Pacific Media Centre Pacific Media Watch Pacific Journalism Review Asia Pacific Report

Good and bad aid in the Pacific: A tale of two universities

The University of the South Pacific ... "good" aid model. Image: Devpolicy

Pacific Media Centre, Scott MacWilliam

11 March, 2014

The University of the South Pacific stands at perhaps the most crucial crossroads in its 41-year history. It faces the call for increased provision of higher education for a region in which the participation rate in higher education is about one quarter of what is deemed adequate to be competitive in an increasingly globalised society and at the same time is being asked to improve its quality, relevance and sustainability.

- USP Strategic Plan 2010-2012, Vice Chancellor’s Foreword, p. 2.

Limit expansion of State-funded places at State universities to 3-4 per cent per year for the next decade, just above the rate of population growth, while the quality base is being rebuilt. There can be faster return to growth if high quality standards are being met, and there can be supplementary growth from private universities.

- PNG Universities Report to Prime Ministers Somare and Rudd,  May 2010 – popularly known as the Garnaut - Namaliu Report, Recommendation 1, p.1 .

RESEARCH: Introduction
This essay (1), and the research which preceded it, is driven by a puzzle that is neatly embodied in the two quotations presented above. Why is the University of the South Pacific of such a quality that Vice-Chancellor and President Rajesh Chandra can speak ambitiously of the institution’s importance for raising the proportion of people in the region who attend university from its current comparatively low level?

The University of Papua New Guinea ... "bad" aid model. Image: UPNGConversely, why do a senior Australian academic economist and a former PNG Prime Minister have to prioritise rebuilding quality and limiting enrolment increases to little more than population growth at PNG’s public universities?

In more direct and directly comparative language, why has the USP continued to be an internationally reputable university, while UPNG, the country’s most important university, has reached a state of near collapse? (2) 

The time frame for UPNG’s decay is easily identified. As Andrew Mack explains, from the mid-late 1980s, what early promise the university held as a centre for educating Papua New Guineans to international standards began to disappear.

He rates personal security, funding reductions and "(c)rime (including the theft of government funds by a burgeoning cast of parasitic public servants)" as factors which "fed the disintegration of the University of PNG".(3) 

He correctly identifies the disappearance of a "modern library", and the departure of highly trained staff as key indicators of decay. As will be shown below, this is in many important respects the opposite of what has happened at USP, even though declining comparative wage levels and personal insecurity, particularly in Fiji, continue to threaten education standards and international staff recruitment at the university.

Why have the two quite distinct trajectories emerged? In this brief presentation which concentrates upon the role of international aid in sustaining one university and under-cutting the other, there is no suggestion that the factors Mack and others have identified are unimportant.

However, to my knowledge, there has been no attempt to compare the political-ideological terms of the international interventions which have been so different as major determinants of what now exists at USP and UPNG.

Here it is argued that while international donor support and oversight has been critical for USP’s continued attention to the requirements of global labour markets, the direction has been entirely reversed for the PNG education system as a whole, and thus the minor place allocated to tertiary institutions, particularly UPNG.

Both universities were constructed at the end of the colonial era, one as a regional institution, the other as PNG’s premier tertiary institution. Each was intended to educate and train skilled and managerial labour, as well as produce an intellectual elite in countries where the bulk of the population lived in rural areas, occupying smallholdings. As the original history of UPNG notes:

Official opinion throughout the 1950s maintained that university education in Papua New Guinea was not yet justified because the quality of primary and secondary schooling was inadequately developed and unable to produce people of the necessary educational standard. By the early 1960s this opinion had shifted dramatically to open espousal of higher education as a priority task.(4)

While the Australian government had what has been termed "an intimate connection" with the foundation of UPNG and the University of Technology at Lae, the move to Independence in PNG broke this connection in one important direction.

Direct aid to both ceased when the grant-in-aid of untied and unconditional funding model was constructed in the early 1970s. (As already indicated and further developed below, if this aid model limited direct funding for tertiary education it did not eliminate the provision of advice about the most appropriate direction for PNG education from Australian officials and consultants, as with the Garnaut - Namaliu Report cited above.)

