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How could the government of Papua New Guinea have addressed poverty reduction through decentralization?

 

1. INTRODUCTION

The national government of Papua New Guinea (PNG) has included national poverty reduction strategies in the five year development plans and PNG Vision 2050 (May 2009). Although subsistence prosperity was not seen through the eyes of poverty (Harriss 2007), a 1996 poverty headcount reveal 94 percent of rural population are living in chronic poverty (Gibson & Olivia 2002).

Political and administrative decentralization was established to address poverty reduction. However, this paper argues that after thirty seven years of political independence, PNG shows every sign of economic paralysis, government collapse and social despair (Windybank & Manning 2003). There is misinterpretation of poverty as multidimensional issue within the decentralized system (Norton & Foster 2001). Dominant focus on ineffective economic development strategies ignored social dimensions of poverty in empowering individual capabilities through primary health care, basic education and sustainable livelihood programs (Harriss 2007 and Sen 1999). What was meant to be a bottom up poverty reduction approach collapsed from chronic political instability, corruption and lack of technical expertise (Reilly 2002).

1.1 Contextual background

Rated 149 out of 179 countries on global Human Development Indicators (UNDP 2008), PNG is a low income developing country in the Pacific (Sachs 2005, p. 67). It is ethnically diverse with 852 language and cultural groups. Service delivery is expensive and logistically challenging and communities have difficulty accessing quality health care, education and adequate transport (Ausaid 2010).

1.2 A system of government  

PNG has a parliamentary democracy based on the Westminster system with independent legislature, executive and judiciary. Composed of 109 elected members from 89 open electorates and 22 provincial governors, parliamentary term lasts five years (Reilly 2002). National politics is characterised by a scattered and fragmented party system, high candidacy rates, high turnover of politicians at every election and frequent party switching by members of parliament. Political parties are weak and tend to band together around personalities rather than issues or ideologies, although they do play a limited role in mobilizing voters and campaigning at election time and in formation of governments (May 2009). Although recognised as a successful democracy, poor governance from national to the decentralized provincial and local level governments has been the main determinant to PNG’s deteriorating economic challenges (Ausaid 2010).

1.3 Socioeconomic situation

Pre-independence PNG experienced moderate population growth, relative peace and enjoyed a high degree of subsistence prosperity. The socioeconomic status of indigenous people, which was evident during the colonial period, was not seen as poverty. It was perceived as being ‘primitive’ rather than ‘poor’ (Harriss 2007 and May 2009). Because of the fragmented cultural and ethnic groups, limited policy development experience, economic progress and the adoption of timely policy reforms have been slow and inconsistent (Turner & Kavanamur 2009). PNG government faces challenges to its legitimacy and power over major issues such as control over mining projects. A set of economic reforms have been prioritized that coincided with the 1999 Structural Adjustment Programme (SAP), brought on by cash-flow problems, mounting debt, falling cash reserves, high inflation and interest rates, a falling Kina, negative growth and rising poverty. “The rate of growth of aggregate output has been relatively slow; creation of new job opportunities has fallen short of the increase in the numbers seeking jobs; and the gap between richer and poorer provinces and between urban and rural sectors has widened…" (Goodman, Lepani & Morawetz1985, p. 3). By international standards, PNG is a poor country and further shoddier poverty is getting worse (Cammack 2008).

2. POVERTY AND DEVELOPMENT PLANNING

From 1970s the World Bank (WB) through a national poverty reduction strategy (NPRS) demanded normal fiscal and governance reforms, and set conditions on borrowing. Although the NPRS is rarely mentioned (Cammack 2008), the government established medium term development strategies (MTDS) at five year intervals to recent PNG Vision 2050 published in 2009. Poverty-related development highlighted primary health care, basic education, infrastructure, law and justice and agriculture (May 2009). As it turned out, political instability and lack of capacity to pursue this national development strategy and process meant that fiscal indiscipline remained a serious problem. MTDS policies and priorities were not translated into spending via the budget, and implementation was poorly coordinated at all levels of government (Kavanamur & Turner 2009). Arguably a good measure of expertise, time and money has been materialised on designing development strategies directly extracted from the national constitution. While realities are absent on the ground, rural poor will remain poor (Gibson & Olivia 2002). ‘For there to be poverty reduction, the state must play a role that does not conform to neoliberal prescriptions’ (Keily 2007, p. 434).

