knowledge of and no voice in global or national affairs, and little expectation of more than a short life of hard work with slight reward. Since then, many countries have achieved truly dramatic improvement in overall indicators of human welfare.

For example life expectancy in the developing countries has risen by more than twenty years (from 41 to 62 years), the percentage of the population with access to clean water has doubled (from 35 per cent to 70 per cent), adult literacy has risen from less than half the population to about two-thirds and food production and consumption have increased at a rate about 20 per cent faster than population growth. This provides evidence of progress.

The impressive strides above have not been uniform and have not been delivered solely by capital injection. Moreover, in some countries poverty is increasing, and in many countries the poor have not shared in the positive global trends described above. Millions of people still die each year from preventable and treatable diseases; 130 million primary school-age children do not attend school; more than one-third of the children in developing countries are malnourished and one in ten dies before reaching the age of five years. Respect for human dignity, and in particular acceptance of the equality of women, remains an unfulfilled dream for too many. History has shown that progress is not inevitable.

In terms of development, the foregoing analysis of Australian development assistance projects in Samoa, has highlighted that each of the development theories has lucanae. Development theories do not adequately explain the process of development. Each theory provides evidence as to the process of development and makes some valid points but none encapsulate the entire process. It is easy therefore to sympathise with Michael Edwards (1989) who while in Africa on a development project wrote a paper, The Irrelevance of Development Studies. He concluded that the theories of development provided no practical help for the field practitioner. He later however recanted these views, suggesting that it was his particular location and predicament; the frustration that caused his negativity. 286

Theories are fundamental in sociological analysis but if they do not accurately explain a situation what is their use? If they are wrong isn’t that a hinderance not a help? The fact is however, theories are important in that they stimulate debate and without debate there can be no progress. If a theory can be disproved that is progress. If parts or all of a theory cannot be disproved then it should be given suitable credence. It deserves further study at minimum, if not complete acceptance. In terms of development theory if a single construct can explain the development process, then the repercussions for civilisation are enormous. Theory does matter.

This thesis suggests that from the data analysed there is no single theory that adequately explains the development process. It suggests that development success is possible in the above milieu only where the people and the institutions of developing countries have made sustained efforts to help themselves – when they are committed to the development process. Capital investment per se will not result in sustainable development but rather engender transitory improvements along the development continuum that ultimately result in development stasis. The projects studied in Samoa demonstrate this fact. Injection of funds and resources by way of projects did not result in lasting development.

Isolating any single factor as the cause of development success or failure is impossible and simply wrong. This is where liberal development, dependency and globalisation theorists go awry. There is no single element that engenders development. Development occurs only when a combination of factors interplay under a very specific formula. The development process occurs in much the same way as chemicals have to be mixed in specific proportions under specific conditions in order to produce desired compounds. Development theories in contrast seek to prescribe simple solutions/formulae to a complex problem. While they inform regarding current development dynamics, they fail to explain the process.

Of the competing theories, globalisation provides the most plausible explanation of development. At least it is realistic in that it portrays the current situation regarding the economic phenomenon, involving the increasing interaction or integration of national economic systems through the growth of international trade, investment and capital flows. In its wider interpretation, globalisation also addresses the phenomenon of increased cross border cultural, social and technological exchange. While it is plausible, it fails to address issues that retard development of countries. These issues have been discussed in the thesis in respect to the Samoa situation. They are basically issues of commitment - commitment to good policy at macro and micro levels and commitment of the populace to development. The issues exist and cannot be denied.

What has been established in this thesis is not completely new but rather a reinforcement of ideas that seem to have been overlooked by theorists in the search for theoretical prescriptions for the development issue. It was N'Diaye (1970), a Senegalese sociologist, who wrote that economic development can only be successfully achieved if, "the majority of the people are consciously and firmly mobilised to carry out and defend its implementation" and if its achievement "rests principally on their own efforts”. This thesis evinces that effective development mobilisation is achieved only within a good micro as well as macro policy environment. 287

The above facts must therefore be included in development theory if it is to adequately explain the development process. There needs to be a marriage of the concepts of N'Diaye, Wallerstein and globalisation to effectively establish a new development construct to adequately explain the development process.

A NEW DEVELOPMENT CONSTRUCT

What is required in order to fully explain development is a new development construct that exorcises elements from the N'Diaye, Wallerstein prescripts and integrates them with progressive globalisation theory.

There is some truth in Wallerstein’s dependent development theory. It is clear that small Pacific Island countries like Samoa can never compete with most industrialised countries. They are just too small, too far away, have too few people and too few natural resources. They tend therefore to have niche markets at best (For example tourism, fishing, coconut products) and to trade on a regional basis. Samoa for example tends to trade mostly with the United States, New Zealand, Australia and American Samoa. This however is not some international plot to subjugate smaller countries as dependent development theory suggests but mere perchance of circumstance. There are limits to possible development in small island nations. Their relationships with their large regional neighbours need however to be acknowledged. Globalisation theory provides a valid basis for such acknowledgement. But a more appropriate construct would incorporate such relationships under the three tiers of dependent development interaction (core, regions and periphery). Similarly N'Diaye’s input in regard to popular commitment to development needs to be incorporated into a new development paradigm.

Figure 14 hereunder attempts to demonstrate the new global dynamic. It shows that there are three basic divisions within globalisation as per Wallerstein viz: the centre, the regions and the periphery. The centre represents a number of large trading blocks. Power among these blocks is not equal and continues to shift. However each is significant in its own right. Each also has varying impact on the regions in respect to trade and social velocity. (The importance of social velocity is inherent in the concept of globalisation and was not considered in the earlier Wallerstein model). Each also interacts directly with other centre blocks, the regions and periphery. Trade includes tertiary, secondary and primary produce. The regions represent those countries that have predominance on a regional basis in respect to trade and impact on social velocity. (Under world systems theory these countries may be seen as the semi-periphery). The regional powers have some tertiary industry, are industrialised and maintain trade in agricultural produce as well. The regional powers interact not only with each other but also the centre and the periphery. The periphery represents the smaller nations that have limited resources. There is a mix of industries with generally limited tertiary industry at best, less industrialisation than the regional powers and a preponderance of agricultural trade. They are dependent on the larger regional and centre nations for much of their export income (as well as aid) and are affected directly by the centre and regions in respect to social velocity.

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Figure 14- The New Global Dynamic

. Small States Regions . (Periphery) ete/Metropoles Centres/ .

South . Africa .. . . Australia New Zealand . EU American . . Samoa Other Samoa . Western Europe . . S. Korea . USA .. .

Malaysia Thailand . . JAPAN, CHINA, Mexic o TAIWAN . . Brazil . . India . . Chile . Argentina . .

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The above diagram in some respects is similar to the prescripts of World Systems theory with its core, periphery and semi-periphery. (See Lim 2003, p 119). The difference is however that World Systems Theory suggests that it is the historical system itself, not the actors, who control development. Proponents argue that the differences and similarities in countries are uninteresting in their own right. They see “power in the system still generally dispersed and/or decentralised among multiple units (nation states). In this sense, we may say that the hegemon rules, but does not reign. … the various political units, including the hegemon, are all enmeshed in an interdependent relationship governed by forces that they may be able to influence but never fully control.” (Lim 2003, p118). Thus World Systems Theory suggests that moving from the periphery to the semi-periphery cannot simply be a matter of adopting good micro and macro policies etcetera. While these actions might be important, they are insufficient in themselves to engender development. World Systems Theory suggests that opportunities exist in periods of expansion and contraction of the world economy for states to be upwardly mobile.

In periods of contraction those countries with sufficient internal strength can try and beak out of their peripheral position by producing more manufactured goods at home (a strategy called import substitution industrialisation), or by increasing the price of their exports through political action, much as OPEC nations did in the 1970s. During periods of expansion development by invitation may occur. A core capitalist country may select a country (with low cost structures) as an investment prospect. This may engender upward mobility of the recipient peripheral country60.

So in terms of the diagram above, World Systems Theory has a similar structure but the basis prescribed for mobility is completely different. Under the proposed construct, movement within the system is largely in the hands of the nation state and its people not the historical system.

