South Pacific Studies Vol. 25, No. 2, 2005

Japan’s Development Aid Effects on the Rural
Transport Industry in PNG: Evidence
from the Bereina-Malalaua Road
Terence Miro L AUFA1
Ph.D. (April 2004), Graduate School of International Development, Nagoya University
P.O. Box 1703, Boroko111, N.C.D. Papua New Guinea

Abstract
This paper has three specific aims to fulfil in providing an analysis on the role of aid in the development
process in Papua New Guinea. Firstly, this paper begins by providing an overview of development theory and therole of aid in the development processes of a country and briefly examines the nature of ‘Dutch Disease’ effectsof aid and links this to the current debate on how aid has failed the Pacific. Secondly, a short literature review on
Japanese ODA with respect to this aid’s objectives and guiding principles; philosophy of this aid and discusses itsrole and reasons and its main characteristics as being part and parcel of an international development activity, of
which Japan undertakes as an aid donor, is provided. Thirdly, an empirical analysis is provided on the BereinaMalalaua road project (1996-2000), which was co-financed by a yen loan and (GoPNG) development budget
support. Empirically, the specific aim of this study is to assess the observed effects of this project with reference
to the two main investigated elements: (1) socio-economic effects on local rural economy, especially on ruraltransport businesses and (2) on socio-economic effects on SUAS in the Malalaua area of PNG.
Key words: Bereina-Malalaua Road, Japanese ODA, public motor vehicle (PMV), Papua New Guinea (PNG),
sago using agrarian societies (SUAS), socio-economic effects

Introduction
An overview of development theory and the role of aid in development process
A discussion on the appropriate role of aid in the development process of societies
tends to make the critical assumption that the developed countries have a moral duty andobligation to assist developing countries to promote sustained economic growth so as tosupport the welfare considerations of people. Because of varying developmental stages andnatural resource endowments, there is the issue of ‘resource gaps’ between and among
countries, which necessitates the need for development aid in the first place. A usefuldevelopment theory that ascribes to this view is the two-gap developmental model, of whichdevelopment economists (e.g. CHENERY and BRUNO 1962), describe it as a planning model
which takes into account a savings gap (domestic savings less than the level needed to reachReceived Jan. 8, 2004
Accepted Dec. 25, 2004
1: E-mail: tmlaufa@hotmail.com Tel: (675) 686-7312

70South Pacific Studies Vol. 25, No. 2, 2005

Fig. 1: Distribution of Japanese ODA projects in Papua New Guinea. Legends: (G) grant assistanceprojects, (L) yen loan projects and (T) project-type technical cooperation. Source: Redrawn
and modified after the PNG Yearbook 2002, p.134.

a growth target) and a foreign exchange gap (between expenditure needed on imports toachieve target growth and earnings from exports). Therefore development aid in the formof foreign assistance is viewed as another institution to boost economies of the third world
countries so as to support local economic development (CHENERY and S TROUT 1966).
Classical economic theory proposes broad strategies for development purposes, ofwhich the following are required: (i) human skills (labor), (ii) investment and savings and(iii) productive technology and infrastructure. Situated in that context, like most developing
countries, PNG relies heavily on foreign aid, especially donor aid infrastructure projects forsupporting her national development priorities and programs, owing to the lack of critical
inputs of capital, machinery, equipment, technology, and more critically to supplement
required level of savings at her disposal. Therefore the level of infrastructure development
in a country is a crucial factor in determining the pace and diversity of economic development, let alone, “the argument for aid as necessary for development rests on the belief thatpossession of capital is critical for economic advance” (BAUER 1995: 364). This surely
provides the economic rationale, let alone a macroeconomic link between aid and growthLaufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

71for PNG seeking development aid from a developed and highly industrialized country such
as Japan.
‘Dutch disease’ effects of Aid
The ‘Dutch disease’ effects of aid in developing countries describes the systematic
dependence on foreign assistance for consumption purposes, of which no serious effort ismade to invest for sustainable growth and economic development. Therefore development
aid is a subject of intense scholarly and public debate, of which the polemic surrounding it
aptly questions why aid flows (resource transfers) from OECD countries has not achieved
significant levels of socio-economic development in developing countries. This is despite
development aid’s well-meaning objectives of assisting with national development programs with respect to appropriate levels of human resource development, infrastructure
support in roads, bridges, railways, dams, water irrigation canals, telecommunications, letalone electricity, or other public works programs. Since development aid is administered
between government to government, it has raised critical concerns about a country’s ability
to absorb foreign capital effectively (absorptive capacity), of which development aid’s
overall effectiveness, addressing the issues of its ‘quality’ and ‘quantity’ of this aid’s
administration programs, are continually challenged and critiqued in a myriad of studies.
More recently, for instance, H UGHES (2003) generally argues that aid flows akin tomineral exports are not earned income; they create economic rents that distort economies.
Although Hughes’s paper provides an interesting overview of how aid has failed the PacificIslands, of which broad comparative perspectives are discernible with other developing
countries and relates this to how other countries such as Taiwan and South Korea have
graduated from ‘aid recipient’ countries to newly industrializing countries (NICs), it isfairly strong on criticism that aid is spent on consumption than on investments but rather
weak on analyses and syntheses of specific aid projects undertaken for national development programs in the Pacific Island Countries. Therefore, based on the need to provide
specific analyses and syntheses on the effectiveness of aid in the Pacific Islands, the author
uses a case study on Bereina-Malalaua road in PNG, which was financed through Japanese
yen loan and GoPNG counterpart funding arrangement. This paper, to an extent, empiricallyattempts to provide a counterview to the current debate that aid has failed the Pacific Islands
by arguing that such a proposition is a function of what a scholar is either ‘looking at’ oris ‘looking for’ in discussing the merits and demerits of ‘aid-giving’ and ‘aid-receiving’ inthe overall scheme of administering aid programs.
Objectives and guiding principles of Japanese ODA
The main objective of the Japanese ODA is to support the self-help efforts of developing countries towards economic take-off, guided by four basic principles as enshrined in the
ODA charter adopted by Cabinet on 30 June 1992. Here the Government of Japan takes into
account the following criteria to decide its assistance to developing countries:
1. Compatibility between environmental conservation and development;
2. Avoiding the use of Japan’s ODA funds for military purposes and for purposes liable72

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to aggravate international conflicts;
3. Monitoring of the trends in recipient countries’ military expenditures, development andproduction of weapons of mass destruction and export and import of arms; and4. Monitoring of activities for the promotion of democratization and introduction of amarket-oriented economy, and for conditions related to basic human rights andfreedoms.
Philosophy of Japanese aid
The philosophy of Japanese aid is based on two fundamental principles of humanitarian consideration and the recognition of global interdependence. Moreover, Japanese ODA
takes pride in basing its guiding principles on sustainable development, peace, stability of
the world and perhaps more important of all, the promotion of market economy and good
governance (RIX 1993). These principles operate in tandem with the joint statement on‘Development Cooperation in the 1990s’ signed by the Development Assistance Committee(DAC) in 1989. Here the DAC members pledged to strengthen and adopt policies to achieve
broad based economic growth; more human resource development (HRD); participatory
development; and environmentally sound and sustainable development.
A brief literature review on Japanese aid
A brief literature review is provided on Japanese aid with specific emphasis on its roleand main characteristics in international development. Many scholars, academics andpractitioners, especially in the fields of development economics and international development studies, which embraces cross-cultural studies, development cooperation and development assistance studies, have studied Japanese aid, as is aptly seen in a whole plethora ofstudies (e.g. G OTO 1997a, b; G RANT 1997; KAKAZU 1994; M ORI 1995; RIX 1993;
S CALAPINO 1992; S TEVEN 1996; S ÖDERBERG et al., 1996; TAKEDA 1993; YAMADA 1998;
Y ANAGITSUBO 1998; YASUTOMO 1986), among others. Many of these researchers, among
others, have attempted to explain the intricacies of foreign aid, especially on the management of Japanese ODA; its appropriate roles and reasons and motivations for providing thisaid to the developing world, and PNG is no exception and has been a recipient since
establishing diplomatic ties with Tokyo back in 1977. It has generally been argued that therole of Japanese aid is to foster economic development, and in principle, to promote ‘selfhelp’ efforts in developing countries according to the Annual ODA Reports published by the‘Association for the Promotion of International Cooperation’.
There are works on regional impact studies for the Asian and Pacific Island regions.
For the former, K AKAZU (1994) investigated the scope and nature of Small Island Economies in the Pacific Island countries by comparing their ‘absorptive capacity’, while for thelatter; Y AMADA (1998) examined Japanese ODA in Southeast Asia focusing on Malaysia.
A more comprehensive study on Japanese ODA was investigated and reported byS ÖDERBERG et al., (1996). They critically analysed Japanese ODA in the Asia region
highlighting five case studies covering projects such as the Chonburi-Pattaya New Highway
in Thailand, Renun Power Project in Indonesia, among others. This focused study byLaufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