2.1 Poverty agenda

While implementation is absent in reality, pro-poverty goals have been a central agenda reflected in the Millennium Develop­ment Goals, through the MTDS and PNG Vision 2050 (MTDS 2004). However, poverty agenda is influenced by how poverty knowledge is extracted (Harriss 2007). Hence in the history of PNG, there have been only two active household surveys performed in 1986 and 1996 on poverty assessment. The 1996 ‘head count’ survey done by Gibson & Olivia (2002) indicate that the rural population of over 85 percent face a lower economic or more negative growth. There is lack of poverty knowledge leading to misrepresentation of poor people’s experiences in poverty reduction policies and strategies from the national government to decentralized sub national levels (Chambers 1995).

2.2 Definition of poverty

While poverty is such a dynamic concept, PNG uses the World Bank definition of US$1 a day to establish poverty related policies and strategies at the national level (World Bank 2007). The debates about this definition are multiple. Escobar (1995) argue that poverty was created so that capitalism can prosper. This means poor people were perceived to need money and wealth. On the same notion, Harriss (2007) claim the World Bank definition of poverty is derived from scientific inquiry which explains the individual deprivation rather than the inequalities in distribution of power, wealth and opportunities. Scientific knowledge is assumed to have answers to social problems. This poverty approach from assets and wealth perspective fail to examine the social and political-economic relationships that activate poverty. While income indicates only one aspect of economic position, some people in society are denied of access to resources that determine economic status, for example the rural population. Therefore, poverty is multidimensional and resembles in material conditions and social and economic positions (Spicker 1999).

2.2.1 Material conditions
Situations of unacceptable hardships determine the general experience of living. Some people have less basic material goods such as food, clothing and shelter compared to others. Lack of such basic needs further lead to circumstances of multiple deprivations from education, employment and income over a period of time (Spicker 1999).

2.2.2 Social position
Poverty is a pattern of social relationships and so people experiencing multiple deprivations are often vulnerable to social risks and excluded from functions of society not only in terms of income but health and education services (Spicker 1999). Individual freedom to enjoy the kind of life that is valued has been deprived due to structural determinants (Sen 1999).

2.2.3 Economic position
Poor persons live under struggle to obtain necessities of life and often receive some form of assistance due to lack of means. Dependency and insecurity position people at a disadvantaged class in comparison with others (Spicker 1999).

Traditionally, anti-poverty policy has only been concerned with bringing the poor above the poverty line. However, if individuals are risk reluctant, a household’s sense of well-being depends on poverty and vulnerability which are related because the poor are more at risk and are less likely to cope with risks (Jha, & Dang 2010 and Sen 1999).

2.3 PNG Vision 2050

The PNG Vision 2050 has targeted ‘lack of access to basic services and infrastructure, as well as access to income and income-earning opportunities which is disproportionally distributed in the rural sector’ as poverty reduction strategy (PNG Vision 2050 2009). Hence poverty is recognized a rural phenomenon created by poor governance (Harriss 2007 and Windybank & Manning 2003). And strengthening of the decentralized local and provincial governments is a critical element of PNG political and administrative structure, and one which has important implications for poverty reduction (May 2009).

2.4 MTDS 2005 – 2010
The medium term development strategy (MTDS) 2005-2010 was established through extensive consultation with provincial and local level governments, private sector, community organisations and ordinary citizens. It primarily prioritized decentralized sub national governments to target poverty reduction through rural development focusing on primary health care, basic education and sustainable livelihood which in turn will promote economic growth (MTDS 2004). This bottom up approach was well stressed by Sir Moi Avei in his key note address that ‘nations are not developed by governments alone. Rather, the role of government is to empower its people to mobilize their own resources, their sweat and labour, for effective development’. Making public policy and implementation more decentralized illustrates potentials for linking macro analysis of poverty to a more localized poverty reduction process (PNG Vision 2050 2009). 