The membership of the centre, regions and periphery are however certainly open to debate. Regional membership, for example, can be assessed by using GNP, trade and other data. If however exports relate to one or two major products only, then the relative importance of that regional member country may be overstated. Also, size is relative to location, in that a regional member might be smaller than counterparts from other regions but still be the locus of activity within its specific region (For example Brazil versus South Korea). While membership can be questioned the fact that there are three discernable levels of activity/power within globalisation is hard to dispute.

Figure 14 attempts to illustrate this point by taking Samoa as an example. Samoa trades with three major partners. It exports directly to the centre ( United States) and also regional power players (Australia and New Zealand). Samoa also has strong trading links with the periphery (American Samoa, Fiji and Tonga). As Figure 16 shows however Samoa also imports from another of the centres/metropoles (Japan). In terms of economic ties it has relationships with the periphery, regions and the centre. Further, the relationships are not always simply formed because of relative location access to an adjacent market. The relationship with American Samoa is

60 One problem with World Systems Theory is that it does not adequately explain how countries like Australia managed to develop. Neither the contraction nor expansion scenarios seem to apply. 290 based largely on ethnicity. Factors of migration must also be taken into account with exports/imports to/from New Zealand, United States and Samoa. These three countries are the main migration points for Samoans. Samoans have business interests in these three countries and Samoans resident in these three countries also have business interests in Samoa. The best example of the importance of relationships is probably the new Samoan garment factory which exports to Germany. The link to Germany goes back to early Samoan colonial history where the Germans ruled Samoa. There is still a small German community in Samoa and German’s still have a specialist affinity for the country.

Figure 15 hereunder shows Samoa’s main exports and export locations for February 2003: Figure 15

Source: Central Bank of Samoa, Foreign Trade Report February 2003, http://www.cbs.gov.ws Accessed 6 June 2003

Figure 16 hereunder shows Samoa’s import trading partners as at February 2003.

Figure 16

Source: Central Bank of Samoa, Foreign Trade Report February 2003, http://www.cbs,gov.ws/ Accessed 6 June 2003 291

What the above situation demonstrates is that trade is not simply a matter of economics. There are other factors that can be of importance such as history, politics and relationships. To give another Pacific example, nickel derivatives account for 92.2 per cent of New Caledonia’s exports61. Seafood provides another 3.5 per cent of exports. Most of the nickel goes to Japan and France. The seafood largely goes to Australia and France. Why are products exported to France? Clearly the answer is colonial ties New Caledonia is a French territory. So, politics plays a large part in trade. Reciprocity is also an issue. If a country exports to another there is usually an implicit requirement to also import from that country. While not obvious in the data, much of the fish (tuna) exported to American Samoa ends up in Japan and this is one reason why Samoa has an import relationship with Japan. Of course in turn, Japan also provides substantial aid to Samoa. Its aid agency JICA has a major office in Samoa. Japan has constructed the MTII hospital in Savai’i, the sea wall protecting much of eastern Apolu and Apia from the effects of cyclones and has provided two ferries for inter island travel all via JICA aid.

In terms of social velocity Samoa is affected primarily by the United States (through the internet, television, cinema, evangelism, travel and migration). This is reinforced by its close trading and ethnic relationship with the American colony of American Samoa. Australian culture and mores impact on Samoa via media feed from ABC TV, travel and Samoan migration. Similarly Samoan migration and travel to/from New Zealand imparts New Zealand mores. Samoan traditional culture is continually being bombarded by that of the centre and regions.

What the Samoan situation demonstrates is that the economic and social relationships that now exist under globalisation are very complex. If the relationships, for a very small relatively isolated nation, such as Samoa are complex then the corresponding relationships for the regions and centre are ever more complex. These relationships are also more complex than in the past if for no other reason that the speed with which they occur and change (social velocity). If an attempt was made to construct world economic and social relationships at Figure 14 for example, it would be so complex as to be meaningless. Any theory of development must therefore acknowledge these nuances of current globalisation.

While globalisation, as described, sets the scene for world development, it also sets the parameters for development. It is clear that there is inequality in the global system. Some countries have more than others. Globalisation itself, as a system, will not solve these problems. Nor is globalisation the reason for the inequality. Inequality always existed but did not manifest itself until the industrial revolution. Only then did the relative imbalance of size, location and natural resources become an issue. Hence the concept espoused by Frank of metropoles appropriating the economic surplus of subordinate satellites, enriching the former and impoverishing the latter, thereby creating and reproducing their underdevelopment, is not supportable. For example, if a country has an essential commodity or desired luxury item it can set or at least negotiate the price and the metropole has to pay or do without. Examples are oil, tuna, caviar etcetera. In some cases of course the

61 Province SUD, Nouvelle Caledonie, http://www.province-sud.nc/index2.html, Accessed 6 June 2003.

292 producer is at a disadvantage (such as where numerous suppliers undercut each other; a buyers market exists). But globalisation has also demonstrated that the metropole is at the mercy of the periphery as well. For example the recent terrorist attacks, followed by SARS, have had dramatic effects on the centre but in some cases very limited effect on the periphery. These situations provided a striking example of how tourism and general trade can be affected in a globalised system. Globalisation clearly implies increased interdependence not necessarily subordination or subjugation.

Globalisation merely provides opportunities for development. It does not even provide equal opportunity for development. It is evident that if a country has a large supply of cheap labour, abundant or at least sufficient land and natural resources and is on a major transport link, it is far better placed to seize the opportunities for economic development under globalisation than a small island nation which lacks these qualities. Opportunities (as distinct from actual development) will mostly be commensurate with the size, location and natural resources of the developing nation.

Globalisation will not stop inequality within countries and may even exacerbate the situation. The OECD recently acknowledged this fact when it reported, ”A number of OECD countries face a growing gap between those who are well placed to profit from the new career opportunities being created by technology and globalisation and those who are not. Less-educated and low-skilled workers, in particular, face severe labour market difficulties. Unemployment, inactivity and low pay appear to be different manifestations of the same underlying problem, which is confining some workers to the margins of the labour market” (OECD,1997).

It is possible that the rich elite may simply get richer while the poor get poorer. This leads to the issue discussed by N'Diaye (1970). It is clear that being tuned in to a globalised world is insufficient to engender development and reduce inequality at the nation state level. Opportunities for development will arise as per the prescription above but will such opportunities be realised as sustainable development? There is an obvious requirement for popular commitment to and management of the development process. N’Diaye highlights this fact but he fails to identify the method by which popular commitment will be generated and sustained. This brings us back to the review of Samoa aid projects. The review highlights the fact that the way to generate commitment and reduce inequality is via the creation of good macro and sector policies for development. If there is commitment to change at the top and within the organisation, change will occur and be sustained.

If the above commitment is limited to development only (without corresponding social agendas), then the possibility still exists that the benefits will be unequally distributed. Thus there are four options for countries in the future:

1. Do not get integrated into the globalised world and stagnate or regress in terms of development 2. Participate in globalisation but fail to seize opportunities for lack of effective macro and micro socioeconomic policies 3. Participate in globalisation but only have an economic (capitalist) approach to development thereby providing for inequity in the distribution of benefits or 293

4. Participate in globalisation, apply sound socioeconomic policies and manage the development process to both constrain and sustain outcomes

In summary, the new construct of development entails four key elements. These are recognition that globalisation in its economic and social velocity form exists; acceptance that globalisation operates at three different levels of interchange - the centre, regions and periphery; that globalisation provides inherently unequal opportunities for development of the nation state and that even the limited opportunities open to nation states to develop are circumscribed by a necessity to produce/implement good macro and sector policies

The above construct for development implies a world where countries will develop unequally, where countries can graduate from one grouping to another or alternatively slip backwards. It proffers a world where individual and public policy will affect life’s outcomes. It proposes a non-utopian world where the individual can still make a difference.

Moreover, it is a world where development can still have meaning in terms of maintenance of culture and restraint of consumerism provided that is the effective will of the populace.

CHAPTER 15 CONCLUSION

AUSTRALIAN DEVELOPMENT COOPERATION PERFORMANCE

The Minister for Foreign Affairs, Hon Alexander Downer, five years ago indicated that a Development Assistance Committee of the OECD peer review had concluded that, “continuing reforms and adaptations to aid policies and management have improved the quality and impact of the program. A strengthened approach to program planning, implementation and evaluation are an integral part of the focus on quality. These reforms put Australia in the vanguard of DAC members’ aid management practices”. The Minister then extolled, “This could not be a more positive report card on Australia’s aid program. It is really quite excellent”. (Downer, 1999, p 3).