USP, as a regional university with eleven original member South Pacific countries, now twelve, was established in 1968, two years after UPNG.(5)  In 1976, just after UPNG ceased to receive any direct funds from Australia, USP was funded by student fees and member countries and also by the UK, New Zealand and Australia. Since its foundation, USP has continued to receive various substantial amounts of direct international aid, as outlined below.

The rise and fall
While it is relatively easy to construct from publicly available documents what happened at USP over the last three decades, this is not the case with UPNG. Reviews have been carried out by institutions which while espousing the supposed governance virtues of openness and transparency rarely practice what is preached.

The recent Garnaut-Namaliu Report required research assistance from AusAID but the information which purported to underpin the conclusions reached regarding tertiary education in PNG has not been made available publicly. Thus, for example, the Report urges the adoption of a HECS style funding model but provides no information on the success or otherwise of earlier fee collection practices in PNG, nor the consequences of HECS for people and countries that have implemented this practice of shifting debt from governments to private individuals.(6) 

Since its inception, USP has continued to be supported by international donors. In 1979, when there were more than 1700 full and part-time students, the UK and Australian governments provided approximately one half of that year’s income.

By 1987, with New Zealand supplanting the UK as a direct source of income in the 1988 Report to Council, both proximate countries provided a total of nearly FJ$1 million for staffing purposes. Ten years later, the 1997 Report contained a statement from Vice-Chancellor Esekia Solofa on a new building programme made possible by funding from AusAID and the Japanese government.

A large multi-purpose teaching complex funded by AusAID and due for completion in 1998 will house three large lecture theatres with a total seating capacity of 800, tutorial rooms and computer laboratories. The Government of Japan is funding the redevelopment of the lower (Laucala, Suva) campus to produce a world-class facility to support teaching and research in the marine services – new facilities which will more than double teaching and research space.

With student numbers exceeding 5000, overseas aid on top of the funds for special projects exceeded FJ$3 million. By 2000, even as aid from donor countries declined dramatically from the previous year, no less than seven countries had a direct financial stake in how USP operated. France, Canada and Taiwan were donor countries, on top of the earlier Australia, Japan, NZ and UK.

As well, multilateral agencies and private foundations had joined the list of donors. Even in one of USP’s worst years for international financing, aid funds totalled almost FJ$10 million.

Financial and other international support amounts to FJ$56 million in 2014, and is expected to rise to FJ$80 million in 2018. Development assistance from countries and other donors including private foundations comprises just over 30 percent of total USP income for 2014, anticipated to rise to 37 percent by 2018.

In June 2012, the Asian Development Bank and USP signed the first loan agreement for a US$19 million loan to assist the university upgrade its regional campuses and improve access to distance as well as e-learning. The agreement was a first for the ADB and USP, for the former in providing a highly concessional loan to a regional institution and for USP its first development loan from the bank.

By 2013, USP had almost 25,000 students enrolled with campuses of varying capacities in all member countries. Consultancy, research and other funds acquired by staff have made possible the construction of an approximately FJ$3 million "business" building for lectures, seminars and offices.

The Japanese government recently provided a special grant of approximately FJ$40 million for the construction of an IT building, with offices, lecture rooms and computer facilities.

USP’s budget meets the on-going operating costs of approximately FJ$2-3 million for this building and equipment.  The main Laucala campus has wi-fi connectivity for students and staff: On a recent visit, the large staff and student dining area was populated with students using notebooks and other electronic equipment to access international and domestic sites at substantial download speeds.

If USP is a relative success story in producing skilled and managerial personnel for international and domestic markets, then international support and oversight has clearly played a critical role.

The obvious comparator is UPNG, the major public university for a country with a population more than three times that of all the USP member countries, and the second largest in the south-west Pacific.

As an early assessment of the different treatment of the two institutions noted, by the early 1980s the initial Australian commitment to UPNG was fast becoming a distant memory.