73S ÖDERBERG et al., (1996), critically reviewed the contractual obligations and manner of aid
commitment and disbursement, especially yen loan projects in the region and concluded
that a rapidly rising share of the‘yen loan’ aid projects were taken up by foreign firms,
especially from China and South Korea, which was traditionally contracted out to Japanese
consultancy, engineering and construction firms. The tactical response and gesture, on thepart of Japanese aid administration’s contribution to international cooperation and development activities, to a certain extent, has negated other aid donors’ widespread opinion thatJapanese aid was used to secure LDC markets in the 1980s and early 1990s.
Moreover, M ORI (1995); RIX (1993) and SCALAPINO (1992) called for reforms inJapan’s aid administration, as it is quite complex in practice because there were bureaucratic
struggles and conflicts, involving three Ministries and an a planning agency all involved inaid policy coordination. They were: Ministry of Foreign Affairs (MOFA), Ministry of
Finance (MOF), Ministry of International Trade and Industry (MITI) and an agency, theEconomic Planning Agency (EPA). According to RIX (1993), bureaucratic struggles andconflicts, stalled the fast implementation of aid projects, let alone blurred the boundaries of
responsibility among the Ministries involved. Furthermore, RIX (1993) argues that, the“cause of the problems faced by Japan’s aid official lies with the structure of the Japanese
aid system and its programs. Administratively complex and politically muddled, aid isgreatly understaffed but is one policy area taking more rapidly rising share of the national
taxes than others”. From hindsight, Japanese aid policy makers recognized those shortcomings in the aid system and in the fall of 1999, made significant changes to that effect, as wasseen in the merger of the Export/Import Bank of Japan with the Overseas Economic
Cooperation Fund (OECF), which then became the Japan Bank for International Cooperation (JBIC).
With respect to Japan’s foreign policy orientation, S CALAPINO (1992) and YASUTOMO(1986) provide a comprehensive account. SCALAPINO (1992: 206) observes that 62.5 % ofJapan’s ODA of US $8.96 billion in 1989 went to the Pacific-Asian region because of thedoctrine of ‘comprehensive security’. In the wisdom of Japanese policy makers, the region’s
security and stability is crucial for economic growth in the long run. Y ASUTOMO (1986) inhis book, The Manner of Giving: Strategic Aid and Japanese Foreign Policy also acknowledges the aid’s concentration in the region for the same reason. Arguably then, “Japanese
foreign policy is strongly oriented towards using economic instruments on behalf ofperceived interests, defined in the broadest terms as helping to promote regional and global
stability”. A case in point would be that of the Kuranari Doctrine, which came to the forein January 1987 after the then Foreign Minister Kuranari visited the Oceania region after thetwo coups in Fiji in 1987, was a political gesture and international commitment on the partof Japan to preserve political stability in the Pacific Islands (TAKEDA 1993: 242).
With respect to Japanese aid’s main characteristics, it has been argued, that theJapanese aid policy derives much of its character from the country’s own experiences; once
upon time she was a developing country and currently serves as an ‘aid superpower’.
Foreign aid is one of Japan’s main international activities, but is not widely known or
understood, even in Japan. Based on these main characteristics outlined, it can be argued

74South Pacific Studies Vol. 25, No. 2, 2005

that Japan’s foreign aid reflects important historical and cultural characteristics. As RIX(1993) observes, “the link between aid policy and socio-cultural values is important”. RIX(1993) identifies four main characteristics of Japan’s foreign aid policy. Firstly, theprinciple of self-reliance is interwoven into Japan’s aid policies for two reasons: The push
for economic development in tandem with problems of scarcity and markets in the Meiji
Period (1868-1912). Apparently, these factors could be attributed to strong internal leadership seeking deliberate adaptation and learning from the West and the desire for imperial
expansion to support domestic economic growth. The second characteristic, RIX (1993)highlights; relates to Japan’s strong affinity with Asia historically and in cultural terms. Its
racial unity and island consciousness are entrenched in the 1980’s zenh ui gaik u oromni-directional diplomacy, which alludes to the ‘Comprehensive Security Arrangement’.
This supports the argument that security is central to Japan’s initiatives for peace, stability
and economic development. Thirdly, a hierarchical view promoting its status and influence
in international activities and responsibilities is another salient feature of Japan’s aid policy.
The ‘aid doubling plans’ and its desire to be an ‘aid superpower’ support this claim. The
fourth characteristic noted by RIX (1993) relates to donors and aid giving. He identifies fourmain motivations, which are humanitarian considerations, charity, guilt conscience conscious for image enhancement and finally, donors’ economic self-interest for the LDC’s
market resources and aid contracts.
Having briefly discussed Japanese ODA, let us look more closely at the road project,co-financed via a yen loan in PNG, with special reference being made to the BereinaMalalaua road. From rural development management point of view; especially, weaving thediscussion around the fundamental aims of promoting structural transformation of ruralagrarian societies to that of rural societies linked to socio-economic influences of marketbased economies, the causal link between providing an infrastructure, in terms of a road as
an adaptive process, is examined. Modernity projects such as adaptive learning andreceiving development assistance (safety net) schemes have transcended on different
societies with varying results. Therefore, it would be of interest to see how SUAS in
Malalaua district participate in this necessary transformation process, so as to clarify
whether the road serves as a central component of rural development or not, owing to its
unique adaptive process.
Is the Bereina-Malalaua Road a central component of rural development in SUAS in
Malalaua area?
Whether the Bereina-Malalaua Road now serves as a central component of ruraldevelopment in SUAS in Malalaua district, is open to question. To be sure, some sort ofcriteria must be in place to assess an evaluative statement of this kind, of which the aid’s
noble intentions and some specific characteristics must be taken into consideration. Firstly,
it is argued that yen loans used to finance infrastructure projects between 1966 and 1993,
which accounted for 52.2 % of the total were used in three main infrastructure categories:
electric power and gas, transportation and communications (TSUKUDA 1995: 5). Secondly,TSUKUDA (1995) points out three characteristics, which are inherent in yen loans forLaufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

75

infrastructure projects. First, the gestation period from the commencement of construction
to the generation of income is long. Second, large amounts of funds are required, sincebenefits emerge after the system is complete. Third, the benefits of the project accrue to thecommunity as a whole rather than to specific individuals or enterprises. Against thatbackdrop, it is also evident that yen loans are being used to construct and upgrade PNG’sinsufficient network of highways, which will help unify the country, stimulate industries
and improve public services in principle. The Bereina-Malalaua road, to an extent, reflectively embraces the three characteristics; therefore, the empirical assessments on thesocio-economic effects in SUAS in Malalaua area to be ascertained in the ensuing discussion may justifiably verify or refute this claim.
Overview of road transport development plans in PNG
The Medium Term Development Strategy (MTDS) 1997-2002: A Bridge into the 21stCentury, a development blueprint produced by the National Planning Office (NPO)highlights that given good roads, agriculture could link 570,000 rural households in PNG
with the rest of the world, providing markets for the entire surplus they produce. Trading
their surplus, it is argued, would allow these rural masses to take the first step toward
socio-economic transformation from traditional subsistence societies to the modern exchange economy and the chance to more than satisfy basic needs: food, energy, nutrition,
clothing and shelter. Thus, the opportunities for those selling their surpluses domesticallyand internationally depend crucially on access to markets; in the first place on roads being
passable and transport costs being at reasonable levels.
These road development views are not new as they were considered as national
development priorities towards the late 1980s and even earlier, as air transport of goods andservices to many parts of the country were relatively higher and remains so, even today. In
general this echoes the calls for building the insufficient network of highways, roads, andfeeder roads to connect places, especially rural areas of PNG, which would ease the burden
on transport costs. To corroborate this statement, it has been quite clearly expressed that atleast any road development plan should serve two main needs, which are: (1) economic
considerations and (2) rural welfare. The former attempts to provide farmers, mining
resources and industry with access to production sites, while the latter explores the socialand political needs to increase access to essential services such as health and education,
likewise improve personal mobility.
Based on the foregone discussion, how can one justify building road for underdeveloped SUAS in Malalaua District that the two main prioritized needs, as pointed out,
conform to national development programs? Surely, there must be a way to capture thewhole essence of determining whether the Bereina-Malalaua road, not only justifies anddemonstrates actual achievements for the stated priorities but also serves as a centralcomponent of rural development in SUAS at a level of generality.