The review of the foregoing development Projects in Samoa however provides some contrast against the Minister’s assertions of project and program excellence. This review has demonstrated that Australian development assistance sustainability, in terms of the Projects investigated in Samoa, was far from impressive and there was a definitive need to improve project design, management, implementation and evaluation. It demonstrates that in some cases original project objectives were not achieved and were never measurable. In most cases the benefits arising from projects were not sustained because of insufficient institutional strengthening, poor administration/management within the recipient organisations and a lack of commitment (or possibly resources) by the Samoan Government. In terms of the Australian Government’s own definition, the projects were not successful.

THE THESIS QUESTION ANSWERED

This thesis undertook to review the sustainability of Australian aid in one Pacific island nation – Samoa and test the hypothesis that Australian aid to Samoa has resulted in only limited development sustainability. In doing so, four AusAID development projects were used as case studies to determine if aid delivery had been sustainable.

The review of the projects clearly indicates that no project was really sustainable. No project actually displayed an ability to deliver development benefits for an extended time after major financial, managerial and technical assistance was terminated. In each case while transitory development benefits were evident, the longer term outlook for sustainability was poor.

The Building Inspection Unit Project and the Cocoa Rehabilitation and Expansion Project Phase II, demonstrated least sustainability. The Building Inspection Unit Project showed very little sustainability beyond the cessation of Project Inputs. Vehicles that were critical to service delivery were transferred even before the project was completed, new work systems and software failed to be inculcated into the Unit. The new Building Code was never promulgated. Funding for the unit was effectively reduced rather than increased by the Samoan Government. The Cocoa Rehabilitation and Expansion Project similarly failed the sustainability test. Even allowing for the impact of the two cyclones (Val and Ofa), the project was never likely to be sustainable due to cultural issues associated with acceptance of the planting material, Amelonado in lieu of Trinitario (Koko Samoa) variety. In addition, donor 295 competition between the Asian Development Bank and AusAID projects resulted in the termination of controlled export through the Cocoa Board. Moreover, loss of trained staff and poor project management also affected project sustainability.

In relation to the Western Samoa Fire Services Project, this project had the most sustainable outcomes of the four case studies. The project did deliver on objectives. A new fire station, appliances and training were delivered. Some 10 years after project completion, the fire service is still significantly more effective than prior to the project. However, the Samoan government has failed to strategically build on the project and develop plans for the Fire Service expansion to Savai’i island or for replacement of aged appliances. The long tern future for the Fire Service currently must be seen in terms of progressive degradation not improvement.

In regard to the Road Resealing Project, while the roads were sealed, little effective maintenance occurred. The result was a World Bank loan to repair the roads once again. Clearly, then there was no sustainability in the original project. Road repair personnel and funds were not sustained. More recently, the bankruptcy of the project design was made more evident when, in 2004, all road repairs were contracted out to private enterprise.

The thesis concludes that the AusAID projects reviewed were not sustainable and only resulted in limited development impact.

THE IMPACT OF DEVELOPMENT VARIABLES

It is clear from the analysis in this thesis that variables such as history, cultural values, religion, state of development and AusAID modus operandi, all impact on development progress. The thesis, through the case studies, as well as preceding chapters, highlights how these variables have impacted development efforts in Samoa and the AusAID projects in particular.

History, culture and religion are inter-related in Samoa and are inculcated into every Samoan from birth. The concepts of fa’a Samoa, respect and service to the family are deeply ingrained in the Samoan psyche. Fa’a Samoa touches every Samoan and guides his or her actions in everyday life. It is the reference point for every Samoan, even if for some of the young and educated it becomes a reference point from which to deviate. The case study analysis shows how issues of history, culture and religion (as encapsulated within fa’a Samoa) do impact on project outcomes. These issues affect public service performance, attitudes to maintenance, even choice of cocoa.

Other variables such as the state of development in Samoa, and AusAID modus operandi also had limited impact of project outcomes. The economic situation in Samoa was fairly precarious at the time that the projects were conceived and implemented. There was little willingness on the part of the Samoan government to invest in sustainability of the Projects. Aid was seen as fungible and as having no cost. Aid was simply a gift. AusAID systems and procedures also impacted outcomes. Contractors had little enthusiasm for trying to amend project designs because of the payment regime of AusAID. For example if the design was queried it would delay progress payments to the contractor. Insufficient time for project design, 296 insufficient input from the Samoan government, poor AusAID oversight of the Projects, lack of a real development partnership with Samoa, perfunctory monitoring regimes (like PCCs), poor contractor commitment and implementation all played a part in the outcomes of the projects.

While, however, the variables affect development outcomes, this thesis finds that they do not prevent development occurring. The projects were not sustainable because of a lack of commitment from the Samoan government - a lack of commitment to sustainable development and the absence of associated policy formulations. .

PROHIBITORS OF DEVELOPMENT

While the above variables are sometimes impediments to development, there are other factors that have far greater impact on development outcomes. These factors are seen as prohibitors to sustainable development. Chapter 13 of this thesis delineated these prohibitors as:

1. Presence of good macro policies 2. Sound sector policies 3. Real commitment of the government and people to development

In terms of Samoan development in the 1980s development was certainly curtailed by the absence of sound macro and sector policies. There was also a view that aid had no cost and was fungible. There was, in society, a commitment to accept grant (gift) aid rather than a commitment to the goals of development espoused by donors. This situation was partly a cultural phenomenon in that while Samoa wanted the trimmings of westernization it was determined to retain its cultural mores. What the last ten years has seen in Samoa is tacit government acceptance that development comes at a cost both in terms of culture, policy positions and donor accommodation. Indeed, this acceptance has resulted in substantial development in Samoa, both economically and socially in the last ten years.

In terms of culture, the matai system has had to accommodate western notions of value and promotion on merit. In terms of policy, Samoa has had to accept International Monetary Fund and World Bank structural adjustment, changes in fiscal management and public service operations in return for funds. These policy adjustments have impacted the power of the matai and church to varying degrees. Donor’s views of development have had to be accommodated. Aid is still largely donor driven with Samoa suggesting development projects/programs while donors pick and choose. The concept of partnership with recipient governments remains largely rhetoric.

This thesis concludes that the development of Samoa has occurred not as a direct result of aid but rather as a by-product. Australian aid projects (among others) have had limited direct impact on development and have largely been unsustainable. In the process however donors have engendered a belief in Samoa that public and sector policy has to be overhauled. It is as a result of these improved macro and sector policies that development has occurred and been sustained to date. This new found belief in and commitment to development has effected a change in society 297 sufficient to improve development outcomes. While a commitment to development and good policy platforms now exist, this does not imply that policy is always good or that development outcomes will always be optimum.

SAMOAN GOVERNMENT PERFORMANCE

In respect to policy positions and optimum development outcomes, the major issue that permeates all projects reviewed is that of the lack of continued sustainability. In terms of resources, the Samoan Government may lack the necessary financial resources to sustain all development projects it may become over extended. This raises a number of attendant concerns. Firstly it raises the issue of misallocation of government funds. As has been seen, the Government has used its discretionary funds not to support projects but rather to divert them for political and sometimes religious purpose. This trend remains evident in the development of the new Faleata Country Club at Tuanaimato and Fale Tatalo (worship centre) for politicians. Both of these initiatives were expensive and attracted negative comment. Neither can be seen as either economic or religious necessities. It is also seen in the use of grant funds for budget substitution. For example where New Zealand grant aid funds were used for many years to maintain the TTM hospital in Apia with no maintenance budget was allocated by the Samoan Government.

Secondly it raises the issue of the continued commitment by the Samoan government to project sustainability. The discussion in this thesis concerning the World Bank, Samoa Infrastructure Asset Management Project clearly shows how Samoa at times has failed in its commitment to sustainability of projects. Its policy decisions have not always been sound.

