Aid, AIDS and

Money

Aid, AIDS and Per diems

If you thought those official overseas trips and conferences were nothing more than a lucrative source of tax-free income, you are probably right.

By Roman Grynberg

the per diem, and they are tax free in most Pacific island countries, the incentive to go ‘down market’ in terms of your accom modation and save the per diem is enor mous.

The hotel in Ermita was the usual fare noisy air-conditioning and tame cock roaches that helped you forget the noise, poverty and misery just outside the door.

A number of participants at the confer ence also came and stayed in Ermita. At night the others wanted to see what Manila was famous for. So I took my col leagues down to Mabini and Del Pillar Street, the centre of what used to be the red light district. There is a great deal of irony as well as misery on those streets.

Both Mabini and Del Pillar were Filipino nationalist leaders who had rebelled against colonial rule. I had always thought that they must be turning in their graves knowing their names were now associat ed with prostitution and brothels.

Much to my horror the old bars were dark - the mayor of Manila had closed them claiming that he wanted to ‘clean up the image of the town’. Quite by accident I met an old friend Drajan, a Yugoslav Australian who owned a bar on Del Pillar.

Sitting there drunk in one of the few remaining cafes, he told me to go down Roxas Boulevard, just beyond the outskirts of Manila and he would find the place where the old Ermita had moved.

The ‘new Ermita’ had even less style than the old. It was a hasty collection of bars established around a vacant lot around an unsealed road and had all the feel of the ‘wild west’. As you got past the bar entrance - there it was, just as Drajan had said - pot-bellied middle aged Australians drooling over half-naked Filipino girls dancing on the stage. All had numbers attached so the buyers, or more correctly tenants, could easily differentiate them.

Five years had elapsed since I had been in such a bar and maybe it was the aids conference I was attending or just too much gray in the beard, but they really did

The number of USP and UPNG eco nomic students who have over the years submitted papers to me about the evil effects of ‘foreign aids’ almost defies credulity. At first I thought this was simply a misspelling but experience has

recently taught me that perhaps they

might know something I don’t.

Last year I was invited by the UNDP to attend a conference in Manila on the eco nomic consequence of aids in Asia. The conference was held, as is so often the case, among the plush marble conference room of the Asian Development Bank headquarters in Manila. The ADB office is beautifully constructed with all the wealth and opulence that one would expect of an organization dedicated to assisting the poor - who can be found in such large numbers just outside their doors.

The conference organizers had done their best to choose the most expensive hotel in Makate. Having been in Manila many times in the past, I decided to opt for a lower cost hotel on the edge of what used to be the red light district of Ermita.

Those who are lucky enough to receive invitation to such international meetings are paid a per diem or a DSA (daily subsis tence allowance). The DSA pays for a lot more than subsistence. Usually it pays for a good hotel and three meals per day. The per diems or DSA vary depending upon the expense of the country. If you are lucky enough to be sent to New York you will get US$2OO per day. If three of you are sent and share a room and eat at MacDonald’s for a two-week conference then you can easily end up saving US$2OOO. For a bureaucrat earning between US$lO,OOO -15,000 a year, which is about average in the South Pacific, such a conference is the biggest legal windfall he can hope for in any year: it will give him more money in the pocket than any promotion he could reasonably expect.

Given that you never have to account for

look like so many sausages for sale or rent.

After the second or third beer I got terri bly depressed and left. My friends stayed.

The next morning the expected hap pened. I went to wake up my colleagues in their room and a girl - number 73, if I recall correctly - answered the door. Clearly my colleagues found sausage far more attrac tive than I did. They of course denied sleeping with the girls - they had just stayed there the night. It was like President Clinton’s now famous admission that he had smoked marijuana but had never inhaled. At that moment I finally understood that my students who appar ently mistook ‘foreign aid’ for ‘foreign aids’ may actually have struck upon something.

My colleague could well have been using the per diem he was getting to attend an aids conference to actually transmit aids back to the Pacific.

I returned to Suva and \ It / recounted the anecdote to my W friends, for many, who like me had previously worked in senior positions in government, the story was no news at all. Virtually everyone could recount a story of having to get their minister out of a brothel in Bangkok when attending an ESCAP meeting or drunken debauchery with their permanent secretaries in Manila

or New Delhi. The per diems that these officials received from the aid agencies to attend these meeting became a means for a life-style that none could possibly afford back home.

The problem with the per diem is not that it ends up used in bars and brothels.