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Methodology
The materials used in this study are based on the author’s field surveys on the
Bereina-Malalaua road in 1999 and 2002, reflecting a ‘without analysis’ and ‘with analysis’situation respectively. The latter time period provides the main component of data acquisition for this study and has two sets of data for empirical assessment. These data werecollected and analyzed from the PMV frequency of trips survey as well as passengers
frequency and purpose of trip survey on route 600 from Port Moresby, which passes
through the Bereina-Malalaua Highway. The parameters for the empirical assessments on
the socio-economic effects of the road on SUAS are briefly described below. The method
used to measure the socio-economic effects of the road is adapted after TSUKUDA (1995)
general assessments, with reference to three main characteristics of yen loan projects, as
was mentioned earlier. A brief summary of the three main characteristics used as criteria forassessing the plausible socio-economic effects of the Bereina-Malalaua road, is provided inTable 1.
Table 1. Using TSUKUDA ’s three characteristics of yen loan infrastructure projects as criteria forassessing socio-economic effects on the Bereina-Malalaua Highway Road Project (TransIsland Highway) 1996-2000.
Parametera(Criteria used)
I. Gestation
periodassessment
II. Very highamount of funds
required(Cost factor
assessment)
III. Project
benefits
community(Benefit factor
assessment)

Characteristics of set criteriab
Gestation period from thecommencement of theconstruction to generation ofincome is long
Large amounts of funds are
required, since project
benefits emerge after system
is complete
The benefits accrue to thecommunity as a whole rather
to specific individuals or
enterprises

Evaluation remarksc
Transitional state ofaffairs. From May 2000
to 2003 at the time ofresearch.
The Bereina-Malalaua
road project cost almost
PNG K 144.8 million(JPN yen 10,152
million)The road built throughmarshy low-lying
swamp is of benefit tocommuters, Rural PMV
operators as well as sago
farmers etc.,

MeasurementdsourceOECF Reports,
JICA development
Study (D/S) of
1987
From OECF
e
Reports, NPO
and Dept. ofWorks and Supply
Rural PMV
survey 2002 andsago surveys 2000
and 2002

Notes: a, c, d; author’s descriptive notes, b; summarized and adapted after TSUKUDA (1995), p. 5.
Source: Modified and tabulated after TSUKUDA (1995).

Parameters for empirical assessments of the socio-economic effects on SUAS
The parameters for assessing the socio-economic effects of the Bereina-Malalaua roadon the SUAS in the Malalaua area are categorized into two parts. The first part examinesthe ‘without analysis’ of the road during the construction phase, covering some impressions
made by potential commuters as per the author’s previous survey of 1999. A rapid appraisalof six randomly selected villages in SUAS investigated how a major road infrastructure
would not only induce economic activities such as opening up trade links with Port
Moresby city, but could also serve as a catalyst for rural development in the broader sense,Laufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

77with specific reference being made to undertaking a foreseeable joint-venture related
investment in the rural sago palm industry, of which SUAS in Malalaua area apparently has
the clear comparative advantage for commercialization of the rural sago palm industry.
Malalaua has abundant sago stands, mostly occurring in semi-cultivated contexts, but did
not have a major road infrastructure then, so as to ably support ‘forward links’ and‘backward links’ from traditional processing to industrial material processing, which
technologically advanced Malaysia presently enjoys; meanwhile Indonesia, too, is following suit rigorously in the world sago starch industry (LAUFA 2004).
Of the twenty provinces in PNG, Gulf Province is the second least developed province
in the country, albeit having an abundance of seafood resources and plant genetic resources(PGR) such as the sago palm (Metroxylon spp.) at her disposal, yet receives cursory glance,
or rather scant attention for development needs and priorities from both provincial andnational authorities. Topographic features and chronic apathetic tendencies of public
officials to effectively address provision of goods and service to people in not only SUAS
in Malalaua, but also to the other five districts in the province appear to explain the overallsocio-economic situation. In retrospect, the general lack of socio-economic development
and poor nutritional status, especially for SUAS in Gulf Province can be equated with
non-existence of major infrastructure such as proper road network systems to link districtsin the province L AUFA (in press). Against that developmental stage of the province, thisstudy was motivated to capture the essence of how SUAS in Malalaua area stand to gainfrom the Bereina-Malalaua road after being left out in the mainstream of socio-economic

Fig. 2. Analytical Framework for Socio-economic benefit assessments for SUAS.

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South Pacific Studies Vol. 25, No. 2, 2005

development for a long period of time, even predating the onset of capitalism as a mode of
production, thus revealing the process of transition from a backward rural agrarian society
to a market-oriented rural economy. The road, to an extent, justifiably provides the basis forsocial and economic inclusion of underprivileged people in SUAS into the mainstream ofrural development, which is reflective of a societal transformation process, akin to medieval
Europe adjusting from feudalism to capitalism.
For SUAS in Malalaua area, this transitional aspect of adjustment to a major infrastructure, such as the road being studied, can be viewed as a ‘late comer’ development process
and phase. Other rural sectors in the province can be further developed, and a lot depends
on ‘self-help’ efforts on the populace to participate in this societal transformation process.
The nature of pre-road construction was provided, as per the rural rapid appraisal then.
Attention is now devoted to the second category, which forms the main part of the empiricalassessment. This is captured under the ‘with analysis’ of the Bereina-Malalaua road as
described. Fig. 2 provides the general framework for these assessments.
‘Without analysis’ of the Bereina-Malalaua Road Project in brief
A ‘without analysis’ of the Bereina-Malalaua road project is presented here from theperspective of transport accessibility in the past. Considering criterion (I) as is described inTable 1 and illustrated in Fig. 2, the gestation period of the road project is measured fromits construction period right through the generation of income, which is rather transitionalin nature, as only four years (2000-2004) have passed after the completion of the project,
though a ‘with analysis’ of the road attempts to measure some income generation activities.
With reference to criterion (II), the costs entailed in the detail design (D/D) right throughthe completion of the project are quite enormous, owing to a thirteen-year-period from 1987
to 2000. In 1987, the JICA-PNG office did the detail design (D/D) for the Bereina-Malalaua
road, which formed the basis of a development study (D/S). Other official formalities along
the way with respect to Exchange of Notes (E/N) between the Governments of Japan and
PNG, right through the four-year (1996-2000) life of the project, took well nigh thirteen
years in total. These assessments and analyses apparently satisfy criteria (I) and (II) withrespect to a yen loan infrastructure project in principle, and characterize a ‘without analysis’situation, though the transitional aspect of criterion (I) makes income measurements, using
a time-series or synchronic assessment of the road project’s benefits accruing to SUAS in
Malalaua area.
In the previous rapid appraisal survey done by the author in 1999, forty questionnaires
were administered, which sought qualitative opinions of potential beneficiaries of a yen
loan road project, as to how they viewed the road in general. Of the forty questionnaires
administered, thirty-two were filled out and returned, while the remainder was not returned.
The results showed that 53.1 % (17 out of the 32 respondents) thought that the road project
was successful and after it was completed would enhance personal mobility, widen accessto health and educational services; likewise, improve market accessibility for primary
produce such as sago (Metroxylon spp.) starch and betel nuts (Areca spp.) for sale in Port
Moresby. A further 21.8 % (7 out of 32 respondents) assumed that the project was not soLaufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

79successful, depending on their needs or personal opinions then. Meanwhile, 15.6 % of the
respondents (five people) felt that the road was not satisfactorily built, while three people
had no idea at all about the road project.
More specifically on the transport needs assessment of SUAS then, it could well beargued that transport accessibility in the past was a real burden and struggle as travels
meandering through the Taure and Lakekamu river basins (Fig. 3) on out-board powered
motors took much time. Such factors could provide causal explanations in regard to thegeneral apathetic tendency, which reinforces the lack of socio-economic development in
SUAS in Malalaua area of Gulf province. Primordial ties and intimacy with the sago palm;
undoubtedly, remained static because of the latter’s role as staple food crop and that
exploitation of this crop depended mainly on subsistence, rather than on commercial

Fig. 3. Map showing sago using agrarian societies (SUAS) along the Bereina-Malalaua Highway, Gulf
Province of Papua New Guinea. Source: L AUFA (2004), p.41.