Despite the fact that counterpart funds dry up after Project completion, the Projects keep on coming. Aid agencies are faced with a basic dilemma - Should donors not embark on development projects or should they commence them in the knowledge that they are likely not to be sustained. Agencies often choose the latter course as by definition development aid delivery requires a good degree of optimism. They hope that at least some of the activity will be sustained, some training will be inculcated etcetera. While this is a noble concept it needs to be bolstered by more effective country contractual commitment. Samoa needs to be reminded of the need for informed policy decisions rather than those that are politically expedient. MOUs signed between Australia and Samoa need to be more effective legal documents that contract Samoa to sustain projects beyond formal completion the end date of MOUs needs to be several years after project inputs have ceased.

If Samoa does not, however, have the capacity to sustain all the Projects currently being delivered, no amount of contractual pressure will solve the problem. Samoa might simply default and what could realistically be done? If the Fiji upheavals are taken as an example, not much can be done. With Samoa, it can be surmised that the response would be much more subdued.

POSSIBLE INITIATIVES TO IMPROVE PROJECT AID PERFORMANCE

So what can realistically be done? The answer may lie in the adoption of a dual approach to development projects. Australia could acknowledge the counterpart 298 resource limitations of Samoa while insisting on the concept of project sustainability as a prerequisite for future project activity. A Development Compact could be signed between the two countries to this effect. The Compact could share responsibility for project sustainability. AusAID could follow the internal advice of its staff (AusAID, 1999) and define certain sectors where it will meet costs associated with project sustainability (possibly health and education), and others where the Samoan Government will be responsible. Continued support in the health and education sectors would be dependent on the continued commitment of the Samoa Government in respect to projects in other sectors. Thus a real development partnership would be formed and the Samoan Government would need to carefully consider the cost benefit implications of projects before commencement. This concept would assist in limiting grant aid fungibility.

In respect of the above AusAID would not be treading on new ground. Both the DAC and ADB already have adopted a partnership approach. The ADB for its part provided a draft Poverty Partnership Agreement to Samoa in 2002 for consideration. The Agreement is generally in line with the Samoa Development Strategy (SDS) 2002-2004.

In terms of aid policy, the review raises serious questions regarding the concept of grant aid versus loan finance for projects. It is apparent that the Samoan Government treated the grant aid in respect to the Road Rehabilitation and Building Inspection Unit Projects as a free resource to bolster budget deliverables. The long- term ramifications of the projects in relation to counterpart capital and maintenance funding were ignored in favour of immediate development infrastructure returns. As seen with the example of New Zealand aid funds in the health sector, grant aid has also been used directly to provide a budget subvention.

There are two supposed advantages that loan funding has over grant funding in the development context. Firstly as it costs the country in terms of interest payments, it is assumed that the recipient country will choose it’s development projects with care. Secondly it will try to ensure that they are sustainable and that they continue to achieve results. This might be the case in an ideal world but, in reality, political graft and corruption often impact on the style of project proposed and its sustainability is often not a question. The history of World Bank and ADB projects in Indonesia and PNG is a testimony to this fact. Only after the Suharto era in Indonesia are the facts about endemic corruption beginning to emerge. In PNG, stories concerning the misuse of donor loan funds are legion. In essence there can be more waste under the loan system than under a comparable tied grant system because control is lost. For instance, Australia through the AusAID tender and contract systems ensures it has control over expenditures whereas under the loan system, the recipient country has effective control of the funds.

In terms of AusAID funds however, loans could offer additional advantages in that they could directly address the private sector and economic development. AusAID could for example provide no-interest loans to private enterprise to stimulate export oriented and/or important substitution industries. In addition loans would make the aid dollar go much further because, if managed properly, they would result in a revolving development fund. There is then evidence to support a loan stream within the Samoa aid program. A soft loan concept was in fact recommended by the 299

Simons Report and in response the Minister for Foreign Affairs indicated that soft loans would be a useful instrument for aid delivery in some cases. Loans would leverage the aid dollar, allow undertaking of some larger projects and better encourage financial discipline on the part of recipient governments.

If grant aid is to continue however, it should be delivered within the context of a comprehensive country development program that would be part of a Development Compact. Neither of these documents exist at the time of writing. The Australia – Samoa Development Co-operation Country Strategy, December 1998 is a perfunctory document that applies no real analysis to the development needs or issues facing Samoa and certainly does not suggest any long-term solutions. It needs to be rewritten with some rigour to address development issues, possible initiatives and the concept of an evolving development partnership (what AusAID refers to as progressive engagement). In this context, where grant aid is to be used to fund recurrent expenditure (possibly, health and education) this needs to be clearly defined in the Compact and a clear deadline set for Samoa to assume such responsibilities. This might include a system under which a sliding scale is used whereby Samoa assumes additional budget refers to as responsibility each year until it has total recurrent budgetary responsibility for the projects.

OTHER ALTERNATIVES

There are other alternatives to current AusAID grant system that are worth consideration. Grant aid, in the form of AusAID Projects, has been largely tied to use of Australian/New Zealand consultants and similar procurement conditions. This has long been a point of contention with countries such as Papua New Guinea where there have been requests for greater local procurement and consultant involvement in the development process. In addition NGOs and the private sector in developing countries have often suggested that they can address grass roots and development priorities better than the government sector.

In partial response to these criticisms AusAID has unveiled some more innovative development mechanisms for the 21st century. The Philippines Australia Vulnerable Groups Facility, the Indonesia Australia Partnership Fund and the PNG Incentive Fund represent some of these. The first of these provides poverty alleviation funds to well targeted and successful Philippine Government programs. The second scheme focuses on poverty alleviation through a small grants approach to NGOs and community groups.

The PNG Incentive Fund is a novel combination and refinement of both of the above schemes in that it originally had two funding streams. The Policy Stream was targeted at supporting government institutions that showed initiative in adopting policy reforms. The Program Stream is directed at stimulating development by seeking development applications (in the order of K1-15 million per year) from local organisations and funding these based on development priority/impact and technical/financial competencies exhibited in the proposal. The Policy Stream was however shelved in year two of operation due to issues of systemic corruption at the provincial government level.

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Another initiative being pursued by AusAID is the Sector Wide Approach (SWAP). This approach steers away from one-off projects in sectors in favour of a continued commitment to sector development over extended periods. This obviously assists strategic planning at the recipient country level by providing more certainty regarding funding. Recently AusAID has extended this concept to one of progressive engagement at the both the sector and sub-national level.

What AusAID management is trying to achieve in these new development support mechanisms is a paradigm shift from the failed budget subvention process and the flawed project based aid mentality of the 1970s through to the 1990s. The idea is basically to back development winners in both the private and public sector and cut through all the red tape of program feasibility, program design, Project Implementation Documents etcetera. AusAID management wants to make aid delivery more responsive, more focused and more effective.

The above systems, if they work, could be adapted for Samoa where many local NGO, community and private sector institutions have the capacity to deliver sustainable programs. (The risk is that these programs will fail because of recipient mismanagement and/or AusAID failure to convince its officers to relinquish day-today control of programs and project activity).

The above aid mechanisms could be included in the proposed Samoan Development Compact as they have already been incorporated in the treaties/memoranda of understanding with other countries. There is however one certainty, unless AusAID forms a sound development partnership with Samoa (and other aid recipients) the results of program aid will continue to be uninspiring and unsustainable in the longer term. Samoans and the Samoan Government must own and commit to the development program in a tangible way.

LESSONS FOR GLOBAL AID

As stated above, this thesis clearly identifies that history, culture, religion and donor systems and procedures all impact on the outcome of development cooperation. There is no point in a single project or program attempting to change a recipient society. The only way this can be realistically achieved is by long-term education. All that a single project can do is attempt to achieve its specific objectives while making some minor adjustments to cultural practice. Many would argue that this is not so but the following anecdote probably illustrates the situation best.

An AusAID consultant was sent to a central Java university on a project. He found that in lieu of the project office he expected, he had no office, no chair, no computer, no telephone and no electricity. Moreover his pay and allowances disappeared into the depths of the Indonesian banking system. Exasperated he called the writer to vent his absolute frustration with the Indonesian system. The writer advised him to consider some mathematics. There were 190 million Indonesians with a society and culture that had 301

endured several millennia and there was a single consultant. Who would change first?62

SAMOAN FUTURES

Samoan culture continues to evolve. Changes will occur as a result of increased education, exposure to western media, the advent of a middle class and the assent of a new, younger, political elite. These changes are however likely to occur over a prolonged period.

