An Assessment Of China's Foreign Aid In Papua New Guinea

This research examines the assessment and effectiveness of Chinese government's foreign aid program in Papua New Guinea(PNG).The research would lead to answering the following two distinct research questions:First,does China's foreign aid really work in Papua New Guinea?Second,examines the measures or approaches of aid taken to continue its success or to improve its effectiveness in Papua New Guinea.The arguments discussed are aimed to identify the Chinese government's relationship in the delivery and implementation of the Chinese foreign aid programs and projects,and examines the real impact of changes in terms of its effectiveness in the PNG government's development priorities including creating the enabling environments for service delivery in the private sectors.China has a long term interest in the PNG and the Pacific region,making it possible for boosted investment in PNG with assistance that accelerates economic growth and expansion.PNG become the primary benefactor of soft loans distributed by China to the PIC nations.The general assumption that China places greater interests in resource rich countries remains a favorite argument among traditional aid donors towards recipient countries and emerging market investors.Especially in the Pacific region it is not only China's national interests that is causing rivalry in the aid generosity discussions,however this would be also true for developed countries such as Australia,New Zealand and United States in mostly protecting their strategic security interests,and consequentially it has been maintained that aid from this ODA donors have failed PNG and the PICs(Hughes 2003;Henderson and Reilly 2003;Mearsheimer 2004 and 2006;Windy 2005;Smith 2014;Zhang and Smith 2015).In this regard with these threat perceptions against China,PNG continues to maintain its relationship with China as the key strategic development partner and on relies on foreign aid arrangements.China's foreign aid in PNG is mainly target specific and goal oriented given that the real objectives of the modalities of foreign aid are tailored towards driving the foundations of tangible major developments in key segments of physical infrastructure improvement programs.In this infrastructure development,the government of China is actively engaged in real sustainable programs for the Pacific Island countries showing significant flows of goods and service circulating within each economy.Consequentially this makes China achieve its objectives and aims of common prosperity for all by successfully and efficiently delivering its foreign aid program.It is an undisputed fact that China is building roads and bridges within PNG and other Pacific Island countries to unleash the gains and maximize each countries benefit's in trade,market access,improved living standards,improved access to quality and affordable health and educations services.As it is consistent with international aid and Pacific scholar's literatures there is a general argument that the PICs with small populations tend to receive more foreign aid funding per capita then large countries such as PNG with highly concentrated poverty even though aid is given mainly for geopolitical and strategic reasons(Alesina and Dollar 2000,Windybank 2005).Compared to other PICs by per capita and GNI,there are continuous programs by ODA for poverty reduction.The ODA efforts from traditional aid donors do not solve the real issues of poverty alleviation,including the overall past MDGs and the current SDGs for PNG.Contrary,poverty still remains highly evident in most PICs.Poverty is concentrated in Papua New Guinea given that the ODA to it increased by 19%.PNG continues to lack behind in this area of progress due to the facts that majority of the aid allocated from ODA countries Australia,US,New Zealand,Japan among others,in most cases entails that the composition of their aid budget is almost entirely soaked up by the yearly exorbitant costs on consultants salaries,daily living allowances,extravagant accommodation,medical and insurance,transportation,and security expenses.Whilst this is mostly argued as a morally and ethically justified approaches to delivering ODA from traditional aid donors and can be seen as a job creation opportunity for ODA countries in PNG,there is literally little contribution towards real economic growth and development.These approaches over the past decades has been practiced without placing significant attention to addressing and achieving the intended purpose of providing huge amounts of ODA annually in alleviating poverty and improving living standards.A clear evidence of this would be the Australia government's current arrangements of the Papua New Guinea Governance Facility as the remodeled version replacing the infamous AusAid program which ran for four decades in PNG.Given these arguments,the PNG economy experienced a steady growth from 2006 to 2016,which was almost similar to other resource rich countries around the world with an average GDP of 5.7%annually(World Bank Group,2017:1).Through steady growth of GDP,PNG still remains a low middle income country with clear indications of highly concentrated poverty in both the urban and rural parts of the country.On the other hand,during this period from 2006-2016 the total ODA provided was USD3.78bn(AidData)which is relatively small compared to other countries in the Africa and Asia.To validate why PNG's economic progress does not equate to the desired outcomes of its national development priorities is due the arguments that from these periods the DAC-ODA directed development assistance to regional initiatives managed by regional organizations culminating the third largest component of ODA to the Pacific region(Dornan and Pryke 2017).This were mainly for policy research and providing policy advise to PICs governments without real tangible value towards addressing challenges of poverty and developing PNG's and other PICs economies.A striking comparison is reflected where aid is meant to increase the GDP and the GNI of recipient PICs however variations exists with PNG gaining less despite of the DAC figures claiming that PNG is the single largest ODA recipient country from Australia's aid in the Pacific region according to OECD.This research discusses the outlook of China's foreign aid without focusing entirely on the aspects of trade-offs in exchange of developing countries' non-renewable resources such as forestry,minerals and petroleum resources,or such as the cases of stereo-typical assumptions and analysis on the notion that China is mostly concerned with imperialistic and expansionist policies.In addition,this is clearly reflected in this research's arguments that the ODA per capita is relatively low for PNG showing significant decreases from 2000-2002 continuing through with the same trend from 2006-2016.Whilst arguing favorably for China's foreign aid in reshaping the aid and development space by highlighting the effects of positive growth trends in PNG.