80South Pacific Studies Vol. 25, No. 2, 2005

interests (LAUFA 2004). This was because moving the sago starch after traditional methodsof processing to the markets in Port Moresby was not only an expensive exercise, but theoverall time taken to arrive at the final good for sale, required much energy expended andlong manhours. Suffice it to say that, concerted efforts to commercialize sago on a grandscale were beyond the purview of the inhabitants of SUAS in Malalaua area (L AUFA 2004).
Situational assessment presently indicates that transport accessibility for personal andrural agricultural product mobility in SUAS generally has been enhanced; owing to increasein the number of rural PMV transport businesses. The Bereina-Malalaua road has made thispossible after it was completed in May 2000, as Malalaua District dwellers are now using
the road to transport their produce such as dried sago starch to markets in Port Moresby
city, which can fetch higher returns because of the high and unmet demand in the city
(LAUFA 2004).
‘With analysis’ of the Bereina-Malalaua Road Project
To ascertain whether the Bereina-Malalaua road is a central component of ruraldevelopment in SUAS, a ‘with analysis’ of the road is provided, so as to estimate its
plausible socio-economic effects on people in Malalaua District. The ‘with analysis’measurements ascribe to criterion (III), on benefits accruing not only to specific enterprises,groups, but also to the whole community. The two specific parameters for examining thesesocio-economic effects on SUAS are: (I) socio-economic effects on local economy withrespect to rural transport business and (II) socio-economic effects on SUAS, bordering on
mobility of people and sago starch to market outlets.
Socio-economic effects on local economy with respect to rural transport business
The local rural economy of Malalaua District, in particular, after the construction of
the Bereina-Malalaua road was structurally transformed taken from a spatiotemporalcontext, to a certain extent, as was evidenced in the number of local entrepreneurs moving
into PMV operator firms commuting along the Bereina-Malalaua road on route 600, which
travels from Malalaua government station, the district headquarters all the way to Port
Moresby city. The flourishing rural transport service industry within SUAS is a direct resultof the construction of the Bereina-Malalaua road, and thus the post-construction era of theroad thereby serves as a parameter for assessing a transformational trend in every respect.
Equally important to observe, is the empirical evidence that the road has physicallylinked many villages in eastern Gulf with the provincial capital, Kerema, which was
impassable prior to the pre-road construction era, though only Malalaua government station
was linked by an unsealed trunk road as far as Kerema then. Travel for other villages ineastern Gulf to the provincial capital, was only made by sea transport, along Toaripi andKaipi coastline. The Kerema-Malalaua road is being upgraded and is planned for sealing so
as to link the province with Port Moresby and nearby Central Province, though theBereina-Malalaua Highway has linked Gulf with Central Province with the main Hiritano
Highway, of which the two provinces continually access for travel to Port Moresby.
The Bereina-Malalaua road, under the auspices of a NRIP, is just a phase of theLaufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

81

program, as further linking and consolidation works have been planned for linking Aseki inMenyama District, Morobe Province with a trunk road linking Keremahaua in Kovio census
division area in Malalaua District. The road will link Putei with Aseki, which are coffee andtea growing areas. Moreover Putei and Keremahaua in Kovio, though have fertile land up
in the highlands of Gulf Province, yet often find difficulties in transporting fresh vegetables
such as bananas (Musa spp.), taro (Colocasia esculenta), yams (Dioscorea spp.), sweet
potatoes (Ipomea batatas), and rural cash crop such as betel nuts (Areca spp.) because of
the rugged terrain, will be linked with other parts of Gulf and Morobe Provinces, if road
up-grading and other planned public works see the light of eventual implementation.
The road networking of districts and provinces under the NRIP, in time, would
hopefully promote ‘intra’ and ‘inter’ provincial trade of agricultural products, thereby
offering hopes for negating the myth surrounding underdeveloped backward rural agrariansocieties. Low-lying marshy land dwellers in SUAS have been trading dried sago starch forbetel nuts, let alone other garden produce with horticulturalists from the hilly areas of Putei
and nearby villages in Kaintiba District for sometime now. Lack of proper road networks,
however, often hinder or rather discourage trade networks, which are being carried out ona relatively small scale and perhaps in time, the NRIP could provide a useful link forenhanced trading of goods and services for both the highland and lowland dwellers in Gulf
Province.
Betel nut sellers from Kaintiba District are now increasingly opting to sell theirproduce themselves to ‘middlemen’ in Port Moresby city. These highland dwellers often
come down to Malalaua station, or are picked up by PMV trucks along Meaporo area,
which is more like a junction onto the main Bereina-Malalaua road. The travel may betreacherous in the unsealed sections of the Kerema-Malalaua road, owing to deep pot holes
created during the annual peak wet season from December to March, however, this does notpreclude ‘self-help’ efforts on the part of different actors (PMV operators, betel nut sellers,
dried sago starch sellers, public servants) mingling with travel discomforts to pay for aservice to sell a product or access other services in the urban areas. Given the ‘mushroom
effect’ of network of rural transport service providers and its cliental base, as is reflected in
the number and frequency of users, it would be interesting for a piece of research to develop
an input-output correlation matrix, which could be quite a useful indicator for analysing
rural income-generation activities so as to determine its distributive aspects from rural
welfare point of view.
Socio-economic effects on SUAS
The socio-economic effects on SUAS with respect to the surveyed villages: namely,
Heatoare, Keke/Tapala and Savaiviri are assessed from the viewpoint of enhanced personaland sago starch mobility to Port Moresby. As medical services are made accessible too, it
goes further to suggest that rural welfare has slightly improved. The recent signing of a
MOU between Gulf Provincial Government and the Port Moresby General Hospital toprovide trainee student doctors to undertake ‘problem-based learning’ in a rural hospitalattests to this point. Four trainee doctors are now serving in Malalaua station Health Centre.

82South Pacific Studies Vol. 25, No. 2, 2005

PMV commuters, especially rural dwellers, and increasingly for traditionally processed anddried sago starch sellers are now accessing the Bereina-Malalaua road. The two basic policy
initiatives of any road development plans in PNG, appears to be fulfilled in light of
economic considerations and rural welfare, even for rural SUAS in Malalaua area.
Economic considerations such as creating and enhancing linkages for the interplay
between people, rural institutions and markets are key requirements that provide the basis
for determining whether rural welfare has been either achieved or underachieved. The
critical issue at hand is that the character, the nature and the aesthetics of describing rural
welfare, is largely a function of economic considerations, through state-sponsored initiatives
in the initial stages. Thereafter, it is a matter of subjective choice for motivated individuals
to recreate an environment that is compatible with their own rational expectations. Self-help
efforts towards rural community assets building, which underscores the main development
philosophy of Japanese ODA is implicitly put across to SUAS. Therefore individuals, acting
upon their own self-interests through explicitly identifying with themselves what is best forthem, is in itself a voluntary matter, considering the number of alternatives or choices, say,sago farmers can make, so as to improve their lot.
Public financing of modernity projects, therefore, with respect to public works
programs, such as a road by governments (e.g. GoPNG) in counter-part funding arrangements with donor agencies (e.g. JBIC), are interventionist schemes, let alone policy
initiatives designed to create an impact on the socio-cultural and physical milieu, so as toachieve rural development through change. A physical change in the natural environment
for people in SUAS occurred, resulting in transformed landscapes and ecosystems of themarshy lands between Bereina and Malalaua after the road was built. From the project’s
point of view, two further questions can be asked. Firstly, how are people in these localities
responding to this change psychologically? Secondly, are there any clear motivations toadapt to this change? The underlying issue is that does the road have any significance at allfor the marshy land dwellers, or is it a project that they seldom associate with for benefit
sharing? Empirical results of this study could possibly show the character and rate oftransformation of this rural agrarian society, though based on criterion (III), as per (Fig. 2);
implicitly, also applies to the basic fundamental aims of any road development plans in
PNG.