3. DECENTRALIZATION TOWARDS POVERTY REDUCTION

Decentralization included transfer of legal, financial and administrative powers from the national level to provincial and local level governments (Conyers 1986). Apart from other ministries; rural health, basic education, sustainable livelihood and basic infrastructure were decentralized. Literatures indicate that decentralization of services overcome physical and administrative constraints to development; improve resource management and community participation (Harriss 2007 and Kolehmainen-Aitken 1992). And decentralization allows elected lower level institutions to access adequate funding with adequate power and achieve accountability between citizens and partners to promote sustainable livelihood for poor people (Farrington, Carney, Ashley & Turton 1999). Decentralization does not necessarily produce pro-poor outcomes. Rather moving decision making closer to people empowers local communities towards self determination (Chambers 1995).

3.1 Provincial and local level governments
Pre-independence local level governments became complex when provincial governments were decentralized through the Westminster system. The Organic Law on Provincial Governments (OLPG) provided that the heterogeneous ethnic groups would come under district administration directly responsible to the provincial government (Reilly 2002). Although health and education ministries were decentralized the national government retained financial authority. Provincial premiers perceiving to have resource control over their constituents made alliances with national politicians while at the same time presiding over a loose coalition of followers that mirror the national politics itself (Strathern 1993).

3.2 Decentralization and poverty reduction

A development recovery program was announced focusing on good governance towards poverty reduction in 2002. Governance generally defined as promoting public sector reform and ‘political stability’. Export-led growth targeted on improving agriculture, forestry, fisheries, and tourism to complement on-going developments in mining, petroleum, gas and manufacturing (MTDS 2004). The 1996 national average figure of 30 percent below the poverty line was used as a bench mark (Gibson & Olivia 2002). Conversely, poverty is a multi-faceted issue that requires integrated and cross-sectoral response to address its many social, cultural and economic aspects. Wealth oriented poverty reduction approach serves capitalist interests rather than empowerment of the vulnerable to build their capabilities to escape poverty (Escobar 1995, Harriss 2007 and Sen 1999).

3.3 Why has decentralization failed to address poverty reduction?

3.3.1 Political instability
Political power streams from fragmented ethnic strongholds often associated with tribal warfare (Reilly 2002). On the floor of parliament elected members shift from one weak political party to the next in search of personal interest rather than national agendas. Political change associated with establishment and entrenchment of government departments is also implicated in the growing havoc of electoral competition, political instability, corruption, and vertical tensions between national, provincial and local levels of society. The poverty focused programs in rural health, basic education and infrastructure failed to be implemented as outlined in the MTDS (Dinnen 2001).

3.3.2 Lack of technical expertise
Human resources development was limited at the time of decentralization. The provincial premiers and local level governments didn’t have the expertise to understand poverty from a multidimensional perspective. A foreign consultant firm, Makinsey and company was engaged to assist in administrative reorganization (Conyers 1986). However, recommendations lacked local knowledge. Due to poor planning, implementing and resources management skills; health, education and infrastructure services continued to decline in rural communities (Kolehmainen-Aitken 1992).

3.3.3 Corruption
The misuse of public office through misappropriation, nepotism, bribery, extortion and fraud for private gain aggravates conditions of poverty manifested in terms of low income, poor health and education status, vulnerability to shocks and other characteristics. Although corruption by itself does not produce poverty, it has direct consequences on economic and governance factors that in turn produce poverty (Chetwynd, Chetwynd & Spector 2003). The chronic poverty in PNG is seen as a natural breeding ground for systemic corruption due to social and income inequalities. In addition, public trust in government institutions has declined. Trust is an important social capital (Sen 1999). When people perceive that the social system is untrustworthy and inequitable, their incentive to engage in productive economic activity declines (Dreher, Kotsogiannis & McCorriston 2007). PNG now ranks 151 out of 180 countries in Transparency International’s Corruption Perceptions Index 2008. A private audit of provincial governments in 2003 recorded comprehensive fraud and financial mismanagement, but no prosecutions had resulted (Lambsdorff 1999). 

 

3.3.4 Unequal distribution of resources
The OLPG provided that a joint district priority planning meeting be held annually to finalize local development grants. This bottom up system meant that the local priorities were not similar to that of the national government. Because the national government retained financial authority, the decentralized local level government priorities were not funded. Strengthening of the three – tier government has been emphasised in the MTDS. Arguably, due to struggle for power, prestige and resources, the local level governments have been the biggest losers (May 2009). Due to lack of financial and other resources, the decentralized rural health, basic education and infrastructure maintenance as poverty reduction strategy could scarcely be implemented (Cammack 2008).

