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The neighbourly way: Financial aid to Pacific Island nations works best when people, not governments, make the decisions

Friday, 24 November 2017

Australia will dispense around $1 billion worth of aid to its Pacific neighbours this year. If the purpose is to help our neighbours develop into resilient, independent nations, are we really getting value for money?

Most research suggests not. One study by Ghanaian academic Adams Bodomo suggests as little of 10 per cent some of it benefits those most in need.

By contrast, remittances - the money Pacific Islander emigrants send back to family and friends - is a highly effective way of providing assistance.

Once again it turns out that individuals know better than governments how money is best spent.

In a report released in March the Menzies Research Centre argued that by encouraging Pacific Islanders to work in Australia we would not only be filling gaps in our workforce but helping reduce our neighbours’ dependency on aid.


We said the nations of the Pacific region present an enormous untapped resource of workers. Australia has forged close economic and cultural ties with many Pacific nations, some of which are fellow members of the Commonwealth, but we have been slow to realise the potential labour migration compared with New Zealand.

The relatively new Seasonal Worker Programme, sourcing labour from participating Pacific Island nations to meet skills shortages in agriculture, tourism and hospitality, was promising.

Pacific Island workers have integrated well into the local communities and made a substantial economic contribution in regional areas as both workers and consumers.

“The time is now ripe for Australia to reconsider how it engages with the Pacific workforce,” we wrote.

We’re delighted to say that the government is doing just that. The 2017 Foreign Policy White Paper released on Thursday endorses the establishment of a new Pacific Labour Scheme to allow workers from the region to take up non-seasonal low and semi-skilled work in rural and regional Australia in growth sectors such as healthcare, social assistance and hospitality.

It says the government is working with financial institutions to reduce the cost of remittances to the Pacific since we share an interest in maximising gains.

It is part of the initiative led by Foreign Minister Julie Bishop to remove the silos between diplomacy, trade, aid and security in structuring our foreign policy and is, if we may say so, sound common sense that would have received a tick of approval from our namesake Bob Menzies.

“We will never be able to say that we live in the golden age of civilisation until we have not only made up our minds that we will help our neighbour, but have gone to some pains to discover, in truth, what it is that our neighbour needs,” Menzies said in 1960. - Nick Cater

You can read Oceans of Opportunity: How labour mobility can help Australia and its neighbours here.

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