Results and Discussion
Socio-economic effects on local economy with respect to rural transport business
Rural transport businesses operated and owned by local entrepreneurs flourished after
the construction of the road. During the author’s rural PMV interview survey of 2002, it
was reported that there were about 36 PMVs operating on route 600 from Port Moresby
travelling via the sealed Bereina-Malalaua road. Of the total number of PMVs then, 27 wereinterviewed and asked specifically about the frequency of trips made per week, whichconstitutes the main source of income for PMV owners. The survey results clearly indicatedLaufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

83

that demand for rural transport services by sago farmers, betel nut sellers, local tradestoreowners, zoom outboard motor, diesel, and petrol retailers led to a sharp increase in thenumber of PMVs.
Prior to the road construction, there were only about 12 PMVs serving rural residents
from SUAS in Malalaua area, therefore the twenty-four fold increase in number of PMVs,
as per 2002 rural road transport survey, reflects a significant increase in the number of
PMVs. This partly explains a demand function, which could be attributed to ‘inter’ and‘intra’ sectoral cooperation, based largely on market mechanisms. The mean of the frequency of the trips made by a PMV is 3.4 roundtrips (combining forward leg and return leg
trips) per week. Both the forward leg trips (Port Moresby to SUAS) and the return leg trips
from the latter to the former fetch different income levels for PMV operators. The incomesare contingent upon the carriage of goods (freight charges) and more critically on passenger
disembarkation points (passenger fares) on the specified route.
The forward leg trip, from revenue raising point of view earns meagre incomes for
PMV operators, as much of it is spent on diesel fuel in Port Moresby prior to the trip being
made, which means that almost half the receipts of the revenue collected from passenger
fares are absorbed by fuel costs. Many PMV operators interviewed during the survey
reported that the PMV fares charged for passengers for different destinations on route 600
from Port Moresby, passing through the Bereina-Malalaua road, stopping along the way forpassengers disembarking at Mekeo villages in Bereina District of neighboring Central
Province such as Eboa, Apanaipi, before reaching SUAS in the Malalaua area, determined
their net incomes. Table 2 shows the disembarkation points and passenger fares charged perperson. The forward leg revenue only increases whenever there are freight charges leviedon items such as tradable goods for rural trade stores and 44-gallon (176 liters) of fueldrums of kerosine, petrol, diesel, or zoom for outboard motor for small-scale retail purposes
within SUAS. This source of income is quite irregular, though is quite appealing to PMV
operators, who compete for a slice of this extra income derived from freight charges, as isreflected in Table 3.
About 22 of the PMV operators are Port Moresby based, though are from other SUAS
such as Heavala, Miaru, Popo Mikafiru, Terapo, Lese Oalai, apart from Savaiviri,
Keke/Tapala, and Heatoare villages (L AUFA, M., 2002, pers. comm.). The rest of the PMV
operators are permanent residents in SUAS in Malalaua area. Higher returns to PMV
operators are usually made on return leg trips because of freight charges levied on mainly
agricultural products such as dried sago starch and betel nuts, serving as rural exports tomarkets in Port Moresby city. Income derived from freight-related agricultural products for
PMV operators is a regular source, as there are many sago starch and betel nut sellers that
constantly supply the city markets, of which other ‘middlemen’ buy in bulk and sell to city
residents, especially, for betel nuts.
The growing numbers of ‘middlemen’ are self-employed migrants from different partsof the country, and increasingly from indigenous people of the city, who eke out a livingfrom agricultural products such as betel nuts. Betel nut sellers because of quick bargaining
and selling often return the same day or return a few days later on available PMV trucks

84South Pacific Studies Vol. 25, No. 2, 2005

after purchasing basic necessities such as kerosene, rice, or canned food items in Port
Moresby for mainly rural family household consumption in SUAS. For the traditionallyprocessed sago starch, without the ‘middlemen’, the producer sells at their own discretionat different market outlets in the city. Table 4 shows the freight charges levied on agricultural products such as sago starch and betel nuts, the two main income sources for SUAS
in Malalaua area.
For many indigenous people, betel nut chewing constitutes an important socio-culturalactivity whereby friendships are forged, renewed or maintained through sharing a betel nut,
which is mixed with lime and mustard and chewed in a peculiar Melanesian society. Heavy
betel nut chewing has been medically proven to trigger mouth cancer, but that does not stop
habitual chewers from practicing an age-old Melanesian custom and tradition passed downfrom a generation to the next. Betel nut is not a food source, but because of its ‘stimulant
factor’ and the manner in which it is sold very quickly, it has been elevated to the status on
par with that of an ‘inelastic product’, almost equal to cigarettes or even alcoholic beverages
and is annually computed for consumer price index (CPI), relative to prevailing inflationary
trends from macroeconomic perspective by the National Statistical Office (NSO), drawing
from official statistics through the Central Bank of PNG (BPNG)’s publication called,
Quarterly Economic Bulletin. Traditionally processed sago starch, unfortunately, does not
Table 2. PMV Route 600 passenger fares as at October 2002.
Destination(Disembarkation point from Port
District
Moresby)
Port Moresby to Mekeo Villages
Bereina
Port Moresby to Bereina
Bereina
Port Moresby to Apanaipi
Bereina
Port Moresby to Miaru
Malalaua
Port Moresby to Lese Oalai
Malalaua
Port Moresby to Popo
Malalaua
Port Moresby to Eopoe
Malalaua
Port Moresby to Iosipi
Malalaua
Port Moresby to Malalaua
Malalaua
Port Moresby to Kerema
KeremaPassenger fares
Province
CentralCentralCentral
Gulf
Gulf
Gulf
Gulf
Gulf
Gulf
Gulf

PNG kina (K) Japanese yen ( ￥)
10.00
13.00
17.00
17.00
17.00
17.00
20.00
20.00
20.00
50.00

360
468
612
612
612
612
720
720
720
1,800

Notes: Amounts in Japanese yen were calculated using the buying rate of the yen at 36 yen is to1 PNG kina. Thus the amounts were in PNG kina were multiplied by 36. Source: From author’s PMV survey (2002).
Table 3. General freight charges for forward leg trips for route 600 PMVs.
Type of freight charge
Forward leg trip

Particulars
Trade store goods (includes 10kg
or 25kg rice or wheat flour bags
and tinned meat/fish etc.,)

Freight charges
10% charge on all on
tradable after
inspection of invoicefrom wholesale etc.,

Full 44 gallon drum of either
outboard zoom fuel or diesel fuelfor automobiles

K50.00 (1800)

Notes: A full-44 gallon drum is equivalent to 176 litres. In parenthesis is the Japanese yen
equivalent. Source: From author’s PMV survey (2002).

Laufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

85

enjoy the privilege of being statistically computed, as is presently enjoyed by betel nut andperhaps in time, attitudinal change in improving sago starch quality in SUAS may alter that.
The functional difference of the two agricultural products from SUAS in the Malalaua area,
be it for food or taken as a stimulant, and their rate of sales, has made PMV operatorscharge more for betel nut bags, than for dried sago starch (LAUFA 2004).
Table 4. Return leg freight charges levied on agricultural products from SUAS.
Item

Betel nuts
Sago starch

Packed in empty roots
rice bag 10 kg size
PNG (K)
5.00
2.00

Yen (￥)
180
72

Packed in empty
roots rice bag 25 kg
size
PNG (K)
Yen ( ￥)
10.00
360
5.00
180

Packed in empty wheat
flour farm set bag 50 kg
size
PNG (K)
Yen ( ￥)
12.00
432
N/A
N/A

Notes: Amounts in Japanese Yen were calculated using the buying rate of the yen at 36 yen is to1 PNG kina. Thus the amounts in PNG kina were multiplied by 36. Source: From author’s
PMV survey (2002).
Table 5. Revenue projections of rural PMV transport operating on Route 600 passing throughBereina-Malalaua (in PNG kina).
PMV truck
Truck A
Truck B
Truck C
Truck D
Truck E
Truck F
Truck G
Truck H
Truck I
Truck J
Truck K
Truck L
Truck M
Truck N
Truck O
Truck P
Truck Q
Truck R
Truck S
Truck T
Truck U
Truck V
Truck W
Truck X
Truck Y
Truck Z
Truck A1
Total
Mean

Forward leg
revenue per
trip
300
300
300
360
300
300
350
300
800
400
250
300
400
300
200
200
300
900
400
600
400
500
700
400
400
400
300
10,660392.59Return leg
revenue per
trip
600
600
300
600
600
600
400
500
1,000
800
700
500
600
500
400
400
800
2,000
500
600
900
600
1,200
800
500
500
400
17,900662.96

Trips perweek

Weeklyrevenue

3
4
3
3
3
3
3
3
3
3
3
3
3
3
4
4
5
4
3
3
5
4
5
4
3
3
3
93
3.4

2,700
3,600
1,800
2,800
2,700
2,700
2,250
2,400
5,400
3,600
2,850
2,400
3,000
2,400
2,400
2,400
5,500
12,400
2,700
3,600
6,500
4,400
9,500
4,800
2,700
2,700
2,100
102,300
3,788

Total
revenue permonth
10,80014,4007,200
11,52010,80010,8009,000
9,600
21,60014,40011,4009,600
12,000
9,600
9,600
9,600
22,00049,60010,80014,40026,00017,60038,00019,20010,80010,8008,400
409,520
15,167

Projected
annualrevenue
129,600
172,800
86,400138,240
129,600
129,600
108,000
115,200
259,200
172,800
136,800
115,200
144,000
115,200
115,200
115,200
264,000
595,200
129,600
172,800
312,000
211,200
456,000
230,400
129,600
129,600
100,800
4,914,240
182,088

Notes: PMV = public motor vehicles, N = 36 (total no. of PMVs operating on route 600 passingvia (Bereina-Malalaua Highway). N = 27 (size of the sample); 3 PMVs voluntarily refused
to participate in the survey; 3 PMVs were off the road for major repairs or overhaul andwere not included at the time of the survey. Source: From author’s PMV survey (2002).

