Australia is a founding member of the Asian Development Bank and, since 1966, has directly contributed US$8.5 billion in capital subscriptions, as well as US$2.86 billion to special funds. Our annual subscription this year is around US$430 million—more than that of the People’s Republic of China.

Since the ADB’s establishment, Australian companies and consultants have won just US$1.75 billion in procurement contracts on ADB-funded projects. So, by any measure, we have been more than generous contributors.

No one doubts the value of ADB grants and loans in our region. In particular, it has long been a major contributor to our closest neighbour, Papua New Guinea.

The total value of ADB projects in PNG is just over US$3 billion. Of that, US$1.82 billion has gone into the transport sector—roads, airports and ports.

What is now of real concern is that increasingly ADB-funded projects in PNG have been awarded to a small group of PRC construction companies. This is an issue that demands urgent and serious examination by the Australian government,

By my estimate, more than three-quarters of recent contracts have gone to PRC companies, most notably the state-owned conglomerate China Railway Construction and Engineering Group. As far back as 2012, China Railway won the lucrative contract for the Lae Port redevelopment—funded by the ADB—in a process which former PNG urban development minister Ken Fairweather tells me was hardly competitive.

The stranglehold that PRC companies have over the construction sector in PNG has been tightening for some years, and began well before PNG signed up to the Belt and Road Initiative in 2018. Today, it is so dominant that Australian, New Zealand and even PNG construction companies no longer bother tendering for most PNG government contracts, including those funded by the ADB.

PRC companies are currently implementing an ADB-funded program that involves upgrading no less than eight provincial airports right across PNG. Australian and PNG companies have not had a look-in.

It’s the same story in road construction and rehabilitation. More than US$1 billion worth of ADB contracts have gone to PRC companies in and around Port Moresby, Lae and Mount Hagen. To that can be added hundreds of millions of dollars for smaller projects elsewhere in PNG.

I am advised that four or five PRC construction companies have recently been lobbying PNG ministers and officials for other road projects valued at close to US$4 billion. It remains to be seen whether these projects are funded by China Exim Bank loans or ADB loans.

Australia is not entitled to seek a privileged position for our construction companies in relation to ADB-funded projects in PNG, or anywhere else. But we are entitled to insist on a transparent process not just in the ‘invitation’ phase, but in the actual awarding of contracts, which in PNG is principally done by the National Executive Council based on ‘recommendations’ from the bureaucracy.

This issue can no longer be put in the ‘too hard’ basket by the Australian government.

And there’s an even greater sense of urgency now that the PNG government is planning a massive national roadworks program over the next decade or more which is worth around K20 billion (A$8 billion).

Just how such a program can be funded at a time when PNG’s debt-to-GDP ratio is around 50%, and headed for an eye-watering 60%-plus in the near future, remains to be seen.

But the very fact that it is now national government policy makes it even more urgent for Australia, along with New Zealand, to act.

The federal government needs to urgently call a ‘virtual summit’ with Australian construction companies, engineers, architects and planners to get an up-to-date assessment on the full extent of PRC companies’ dominance in the government construction sector, including ADB-funded projects. It will be shocked by what it will hear.

It also needs to engage with the New Zealand construction sector and, most importantly, with PNG’s construction industry, which is suffering just as much from the growing dominance of Chinese companies on ADB tenders and on projects funded by the PNG national and provincial governments.

Australia needs to then engage with the ADB and with the highest levels of the PNG government and insist on a level playing field on every tender process, especially for road, airport and port projects.

It also needs to consider offering incentives to Australian and PNG companies to engage robustly in the tender process, and in the training of PNG apprentices, including in the TAFE system in Australia. If need be, concessional loans should be made available to both Australian and PNG companies to get right in the game and compete with the PRC construction companies that are well entrenched in PNG.

Yes, the recently established Australian Infrastructure Financing Facility for the Pacific will help Australian and PNG companies in gaining concessional finance, which will enable them to compete against Chinese companies. But what the Australian facility plans to offer is small beer when compared with what the ADB is funding, and what the China Exim Bank is funding.