The same situation exists for elites such as the matai and religious leaders. Over time their power will wane. The matai may eventually be seen as an anachronism in a cash-based, educated society that believes in freedom of expression and universal suffrage. Similarly, as the young rebel against the strictures placed upon them by fa’a-Samoa and the church, the influence of religion will be tested. If things proceed as they have in the West then the power of the church will be vastly diminished. The above is not simply conjecture as the major demonstration in Tonga in May 2005, where 20,000 people called for the abdication on the King, demonstrates. Further, as urbanisation of Samoa increases, the inability of the matai and church to control Samoan youth is already evident in the breaking of the Sar, land disputes, migration overseas and law and order problems.

In respect to the above, a consultative workshop sponsored by the AusAID Public Service Commission Institutional Strengthening Program was opened by the Prime Minister of Samoa, Hon Sailele Malielegaoi on 26 January 2001 at Matautu.

In his address to the meeting the Prime Minister stated:

This reform program has not been a simple undertaking but one that has involved a complex analysis to ultimately focus on such questions as: ‘what are the services that people need?’, ‘amongst these, which ones have a higher priority over others and how can we provide them in a way that enables the appropriate funding so that the full service is delivered and not just part of it?’ and finally ‘what needs to be done to strengthen the ability of Departments to deliver those services? And ‘how do we best go about that in a competent way?’

I want to demonstrate that we are serious about our commitment to the trust of the people – after all, if not for them then what is our role or purpose? Our purpose is to serve and I cannot make that any clearer. It is to provide the best service that we can humanly provide. It means meeting the public according to their wishes not ours. It means stretching ourselves to do more and to do better. "Now I know the image of government and public servants is not what is should be.

…… I want to go against the tide of this view that government public servants are only mediocre at the best of times that they are not

62 This incident occurred when the writer was Team Leader in charge of an Indonesian university development project in the late 1980s. 302

interested in extending themselves beyond their own area of self- interest, extravagantly if not wastefully, that they abuse their positions of power by lauding it over people who are simply seeking some assistance.

In any society these are damning comments and it is a maxim in any change program towards improvement that unless there is an acceptance that there is even the remotest possibility for a change being needed then change will not take place..

The above statement clearly shows that the Samoan Government is aware of service deficiencies at all levels and what is needed to drive change. The macro policy environment is sound but the sector policy level still shows deficiencies. It seeks to change these while at the same time history shows that it has not really been committed to the maintenance costs. It eyes performance improvement but has often not invested in project sustainability. It is perhaps with some irony that a government beholden to the matai system for its election, seeks to engender change that, if successful, may eliminate privileges enjoyed by that very group. Or is it more likely that the Government while outwardly pursuing reform is not entirely committed to its consequences?

A STRONGER COMPACT FOR EFFECTIVE PARTNERSHIPS

This thesis suggests, based on the Samoa experience, that each developing country and its people are ultimately responsible for their own development. Good macro and sector policies, that reflect local circumstances, are required as the prerequisites for creating sustainable development. Some developing countries will need specific help in building the necessary policy capacities. Development co-operation at the regional level, and on provincial/district and sectoral lines, will be important in this process. Donor approaches should however be directed at complementing and enriching efforts to strengthen national policy capacities rather than imposition of donor driven agendas.

Development policies, strategies and targets should result from dialogue among the political elite, public servants and the wider community within developing countries. Donor programs should operate within a recipient country policy framework in ways that respect and encourage strong local commitment, participation, capacity development and ownership. There should be true development partnerships, as espoused by the OECD Development Assistance Committee, rather than the current imperious model pursued by Australia.

THE APPLICABILITY OF DEVELOPMENT THEORY TO DEVELOPMENT PRACTICE

As the previous chapter has identified, this thesis concludes that while development theories are important in that they stimulate and inform debate about development, they fail to adequately describe the development process. Sustainable development is only possible where there are good macro policies, sound sector policies and a real commitment of the government and people to development.

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The thesis provides evidence to suggest that, over the years, various governments have applied theory and dogma to their development assistance. This includes Marxism from the Soviet Union, to modernisation from the United States and the West, and dependency from the Left. What becomes evident when reviewing the case studies, is that no amount of theory is a substitute for practice.

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ANNEX A - LIST OF MAJOR SOURCE DOCUMENTS

AusAID Pacific Regional Team Western Samoa Cocoa Rehabilitation and Expansion Project Phase II, Mid Term Review, July 1989

Austral Special Vehicles (NZ) Ltd Letter to Dr Kilifoti S Eteuati, Secretary to Government, Prime Minister’s Department, 14 April 1989

Cardno & Davies Australia Pty Ltd Resealing of Main Rural Highways, Public Works Department , Government of Samoa, January 1989

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 1, September 1990

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 4, Annex 6, June 1991

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 5, September 1991

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 6, December 1991

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 7, March 1992

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 8, June 1992

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 12, June 1993

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 14, December 1993

Cardno & Davies Australia Pty Ltd Road Resealing Project, Quarterly Report No 16, June 1994

Cardno & Davies Australia Pty Ltd Road Resealing Project, Project Completion Report (Draft), August 1995

Hassall & Associates Cocoa Rehabilitation and Development Project, Phase II, Draft Implementation Document Part A, July 1988

Hassall & Associates Cocoa Rehabilitation and Development Project, Phase II, Draft Implementation Document Part B, August 1989

Hassall & Associates Western Samoa Cocoa Rehabilitation and Expansion Project Phase II , Final Project Completion Report, February 1991

Hassall & Associates Final Report of the Processing and Marketing Specialist and Marketing Specialist, 1991

Hassall & Associates Project Implementation Document, Part A, Western Samoa Cocoa Rehabilitation and Expansion Project Phase II

OPCV Western Samoa Fire Service Upgrade Project, Project Implementation Document, June 1993

OPCV Western Samoa Fire Service Upgrade Project Annual Plan, Financial Year 1994/95, August 1994

OPCV Western Samoa Fire Service Upgrade Project , Draft Completion Report, January 1996

Overseas Service Bureau Strengthening of Building Inspection Unit, Public Works Department, 305

Western Samoa, Project Implementation Document, February 1993

Shedden Agribusiness Pty Ltd Western Samoa Cocoa Project Phase II Independent Impact Study Mid Term Report , June 1991

ANNEX B - LETTER TO AUSTRALIAN HIGH COMMISSION

PO Box 9224 Apia October 15, 1998

Mr Chris Wheeler First Secretary Development Co-operation Australian High Commission Apia

Dear Mr Wheeler,

I refer to our discussion yesterday regarding the decision by AusAID to conduct reviews of the Samoa Fire Service and Building Inspection Unit Projects.

As you are aware I have been undertaking a research project that encompasses review of the both the above projects as well as the Cocoa Rehabilitation and the Road Resealing Projects. I have conducted extensive interviews with Fire Service and Public Works officials regarding Project outcomes, delivery efficiency and sustainability. Indeed, I am working with the Fire Service to prepare a Strategic Plan for the organisation.

I have prepared notes on my review of Project documentation, interviews and findings. I attach these for the information of AusAID and the review team. It should limit the need for the Team to duplicate my enquiries.

I would also be happy to discuss the Projects with the review team if they desire.

Yours sincerely,

Bill Hamblin

ANNEX C - AUSAID ACTIVITIES IN SAMOA

Public Sector Administration

The Government of Samoa (GoS) has pursued a rigorous program of reform to create a more efficient, effective and accountable public sector. Features of the reform program include restructuring central government agencies, and commercialising and privatising state-owned enterprises. The program also encompasses introducing performance budgeting, strengthening government accounting and financial controls, strengthening human resource management, and enhancing corporate planning processes, project appraisal, monitoring and evaluation.

Public Sector Improvement Facility (PASIF)

• Funding: Bilateral • Contribution: $10,000,000 • Duration: 2005-09 • Contractor: SAGRIC

The goal of the PSIF is to improve the efficiency and effectiveness of Samoa's public service to support national development priorities. Support for planning, at a whole of government, sectoral and Ministry level, and improved collaboration between Ministries and Agencies, and between them the private sector and civil society, are also areas where the PSIF will support Samoa's reform agenda.