4. HOW DECENTRALIZATION COULD HAVE ADDRESSED POVERTY REDUCTION

The World Bank overlooks the role of decentralized governments in poverty reduction to argue that decentralization is a flawed system (World Bank 2007). This argument is challenged as bringing decision making power closer to people enables poor people to take ownership and fully participate (Sen 1999). At the same time, difficult natural geography isolates 85 percent of the rural population from mainstream development (Allen, Bourke & Gibson 2005). In developed countries, infrastructural development largely overcomes the difficulties created by natural constraints. In PNG while only 3 percent of the roads are paved, individuals and households are more vulnerable to poverty (Jha & Dang 2010).  Assessing vulnerability is crucial in order to manage the risks that make people vulnerable to poverty. It is argued that poverty is a multidimensional phenomenon that involves vulnerability and deprivation (Sen 1999). The national government acknowledges that poverty is a multi-faceted issue that requires an integrated and cross-sectoral response. Poverty reduction strategies focus on investing in people through primary health; basic education; infrastructure development and promoting broad-based economic growth through sustainable livelihood program (PNG Vision 2050 2009).

4.1 Primary health care
PNG has the highest infant and maternal mortality rates and lowest life expectancy at birth in the Pacific. Population growth is estimated at 2.7 percent a year (WHO 2008). The link between rapid population growth and absolute poverty result in slow per capita income growth, lack of progress in reducing income inequality, and more poverty (Sachs 2005). A poverty characteristic such as lack of education for women can lead to inaccessibility to family planning resulting high fertility rates (Chambers 1995). The government establishes health as a priority poverty indicator. And primary health care which has been decentralized to local level government works from a social model of health to improve quality of life and health outcomes of people in society (Keleher 2001 and MTDS 2004). Essential primary health care services include maternal and child health care, community and immunization (WHO 1986). Lack of technical expertise within the decentralized system failed to secure funding for essential primary health care (Kolehmainen-Aitken 1992).

4.2 Basic education

Only up to 58 percent of the population is literate while illiteracy amongst the rural majority is high (ADB 2009). Not only basic primary education but adult literacy, vocational and life skills and community based learning systems are relevant mechanisms for breaking the cycle of intergenerational poverty (MTDS 2004). Adult literacy provides pathway to learning basic numeracy and problem solving skills which can build a person’s capability to take advantage of income-earning opportunities in rural areas. As Sen (1999) argues enhancing individual capability expands a person’s ability to be productive and earn a higher income.

 4.3 Sustainable livelihood program
Sustainable livelihood program as basic human right should be the most effective program with the decentralized system. It strengthens the vulnerable such as women, children and minorities. Promotion of community participation empowers people to take ownership over activities (Norton & Foster 2001). Poverty focused activity should be people centred, emphasises on what matters to people, understands differences and works in a way that is harmonizing with their current livelihood strategies, social environment and ability to adopt (Farrington, Carney, Ashley & Turton 1999). People themselves are key actors identifying and addressing their livelihood priorities. Equally partnership at all levels of governance and private entities must recognise the dynamic nature of livelihood strategies, respond flexibly to changes in people’s situation, and develop longer-term commitments (Chambers 1995).

4.4 Infrastructure   

The relationship between infrastructure and poverty is crucial. This is because majority of the population live in rural areas and are faced with main infrastructure problems. PNG has been slow to develop in terms of infrastructure due to mountainous and rugged terrain the country suffers from a fragmented transportation system. Recent country wide poor district visits reported deteriorating of basic services and infrastructure. Formal systems of public resources distribution and public service have collapsed (Turner & Kavanamur 2009).

5. CONCLUSION

This essay has argued that a Westminster decentralized system of government in PNG has misinterpreted poverty into development policy and planning. Decentralization of local and provincial governments was geographically relevant as a bottom up approach in the interest of 94 percent of rural population who live in poverty; isolated from basic infrastructure, health and education services (Gibson Olivia and 2002). However, while aligning policy directions with the World Bank poverty definition of US$1 day, the national government focused on unsuccessful strategies in wealth creation and economic growth. Decentralized, social dimensions of poverty reduction priorities in primary health care, basic education and sustainable livelihood programs never got funded leading to collapse of the system (Harriss 2007).  As a result rural people remain poor and getting poorer (Gibson & Olivia 2002). 

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