The most recent indication from the managers of the Infrastructure Financing Facility was that it hoped to gain approval for around A$300 million in loans and grants by 30 June. That is nowhere near enough.

The time has come for the Australian government to ask the ADB serious questions, and develop a constituency that will help wrest a reasonable share of infrastructure work in our closest neighbour from the clutches of well-resourced, aggressive and well-connected PRC companies that currently have free rein right across the important infrastructure sector in PNG.

If it does not happen soon—very soon—it will simply be too late.

It takes 15 minutes in a tinny to cross from Australia to Papua New Guinea. Boigu Island in the Torres Strait is less than six kilometres from PNG—‘within a bow shot’, a colonial administrator once quipped. More conventionally, it’s a 90-minute flight from Cairns to Port Moresby.

Yet according to the Department of Foreign Affairs and Trade, only around 10,000 Australians are in PNG at any one time, including those working in the government and private sectors and more than 5,000 who walk the Kokoda Track each year.

It’s disappointing that more Australians don’t take an active interest in their nearest neighbour, especially noting our shared history, PNG’s vibrant and diverse culture and its physical beauty—for example, the country is home to the world’s third-largest rainforest.

PNG often gets bad press with news highlighting violence, corruption and hardship, and there may be a sense that its challenges are too overwhelming to address. While Australia is third on the 2018 UN Development Programme composite human development index, behind only Norway and Switzerland, PNG is at 153 with Rwanda, Afghanistan and Solomon Islands.

Australians can expect to live nearly 20 years longer than Papua New Guineans. Women in PNG are at least 37 times more likely to die giving birth than women in Australia. Less than half of Papua New Guineans have access to safe water and only around 13% have electricity. Distressingly, polio, eradicated in much of the world, has reappeared in PNG, a result of the very low immunisation rate.

PNG is growing quickly. The population, 2.5 million at independence and 8.5 million now, is set to double by 2050. A youth bulge means almost 60% of the population are under 25. Access to health, education and other services isn’t keeping pace with growth.

I’m very aware of these challenges because my job is to help PNG’s largest company, Oil Search, help the country address them. As executive director of the Oil Search Foundation, I lead a team implementing over $35 million worth of programs targeting health, education and women’s empowerment each year. Our programs promote shared value by bringing together what’s good for business while addressing community needs.

From 2000 to 2011, I worked for the Australian government, including heading the PNG–Australia Development Cooperation Program with an annual budget of over $500 million. I’ve grappled with two main questions—how to get Australians interested in PNG and how to deliver positive development.

There’s always been recognition at the political level of PNG’s importance. Prime Minister Billy Hughes told the 1920 Paris Peace Conference, ‘Strategically the northern islands encompass Australia like fortresses. They are as necessary to Australia as water to a city.’ During World War II, Australians fought desperately to stop Japan from occupying PNG, which would have provided a launching pad into northern Australia.

There’s also been recognition that PNG’s borders are porous to crime, people, pollution and disease—and of its economic importance. Two-way trade was $6 billion in 2017. Around 5,000 Australians do business in PNG, and Australian companies currently invest over $18 billion there.

It’s not surprising that Australia has been PNG’s most significant donor, both in the volume and breadth of aid. It also raises the question of whether our aid programs are delivering the outcomes they were designed to achieve.

Australian documents describing PNG’s development challenges suggest not. The 2015 aid investment plan commented that:

PNG’s strong overall growth has not translated into equitable development for Papua New Guineans. PNG’s poor law and order, lack of infrastructure, complex governance arrangements, weak public service, inequality between men and women, poor health and education services, and rapidly growing population are challenges to its future prosperity … Over three million people—or 40 per cent of the population—remain poor or face hardship.

I wrote almost identical words when drafting aid documents in 2000 and these sentiments have been captured in a similar form in all official aid documents since.

