Lessons to learn

This item was first published in the Vanuatu Daily Post on May 12th, 2017.

In the days leading up to the arrival of Cyclone Donna in Vanuatu, I tweeted that anyone who was expecting to assist the government of Vanuatu with a response effort should do some pre-reading.

The recommended reading was a report that was released in February 2017 by the Office of Development Effectiveness (ODE). It is called ‘Humanitarian Assistance in the Pacific: An Evaluation of the Effectiveness of Australia’s Response to Cyclone Pam’.

By its nature, this report is quite limited because it looks only at the humanitarian response by Australia. However, it covers all the aspects of this response: the work done by and through the Australian High Commission, military contributions and responses by NGOs.

I was one of the people consulted by the authors of this report when they visited Vanuatu during 2016. Overall, I feel the report does a good job of identifying how disaster response can and should be improved in the future. Although the focus of the report is response by Australia, many of the points that are identified can and should inform future responses by other partners.

The ODE is an independent unit within of the Department of Foreign Affairs and Trade (DFAT), the agency who is responsible for delivery of Australian’s aid programme. The ODE has a reputation for providing robust assessments, including identification of areas where things have gone wrong or not gone as well as they could have done.

The report is available online and the executive summary contains five recommendations for future activities in this area. Notably, in its ‘management response’ DFAT expresses agreement with all of the recommendations.

Some of the suggested improvements intended to progress the recommendations are ones that I have advocated previously. I have certainly observed steps that have been taken to put some of them into practice. But there is more to be done on all sides of the equation.

Recommendation 1 reads:

DFAT SHOULD CONTINUE TO PROGRESS WORK TO SUPPORT NATIONALLY-LED RESPONSES AND LOCALISATION BY

• defining what is meant by localisation and unifying implementing partners around a common understanding of localisation

• identifying in advance of a crisis local, national and regional partners, including private sector and civil society actors, that could contribute effectively to a humanitarian response, as well as mechanisms that could be used to support them in the event of a crisis

• exploring possible options for Pacific crisis response teams.

The first aspect of this recommendation neatly summarises an ongoing issue in this area. It is how to achieve effective coordination within and between sectors. Whether DFAT is able to do the required ‘unifying’ or is the best agency to even attempt such a thing is open to question.

Moving on to the second aspect of this recommendation, this is something that needs to be at the heart of improved disaster responses in Vanuatu and elsewhere in our region. The support mechanisms should include facilitating the participation of appropriate actors, including those from within the private sector, in response activities. This will provide access to a wider range of local knowledge than might otherwise be the case.

Since the passage of Cyclone Pam, DFAT has established a pilot project with the Australian Red Cross. This initiative is working to develop systems and to facilitate more and better contribution by the local private sector to humanitarian responses. I look forward to learning more about how this pilot develops and how the knowledge learned can be shared with other Pacific island countries.

The third aspect of this recommendation echoes some of what was contained in a submission I co-authored with Anna Powles and Jose Sousa-Santos.

The submission was made last year through the public policy process under the Framework for Pacific Regionalism.

Our submission recommended the establishment of a Pacific Disaster Response and Coordination Unit (PDRCU). One of the anticipated functions of this unit was to maintain a database of professionals and organisations that are located within the region whose skills and expertise can be mobilised on an intra-regional basis. This would include contributors from numerous sectors including public servants, the private sector and civil society (including traditional leaders and the churches).

A mechanism of this type would form the basis of Pacific response teams as referenced in the ODE report. This, in turn, allows for the ‘lessons learned’ about preparing for and responding to disasters to remain in our region and contribute to increased local skills and expertise.

As acknowledged in the ODE report, responding to natural disasters is the responsibility of national governments. National leadership needs to be recognised and accepted by all partners. It must be exercised appropriately and responsibly. There are many lessons to learn.

 

Vanuatu after Cyclone Pam: how will reconstruction be financed?

 

This item was first published by Matthew Dornan & Tess Newton Cain on Devpolicy on May 7th, 2015.

Vanuatu is currently faced with the daunting task of reconstruction in the wake of one of the strongest cyclones to ever hit the country. An earlier post noted that reconstruction will be expensive, and argued that the most important question for the Vanuatu Government in the coming years will be how to finance that reconstruction. That challenge will be the focus of this blog post.

Estimates of the damage caused by Cyclone Pam are still being undertaken. In the meantime, we can look at other disasters in the region for guidance. In the case of Cyclone Evan in 2012, the damage in Samoa was estimated at 30 percent of GDP. This is likely to be an underestimate in the case of Cyclone Pam, which impacted most provinces in Vanuatu. Nevertheless, if we use 30 percent of GDP as a guide, a similar impact in Vanuatu would equate to damage of $248 million USD, or 26,601.7 million vatu (an amount equivalent to 140 percent of annual government revenue).