86South Pacific Studies Vol. 25, No. 2, 2005

Whatever the case may be for rural agrarian products, it demonstrates, on the whole,that this interactive buying and selling taken from rural-urban contextual dimensions aptly
reflects a ‘win-win relationship’ (benevolence), taking into account the gains made by
agricultural product sellers, middlemen in the city and PMV operators. Socio-economic
benefits sharing, arguably, has made lower income groups better off, who appear to be
adept and apt at adapting to the logic of the market. This in itself explains a structuraltransformation process of societies. Moreover it signifies Adam Smith’s abstract notion of
the much-acclaimed ‘invisible hand’ (laissez faire) of the market, justifying its determined
logic that people acting through their own ‘self-interests’, indirectly results in creating
public goods, whereby benefit sharing through carriage of people and goods, through theirrelative modes of production underscores theoretically the creation and distribution of
wealth in societies. A case in point is that of the forward leg and return leg incomes
Table 6. Forecasted total expenditure of rural PMV transport operating on Route 600 passing
through Bereina-Malalaua Road (in PNG kina).
PMV truck
Truck A
Truck B
Truck C
Truck D
Truck E
Truck F
Truck G
Truck H
Truck I
Truck J
Truck K
Truck L
Truck M
Truck N
Truck O
Truck P
Truck Q
Truck R
Truck S
Truck T
Truck U
Truck V
Truck W
Truck X
Truck Y
Truck Z
Truck A1
Total
Mean

License
fees
400
158
134
160
158
158
158
158
140
160
120
138
138
158
260
260
300
446
206
300
500
*
260
400
400
400
400
6,470
239

Labour
wages
1,458
1,944
972
1,555
1,458
1,458
1,215
1,296
2,916
1,944
1,539
1,296
1,620
1,296
1,296
1,296
2,970
6,696
1,458
1,944
3,510
2,376
5,130
2,592
1,458
1,458
1,134
55,285
2,047

Spare parts

Fuel costs

1,998
2,664
1,332
2,131
1,998
1,998
1,665
1,776
3,996
2,664
2,109
1,776
2,220
1,776
1,776
1,776
4,070
9,176
1,998
2,664
4,810
3,256
7,030
3,552
1,998
1,998
1,554
75,761
2,805

3,024
2,880
2,640
3,672
2,160
1,800
2,040
2,160
3,840
2,400
2,520
2,424
1,200
2,280
3,520
3,360
4,200
5,040
2,760
3,240
6,000
4,800
6,000
3,840
3,000
2,160
2,160
85,1203,152Monthly costs Total costs per
annum
6,480
78,1607,488
90,014
4,944
59,462
7,358
88,4605,616
67,5505,256
63,2304,920
59,198
5,232
62,942
10,752
129,164
7,008
84,256
6,168
74,136
5,496
66,0905,040
60,618
5,352
64,382
6,592
79,364
6,432
77,444
11,240135,180
20,912
251,390
6,216
74,798
7,848
94,476
14,320172,340
10,432
125,184
18,160218,180
9,984
120,208
6,456
77,872
5,616
67,792
4,848
58,576
216,166
2,600,466
8,006
96,313

Notes: Monthly expenditure = labor wages + spare parts + fuel costs, Annual expenditure = license
fees + (labor wages + fuel costs) × 12 months, * on two-month temporary permit. PMV= Public Motor Vehicles, N = 36 (total no. of PMVs operating on route 600 passing via(Bereina-Malalaua Highway), n = 27 (size of the sample); 3 PMVs voluntarily refused toparticipate in the survey; 3 PMVs were off the road for major repairs or overhaul and were
not included at the time of the survey. Source: From author’s PMV survey (2002).

Laufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

87generated for PMV operators as presented in Table 5. For all PMVs interviewed, the returnleg fetches higher income as compared to the forward leg; quite precarious, owing toirregularity in freight-related charges, not to mention, fuel costs appears to drasticallyreduce PMV operators’ income.
Return leg trips are quite profitable for PMV operators; meanwhile, agricultural
producers in SUAS in Malalaua area gain from forward leg assessments, after their rural
agricultural products are sold in urban markets in Port Moresby. This network of traderelationship between PMV operators (tertiary rural service industry) and that of sago starch
processors (primary industry) aptly underscores the nature of ‘zero-sum proposition’
wherein a loss somewhere, be it for the PMV operators or for the sago starch sellers, isimplicitly a gain somewhere in the whole scheme of commercial transactions, with respect
to a whole plethora of trading networks, as regards, middlemen from the urban area for
agricultural products from SUAS in Malalaua area, service station operators, tyre repair
workshops, among others.
From specific assessments for revenue gains to rural transport sector, it can be argued,
for instance that, truck A makes three return trips per week and each return trips earns PNG
kina 900, thus its weekly revenue is projected at PNG kina 2,700 and its monthly income
is set at PNG kina 10,800. Table 7 shows the net incomes for PMV operators, after
considering the main expenditures presented in Table 6. It will be demonstrated that the net
incomes for PMV operators are dependent on the passenger capacity, which ranges between
25 to 60 passengers, assuming that these trucks were filled to the required licensed capacity.
This means that larger trucks rake in more profit compared to smaller trucks operating onroute 600.
Table 6 shows the forecasted total expenditure of rural PMV transport service providers operating on route 600 passing through the Bereina-Malalaua road. Operational costswith respect to labor wages paid to drivers and crewmembers, spare parts or general repairs
made to air filter, oil filter, shock absorbers, spring bushes, and tyres for wear and tear, adds
a significant burden to PMV operators. During the rural PMV survey, it was reported thatthe wear and tear made on tires and shock absorbers is made severe and quite frequent by
an unsealed section of the road between Agevairu in Kairuku District, Central Province andthe Mekeo villages, along the main Hiritano Highway, which is then linked to the BereinaMalalaua Highway. The eventual upgrading and sealing of this section of the road along themain Hiritano Highway may not only reduce travel discomforts for passengers, but could
also reduce the wear and tear on PMV trucks operated by people from SUAS, thereby
improving the net incomes for rural PMV operators.
This study critically examined the Japanese yen loan co-financed Bereina-Malalaua
road project in retrospect and prospect. Socio-economic effects of the road were assessed
through small-scale rural PMV surveys. A total of 36 PMVs operate on the BereinaMalalaua road, of which 27 were interviewed. It was established that a return leg trip
between SUAS and Port Moresby City fetches on average about PNG kina 662.96; whilst
a forward leg trip from Port Moresby City to SUAS earns about PNG kina 392.59, which
critically depend on carriage (freight-related charges) of perishable goods such as sago

88South Pacific Studies Vol. 25, No. 2, 2005

(Metroxylon spp.) and betel nuts (Areca spp.) and, more critically on the receipt of passenger fares forward-bound or return-bound. The study shows that the net income earned by arural PMV operator represents 42.7 % of the total revenue, whilst the other 57.3 % isabsorbed by operational costs (labour wages, fuel costs, repair and maintenance). Based onthese indices, a rural PMV operator on average makes weekly total revenue of PNG kina
3,788 and a net income of PNG kina 1,617 after operational costs. Therefore, the rural PMV
operator on average earns a monthly net income of about PNG kina 6,469. Likewise the net
income per annum for a rural PMV operator is projected at about PNG kina 77,628,
assuming that the PMV trucks are in operational condition throughout the year. It is also
critical to observe that for rural PMV operators, the operational costs represent a significant
risk, which ultimately decides their net incomes.
From national and regional development perspective, the road provides a vital link forrural masses in the two provinces within the southern region of the country connected by
Table 7. Net income of rural PMV transport operating on Route 600 passing through BereinaMalalaua per annum (in PNG kina and Japanese yen).
PMV
truck