While the grant-in-aid budget support process was critical in explaining the rapid change, why Australian aid took this direction generally and with respect to tertiary education in particular is little explored. Most importantly, this was not what Australian aid for tertiary education was doing elsewhere in the region, at USP and in South-East Asian universities.(7) 

While it would take more time than this seminar permits to explain why the grant-in-aid process was established, it is sufficient here that the outcome was driven by an anti-colonial nationalism that dominated Australian development policy toward the colony from World War II on. (8)

This ideological reflex was especially virulent in the ALP government which held power as PNG moved from self-government to Independence. (9) The belief that staffing at UPNG should be almost immediately dominated by nationalist criteria favouring indigenous personnel fitted the international mood as well.

Placing the budget allocation for UPNG at the mercy of domestic politics occurred at an especially critical moment. With the honey pot created by the resource rent tax on exports of copper and gold from the Panguna mine at the mercy of indigenous businessmen - politicians and their allies there was a rapid escalation in the plundering of state funds.

Already by 1977, concerned Papua New Guineans including the "gang of four", of which Namaliu was a member were warning about the rise of corruption. The process had begun by which in 2009 "the inflation-adjusted public funding per student made available to the universities was about one 14th of the level in the early years of Independence".

However to explain the reduction as merely a "downward adjustment in the share of public resources going to the universities (which) was warranted after the crash programmes preceding Independence" as a "correction (which) went too far" is disingenuous.(10)  While the domestic politics by which a class of indigenous capital and their allies plundered state assets did result in major reductions of expenditure on health, education and other public facilities, there is a more substantial explanation why tertiary education lost its importance in PNG.

There is no need here to labour the point of how far UPNG has declined, at the same time as the demand for skilled labour in PNG has risen dramatically. As the Garnaut-Namaliu Report concludes (p.10):

There is a critical shortage of virtually all of the skills that are generated in institutions of higher education. Papua New Guinea is not producing the teachers in quality or quantity for maintaining into the future existing standards of general education, let alone the vast increase that is demanded by the democratic polity and routinely recommended by the international development agencies and internal and external reviews of development.

Not only has the university been unable to update its website after 2007, there is almost no access at acceptable download speeds for internet usage on campus. Buildings are in a state of disrepair and there is nothing comparable to the continuous building programme which exists at USP.

While the university has very substantial assets in the form of land, housing for academic staff and students is minimal, low standard and personal security unsatisfactory.

Although there are dedicated and skilled staff who labour to provide a quality education, these are vastly outnumbered by the semi-skilled and poorly trained staff who do the bulk of the teaching.

This decline, however, is not the consequence of a necessary "downward adjustment" as proposed by the economist and the former politician.

Instead as the paper explains, education policy in PNG remains in the grip of what can only be described as reactionary ruralism.

Unlike at USP where training of labour, the development of the capacity to labour in a global economy holds ideological priority, in PNG the most powerful vision is that of providing skills to make a rural existence possible.

Most importantly, this reactionary view holds sway domestically and in the advice provided by domestic and international institutions, including the World Bank and AusAID since the late 1980s at least.

Even the position espoused by the Garnaut - Namaliu Report, which advocates checking the growth of enrolments, fits within the limited vision. To what level of education the bulk of the population should aim if not at universities and comparable state-backed tertiary institutions remains the unasked question that underpins the report even as it hints at the underlying problem when noting (p.12) that:

Together the Papua New Guinea universities provide for a number of students that is small by any international standards relative to the national population and to the demand for professional and technical skills. There is a pressing problem of quantity, reinforced by the widespread and powerful demands by parents for more university places.

Reactionary ruralism
Since the late 1960s and early 1970s, one constant description of the existence of the majority of Papua New Guineans is that they live a subsistence life, with over 80 percent attached to smallholdings in the countryside. Politicians and government officials have sought to develop policy which supports this existence.

However, users invariably fail to note the irony that the idea and existence of supposed subsistence is underpinned by the (capitalist) state, including through the use of money issued and controlled by the central bank. Education policy remains in thrall to the description of subsistence, with its very strong anti-urban bias.