Immigration Institutional Strengthening Project

Funding: Bilateral Program Contribution: $5,000,000 Duration: 2002-05 Contractor: Uniquest Pty Ltd

The project is strengthening the Immigration Division of the Ministry of the Prime Minister to deliver a more transparent and accountable passport, citizenship, entry and exit administration that is customer focused. The project is also facilitating the establishment of a new National Border Management Committee and introduced an integrated computerised border management system.

Financial Management Information System

• Funding: Regional • Contribution: $1,520,000 • Duration: 2005-06

The Government of Australia is providing financial assistance to the Government of Samoa's Financial Analysis and Reporting Project (GoFAR) for the purchase of a new financial management system to be used throughout the public service. The new system will enable the government to devolve financial management to its line agencies. 308

Pacific Technical Assistance Facility

• Funding: Bilateral Program • Contribution: Dependant On Requests • Duration: Ongoing • Contractor: AVI

The Facility supports the secondment of Australian expertise to the Pacific region, generally for two-year capacity-building assignments. In 2004-05 there will be an anticipated three Australian experts working in government departments in Samoa including a parliamentary counsel to the Attorney-General and a financial accounting adviser to the Treasury.

Electoral assistance

• Funding: Regional Program • Contribution: Approximately $200,000 p.a. • Duration: Ongoing • Contractor: Australian Electoral Commission

The project is building capacity in the South Pacific to efficiently conduct free and fair elections. A workshop organised by the Australian Electoral Commission has established a network that encourages members to exchange information on electoral processes and to address common electoral problems.

Pacific Outreach and Publications

• Funding: Regional Program • Contribution: $741,000 • Duration: 2003-06 • Contractor: Australian National University • Coverage: All Pacific Island Countries

Australia encourages and supports scholarly endeavour on development issues in the Pacific region, and is ensuring that the results of this work are disseminated via publication and outreach activities. Australia funds the National Centre for Development Studies at the Australian National University to produce and distribute the Pacific Economic Bulletin in both hard and electronic versions. The Australian National University also holds public seminars in both Australia and the Pacific region in association with other universities and/or private and public sector institutions.

Pacific Media and Communications Facility

Funding: Regional Program Contribution: $2,100,000 Duration: 2004-07 Contractor: To Be Determined Coverage: Forum Island Countries

The Pacific media and communications facility, which follows the Pacific media initiative, aims to strengthen governance throughout the region by strengthening links between media, civil society and government through training and workshops. 309

Australian Youth Ambassadors for Development

• Funding: Regionally • Contribution: Dependant on requests • Duration: Ongoing • Contractor: AVI

The Australian Youth Ambassadors for Development Program aims to strengthen mutual understanding between Australia and countries in the Asia-Pacific region and make a positive contribution to development. Young Australians on short-term (3-12 months) assignments to Samoa include a biodiversity officer at the Ministry of Natural Resources and Environment and a computer administrator with the Tourism Authority.

Small Grants Scheme

• Funding: Bilateral Program • Contribution: $400,000 p.a. • Contractor: Government of Samoa

The Small Grants Scheme is managed by the GoS and provides funding for small- scale community level development activities.

Increased Employment and Investment Opportunities

Increasing employment and investment opportunities in Samoa and other Pacific island countries is a complex task. A robust private sector should enable people to generate a secure, sustainable livelihood that meets their aspirations and reduces poverty and is key is supporting good governance. A number of initiatives funded through the regional aid program are enhancing business skills and create strong enabling environments for private sector development and foreign investment.

Foreign Investment Advisory Service

• Funding: Regional Program • Contribution: $425,000p.a. • Duration: 1995-05 • Implementer: International Finance Corporation • Coverage: All Pacific Island Country Members

Foreign investment can make a significant contribution to the growth of Pacific economies. Australia supports the work of the Foreign Investment Advisory Service, a facility of the International Finance Corporation. Through this service, Pacific countries have access to advice on policy and strategies to help them attract investors. Australian funding supports the operations of the Foreign Investment Advisory Service's Asia-Pacific regional office in Sydney.

Economic analysis

• Funding: Regional Program 310

• Contribution: $100,000 p.a. • Duration: Ongoing • Contractor: Various • Coverage: All Pacific Island Countries

Australia is promoting regional development by providing independent analysis of the economic performance and potential of Pacific island countries. The economic analysis program supports the production of regular economic reports on island countries, research into specific areas of national economies and Pacific-wide sector reports.

Pacific Islands Trade and Investment Commission

• Funding: Regional Program • Contribution: $1,000,000 annually • Duration: Ongoing Implementer: Pacific Islands Forum Secretariat • Coverage: All Pacific Islands Forum Countries

One of the main factors affecting the export development prospects of producers in Forum island countries is their ability to market their goods comprehensively. The work of the Pacific Islands Trade and Investment Commission, based in Sydney, seeks to overcome the lack of representation or practical experience and expertise of Pacific island producers in the Australian market. The commission also aims to enhance private sector development in Forum island countries by increasing trade, facilitating export diversification and attracting Australian investors.

IFC Pacific Technical Assistance Facility

• Funding: Regional Program • Contribution: $500,000 (Since 1997) • Duration: Ongoing Implementer: International Finance Corporation • Coverage: All Pacific Island Countries

Australia and the International Finance Corporation jointly established the Pacific Technical Assistance Facility in response to requests from Pacific island governments for more technical assistance for private sector development. Under this facility, firms and individuals are engaged, primarily as short-term consultants, to examine specific sector conditions, business and financial constraints, and other broad issues that affect the business environment. Consultants assist in preparing feasibility studies, set up demonstration or pilot operations for industrial and commercial activities, and offer technical assistance to governments on privatising state-owned enterprises.

South Pacific Project Facility

• Funding: Regional Program • Contribution: $625,000 p.a. • Duration: Ongoing Implementer: International Finance Corporation • Coverage: All Pacific Island Countries 311

Entrepreneurial activities in the Pacific are being encouraged through the work of the South Pacific Project Facility, which helps small-to-medium private sector enterprises to develop and finance commercially viable businesses. Assistance includes evaluating business ideas, developing business plans and advising on the selection of business partners and investors. The South Pacific Project Facility is an agency of the International Finance Corporation.

Enhanced Law and Justice

Although the maintenance of law and justice is not a major problem in Samoa - due largely to the strength of traditional authority systems - the number of crimes against people and property is increasing. In addition there is recent evidence of transnational crime such as money laundering and drug trafficking. The GoS sought Australian assistance in strengthening the capacity of the Samoa Police Service. The project concentrates on training for executive and senior members of the force as well as core police training to enhance basic operational and investigative capacity. The construction of a combined Police Headquarters and Apia Police Station is proposed for year 3.

Strengthening Capacity of the Samoa Police Service

• Funding: Bilateral • Contribution: $9,000,000 • Duration: 2005-09 • Contractor: Uniquest Pty Ltd

Regional Police Initiative

• Funding: Regional • Contribution: $15,000,000 • Duration: 2004-2008 • Contractor: SAGRIC

Improved Education Outcomes and Opportunities - Basic Education

Samoa has a high literacy rate, reflecting its accessible primary schools and strong commitment to education at community levels. Education is seen as the key to generating employment and fuelling the growth of the private sector. The Government is dedicating resources to improve the quality and relevance of education at all levels, with vocational training a particular focus. As in other Pacific nations, large-scale emigration of productive and skilled workers is an obstacle to economic development, despite the remittances they provide. Australia's support for education and training in Samoa is designed to build a core of individuals with the skills to promote national self-reliance.

Primary and infants education materials

• Funding: Bilateral Program • Contribution: $5,530,000 • Duration: 1996-04 312

• Contractor: Macquarie Research Limited

The first phase of the project, completed in June 1999, gave local educators in the Curriculum Development Unit of the Ministry of Education, Sport and Culture, the skills to independently write and produce high standard curriculum materials in English, mathematics, science and social science. The second phase of this project commenced in July 2000. Its objective is to provide quality school materials, in- service teacher training and teaching resources for school years 1-3.

Training Programs

• Funding: Bilateral Program • Contribution: Approx. $2,530,000 p.a. • Duration: Ongoing

Scholarships are offered for postgraduate studies and for upgrading qualifications in Australia, and for diploma, degree and postgraduate qualifications in Pacific institutions such as the University of the South Pacific and the Fiji School of Medicine.