Much of this damage bill will of course be absorbed by households and businesses – only some of which are likely to have had insurance cover. But the Vanuatu government will also fund considerable reconstruction, given the damage to public infrastructure such as schools, health clinics, and government administration buildings. It is also assisting households affected by the disaster. The government has already funded much of the emergency response and initial recovery effort; in its appeal for emergency relief, the government sought $29.4 million USD, and received about half that amount. In its subsequent Humanitarian Action Plan, which will cover three months to the end of July, the government has requested $13.5 million USD.

Revenue raising options are limited. The government is unlikely to increase taxes just when ni-Vanuatu are reconstructing their homes and livelihoods (in fact, it has lowered import duties on certain goods, such as farming tools, seeds and building materials). The same consideration will also restrict its ability to widen the tax base. The establishment of income taxation is a worthy long-term endeavour, but not something that should be pursued in the aftermath of Cyclone Pam. The imposition of a disaster levy, as occurred in response to the Queensland floods in Australia in 2010–11, would adversely affect households hit by the cyclone. (In the case of the Queensland flood levy, the Commonwealth Government was able to transfer resources collected by the tax from non-affected parts of the country to flooded areas – an exercise that is less feasible in Vanuatu given that most of the country was struck by the disaster.)
External funding will therefore be required.

A surge in aid provided in response to Cyclone Pam will cover some reconstruction costs. Australia has announced $15 million AUD in assistance (less than $5 million of which, it appears, will take the form of budgetary assistance), the ADB is giving $5 million USD, and the World Bank a similar figure. The Pacific Disaster Risk Financing and Insurance scheme has also provided $1.9 million USD. This funding has been welcomed by the Vanuatu Government. However, it is grossly inadequate for the task of reconstruction. This is hardly a surprise. As noted previously, experience around the world tells us that increases in development assistance never fully fund reconstruction. Past disasters in Vanuatu (three cyclones in 1985) and Samoa (Cyclone Evan in 2012) have resulted in aid surges of approximately 5 percent of GDP – far below the cost of damage caused by these events.

The Vanuatu Government will need to borrow funds for reconstruction, as did the Samoan Government after Cyclone Evan. It makes sense to do so. Access to finance for reconstruction is an essential element of recovery, and one that influences the severity [pdf] of the economic impacts of a disaster. Cyclone Pam was not like other cyclones that regularly hit Vanuatu. It was a unique event, which one hopes, will not be repeated for some time.

Vanuatu is currently in a sound fiscal position, with public debt of only 21 percent of GDP, well below the 40 percent threshold recommended by the IMF. On the face of it, the Vanuatu Government is therefore in a position to borrow money for reconstruction. However, look more closely and the government’s position is less rosy. It currently has a significant pipeline of infrastructure investments forecast. These projects are to be funded through a combination of grants and concessional loans from donors, and would result in a considerable increase in public debt – forecast to rise to just below the 40 percent threshold identified by the IMF (and this is optimistic, given that it does not account for the economic impacts of Cyclone Pam).

The government will need to reconsider whether infrastructure projects that had been planned prior to Cyclone Pam should proceed. There are strong fiscal grounds for cancelling or postponing, where feasible, given the financial and logistical demands that reconstruction will place on both government and the private sector in Vanuatu. If all of the projects that were planned prior to Cyclone Pam were to proceed, it is difficult to see how the government could fund them in addition to reconstruction without placing itself in a precarious financial situation. The government will be conscious that the more it borrows, the more vulnerable it is to future disasters, whether of an economic or natural variety. The inflow of funds also risks placing upward pressure on the vatu, and the construction activity associated with such projects would exacerbate inflationary pressure caused by reconstruction activity (Samoa experienced this in the wake of Cyclone Evan).

The government must therefore balance the need to finance reconstruction with the long term risks associated with that debt.

However, cancelling projects will also involve costs, and will not always be feasible. Some projects are well-advanced. Construction work has already been tendered, and construction companies have invested in plants and machinery. There is concern in Vanuatu’s private sector that these projects will not proceed, leaving businesses out of pocket. The decision about whether or not to proceed will therefore need to be made cautiously, with a view to the impact on the government budget, private sector, and the economy over the long run.