However, post-Independence policy is unlike that which drove the colonial administration after WWII. During the earlier period small holdings and village life were secured in order to raise agricultural production and productivity as the necessary precursor for an industrial, urban existence and independent country. As the relevant Australian Minister Paul Hasluck explained, a major purpose of development policy was to secure village life before the uncertainties and vicissitudes of urban existence, proletarian life, took over.(11)

To this end, colonial education policy directed attention at developing skills appropriate to smallholder existence, mainly at primary level schooling. However from the late 1960s as independence approached and the pace of urbanisation picked up, there was growing concern among indigenous politicians, expatriate academics and government advisors about "the ills" of urban life.

Romanticism regarding rural existence played a part in this concern, which fed into advocacy for greater emphasis upon primary rather than tertiary education. Even as UPNG was established and enlarged, the "primary education first and foremost" proponents remained prominent domestically. From the mid-1980s, coincident with the "downward adjustment/balance the budget" ascendancy, the "return to the basics of primary education" direction became dominant.

By the late 1980s, international advice supported this policy direction, as the reduction in state expenditure for all public education continued.(12)

In 1994, the Department of Education produced a National Plan of Action under the slogan `Education for All’ to cover the period from 1994 to 2010. It was developed by a large group of domestic and international officials from the Department of Education, officers of 20 Provincial Education Boards and UNESCO’s Principal Regional Office, Asia Pacific. Funds for the Plan were provided by UNESCO and UNICEF. The plan is introduced by the Minister’s `Forward (sic)’ and neatly frames the principal direction of education planning.  In the Executive Summary, part 4 `Development Programme’ the underlying purpose of education for the most important education ministry is summarised in these terms:

Education will enable students to apply skills and knowledge in their communities and take advantage of traditional work and opportunities for community-based employment. They will not have to move to urban environments in order to find work and will not be inclined to join youth gangs and become criminals because of lack of employment.(13)

Three years later, the PNG Government endorsed the country’s first National Education Plan to cover the decade from 1995 to 2004. Constructed through the Department of Education under the 1995 theme of "Doing More with Less and Doing it Better" the plan does not include university education, the responsibility of another department. However it notes the necessary connection with universities, pointing out that the "(s)upply of secondary teachers by the university sector is out of step with national need."

The plan draws upon National Objective 24 for its legitimacy, which states the need to "develop a schooling system to meet the needs of Papua New Guinea and its people which provides appropriately for the return of children to the community for formal employment and for continuation to further education or training".

To ensure that this direction was not misunderstood, a later section headed "The Developmental Framework" extended the fear of urbanisation in more detail. While noting that the rate of growth of the urban population slowed between 1980 and 1990, nevertheless (p.23):

The growth in urban population is creating some overcrowding, and causing an increase in urban crime, drug abuse, unemployment, housing and sanitary problems. Discontentment amongst the youth, and an upsurge in white collar crimes are major dysfunctions of Papua New Guinea’s urban societies-a scenario likely to continue and threaten future development.

At a lower level of official determination, in 2001 the National Department of Education and AusAID produced a report titled "The State of Education in Papua New Guinea".

Constructed by the Education Reform Facilitating and Monitoring Unit, and with no reference to university education, this unit again cites the NEC Objective 24 cited above with its rural pre-occupations. In none of these plans or reports does the need for a strong and growing university component of the education system appear.

That UPNG was at the same time withering and falling into almost irreparable disrepair clearly had no place in either domestic or international concerns about education in the country. While USP focused on producing more and more graduates for domestic and international markets for skilled and managerial labour, UPNG indeed did less with less.

International aid is invariably assessed in such bland and seemingly uncontroversial terms as good governance, accountability, effectiveness and efficiency. After all, who could be against greater efficiency, especially in the use of taxpayer funds "overseas"?

This paper instead suggests that other criteria of assessment be employed, including good and bad. Good aid is that which advances accumulation of capital: in the case of education, this is aid which produces and reproduces labour power in the capacities and quantities required for a capitalist economy, national and international.

