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Chapter Three: Papua New Guinea and the Pacific
Papua New Guinea
PNG Development Indicators6
Country
GNP per capita
($A)Access to safe water
(% of population)Life expectancy (years)
Adult literacy
(% of population)Papua New Guinea
1,417
23
58
45
PNG Program
| Programmed activities | $300.0 | million |
| Retirement benefits | $14.3 | million |
| Estimated other flows | $9.4 | million |
| Estimated total aid flows | $323.7 | million |
Australia's development cooperation program in PNG is the largest bilateral aid program and is one fifth of the total aid program. The strategy for the program to 2003 has four key objectives:
- strengthening governance through the introduction of an Incentive Fund, supporting economic management and creating an environment that encourages growth in the private sector, building the capacity of PNG agencies to deliver services, promoting the rule of law and strengthening civil participation and representation
- improving social indicators by expanding the quality and reach of primary health care and education facilities, especially to poor rural communities, strengthening PNG's emergency response capacities and promoting gender equity
- building prospects for sustainable economic growth by constructing and maintaining infrastructure vital for development, increasing agricultural productivity and encouraging the sustainable use of natural resources
- consolidating the peace process in Bougainville by providing an identifiable peace dividend.
The change from direct budget support from the aid program to jointly programmed aid was completed in 1999. Australia's aid program in PNG will be significantly more effective, transparent and accountable. The new Treaty on Development Cooperation between Australia and PNG will come into effect on 1 July 2000. The Treaty links performance more closely to future funding decisions. A maximum indicative annual planning figure of $300 million nominal will be provided, subject to performance against benchmarks. A new Incentive Fund will provide greater flexibility as for the first time, PNG organisations such as community groups, provincial governments and the private sector, can seek direct funding. The aid program is working to increase PNG participation in the program, where possible providing funding for relevant PNG agencies to undertake aid activities.
Sectoral Assistance to PNG
To achieve its objectives, the PNG program is focused on governance, education, health, infrastructure, renewable resources and assisting the peace process in Bougainville.
Diagram 10: Estimated total aid flows to PNG
by sector in 2000-01
Governance
Australia's aid program is introducing mechanisms to ensure that assistance can be provided more flexibly to those institutions that have a proven track record in service delivery or which are engaged in the process of reform. The aid program is supporting the PNG Government's commitment to political and economic reform, including re-engagement with the IMF and World Bank.
Australia is providing technical assistance and training to improve PNG's economic management, including areas such as privatisation, debt management, economic forecasting and financial management. Projects are building capacity within PNG's public administration to manage more effectively resources and programs. A number of central agencies critical to overall governance require specialised support, including Finance and Treasury, the Ombudsman Commission, the Electoral Commission, the National Statistics Office and the Internal Revenue Commission.
Australia is also helping the judicial, police and prison services to promote the rule of law and is increasingly looking at community-based initiatives to strengthen the justice system.
Support for the development of civil society is also a priority. Projects initiated by NGOs and community-based organisations are funded through the Community Development and Small Activities schemes. Australia helps the PNG private sector, particularly small to medium enterprises, by supporting training services and microfinance organisations.
Greater resources are being provided to support governance programs. Expenditure on governance activities across the PNG program should increase from approximately $40 million in 1999-2000 to more than $70 million per year over the next four years.
Education and training
Educational needs in PNG are enormous. About 60 per cent of women and 50 per cent of men are illiterate. PNG has begun to implement a bold new agenda for education reform that has seen over 192,000 extra children at school in the past four years - a
one-third increase. More facilities will be built to accommodate increased student numbers.In 2000-01 Australia will provide approximately a quarter of annual aid to PNG for the education sector. Australia's assistance is helping PNG to continue the considerable gains achieved in education in recent years.
A joint study of Australian assistance to the PNG Education Sector was undertaken in late 1999. It recommends that future assistance focus more closely on two principal goals: to assist PNG progress towards achieving quality universal basic education and to assist PNG to achieve a productive, skilled population. Future assistance to the sector will see an increased emphasis given to vocational and technical training.
Australian assistance seeks to improve the quality and relevance of teaching at the primary and secondary levels, the development of curricula and materials and the construction and rehabilitation of education facilities. Australia is also the largest provider of tertiary scholarships to PNG with around 100 students graduating each year from tertiary institutions in Australia.
Health
PNG suffers from unacceptably high levels of infant mortality, malaria, tuberculosis, and HIV/AIDS. Rural health services are in crisis, with PNG lacking the capacity and resources to provide even basic health care to many communities.
Expenditure in the health sector is projected to increase to 15 per cent of the PNG program in 2000-01. PNG and Australia have agreed that health expenditure should continue to increase, based on a commitment by PNG to maintain and increase its own health budget.