The most common use of the per diem in the Pacific is for savings. Most Pacific Islanders do not end up in bars - most live very frugally and save their per diem so that they can buy themselves a duty-free stereo. In my own case the difference in hotel costs was enough to pay for clothes for my children and wife for almost a year.

This very financial logic, or something that is very similar to it, is what pervades the decision by many Pacific Islanders on where they stay when are invited to attend international conferences.

But there is another very important down-side to per diems.They are so lucra tive that some government officials will become what is known in the business as ‘astronauts’ - flying around the world attending one conference after another in order to collect per diems. However, in order to get to these conferences the offi cial has to satisfy two parties - his boss as well as the aid agency. I recall one previ ous deputy Secretary General of a region

al organization black-listing a Niuean offi cial who had had the temerity to com plain about her during an attachment with the organization. ‘No more per diems for her’ was the passing comment.

Senior government officials know that the best pay-off to one of your ‘yes men’ is to send him or her on a conference. Thus the conference travel becomes a powerful vehicle of incentives and control of gov ernment officials.

Understanding per diems goes a long way to explaining a lot of government behavior that is not always clear to those viewing government from the outside. If you want to have a regional conference and you want permanent secretaries to attend, the conference has to be in Sydney or Brisbane. Even the paltry SPOCC (South Pacific Organizations Coordinating Committee) per diems in Australia are about US$l7O per day with the opportunity for good shopping. The best attended conferences are before Christmas, as they permit a shopping trip.

If you only want junior officials to attend then Kiribati will do, but Western Samoa is just a no-no because the per diems (US$ 110 per day), for some reason are very low.

But there is another element of all this that is far from comical. The current pressure for training semi nars is part of the same economic incen tive. Training seminars are usually long and hence the total per diems earned by a participant can be enormous. A training seminar for junior central bank officials in Washington with IMF or a trade officials course at GATT in Geneva can be US$lOOO - 2000 in saved per diems.

The very best option, though, is training leave. This will give you a year (or some times two) where you will receive not only your regular salary as a public servant back home, but also a scholarship or bet ter, with restricted per diems. In PNG the Commission for Higher Education and the Public Service could never understand why it look so long for their students to finish their MAs and PhDs in Australia or the UK. It was not because the students were bad but because they were making double income and returning home would be a financial disaster.

To the outsider who is not privileged to have entry to this world, these stories are a source of anger which is often just thin ly disguised jealousy. But if collecting per diems and attending a dozen training sem inars in two or three years is a ‘bad thing’, then trying to remove them might be futile and counter-productive. Financial controllers of international organizations and government bureaucracies have long known about this ‘rent -seeking behavior’ but they are faced with two options. The

first is to pay per diems and have confer ence participants account for the expense or just pay a lump sum as is presently the case. The former course cre ates a massive financial bureaucracy where the financial controllers have to check thousands of receipts - many of which can be easily forged or created. The other is to put up and shut up- which is the usually accepted option.

In a real sense this per diem hunting is just one more symptom of economic fail ure. If the region develops and salaries are high, the relative financial benefits of going to conferences would be small - as they are in developed countries. But this is not the case. Per diems have become a sick and perverse link between the nation al bureaucracies of the region and the international aid agencies that assist and increasingly dominate policy in the region. But remove the per diems and some of our officials will find other, less savory ways of supplementing their incomes.

At very best , per diems will clothe my children or pay for a stereo, but at worst they end up as a conduit for aids.

However, in the end the money that is used for the payment of per diems is for eign aid and if naivete can be forgiven, it is money that could have helped the poor which, believe it or not, was orinal ly the intention of the citizens of the developed countries who pay for the aid.

If for one moment we look past the slick cynical over -paid officials who will give you a hundred reasons why this process continues, the real reason is that it is part of a very personal web of control over each and every one in government. These meetings give mandates to aid agencies to undertake initiatives - they are important vehicles by which these agencies get gov ernment consent to continue to under take their work programmes. Without many of these meetings more money can not be spent, consultants will not be hired and bureaucrats who are nothing in their own countries will not be able to contin ue to live on their fantastic salaries in the Pacific and elsewhere. From the per diem recipient’s perspective, the key is that without these meetings there are no more meetings and hence no more per diems.

Only those who are so rich that they want no more per diems would be so rude as to get up at an international conference and say that it is time we spent develop ment assistance funds on the poor rather than on clothes, stereos or spreading aids. ■

These are the views of Dr Roman Grynberg and not necessarily those of the University of the South Pacific where he is employed.