The VC of USP, a university heavily funded, supported and scrutinised by international donors, clearly had this purpose in mind when he spoke of the current and future activities of the institution (see above).

So too did the Garnaut -Namaliu Report which stressed the need to train university graduates to replace the expatriates who have flooded labour markets in PNG, and also to compete for employment internationally.

Bad aid, in the case of education, is that which fails to produce current and future labour requirements for skilled, semi-skilled and managerial personnel. In supporting the down-playing of tertiary education in PNG since at least the 1980s, and advocating much of the same with a very restricted expansion of places, international advice still compounds the effects of domestic politics.

Without providing much in the way of direct financial support international organisations and national governments, including Australia, have little or no leverage over PNG governments even if the preferred direction was distinct from that being followed in the country.

But, as the paper has showed, the direction favoured within PNG of reactionary ruralism is in tune with the international advice. Bad aid supports the domestic politics and helps to ensure that disorder, unemployment and underemployment are as prevalent in rural as in the supposedly undesirable urban areas.  

Scott MacWilliam presented this paper at a seminar in the State, Society and Governance in Melanesia Programmme at the Australian National University on 11 March 2014.

1 This presentation is made in honour of the late Tim Curtin, who for many years researched, wrote and spoke about the misguided priorities which have governed policy toward education, and particularly university education, in Papua New Guinea and elsewhere including Australia. Tim’s analysis of the damage being done was conducted within the framework of neo-classical economics and econometrics. His perceptiveness and courage, which extended to confronting the orthodoxy at the World Bank itself, deserves credit and recognition. For a selection of Tim’s writings on education, finance and tax see his website:

2 For the basis of this description of UPNG, see my earlier two-part essay `Destroying Capacity: A Cautionary Tale from Papua New Guinea’ and `Capacity Destruction Accelerates’.

3 Searching for PekPek: Cassowaries and Conservation in the New Guinea Rainforest (New Florence, PA, USA: Cassowary Conservation and Publishing, LLC, 2014), p. 61.

4 New Guinea Collection, University of Papua New Guinea Library, The University of Papua New Guinea 1966-1986 (Port Moresby: UPNG, c.1986).

5 Consideration is now being given to increase membership by a further three countries, including Papua New Guinea.

6 For a short essay which outlines some consequences of this shift for PNG, see Ben Havenga and  Scott MacWilliam "Public Probity, Private Penury:Micro - Finance in Papua New Guinea". Tim Curtin researched and wrote extensively against HECS funding models, as documented in papers listed on his website.

7 D.A.Low, K.J.C.Back and C.E.T.Terrell Australian Assistance to the Universities of the South Pacific Region Report of a Review conducted for the Australian Development Assistance Bureau (Canberra: AGPS, 1982), pp. 5-6.

8 MacWilliam Securing Village Life: Development in Late Colonial Papua New Guinea (Canberra: ANU E-Press, 2013).

9 Gough Whitlam, The Whitlam Government 1972-1975 (Ringwood, Vic.: Penguin Books, 1985).

10 Garnaut-Namaliu Report, p. 8.

11 Huntley Wright, "A Liberal “Respect for Small Property": Paul Hasluck and the "Landless Proletariat” in the Territory of Papua and New Guinea, 1951-63" Australian Historical Studies, April 2002 vol.33, no.119, pp55-72; MacWilliam Securing Village Life.

12 World Bank,  Costs and Financing of Education in Papua New Guinea. Washington: IBRD, 1987; World Bank; Papua New Guinea: Policies and Prospects for Sustained and Broad-Based Growth, Washington: IBRD, 1988.

13 Port Moresby: Department of Education, 1994, p. xix.

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This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 New Zealand Licence.

About the authors

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Pacific Media Centre

PMC newsdesk

The Pacific Media Centre - TE AMOKURA - at AUT University has a strategic focus on Māori, Pasifika and ethnic diversity media and community development.

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Scott MacWilliam

PMC contributor

Dr Scott MacWilliam is a visiting fellow in the State Society and Governance Program in Melanesia at Australian National University.


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