Nor has the focus of aid changed much since the 1990s. Australia is still funding programs to improve governance, support and strengthen NGOs, empower women, improve infrastructure, build the capacity of police and justice services, foster people-to-people links, and support the delivery of health and education services.

What has changed somewhat is the way aid is delivered in line with international trends, or the priorities of the Australian government at the time, such as the appetite to either work within PNG government systems or directly fund services. Since the late 1990s, as budget support was phased out, there’s remained a steady reliance on expatriate managing contractors and advisers to support aid delivery or institution-strengthening programs.

But Australian aid has made a difference. It’s saved lives by keeping healthcare facilities open with trained workers and medical supplies. More women have survived childbirth and many children have avoided deadly diseases because they’ve been immunised. Aid has improved access to family planning, maintained essential infrastructure, kept roads to markets open, supplied classrooms, supported domestic violence survivors, and trained teachers and public servants. When I was head of the aid program and we were still funding direct service delivery, Australia provided much of PNG’s medicine. Our aid was saving lives simply by keeping stocks up.

It’s also true that many of PNG’s most successful business, civil society and government leaders have been recipients of Australian scholarships. Australian aid provides technical advice on public expenditure and budget management, public sector reform, and decentralisation. It has helped to foster a positive bilateral relationship essential to our national interests.

The problem remains that Australia has been delivering aid in PNG for decades and it still languishes at the bottom of the UNDP index.

Part of the reason that aid hasn’t been more effective is the weak institutional environment in PNG and the fact that Australian aid makes up only 8% of PNG’s budget. For development outcomes, it matters what PNG does with the other 92%.

In my long experience dealing with all of these realities, I’ve learned that some aid works and some does not. It’s important to understand these differences if aid is to more effectively help PNG change its development trajectory.

A good starting point is the key principle of the 2005 Paris Declaration on Aid Effectiveness: aid works when we work together to achieve results.

PNG needs to own the agenda and support a conducive environment for aid. This means its government needs to take the lead to set policies, improve institutions and tackle corruption. This takes decades of commitment and often generational change.

Partners must continue to explore how to work within governance constraints while maintaining integrity. PNG is increasingly accepting that some government responsibilities can be delegated to the private sector. Corporate leaders are now chairing boards of provincial health authorities (PHAs) and overseeing expenditure and performance, resulting in healthier communities. In Hela province, where Oil Search managing director Peter Botten is PHA chair, all expenditure is tightly controlled and all partners—government, private sector, donors and members of parliament—are starting to put their funds through PHA systems. This is improving results, including 100% of immunisation targets being met. We’re taking a similar approach in Southern Highlands where I was recently appointed board chair, and it’s happening elsewhere.

In this decentralised system of government, what happens at the subnational level can make a huge difference. Indeed, one of the most promising developments in recent years is the number of provinces and districts taking leadership and performing better despite constraints at the national level. It’s easy to find committed, honest, hardworking people who want to make a difference for their communities.

Donors must align with PNG government systems, standards and legislative frameworks. I saw in Hela province the consequences of a failure to do so. In 2015, the Oil Search Foundation was asked to help ensure the provincial hospital didno’t collapse following the exit of a partner who had been working outside the health system, hiring their own staff, buying their own drugs and delivering separate medical services. The capacity of the hospital was so weak after years of neglect that without external support more than 300,000 people would have been without its services.

Alignment doesn’t mean everything must go through government. Where appropriate, the government can and should outsource aspects of service delivery or delegate governance functions, including to the private sector. Nor does alignment mean donors must put their funding through PNG government systems. Rather, we should work together to coordinate and report all funding under the government’s budget framework, reporting frameworks and other systems.

Traditional donors—bilateral, multilateral and international NGOs—must work better together and more constructively with non-traditional partners like the private sector. Until now, coordination and cooperation have been very poor. Similarly, the current practice of contracting out management of the aid program can, if care isn’t taken, stifle innovation and the willingness of other partners to commit their own funds and other resources to achieving shared goals.