Where possible, projects should be modified to incorporate reconstruction work. There are some projects where this is clearly possible. The Vanuatu Tourism Infrastructure Project, for example, which includes beautification of the Kalsakau Drive (Port Vila seafront), has been fast-tracked by donors in response to government requests. Rehabilitation will include reconstruction work. This ensures that the project meets the needs of Vanuatu, while also honouring contracts.

The debt implications of projects should also be considered. Many of the infrastructure projects in the planning pipeline involve both concessional loan and grant elements, which makes them attractive even if there is no potential to incorporate reconstruction activities. The Port Vila Urban Development Project is a case in point. The project is estimated to cost $39 million USD, but most of this is being provided as a grant by DFAT – borrowing for the project will involve only $5 million. Debt associated with this particular project is therefore minimal.

Projects that are good candidates for cancellation or postponement are a) those that require the government to borrow considerable funds on less concessional terms, and b) those that are less advanced, or where financiers are willing to amend contracts. One project that fits the first characteristic is the road upgrade in South Tanna and Malekula, which is being funded by China Eximbank. The conditions associated with this loan are not very concessional – interest of 2 percent will be charged over 20 years, with a five year grace period. The loan is also reported to be very large, at $50 million USD (for purposes of comparison, the Lapetasi wharf development is being funded by a Japanese loan of approximately $40 million USD, which will incur an annual interest payment of 0.56 percent and be repaid over 40 years, with a ten year grace period). Outright cancellation is unlikely, given that ground was broken for the project last week, but modification or downsizing could be possible – the second phase of the project, focused on Malekula (which was not so badly affected as other parts of the country), has not yet begun.

The economic impact of a project is also important, of course. Projects that generate economic activity, and thereby increase revenue that the government can use to repay debt, are attractive. However, it is worth stressing that when considering economic impact, a conservative and risk-averse approach is appropriate, given Vanuatu’s exposure to natural disasters and economic (and policy) developments in neighbouring countries.

The Vanuatu Government clearly has some difficult decisions to make as it seeks to ensure that sufficient funding is available for reconstruction. Although public debt is currently low, the government has entered into agreements with development partners and contractors for a range of infrastructure projects. These should be amended to include reconstruction where possible. In some cases, where projects are less advanced and grant finance is minimal, it will make sense to postpone projects (possibly indefinitely). Cancelling or postponing any project will be a painful and contentious exercise. Not doing so will also be painful – in the long-term – as it will limit the government’s ability to borrow funds for reconstruction.

 

The dangers of an information deficit when responding to Cyclone Pam

This item from Radio Australia looks at some of the lessons learned in the immediate aftermath of Cyclone Pam. One that is not discussed is the importance of communication and information sharing. There has been a lot of confusion and insecurity in the wider community as a result of the NDMO/VHT not providing a regular supply of authoritative, credible information about what they are or are not doing. In the very early stages an activity of this type was hampered by lack of access to communications including radio, social media and text messaging. However, as we know, those services were restored in parts of Port Vila relatively quickly and are continuing to come back on stream elsewhere in the country with each passing day.

The government and partner agencies have of course been very busy doing humanitarian relief and this does not leave a lot of time for telling people what you are doing. But there are significant risks associated with leaving an information vacuum. Nature abhors a vacuum and if people are left to fill an information vacuum then they are almost certain to fill it with a bad news story not a good news story. We have seen that happen in the days since the response to Cyclone Pam commenced. Based on what I have talked about with many people plus what is being circulated in traditional and social media, the following things seem to have happened because people simply did not have access to the right or enough information:

  1. People in different parts of the country have no idea how this storm affected other parts of the country and so find it difficult to accept that some areas are more in need of assistance than others.
  2. Particularly in urban and peri-urban areas, people are confused about whether they have been included in the assessments undertaken to determine relief needs, whether they are entitled to food aid or other kinds of relief and how to access relief that they are entitled to.
  3. Rumours have been able to start and spread which might lead you to believe one or more of the following: no aid has been distributed anywhere and is being stockpiled at NDMO where it is raided by NDMO employees; all of the aid has gone to Tanna because that is where the prime minister and the chairman of the National Disaster Committee are from; no aid has gone to Tanna; the aid agencies know what to do but the government won’t let them; the government knows what to do but the aid agencies won’t tow the line. There is no single source of quality information that people can be directed to that can act as a counter to this rumour mill.

The importance of maintaining good information flows goes way beyond simply getting the PR right. It is important from the point of view of transparency and it is a key aspect of maintaining social cohesion in times of stress. It is also important in order to counter a very unhelpful narrative that ‘the government isn’t doing anything’ which in the long term can undermine a population’s (already somewhat tenuous) confidence in the state to provide for them at all. It is also necessary to assist with managing expectations. If people know that their community is expected to receive relief supplies in 5 days time, they can plan for that. Admittedly they may not be happy about the wait but if they receive no information then they are more likely to feel forgotten about or abandoned, either of which would be worse.