A new sector approach currently being developed will focus on national policy objectives and develop improved management and coordination across all sector activity. The new PNG National Health Plan 2001-10 is crucial to this approach and will provide the framework for Australia's aid to the health sector over the next decade.
As the vehicle for Australia's move to the sector-wide approach, the Health Services Support Program, in combination with the women's and children's health project, will be critical to improving rural health services. The National HIV/AIDS support project due to be implemented in August 2000 will assist PNG to tackle HIV.
Infrastructure
Improvements to infrastructure are fundamental to PNG's development. Poor and degraded transport and communications infrastructure can prevent the delivery of essential services and access to markets particularly in the rural and remote areas. A new program of assistance is being developed in water supply and sanitation, a key infrastructure requirement for improved health.
The land transport program is assisting PNG to improve the maintenance of the national road network in six provinces. It will also help to upgrade a section of the Highlands Highways and support major reconstruction work on key roads in the port area of Lae, the major port for the Highlands region. The program is supporting the maintenance of the road and bridge network, reconstruction of roads in Bougainville and East New Britain and training and institutional strengthening in the PNG Department of Works.
Assistance in civil aviation will improve aviation safety through the maintenance of key navigation and safety equipment and the upgrading of national airports.
Renewable resources
Sustainable management of resources is essential to maintain PNG's natural environment and to promote continued economic and social development. Australian aid aims to strengthen PNG agencies so they can manage resources in a sustainable manner.
Management of forestry resources is a particular concern. Australia is supporting the government's moratorium on new logging leases through the Forestry Human Development Project. New activities will continue support to the forestry and environment sectors at both national and local levels.
Raising productivity, employment opportunities and income generation in the agriculture, forestry and fisheries sectors will help raise the standard of living of the rural population. The forthcoming Agriculture Sector Training Project will assist 60,000 semi-commercial farmers throughout PNG to move into commercial production.
Bougainville Peace Process
The peace process in Bougainville has made substantial progress since the cessation of fighting in 1997. There is still a long way to go before all parties agree on the political and administrative future of Bougainville. Australia will continue to assist the reconstruction of Bougainville after a decade of conflict. Activities totalling $51 million are planned over the next three years, including support with transport, infrastructure, health, education, agriculture and the strengthening of governance systems.
Assistance will continue to emphasise community activities that maximise local participation, including the unemployed and ex-combatants, and the development of civil society on Bougainville. Maximum local involvement in planning and implementing aid in Bougainville is critical to the success of the aid program.
The peace process is now well established in the PNG province of Bougainville. The considerable progress in the last two-and-a-half years is due to the commitment of the PNG Government and the Bougainville people. The presence of the Australian-led multinational Peace Monitoring Group (PMG) has helped achieve an environment where people can once again feel safe and turn their attention to the immense task of rebuilding Bougainville.
Australian aid has been able to make a real difference in this environment. Australia is helping to meet priority needs in basic health and education through the construction and refurbishment of schools and medical centres (including a new hospital in Buka). Australia will be supporting basic literacy and numeracy programs for unemployed youth and ex-combatants.
Australia is also providing aid to stimulate the economy of Bougainville. A three-year program of building copra and cocoa dryers and fermentaries will help revitalise these two agriculture sectors. Microfinance facilities have also been established with training provided to local NGOs. A joint Australia-New Zealand Community Police training project will help to restore civil society and create an environment in which rebuilding can be carried out.
The Pacific Region
Regional Development Indicators7
Country
GNP per capita
($A)Access to safe water
(% of population)Life expectancy (years)
Adult literacy
(% of population)Fiji
2,110
77
67
93
Solomon Islands
750
64
65
30
Vanuatu
1,270
87
66
34
Samoa
1,020
90
67
96
Tonga
1,690
95
68
99
Kiribati
1,180
76
62
92
Tuvalu
1,843
85
67
95
Regional Overview of Pacific
Australia is a major donor to the Pacific region. Australia's assistance helps Pacific island governments to deliver essential services that meet the basic needs of their people.
Pacific countries face a number of common development challenges - remoteness from major markets, modest natural resource and export bases, a heavy reliance on costly imports and need to broaden skill levels. Their expanding populations and limited access to viable agricultural land place further pressures on development. Pacific island countries are also vulnerable to natural disasters and environmental degradation.
Regional strategy
The long-term objective of Australia's assistance to the Pacific is to help countries in the region achieve the maximum possible degree of self-reliance. In the medium-term, Australia's aid aims to achieve five principal outcomes for Pacific island countries: better governance, stronger economic growth, greater capacity, better service delivery and environmental integrity.
Sectoral Assistance to the Pacific
To achieve these outcomes assistance in 2000-01 will continue to focus on economic reform and governance, health, education and training, environment and natural resource management.