There’s still a long way to go to leverage the full potential of PNG’s private sector to achieve development objectives. Business brings substantial capital, and capital investment (much more than aid) provides jobs and training, can influence society by empowering women or addressing major health concerns such as tuberculosis and HIV that threaten the workforce, and can promote changes in the behaviour of tens of thousands of staff captured under a company’s value system. The private sector can work with agility and speed and often is able to deliver results more quickly than government or donors. Increasingly, companies are recognising that business is most likely to thrive if it can improve a society as a whole while generating a fair return.

There are real opportunities for innovative approaches to public–private partnerships that could transform sectors like agriculture that can employ many people while addressing social issues such as conflict prevention, empowering women, addressing the youth bulge and preventing disease. There’s an incredible opportunity to work together to build the next generation of PNG leaders—a long-term solution to the governance challenge—as well as many other possibilities to achieve sustainable development.

The importance of the private sector is well recognised by the Australian government as articulated in the 2015 ministerial statement on engaging the private sector in aid and development. But statements such as these require better implementation, at least in PNG.

It has been difficult, partly because Australian contractors haven’t been able to operate in a high-risk security environment, to find ways to rebuild after the devastating earthquake that struck the PNG Highlands on 26 February. This is despite the fact that many schools and healthcare facilities have been closed since, which is not only a social disaster but is fuelling conflict. There’s been no real effort to engage companies working in earthquake-affected areas that have strong interests in rehabilitation. A stable operating environment is as important to many of these businesses as national security interests are to Australia. They have their own funding to offer, and fewer security constraints.

A more positive partnership approach is improving health services in Hela and Southern Highlands, two remote provinces challenged by ongoing conflict and service delivery and heavily impacted by the recent quake. Partners have defined the results they’ll work together to achieve, using the performance indicators in PNG’s medium-term development strategy. Funding and other support is secured from more than 10 different organisations, including the PNG government, Oil Search and the Australian government. Results like increased levels of immunisation, a reduction in diarrhoea, and delivery of water and electricity to all health centres are closely monitored to show progress. Over time, this will reduce child and maternal mortality.

This approach is proving successful because of the range of partners involved, the ownership by government and the delegated governance model outlined above. The Oil Search Foundation has played the role of coordinator and is supporting good governance. The model has adequate resourcing and a true commitment to working in a manner that meets individual and collective interests. There are no highly paid international advisers co-located to ‘build capacity’ and ‘strengthen institutions’. Instead, partners work side by side with government to get the job done, and succeed in incremental but durable capacity-building along the way.

This approach and other multi-partner innovations should be expanded to other areas where there’s a collective interest in finding a solution.

Together, all parties must identify the impact they want to have and understand their individual and collective interest in success.

We should not accept a continued lack of progress as the norm. Instead, we should all agree that it’s possible to create a partnership that delivers large-scale change and remain committed and vigilant in ensuring this happens.

Australia can base its engagement with the South Pacific on strategic, economic, environmental and resource issues, but we’d be much better off building our relationships on something that is both deeper and more appealing: we like the people of the South Pacific and we think that their success and the success of their nations is good for us.

This basis for Australian engagement—which informs strategic, economic, cultural and environmental agendas—is a much more inspiring one than simple mercantile advantage or viewing South Pacific nations as pawns in a game of great-power competition.

Next month’s Pacific Islands Forum meeting will focus on security, centred on discussion of the ‘Biketawa Plus’ declaration. That’s good, though we might start with some broader agenda items that put security into context as just one part of our relationships.

So, what might a more aspirational approach look like? A complete agenda would take longer than an article of this length, so I’ll just give a bit of a tasting menu to show what might be possible.

Let’s start with something that’s very big in all our nations and excites great swathes of our peoples—sport. As we’ve seen with North Korea and the Asian Winter Games, or even during the Soccer World Cup, sport can connect people. The region is filled with fans and future players of rugby union, and Australian teams have many South Pacific players. Papua New Guinea lives and breathes rugby league.