Passenger
capacity

Truck A
Truck B
Truck C
Truck D
Truck E
Truck F
Truck G
Truck H
Truck I
Truck J
Truck K
Truck L
Truck M
Truck N
Truck O
Truck P
Truck Q
Truck R
Truck S
Truck T
Truck U
Truck V
Truck W
Truck X
Truck Y
Truck Z
Truck A1
Total
Mean

25
30
25
30
30
30
25
25
50
30
30
25
25
30
25
25
30
64
40
50
25
50
30
25
45
25
30
704
26

Total revenue
PNG kina Japanese yen
129,600
4,665,600
172,800
6,220,800
86,4002,764,800
138,240
4,976,640
129,600
4,665,600
129,600
4,665,600
108,000
3,888,000
115,200
4,147,200
259,200
9,331,200
172,800
6,220,800
136,800
4,924,800
115,200
4,147,200
144,000
5,184,000
115,200
4,147,200
115,200
4,147,200
115,200
4,147,200
264,000
9,504,000
595,200 21,427,200
129,600
4,665,600
172,800
6,220,800
312,000 11,232,000
211,200
7,603,200
456,000 16,416,000
230,400
8,294,400
129,600
4,665,600
129,600
4,665,600
100,800
3,888,000
11,727,360 422,184,960
434,346 15,636,480

Total expenditure

Net income

PNG kina Japanese yen PNG kina Japanese yen
78,1602,813,760
51,4401,851,840
90,0143,240,504
82,7862,980,296
59,4622,140,632
26,938969,768
88,4603,184,588
49,7791,792,051
67,5502,431,800
62,0502,233,800
63,2302,276,280
66,3702,389,320
59,1982,131,128
48,802
1,756,872
62,9422,265,912
52,258
1,881,288
129,164
4,649,904
130,036
4,681,296
84,256
3,033,216
88,544
3,187,584
74,136
2,668,896
62,6642,255,904
66,0902,379,240
49,1101,767,960
60,6182,182,248
83,3823,001,752
64,382
2,317,752
50,818
1,829,448
79,3642,857,104
35,836
1,290,096
77,444
2,787,984
37,756
1,359,216
135,180
4,866,480
128,820
4,637,520
251,390
9,050,040
343,810 12,377,160
74,7982,692,728
54,802
1,972,872
94,4763,401,136
78,324
2,819,664
172,340
6,204,240
139,660
5,027,760
125,184
4,506,624
86,016
3,096,576
218,180
7,854,480
237,820
8,561,520
120,208
4,327,488
110,192
3,966,912
77,8722,803,392
51,7281,862,208
67,7922,440,512
61,8082,225,088
58,5762,108,736
42,224
1,520,064
6,721,808 241,985,088
5,005,552 180,199,872
248,955
8,962,410
185,390
6,674,069

Notes: PMV = public motor vehicles, N = 36 (total no. of PMVs operating on route 600 passingvia (Bereina-Malalaua Highway), n = 27 (size of the sample); 3 PMVs voluntarily refused
to participate in the survey; 3 PMVs were off the road for major repairs or overhaul andwere not included at the time of the survey. Source: From author’s PMV survey (2002).

Laufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

89the main Hiritano Highway to effectively participate in socio-economic activities. This
ensures a steady flow of goods and services between rural and urban areas; however, suchinitiatives are often thwarted by bureaucratic red tape, hampering rural development wherebulk of the population lives. While SUAS in Gulf Province appear to be the immediate
beneficiaries of the recently constructed Bereina-Malalaua road, commuters in nearby
Central Province, though were connected to Port Moresby well before, appear to be
stagnating in real benefits distribution and sharing because of the unsealed sections of theroad, which requires resurfacing and bitumen tar sealing, if the pitiful situations afflicting
people of the western part of Central province is to be collectively addressed.
Based on the assessment made with respect to criterion III, the main beneficiaries of
the road project appears to be the rural PMV transport businesses operating on route 600
serving the SUAS. More specifically, general commuters and sago farmers, the other two
beneficiaries of the road utilize these transport services, which have been quite regularly
facilitated, owing to frequent trips, on at least three return trips per week on average. The
net incomes for PMV operators, as shown in Table 7 attempt to provide how this vital ruraltransport service industry is gaining from the post-road construction era, whilst moving
people and rural agrarian products from SUAS in Malalaua area to Port Moresby and viceversa.
Socio-economic effects on SUAS with respect to transport accessibility in the past
Transport accessibility in the past is not a difficult parameter to measure as where theroad now meanders through was really a pool of marshy peat soils and that travel between
other hamlets and villages within the province was only made possible through rivertransport, using motorized dinghies or canoes. To travel to Port Moresby before theconstruction of the Bereina-Malalaua road, sago farmers had to travel via waterways toLavare, an embarkation and disembarkation point for commuters to Port Moresby. Lavare
was extensively used in the past by PMV operators, but is no longer used as transit point
for moving in and around a maritime province like Gulf nowadays. The road from Lavarein Iokea village (Moripi census division) used to be another trunk road from the main
Hiritano Highway and many Gulf people relied on it for their transportation needs before.
To illustrate the case here, people from, for instance, Heatoare, Savaiviri, or the Lese andPopo villages travelled by river and sea to get to Lavare to further their journey to Port
Moresby during the pre-Bereina-Malalaua road construction period. Transport accessibility
in the past for marshy land dwellers in SUAS was epitomized by waterway transport system
and indicated quite clearly that moving sago starch, using waterway transport to othertransit points for transporting by road transport was both a deterrent because of unpredictable weather patterns, causing travels to be hazardous and the movement itself absorbed somuch time, to the dismay of SUAS before.
Socio-economic effects on SUAS with respect to transport accessibility at present
Transport accessibility at present has generally improved for SUAS in Malalaua
District, owing to the fact that Port Moresby is now only five hours away, unlike the past90South Pacific Studies Vol. 25, No. 2, 2005

meandering river systems to get there. The ratios on sago palm utilization, be it for
self-consumption, or for sale, in a ratio of 3:7, alludes to the probability that more sago
would be sold, then to be kept for self-consumption because it is fairly convenient totransport traditionally processed sago starch to city markets through the road transportsystem nowadays (LAUFA 2004). The notion of trade promotion between SUAS in
Malalaua District and that of Port Moresby city has experienced a new threshold of
supply-demand situation, only made possible through the road, which undoubtedly is thecausal link for explaining this production and consumption behaviour of rural and urban
dwellers.
One way of ascertaining transport accessibility of people in SUAS in Malalaua area is
to gauge commuters’ purpose of travel, let alone, determine their present perception of theBereina-Malalaua road. Of the 38 respondents (Table 8), who voluntarily participated in therural PMV survey conducted by the author in 2002, about 44.7 % of the respondents
generally expressed that the road was well constructed, while a further 52.6 % observed thatthe road was not so well constructed. A very small portion (2.6 %) of the respondents
actually only one person thinks that the road was poorly constructed. Equally importantfrom the viewpoint of the purpose of travel to Port Moresby, can be judged from theresponses made in Table 9, whereby, about 78 % of the respondents have an economic
reason for travel, while the remainder, could be just general commuters using the rural
Table 8. Commuter’s perception of the Bereina-Malalaua Road (passing through Route 600).
I.
II.
III.
Total

Parameters
Well-constructed
Not so well constructed
Poorly Constructed

No. of respondents
17
20
1
38

Percentage (%)
44.7
52.6
2.6
100

Notes: Total no. of respondents were 38. Source: From author’s PMV survey (2002).
Table 9. Commuter’s reason for travel to Port Moresby (passing through route 600).
Parameters
I.
II.
III.
Total

Sell sago and betel nuts
Buy goods for trade store
Other reasons

No. ofrespondents
27
3
8
38

Percentage (%)
71.1
7.9
21.0
100

Notes: Total no. of respondents were 38. Source: From author’s PMV survey (2002).
Table 10. Summary of socio-economic effects on SUAS showing change factor induced bypost-construction era of the road from May 2000 to present time.
Actors in SUAS
(Parameters)(I)
Sago farmers(II)
Betel nut sellers(III)
General commuters(IV)
Trainee doctors/Nurse(V)
PMV operators(VI)
PMV crewmembers(VII) PMV drivers(VIII) Fuel drum retailers(IX)
Trade store operators(X)

Teachers and students

Sector ofsociety
Agriculture
Agriculture
SocialHealthTransport
Transport
Transport
Merchandise
Merchandise
Education

Benefits to actors in SUAS in Malaua area
Personal and sago starch mobility to markets in urban area
Personal and betel nuts mobility to markets in urban area
Personal mobility to urban area
Personal mobility and pharmaceutical drugs to SUAS
Deriving profit from rural transport services
Employment in rural transport sector
Employment in rural transport sector
Deriving profit from zoom, dieseline, kerosene, petrol etc.,
Deriving profit from villagers in SUAS from sale of tradable
food items such as rice, flour and tinned meat or fish.
Personal mobility and access to urban area facilities.