Diagram 11: Estimated total aid flows to the Pacific 2000-01
Economic Reform and Governance
Improving governance is fundamental to Australia's assistance to the region, recognising the strong links between standards of governance, aid effectiveness and sustainable development. Better governance, stronger growth and improved service delivery all require the adoption of appropriate policy, legislative and administrative frameworks for both the public and private sectors. There is also a critical need to enhance professional, technical and administrative skills.
In 2000-01 implementation of the internationally endorsed Automated System for Customs Data will be completed in Fiji, Samoa and Vanuatu. Australia will continue to promote and disseminate research on the unique development challenges in Pacific island countries through support for publications and a program of seminars in Australia and the region. Australia is also introducing a pilot program to increase support for NGOs, strengthening their ability to assist communities in need.
Education and training
In 2000-01 Australia's regional and bilateral assistance for education will aim to improve the quality and relevance of education in Pacific island countries. Australia's aid will upgrade teachers' skills and assist with curriculum development and vocational training. Australian aid will continue to emphasise student literacy and numeracy skills for primary aged children and help to equip secondary school leavers with vocational skills that benefit their future employment. In 1999-2000, around 800 Pacific islanders studied on Australian scholarships either at regional institutions, such as the University of the South Pacific (USP), or in Australia.
A new telecommunications network at USP, funded jointly by Japan, New Zealand and Australia, is providing an important distance education link between Suva and USP's twelve regional centres. In 2000-01, Australia will supplement infrastructure support for this project with essential staff training, course materials and software.
Health
National and regional primary health care and disease prevention programs continue as priorities for Australian assistance. Australia supports a range of programs for national health reform and management, medical training, health promotion and the provision of clean water and sanitation. Lifestyle diseases, such as heart disease and lung cancer are having an increased impact on health. Australia will also introduce measures to combat the incidence of infectious diseases, including malaria, dengue, hepatitis and HIV/AIDS.
In 2000-01 Australia will continue to support bilateral and regional activities in these areas. New initiatives are planned in reproductive health, the prevention of child abuse, non-communicable diseases, immunisation and the maintenance of medical equipment. Australia will fund more visits to the region by Australian specialist volunteer medical teams for clinical services and training across a range of fields. Australia will also maintain support for women's crisis centres in Fiji and Vanuatu.
Environment and natural resources
Australia is assisting Pacific island countries to manage their limited natural resources sustainably, particularly fish stocks and forests. Australia's aid is helping these countries to protect fragile environments from pollution and natural disasters. A new regional project, jointly financed by Australia and France, will help to establish renewable, low cost wind and solar energy facilities in remote rural areas.
Through its contributions to the Forum Fisheries Agency and Secretariat of the Pacific Community, Australia is helping island countries in their efforts to conserve and manage tuna fish stocks that provide an annual catch valued at around $2.8 billion.
Private sector development
Australia's assistance for private sector development will help Pacific island countries to establish policy and regulatory environments that support private sector investment. Australia will provide assistance to private sector organisations through specialist advice on developing commercially viable projects and opportunities for increased trade and investment in the wider Pacific region.
In 2000-01 Australia will continue to support the World Bank/International Finance Corporation's South Pacific Project Facility (SPPF) and the South Pacific Trade Commission. The SPPF assists entrepreneurs to develop commercial project proposals. In 1999 the SPPF achieved its target of a record 17 projects approved by financial institutions.
Pacific Regional Organisations
Regional organisations play an important role in providing Pacific island countries with technical assistance, capacity building, policy development and international representation across the range of economic and social sectors. Australia's Pacific regional program complements bilateral and multi-country assistance and is delivered through key regional organisations like the South Pacific Forum, the Forum Fisheries Agency and the South Pacific Regional Environment Programme.
In 2000-01 Australia will work to enhance the effectiveness of regional organisations through systematic management reviews under the new Multilateral Assessment Framework. The aid program will increasingly focus on program achievements in assessing its relationships with these agencies. To promote efficiency and donor coordination, Australia is also seeking to locate more of its multi-country projects within regional organisations.
New triennial funding arrangements have been agreed between Australia and the principal regional organisations providing increased financial security and greater flexibility for priority programs.
Bilateral Programs
Diagram 12: Estimated total aid flows to the Pacific by country
Fiji
| Country program allocation | $17.5 | million |
| Estimated other flows | $4.8 | million |
| Estimated total aid flows | $22.3 | million |
Australia's aid to Fiji will continue to support the Fiji Government's key development priorities, particularly public sector efficiency, health and education. Australia will work with Fiji to further strengthen key government agencies and improve public sector performance and service delivery. The aid program will focus on improving access to quality education through training and support for basic educational infrastructure.
In the health sector, Australia's support for primary and preventative care is helping to meet basic needs and improving the delivery of health care. The sector will benefit from improvements in health administration achieved partially through Australia's assistance to the Ministry of Health.