Working with the media is one way of keeping people informed about what humanitarian responders are or are not doing. On the other side of things, a mechanism for collecting, collating and distributing inward flows of information would likely assist NDMO/VHT in doing their work even better. There does not appear to be any means for people to deposit information they have gleaned from family and other networks with NDMO/VHT (other than being able to talk your way in to speak to someone who is already so busy that they have difficulty understanding what you are saying). This type of mechanism can help add to responders’ knowledge about what is happening on the ground, including in some very remote areas where every bit of local knowledge would assist in ensuring that relief efforts are appropriate, effective and well managed. Given that a lot of the people assisting government with this response effort are new to Vanuatu, their task would surely be made easier if they had access to updated credible information that was being collected and collated from as many useful sources as possible.

There have certainly been some instances of NDMO using opportunities to communicate with stakeholders and the wider community and I am particularly pleased to see that they recently convened a meeting with all of the country’s politicians. These people are now able to perform a great service to the country by using their networks to give people some concrete facts about what the government is and is not doing in response to Cyclone Pam.

But in terms of ‘lessons learned’ I recommend that NDMO/VHT invest in developing an appropriate communications strategy that will support and strengthen this work in the future.

 

Resilience and state building – challenges and opportunities in Vanuatu

This item was first published on March 29th, 2015

We have heard a lot about resilience in Vanuatu since the passage of Cyclone Pam, during the 13th and 14th March. I referenced it in a post I wrote a few days after I returned to the country. It has been mentioned with approbation by politicians, decision-makers, UN aid workers and many more.

It is important to understand that resilience, whether of individuals, communities, organisations or states, is not a given. Resilience needs to be supported and preserved. By its very nature, resilience is something that operates over time and so it is important to think and act carefully in the immediate and short term to minimise the risks of undermining longer term resilience.

To date, little has been said about state resilience. Vanuatu, like other Melanesian countries, is often characterised as being relatively weak in terms of state capacity. It is certainly the case that beyond the capital city Port Vila the state’s presence is not extensive. There are schools, aid posts and sometimes police posts. They are often closed because there is no-one to staff them or there are no resources to allow for service delivery. Critical infrastructure, including roads, bridges, wharves and airstrips is poorly maintained and likely to be out of action especially when weather conditions deteriorate. All of these conditions pertained long before the arrival of Cyclone Pam.

So how resilient has the state of Vanuatu proved to be in the face of this event, the most significant natural disaster to strike the country in its (almost) 35 years of existence? In the 2+ weeks of immediate response, the machinery of government showed great resilience by showing up and taking control of the emergency response. Further to previous investment in the National Disaster Management Office, including through support from the Vanuatu Humanitarian Team, a coordinated and planned approach to assessment and distribution was able to be implemented from day one.

However, as we move to the medium and longer term, gaps in the resilience of state agencies are likely to appear. The public servants who are needed to lead the government’s work in coordination of aid are largely unavailable as they are working within the Emergency Operations Centre on distributing aid. Donors often complain that the central agency responsible for coordinating aid to Vanuatu does little in this regard. The public servants that work within this unit complain that donors do not do enough to comply with what they want to see happen in terms of coordination. The truth of the matter no doubt lies somewhere between these two positions. However, now more than ever, the people of Vanuatu need their government and the country’s donor partners to work together to deliver aid in ways that not only preserve state capacity but capitalise on opportunities to enhance it.

The politics of aid are well known and we have seen them play out in Vanuatu and the wider region or more than one occasion. It is too idealistic to think that all of the mistakes of the past will be avoided in Vanuatu over the coming weeks, months and years. And it is too cynical to say that there is nothing that can be done to prevent the aid circus from overrunning local leadership.

The path for government, policy makers, donors and those who advise them needs to be one based on putting the long term interests of the country and people of Vanuatu first and being committed for the long haul. There are a number of principles that I believe can and should underpin future decisions and developments on all sides. They include:

  • Investing in knowledge aggregation and sharing drawing on expertise, innovative thinking and experience from a wide range of sources.
  • Working with what is already in place, to achieve better multiplier effects and returns on previous and current investments.
  • Taking all steps available to reduce transaction costs in country
  • Managing the risks associated with individuals and organisations manipulating situations to prosecute vested interests rather than achieving objectives of national importance.