Private enterprises usually operate on the principle of the smallest amount of energy and funding required to produce the greatest outcome. In striking (and disturbing) counterpoint to this, it seems to me that too many donor organisations – both international or domestic – operate in a parallel but opposite world guided by the principle of the greatest amount of energy and funding required to produce the least outcome.

Precious Resources Wasted

A couple of years ago, a major donor in Vanuatu decided to provide assistance in tourism. The donor sent out requests for expressions of interest in producing (wait for it…) a ‘Pre-Feasibility Study’ on developing tourism to the outer islands of Vanuatu. Even better, the ‘Pre-Feasibility Study’ in question had two programmed follow-ups: a ‘Feasibility Study’ and an ‘Implementation Plan’!

The winning tender went to a consultant company from northern Europe. They assembled a crack team with representatives from all over the world. Unfortunately, all but one had never worked or studied tourism in Melanesia (the team leader had spent a week in New Guinea).

As a vital counterbalance to this, I was hired as one of three ‘local experts’. But was our combined 60-plus years of local knowledge valued? No, it was mostly ignored, our function reduced to facilitating the appointments and travel needs of the imported consultants; on many occasions, the local ‘consultants’ were actually excluded from meetings with the very same local people we had arranged. The fieldwork was completed over a two-week period and the 30-odd page document (written by the team leader) was submitted to the client two months later.

The outcome: a report so academic and long-winded that no one could keep awake long enough to read it. It has been shelved with all the other donor-requested studies gathering dust. No follow-up ‘Feasibility Study’ has been commissioned. In any case, the final report would have take its place as something like the 10th or 15th study on the topic in as many years, probably resulting in the same conclusions and recommendations as those that preceded it – predictable outcomes, since each successive study appears to plagiarize its predecessors – a process in which career consultants are experts.

The worst thing about it is the vast amount of the money spent on these multiple re-examinations of the same issues year after year. In the case above: between US$110,000 and $130,000. Sometimes two national donor organisations have conducted virtually the same study only weeks apart – one in English and the other in French – each financed by a different government. Millions of Australian, New Zealand, American and European taxpayers’ dollars are squandered by elitist consultants staying in expensive resorts, being paid salaries nearly equal to the total annual revenue of a small B&B hotel, and travelling and dining like royalty. Meanwhile, the private sector is doing the hard lifting by maintaining and growing the real economy (as distinct from the hypothetical one).

Why Must We Study the Need to Study a Need?

The public sector, including governments and donor agencies, does not generate income. It never has. It doesn’t know how to, so why is it advising on the topic? The public sector only knows how to spend (note I did not say ‘invest’), more often than not with negligible return or total loss.

It almost seems to me like the objective is to spend taxpayers’ money with no sense of how hard it was for the taxpayer to come by the income in the first place. Donors seem to believe that the pot is inexhaustible, and maybe it is, as long as people continue to pay taxes and spending excesses can be hidden in national government budgets.

But that doesn’t change the deplorable ongoing waste of precious resources by some of these donors, all to the detriment (not targeted benefit) of our society, our world. As we’ve learned (and suffered) from the greed of Wall Street, is it not time to question donors about how they are spending our money? Money that, if used wisely, could fix so many problems in the developing world. The unacceptable alternative is the kind of unchecked waste that only delays fixes and pads the pockets of people on the consultant gravy train.

Let’s take a quick look at what could have been done in Vanuatu (as just one example of the world’s many developing nations). The main challenge to starting any tourism business in Vanuatu is the availability of energy. Without energy, there is no communication, no refrigeration etc. The means certainly exist for isolated indigenous operators to generate cost-effective, renewable, earth-conscious energy through hydro, solar, thermal and wind power. In fact, viable micro-systems have been established for as little as US$10,000.

Think of what we could have accomplished with the money that was spent on the most recent Vanuatu ‘Pre-Feasibility Study’. Instead of thinking about thinking about how to help, we could have given a real fighting chance for the long-term survival of a dozen accommodation providers on the outer-island, where a little capitalism and financial reward are the type of hands-on assistance required. But no, it was more important yet again to waste time with interviews and cruel teases about the potential for the possibility of better things to come in the name of research. What improvements were made? The perpetuated reputation of the futility of working with governments and donor agencies. Oh yes, and the ever-growing salaries (with perks) of donor officials and their consultant mates.

All that said, it would be foolish to tar all consultants employed by donors with the same brush. I work closely with a few that really care and are genuinely committed to their missions. Nevertheless, passions are quickly cooled in donor politics and bureaucracy.

Donors that really want to effect change aren’t (and shouldn’t be) afraid of transparency and financial accountability. They must work closely with the local private sector in order to gain the respect and cooperation from the industry they wish to ‘assist’. Until that happens, they will continue to be seen by locals as air-filled soufflés of change.

My opinion is not a new one; the World Bank obviously identified this issue a long time ago in Asia, where the WHL Group was born as a development project of the IFC (part of the World Bank Group). The results are on record for all to see, but let me say this: it would be hard for any donor to find a better return on investment than the WHL Group, now privately owned and operated, but proud of its pedigree. As a recipient of start-up funding from the World Bank/IFC-managed PEP-Pacific (Private Enterprise Partnership – Pacific), I was able to join whl.travel, one of the partner companies of the WHL Group. Thanks to all parties involved, my business, Vanuatu Hotels, is now the leading private support to locally-owned small and medium-sized enterprises in the Vanuatu tourism and hospitality industry.

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