Solomon Islands
| Country program allocation | $14.5 | million |
| Estimated other flows | $5.2 | million |
| Estimated total aid flows | $19.7 | million |
Australian aid supports the Solomon Islands Government's Policy and Structural Reform Program, through activities aimed at improved revenue collection, expenditure controls and service delivery. In 2000-01 Australia is providing an additional $1 million in recognition of continued economic reforms by the Solomon Islands Government.
By early 2001 the aid program will have completed the transition from interim assistance to long-term projects in all critical areas of support: finance, land administration, forestry management, customs, auditor-general, education, health and national security.
Australian assistance will continue to play a vital role in helping Solomon Islands address its internal security threats. Australia has been quick to provide humanitarian assistance and support for the Solomon Islands police and the reconciliation process. In 2000-01 Australia will provide institutional strengthening for the police and legal system and assistance to help build Solomon Islands' capacity for disaster relief.
Vanuatu
| Country program allocation | $12.4 | million |
| Estimated other flows | $5.7 | million |
| Estimated total aid flows | $18.1 | million |
Australia's assistance focuses on addressing needs identified under Vanuatu's Comprehensive Reform Program Action Plan. These include a more effective and efficient public sector, strengthened fiscal and economic management, and improvements to the legislative framework and legal system.
Support for the Comprehensive Reform Program involves a long-term commitment. In 2000-01 Australia will support ongoing activities to strengthen financial management, the public service and the legal sector. A key priority in health is to ensure better service delivery throughout Vanuatu. A program to enhance secondary and technical education opportunities will continue. The construction of a hostel for ni - Vanuatu studying in New Caledonia (a joint project with France) will be completed. A new program of support for rural development will be developed.
Samoa
| Country program allocation | $11.0 | million |
| Estimated other flows | $3.5 | million |
| Estimated total aid flows | $14.5 | million |
Australian assistance has significantly advanced Samoa's public sector reform program by targeting reform in key government departments and promoting a `whole of government' approach to reform issues. This focus on governance and public sector reform is complemented by other activities in the health, education and natural resource management sectors.
In 2000-01 Australian assistance will continue to support Samoa's key economic strategies. Improving public sector performance will remain a priority. Ongoing activities in the Treasury and Public Service Commission aimed at improving financial and human resource management will be complemented by new activities to strengthen the Ministry of Agriculture, Forestry, Fisheries and Meteorology and Ministry of Immigration.
The education and health sectors will continue to receive high priority. The Samoa Health Project will improve the health status of Samoans by strengthening the management and operational capacity of the Department of Health. Phase two of the Primary Education Materials Project will provide materials for infants in years one to three.
Tonga
| Country program allocation | $9.5 | million |
| Estimated other flows | $2.2 | million |
| Estimated total aid flows | $11.7 | million |
Australia's assistance to Tonga focuses on economic reform, health, education, private sector development and natural resource management. Australia is supporting improvements in government revenue raising, particularly within the Ministry of Finance. Provision of small-scale infrastructure to outer islands has helped improve the quality of life for many Tongans. Australia has also contributed to improved service delivery in the health and water supply sectors. In education, Australia is focusing on training to assist Tonga to develop its skilled labour base.
In 2000-01 Australia will continue to support the improved efficiency of the public sector including assistance to the Ministry of Finance and strengthening program budgeting across government. Improving the provision and quality of basic services, including education, health and utilities will also remain high priorities. New initiatives include a Legal Institutions Strengthening Project and Road Safety Project.
The Ha'apai Group of islands will remain a geographic focus of the program. The Ha'apai Outer Islands Electrification Project will commence later in the year.
Kiribati and Tuvalu
| Country program allocation | $9.7 | million |
| Estimated other flows | $3.6 | million |
| Estimated total aid flows | $13.3 | million |
Australian assistance to Kiribati promotes better economic planning and public sector reform. Australia will continue to support public sector reform through a new activity focused on strengthening the Customs Department. Access to higher quality education will continue to expand through a focus on broader needs, such as teacher training and curriculum development.
The aid program to Tuvalu concentrates on public sector reform through support for management and maintenance of government assets, education and training. New initiatives for Tuvalu include teacher training and waste management.
Other Island Nations
| Country program allocation | $4.6 | million |
| Estimated other flows | $5.5 | million |
| Estimated total aid flows | $10.1 | million |
Australia's development assistance to the Federated States of Micronesia, Marshall Islands, Nauru and Palau will provide training scholarships to study either in Australia or at the University of the South Pacific. Australia will also assist with economic reform and improved service delivery in education and health.
In 2000-01 Australia's assistance to the Cook Islands and Niue will continue to focus on human resource and infrastructure development and public sector reform.
6 Unless stated otherwise all GNP data are from DAC (1998).
7 All indicators in the table are from UNDP Pacific Human Development Report 1999. Development indicators from the Pacific are often unreliable and should be treated with caution. They do not, as well, reflect the vulnerability of small island states.