In-Country Training Program

• Funding: Bilateral Program • Contribution: $400,000 p.a. • Duration: Ongoing • Contractor: NZAID

A program of specialised, short training courses for employees in the public and private sectors is offered in Samoa. Australia's contribution includes project management, personnel and direct funding. Samoan counterpart trainers are selected to work with project personnel, so that Samoans can deliver future courses. Courses have been conducted in auditing, intellectual property rights, human resource management, occupational health and safety, and counselling for youth workers.

Improved Health Outcomes - Primary and Preventative Health

Health services in Samoa need to be delivered and financed more efficiently if basic health care is to be available to all. The Government of Samoa has increased the emphasis on primary health care and community awareness of health issues in order to reduce curative costs. With Australian assistance the Government is adopting a more strategic approach to managing the health sector and improving the quality of training for medical personnel.

Samoa Health Institutional Strengthening Project

• Funding: Bilateral Program • Contribution: $8,600,000 • Duration: 2001-05 • Contractor: APAC Health Systems Pty Ltd 313

This project is designed to improve the quality of hospital clinical services, improve the quality and increase the reach of rural health services, and reduce the incidence of non-communicable diseases, particularly diabetes.

South Pacific reproductive health and family planning training

• Funding: Regional Program • Contribution: $2,852,650 • Duration: 2000-04 • Contractor: Sexual Health and Family Planning Australia • Coverage: Solomon Islands, Vanuatu, Samoa, Fiji, Tonga

This project is developing sustainable sexual and reproductive health training programs including curriculum and support for graduates of teacher and nurse training institutions. Training is being given to key educators in each participating country to enable them to implement an annual program of community education for youth, church groups, non-government organisations and health workers in their countries.

Tertiary health care

• Funding: Regional Program • Contribution: $8,014,297 (Phase III) • Duration: 2001-06 • Contractor: Royal Australasian College Of Surgeons • Coverage: Cook Islands, Fiji, Federated States Of Micronesia, Kiribati, Marshall Islands, Solomon Islands, Tonga, Tuvalu, Vanuatu, Samoa, Nauru

Australia is funding medical teams to provide clinical specialist health services and training in 11 Pacific island countries. The teams of Australian and New Zealand surgeons and nurses provide services in a range of fields including anaesthesia, cardiac surgery, ear, nose and throat, radiology, urology, and neurosurgery. The project fills specific gaps in local medical services and provides on-the-job training to local medical staff. Funding is provided for local staff to undertake screening trips in advance of visits, for short-term training and for diabetes treatment.

Medical Equipment Maintenance

• Funding: Regional Program • Contribution: $3,668,400 • Duration: 2000-05 • Contractor: Royal Australasian College of Surgeons • Coverage: Cook Islands, Kiribati, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu

The repair and maintenance of medical equipment in Pacific island countries have been a major problem for many years. This is due largely to the lack of recognition by health authorities of the importance of preventive maintenance and suitably trained biomedical engineers. Through this project, systems for equipment management, maintenance and repair in the health ministries are being established and improved . 314

Strengthening the Expanded Program of Immunisation

• Funding: Regional Program • Contribution: $600,000 p.a. • Duration: Ongoing • Implementers: UNICEF; Who • Coverage: Federated States of Micronesia, Palau, Kiribati, Samoa, Cook Islands, Fiji, Marshall Islands, Tonga, Tuvalu, Tokelau, Niue, Solomon Islands, Vanuatu

Australia is supporting and strengthening the immunisation efforts in 13 Pacific island counties. The project is jointly implemented by UNICEF and WHO. Through this project national and regional activities will improve national immunisation plans, strengthen measles control, improve vaccine planning, management and supply, strengthen cold chain and safe injection practices, provide pre-service and in-service training for health care workers and improve surveillance and response systems.

Pacific Regional HIV/AIDS project

• Funding: Regional Program • Contribution: $12,500,000 • Duration: 2003-08 • Contractor: IDSS • Coverage: All Pacific Island Countries

The regional HIV/AIDS project will consolidate progress made under earlier regional initiative and assist counties to develop or strengthen multi-sectoral national planning and response. The project will include grants and capacity-building support for the 14 independent Pacific island countries and non-government organisations. Countries with HIV/AIDS strategic plans will be able to apply for grants to implement parts of their strategic plans. The project does also provide for the engagement of the Secretariat of the Pacific Community to revise and implement the regional HIV/AIDS strategy.

UNAIDS Program Coordinator

• Funding: Regional Program • Contribution: $246,000 • Duration: 2003-06 • Implementer: United Nations Development Programme • Coverage: All Pacific Island Countries

Australia is co-funding, with New Zealand, the position of the UNAIDS program coordinator. The position is important for coordinating UN activities that will complement the new regional HIV/AIDS project. The project aims to increase political understanding and commitment, strengthen the management and surveillance of sexually transmitted infections and improve care for people with HIV/AIDS

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Pacific Children's Program

• Funding: Regional Program • Contribution: $2,500,000 • Duration: 2001-04 • Contractor: IDSS Pty Ltd • Coverage: Fiji, Samoa, Vanuatu

Australia is assisting three Pacific countries with an innovative, primary prevention approach to combating child abuse and neglect. By drawing on traditions in each country that work to protect children from harm, the project aims to increase responsibility at family, community and national levels.

Improved Management of Natural Resources

The majority of Samoa's population earn their livelihood through agricultural and fishing activities. The agricultural sector offers considerable potential for increased production at both the subsistence and commercial levels.

Ministry of Agriculture Institutional Strengthening Project

• Funding: Bilateral Program • Contribution: $5,000,000 • Duration: 2001-05 • Contractor: Lincoln International Ltd

The goal of the project is to increase the capacity of the Ministry of Agriculture to assist people to improve food and resource security and generate income and employment opportunities within the agricultural, fisheries and forestry sectors in an ecologically sustainable manner. The project has helped to identify how the Ministry can realign its organisational and management systems and procedures and adjust to the reform process.

Quarantine Improvement Project

• Funding: Bilateral Program • Contribution: $4,400,000 • Duration: 2001-06 • Contractor: URS Australia Pty Ltd

The goal of this project is to support sustainable agricultural production by protecting Samoa's plants, animals and biodiversity against exotic pests, diseases and species introductions. The project is upgrading quarantine facilities at all entry points, enhancing the Quarantine Division of MAFFM's capacity to mobilise community support and participation, and improving the division's strategic policy development skills and human resource management.

Sea-level and Climate Monitoring

• Funding: Regional Program 316

• Contribution: $9,400,000 (Phase III) • Duration: 2000-05 • Contractor: Australian Marine Science and Technology Ltd • Coverage: 12 Pacific Island Countries

The project is compiling an archive of sea-level and related climate data that provides partner countries with the information about sea-level variability and change required to sustainably manage their near-shore and coastal resources, and to develop policies and strategies for responding to long-term trends. It also aims to develop the capability within national and regional counterpart agencies to acquire, manage and disseminate data and information about sea-level variation.

Disposal of persistent organic pollutants

• Funding: Regional Program • Contribution: $4,400,000 (Phase II) • Duration: 2001-06 • Contractor: GHD Pty Ltd and the South Pacific Regional Environment Programme • Coverage: 12 Pacific Island Countries

South Pacific countries are being assisted to better manage the threat posed by persistent organic pollutants (POPs) to the environment and human health. Phase I of this project identified POPs and contaminated sites in 13 Pacific island countries and suggested management and disposal options. Phase II will upgrade the region's capacity for managing chemicals.

Regional forest genetic resources

• Funding: Regional Program • Contribution: $4,200,000 (Phase II) • Duration: 2001-05 • Contractor: CSIRO • Coverage: Fiji, Vanuatu, Samoa, Solomon Islands, Tonga

The forestry resources of Fiji, Vanuatu, Samoa, Solomon Islands and Tonga are being protected by this project through the collection, distribution, propagation and exchange of genetic material. The project is also providing training opportunities to nationals of all Pacific countries, with the aim of developing local institutional capacity that will enable project activities to continue after the end of the project.