Why couldn’t the Australian government build on those connections and push for South Pacific nations’ participation in the Super Rugby competition, the National Rugby League and National Netball League? Although some start-up funding might be required to get through the rough early years, those investments will create opportunities for people-to-people links, tourism and business relationships. The idea fits with ASPI’s Our near abroad and Australia’s sports diplomacy strategy.

We could also think creatively about using the new infrastructure that’s being built in the South Pacific (not just how to build more of it). Why not work with the Vanuatu government, for example, to maximise the economic benefits from the new wharf on Luganville? It could be a mix of government and private-sector arrangements, involving, say, the cruise industry and our navy and maritime elements. We could work with our other partners so that big new projects—like airfields, roads and ports—don’t become stranded assets or dubious debt-trap endeavours.

Stepping beyond infrastructure, let’s boost the ADF’s presence in the South Pacific, but in a different way. Basing two of the RAN’s 12 new offshore patrol vessels in the South Pacific, where they can work more closely and continually with multiple partner nations, is an obvious initiative. The Australian Army can play a useful role too—working with partner nations’ disciplined forces on local engineering projects and on building surveillance and reconnaissance skills are two examples. A more creative Australian version of the US compacts of free association with the Micronesian states would be a platform for more here.

We might also move quickly and creatively on issues that have been the subject of much debate, consideration and international organisations’ slow-grinding processes and just do some things that we know the people and governments of the South Pacific need and want.

One big, very useful example is to provide safe and cheap power to villages and towns across the South Pacific. The simple economic and logistics benefits from small-scale renewable power systems is compelling in the South Pacific. Alternatives that rely on diesel-powered generators are expensive and require more maintenance than modern renewable systems. Australian companies are ready to do this work—the obstacles are mainly to do with financing cash-flow risks and meeting the accreditation requirements of arcane international institutional rules. If the government can make $3.8 billion in funding available for defence exporters through the Export Finance and Insurance Corporation, surely it can do more to help underwrite any risk for Australian companies doing business in the South Pacific.

Another is getting well-planned resource projects up and running, which will provide revenue to governments, jobs, and benefits to local landowners. Some are ready to go, but need a push by our respective governments to get the final greenlight—Solomons Islands has at least one example.

If we really want to show that we want our South Pacific partners to thrive, we must work with them to mitigate the effects of climate change on their territories, natural resources and societies. Again, some initiatives are already underway. However, we might have to think a little bigger and be willing to consider new approaches.

If small island states like Kiribati and Tuvalu are at risk of going underwater from the effects of climate change, then they need a future. It’s not crazy to wonder where those sand-pumping barges are that have created all those ‘non-military’ artificial structures in the South China Sea. Imagine the impact of one or two of them appearing in the South Pacific, to geo-engineer a future for these states (and a few facilities on the side) as an alternative to evacuation. I recognise the large environmental and engineering issues involved, but given what we’ve seen in the South China Sea, let’s imagine a near-term future where Australia is a partner in well-planned, sustainable geo-engineering solutions that give our Pacific partners certainty about one important thing: they will have a home.

Fisheries resources everywhere are threatened by the massive build-up of plastics in the world’s oceans. So far, the problem has generated some research, and some quixotic efforts by private organisations (like the Ocean Cleanup), but no country has taken a leadership role. If Australia did so, by making a headline investment in early plastic-removal systems and in applied science and research to make rapid advances in new removal techniques, we would gain a massive ‘soft power’ advantage not just in the South Pacific, but internationally. The CSIRO, other research institutions and our offshore engineering community would be able to make strong contributions.

Actually taking leadership would require more than tens of millions of dollars, but if the government can provide $443.3 million to a private foundation for the Great Barrier Reef, then $1 billion could be made available for this kind of international initiative. Controlling plastic waste in the islands themselves would be another active and welcomed step.

So, a combination of simple things that we can do now, symbolic things that deepen the people-to-people partnerships, and some big ‘crazy’ ideas whose time is coming. An agenda that inspires and excites seems much better than one that is couched in the language of risk and competition.