Notes: General commuters could be simple villagers in SUAS, school-age children, other district
support services staff within Malalaua District, or even as far as Ihu, Baimuru and Kikori

Laufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

91transport service for sightseeing in Port Moresby. Of the total number of the respondents,
27 people at any one time, which represents 71 % of the commuters, are either selling sago
starch or betel nuts in Port Moresby city markets.
Net socio-economic effects of the Bereina-Malalaua Road on SUAS in Malalaua area
Based on criterion (III), this study tentatively summarizes the combination of the net
socio-economic benefits accruing to SUAS in the Malalaua area, considering different
actor-participant situational analysis, capturing the change factors inherent in a societal
transformation process within spatiotemporal conditions. The road now ultimately serves animportant rural welfare function, in that, it serves as a central component of rural development whereby several key functions of a particularistic society, that of SUAS in the
Malalaua area are now experiencing enhanced relations between market institutions in bothrural and urban areas with regards to personal and agricultural product mobility, covering
space and time. Table 10 provides a summary of these net socio-economic effects accruing
to SUAS, reflecting societal viewpoint of how the road appears to be linking rural-urban
actors with markets and other services within the district and elsewhere in the province.
Social philosophy of the Bereina-Malalaua Road
Social philosophy of the Bereina-Malalaua road for SUAS in Malalaua area attempts
to explain the livelihood of the people and their social and physical milieu in a state oftransition. The ‘backward linkages’ and ‘forward linkages’ of the Bereina-Malalaua road,showcased against the H IRSCHMAN’s Circular Model (1958), reflectively show the characterand rate of societal transformation in SUAS. Micro-scale traditional sago processors in
Malalaua area can now conveniently sell their dried sago starch at urban markets and it isentirely up to the sago starch purchaser to either process for self-consumption or re-sells
with other additives for local food markets in the city. The once idle-lying marginal marshy
land with poor nutritional status in the past, which experienced very low levels of socioeconomic development then, is undergoing a societal adjustment, which is an evolutionary
process; quite slow, but has the potential for further development in agribusiness enterprises
such as vanilla farming, cane furniture production, or even eel farming, thereby strengthening the diversity and pace of economic development. Distribution channels of rural income,courtesy of the road, for SUAS through local entrepreneurial activities as supported bydifferent actors and mutually reinforced by rural-urban economic interactions, somewhat
reflects the diversity and pace of rural development from socio-economic considerations.
Spatiotemporal attributes of the roadAt least two critical change factors inherent in SUAS transformation process, which
aptly describes the nature of its political economy of development, could be attributed to thefollowing key elements. Firstly, without the road and even predating capitalism, backward
rural SUAS had an elaborate barter trade, the Hiri Trade, with the Motuans in Central
Province. Movement of sago starch from Malalaua people to Motuan people was undertaken on sea voyages, utilizing the north-westerly trade winds called, Lahara, (in Motu

92South Pacific Studies Vol. 25, No. 2, 2005

language), whilst clay pots were imported into the Malalaua society, utilizing the southwesterly trade winds called, Laurabada (in Motu language). This changed after the late
1950s. After the Hiritano highway was constructed during the late 1970s, only a few sago
farmers brought sago starch to Port Moresby from Lavare transit point to other villages in
Gulf Province then. As of May 2000 and up till now, time lag and the transition from sea
voyage barter trade to a relatively small-scale supply of sago starch to Port Moresby
markets through the Bereina-Malalaua road represents a significant socio-economic change,
though the motivation to trade surplus dried sago starch, was quite evident and continues tobe so, even today. This was ultimately undermined by lack of proper road network system
in place prior to the period May 2000.
Secondly, a key spatiotemporal attribute of the Bereina-Malalaua road relates to land
use change after it was completed. Vacant parcels of traditionally-owned lands along theroad, interestingly enough, are now the sites of traditionally built houses and more are being
planned to be built in the coming years, as many people want to be closer to the road andaccess transport and other vital services regularly. This is an attitudinal change, somewhat
induced by the post-road construction era and may eventually lead to increased economic
activities of smaller scale timber processing. The economic geography of SUAS in
Malalaua area, to an extent, with the road has transformed and is poised for more socioeconomic changes to its land use functions, whereby those who were not too keen on land
use management for cash crop farming, or for establishing poultry or piggery projects, will
now face social and resource pressures, as those ‘city returnees’ such as retired or retrenched public servants also have equal stake in traditionally owned natural resources,
which includes land. It means that once hunting grounds for game and horticultural land for
growing bananas, cassava may well be transformed into house resettlement schemes, which
is now an on-going trend within SUAS in the Malalaua area. New settled communities will
emerge from within SUAS, which may have different needs, say, more commerciallyoriented in scope. Land use management, therefore, will also accompany changes to thephysical and social structure with regards to the exercise and controlling rights of land. Thisdepends on the nature of rights as afforded to an individual, or a particular clan possess in
the Malalaua area.

Conclusions
Having a road is not a luxury; it is an essential need, if it serves the transportationneeds of the people who rely on it for transporting goods, links to other vital services suchas health and education facilities, let alone providing means to market sources for cash
income. Depending on spatial and population distribution within a locality, it is quite an
essential requirement for having good roads in the first place. For the SUAS in Malalaua,
it was a virtual impossibility to enhance personal and product mobility for agricultural
products such as dried sago starch, betel nuts and other produce prior to the completion of
the road project in May 2000, owing to topographic nature, which physically limited

Laufa: Japan’s Development Aid Effects on the Rural Transport Industry in PNG

93

opportunities for economic development in the area. Science and technology (S and T)
application through a yen loan infrastructure project made the transition from backward
rural SUAS to societies that possess the capability to improve further in time. Socioeconomic importance of the Bereina-Malalaua road, therefore, cannot be overemphasized,
but should be seen as entry points for developing other vital life-sustenance activities so as
to support rural-based small-scale industries, that may otherwise be difficult to reach,considering time and its other concomitant discomforts.
This paper provided analyses and syntheses of how Japanese ODA has made an impact
on PNG micro-economy, of which an attempt was made to clarify how SUAS reflectively
adopts to proactively planned and implemented infrastructure projects in Malalaua districtin Gulf Province of PNG. This study critically examined the Japanese yen loan co-financed
Bereina-Malalaua road project in retrospect and prospect. Socio-economic effects of theroad were assessed through small-scale rural PMV surveys. A total of 36 PMVs operate on
the Bereina-Malalaua road, of which 27 were interviewed. It was established that a return
leg trip between SUAS and Port Moresby City fetches on average about PNG kina 662.96;
whilst a forward leg trip from Port Moresby City to SUAS earns about PNG kina 392.59,
which critically depend on carriage (freight-related charges) of perishable goods such assago (Metroxylon spp.) and betel nuts (Areca spp.) and, more critically on the receipt of
passenger fares to and fro. On the whole, the net income earned by a rural PMV operator
represents 42.7 % of the total revenue, whilst the other 57.3 % is absorbed by operationalcosts (labor wages, fuel costs, repair and maintenance).
Finally, it can concluded that the Bereina-Malalaua road serves to negate the disenchantment of fragmented societies, owing to natural limits imposed by the physicalenvironment, wherein a vast area is covered in marshy, marginal swampy lands, which
typifies the situation for SUAS in Malalaua area. The results of this socio-economic study
show that the three immediate observable beneficiaries of the road project in SUAS can beeasily identified with PMV operators, rural agricultural producers and the general travelling
public. These beneficiaries of the road project ascribe to criterion (III) of the yen loan
projects, therefore, justifiably suggests that the Bereina-Malalaua road project serves as acentral component of sustainable rural development prospects in SUAS in the Malalaua areaof PNG.

Acknowledgements
The author is indebted to the PMV transport owners operating on route 600, which
passes through Bereina-Malalaua Highway for kindly participating in the rural transport
survey conducted in 2002. Thanks also go to my wife Dr. Betty Philip HAIVERAVA, an
alumna of Chiba University, Japan as well as my dear parents Miro LAUFA (father) and
Taise EHAVA (mother) for assisting with interviewing 27 of the 36 PMV owners in PNG,
of which this study would not have been possible.

94

South Pacific Studies Vol. 25, No. 2, 2005

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