Enhanced Application of Climate Predictions in PICs

• Funding: Regional Program • Contribution: $2,000,000 • Duration: 2003-06 • Contractor: Commonwealth Bureau of Meteorology • Coverage: All Pacific Island Countries 317

The goal of this project is to strengthen PICs capacity in climate prediction. It aims to expand and enhance the prudent use of climate predictions by PICS in both National Meteorological Services and Client Planning Departments.

Regional Organisations and Institutions

In addition to bilateral and regional aid activities, Samoa benefits from Australian support to the following regional organisations and institutions:

Pacific Islands Forum Secretariat

Australian funding to the Forum Secretariat is approximately $4.3 million, including the Pacific Islands Trade and Investment Commission (approximately 20 per cent of its total funding).

Secretariat of the Pacific Community

Australia's support to the secretariat amounts to approximately $11 million a year. Programs provide opportunity for higher-level policy dialogue on key sectoral issues and will allow SPC to manage the details. Delivering development assistance in the form of program funding will also help Australia's policy on donor harmonisation in delivering overseas aid. New Zealand is strongly supportive of this approach and France has indicated in-principle support.

South Pacific Regional Environment Programme

Australia's support to SPREP is approximately $1.4 million per annum. Australia's assistance to the organisation is particularly directed to natural resource management including coastal management, protection of threatened species and reducing the impact of invasive species; prevention of pollution; and building capacity in the environment departments of Pacific island countries through the use of volunteers and Australian Youth Ambassadors for Development.

South Pacific Board of Educational Assessment

Australia' support to SPBEA is approximately $350,000 for 2004-05. The SPBEA helps education administrators in the region to develop assessment procedures and set national and regional standards for educational standards.

South Pacific Applied Geoscience Commission

Australian government funding for SOPAC is approximately $1.8 million per annum. Australia's funding for SOPAC is focused on direct support for overall program strategies rather than individual projects. SOPAC's corporate plan highlights three program areas: oceans and islands; community risk; management and community lifelines.

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Forum Fisheries Agency

Australian funding to the Forum Fisheries Agency for 2004-05 is estimated to be $1.5 million. Australian funding supports the agency in key areas of its work with Pacific member countries. A high priority is assisting island countries to participate effectively in the preparatory phase of the Pacific Tuna Commission, which will be responsible for ensuring that the tuna resource is sustainably managed. Another priority for the agency is to help member countries develop their domestic tuna industries.

University of the South Pacific

Australia has agreed to provide $3 million a year to USP over the 3 calendar years 2003 - 2005. Of this, $2 million p.a. will be provided as a core budget contribution (to USP's general revenues) and $1 million will be for program funding. Australia's assistance to the University of the South Pacific amounted to $4.3 million for 2002/03 financial year.

Source: http://www.ausaid.gov.au/country/cbrief.cfm?DCon=9205_8231_8940_8250_1457&CountryId=18

Accessed 21 April 2005

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ANNEX D - NEW ZEALAND AID TO SAMOA 320

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ANNEX E - FIRE SERVICE REPORT TO THE POLICE COMMISSIONER

ANNEX F - BUILDING INSPECTION STATISTICS 1997/98 – 1998/99

Samoa Development Background 325

GLOSSARY OF SAMOAN TERMS alofa love ‘āiga family; bilateral, corporate descent groups ‘aitu ghost, human gods ali’i chief ati ma le lau a traditional form of village punishment which involves the removal of family and property from the village. All that remains of the family dwelling is slashed and burnt. The village is required to delete from memory any knowledge of the existence of the family atua refers to the earth originated gods, non-human gods aualuma daughters of the village, a village organisation comprising married and unmarried village girls aumaga untitled men (who serve the matai) fa’aaloalo respect fa’alavelave obligations to the church and village fa’alupega a set of ceremonial greetings that are recited when the fono meets fa’a-Samoa Samoan way faife’au pastor falaulufalega traditional ceremonies fale house faletua ma tausi wives of the matai fono meeting, governing council of village lāuga traditional oratorical performance, celebration of eternal values and immutable hierarchies lau pele edible plant with green palm shaped leaves malu female tattoo mana status Mativa lack of money, no money, poor matai titled person, chief, the political representative of the ‘āiga and the custodian of the ‘āiga’s land and property Mau literally “opinion” but also refers to Mauna Pule , a political pressure group of the six traditional districts of Savai’i island in 1908-09 meaalofa gifts mu le foaga a traditional form of village punishment which involves ostracism and the setting on fire of the offenders home and belongings and even causing the death of those who may object or stand in the way. nu’u village palagis westerners, Europeans pule authority, the six political centres on Savai’i Pulenu’u village mayor Pulotu the reposing realm of the souls of the High Chiefs and the common people Tafaifa "Four-in-One" matai title tamaiti children taumafataga feasts Taupous virgins of high rank, sought after in marriage by young chiefs Taupou-sa sacred maid of the village titi leaf girdle. Out of respect to the God Titi Usi the name was changed to savalinga or walking. The girdle was made of Ti leaves Tofigas legacies tonei Sunday feast tulafale orator chief title tupu king umu earth oven

Samoa Development Background 326

GLOSSARY OF ACRONYMNS

ADB Asian Development Bank AIDAB Australian International Development Assistance Bureau (predecessor to AusAID) AMC Australian Managing Contractor AusAID Australian Agency for International Development AusGUIDE AusAID Guide for Program Implementation BIU Building Inspection Unit of Dept. of Works Samoa CASP AusAID Commodity Assistance Support Scheme CDC Samoan Cabinet Coordinating Committee CHOGM Commonwealth Heads of Government Meeting CIDA Canadian International Development Agency CPOG AusAID Country Programs Operations Guide CRAOAP Committee to Review the Australian Overseas Aid Program DAC Development Assistance Committee of the OECD DAFF Samoa Department of Agriculture, Forests and Fisheries DflD UK Department for International Development DIFF Development Import Finance Facility (AusAID) DSM Samoan Donor Sector Meetings EIB European Investment Bank EFIC Export Finance Insurance Corporation (Austrade) EMDG Export Marketing Development Grant (Austrade) FAO United Nations Food and Agriculture Organisation FDS Feasibility/Design Study FIRR Financial Internal Rate of Return GDP Gross Domestic Product GTZ German Development Corporation HDU High Dependency Unit HIV Human Immunodeficiency Virus HRPIRD Human Resources, Policy, Information and Research Division, Samoa Department of Health ICD International Statistical Classification for diseases and related problems ICTs Information and Communication Technologies IDA International Development Association IDO International Development Organisation IFC International Finance Committee of the World Bank IMF International Monetary Fund (World Bank) IRT Independent Review Team JICA Japan International Cooperation Agency LAN Local Area Network LLDC Least Developed Countries Logframe Logical Framework Matrix (a logical description and sequencing of Project components) Maximo Road Maintenance Costing System Software MFB Metropolitan Fire Brigade of Melbourne Samoa Development Background 327

MOU Memorandum of Understanding NBC Samoan National Building Code NCDs Non-communicable diseases NEMS National Environmental and Development Management Strategies NGO Non Government Organisation NZAID New Zealand Aid NZODA New Zealand Overseas Development Assistance ODA official development aid or assistance OECD Organisation for Economic Development OPCV Overseas Projects Corporation of Victoria OPRE Office of Program Review and Evaluation PAL Polynesian Airlines PCC Project Coordinating Committee PCG Project Coordinating Group PCR Project Completion Report PEM Protein-energy malnutrition PID Project Implementation Document PMES Programming, Monitoring and Evaluation System PMG Project Monitoring Group PNG Papua New Guinea PPTA Project preparatory technical assistance PSC Public Service Commission of Samoa PSLP Private Sector Linkages Program (AusAID) PWD Public Works Department of Samoa QAG Quality Assurance Group SES Samoan Statement of Economic Strategy SNDP Samoa National Development Party SPPF South Pacific Project Facility TAFE Technical and Further Education (Australia) TAP Technical Assessment Panel convened by AusAID TTM Tupua Tamaese Meaole hospital in Apia UN United Nations UNDP United Nations Development Program UNICEF United Nations Children’s Fund USAID United States Aid WSTEC Western Samoa Trust Estates Corporation WHO World Health Organisation WSFS Western Samoa Fire Service WTO World Trade Organisation

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