Chapter Two: Papua New Guinea and the Pacific
Papua New Guinea
PNG development indicators
|
Country |
GNP per capita |
Access to water |
Life expectancy (years) |
Adult literacy |
|
|
Papua New Guinea |
1,312 |
42 |
56 |
64 |
|
Source: GNP per capita: DAC, 2000; other indicators: Human Development Report, UNDP, 2001.
Programmed activities $300.0 million
Retirement benefits $14.2 million
Estimated other flows $37.2 million
Estimated total aid flows $351.4 million
Australia's aid to PNG comprises approximately one-fifth of the total aid budget. It is the largest of Australia's bilateral aid programs.
PNG faces significant development challenges. These include potential declines in public revenue as the mineral sector contracts, weak state institutions contributing to corruption and lawlessness, and the impact of HIV/AIDS on the economic and social development of PNG.
The Australian aid strategy for PNG seeks to support PNG's economic and social development by:
- strengthening governance
- improving primary health care and primary education, particularly for the rural poor; promoting gender equity; and developing PNG's disaster response capacity
- building prospects for economic growth through constructing and maintaining infrastructure vital for development, increasing agricultural productivity and encouraging the sustainable use of natural resources
- consolidating the peace process in Bougainville through providing an identifiable peace dividend.
Diagram 9: Estimated
breakdown of bilateral program to
PNG by sector in 2002-03
Strengthening Governance
Australia is promoting good governance in PNG by:
- supporting effective economic management and policies that encourage the private sector
- building public sector capacity to deliver essential services
- strengthening law and justice institutions
- promoting civil participation and representation.
Australia is providing financial and advisory support for the continued implementation of PNG's structural adjustment program with the International Monetary Fund (IMF) and the World Bank. Australia's support for PNG's reforms include a twinning program between Australia's Treasury and the PNG Treasury to improve economic management, assistance to a PNG Government program that will provide training in basic financial management to public servants across the country, and support for the analysis and publication of data from the 2000 PNG Census.
Australia is supporting the development of the private sector in PNG by working with the Asian Development Bank on a major microfinance and employment project that will operate across PNG. Australia will also fund the second phase of an activity that will provide microfinance services in Bougainville.
The PNG Incentive Fund was set up in 2000 to assist organisations that demonstrate excellence in program management and financial accountability to deliver community and public services. In 2002-03 Australia expects to provide $30 million to this contestable fund.
In 2002-03, Australia and PNG will refine the strategy for assistance to the law and justice sector and look to support community-based approaches in line with the PNG Government's recently released National Policy on Law and Order. Australia will continue to assist the Ombudsman Commission to improve accountability in the PNG government. Projects with the Royal PNG Constabulary and the Department of Correctional Services will strengthen their management. Australia will maintain its support for improving the administration of the justice system and encouraging greater access to legal information.
Australia will seek to enhance the capacity of PNG civil society to engage and participate in the development process through the Community Development Scheme. The scheme helps PNG non-government and community based organisations build their capacities and undertake community development activities. A second phase of the scheme will commence in 2002.
Improving education and health
Education
In a country where there are limited employment opportunities in the formal sector and most school leavers will return to a traditional village-based lifestyle, the education sector faces special challenges. In 2002-03, Australia will assist the Government of PNG to reform its primary school curriculum to make it more culturally relevant, and to address the life skills that students will need.
Another goal of the program is to assist PNG to maximise the benefits that information technologies can provide. Australia will do this by providing Virtual Colombo Plan Scholarships in early childhood education and for Masters of Education. Both programs target teacher trainers. Australia will also construct learning centres at the two largest teachers colleges. These learning centres will enrich the quality of primary education by strengthening staff and teacher trainees' use of information and communications technologies. If this program achieves the planned outcomes it will be expanded to include other teachers colleges throughout the country. Australia also expects to help PNG establish the Global Development Learning Network, a fully interactive network that provides a flexible distance learning system.
PNG's stock of educational infrastructure is under great stress, the result of growth in enrolments and years of lack of maintenance. Australia is assisting local communities to maintain their schools, upgrading a provincial high school and providing essential maintenance at the main teachers colleges.
The PNG education sector faces a broad range of constraints in implementing an education policy reform agenda. These include limited institutional capacity and poor management of human resources at national, provincial and district levels. In 2002-03, Australia will commence a program to build capacity in the education sector. The program will assist PNG to implement its reform agenda in a manner that is both sustainable and affordable.
Health
During 2001, the PNG Government reviewed its health services as part of its commitment to focusing resources in priority areas and improving basic service delivery. The review concluded that the quality and coverage of health services in rural areas, where 85 per cent of PNG's population lives, are declining. Key factors underlying this situation are declining real funding for health services operations, and a fracturing of the technical supervision of health workers following decentralisation of the administrative and financial system.
Donors, particularly Australia, are playing a major role in keeping the system functioning. This, combined with strong commitment to reform shown by the PNG National Department of Health, has led to some key health indicators improving marginally in 2000 and 2001, after a number of years of stagnation or decline.
During 2002-03, Australia will work closely with the PNG National Department of Health to build on major aid delivery reforms instituted under the jointly agreed Health Services Improvement Program. Australia will also help implement the recommendations of PNG's 2001 review. This support will help PNG develop appropriate planning and budget mechanisms to improve levels of health funding. Australian aid will also help restructure rural health services so that lines of responsibility for resource allocation and supervision are improved. Support will be provided to strengthen linkages with church health services, and improve workforce planning and training.
Minimising the impact of HIV/AIDS on individuals and communities will remain a priority for Australia's program. A major focus in 2002-03 will be providing support for community groups and government organisations to implement prevention and care activities. Direct support for rural health service delivery will also be maintained. Aid posts, health centres and staff housing will be built or renovated, radios installed at health facilities on a rolling basis and essential drug kits supplied regularly to health centres throughout the country. The kits include drug treatment for high priority health problems such as malaria, pneumonia and tuberculosis (TB).
Sustainable economic growth
Infrastructure
Transport infrastructure improves access to services and markets in rural areas. Australian infrastructure assistance to PNG focuses on the land transport and aviation sectors with smaller programs in maritime transport and in water supply and sanitation.
Key priorities for 2002-03 include working with the Government of PNG to strengthen the capacity of responsible agencies to plan and manage maintenance programs. Australia and PNG will maximise the economic return of maintenance programs by emphasising linkages to markets and services in rural areas. Australia will continue to assist the Government of PNG to maintain key national roads, including the Highlands Highway and major roads in the rural areas of eight provinces.
Air transport provides the only access to much of PNG's remote territory and important links to other transport networks. Australia will continue to support the maintenance of PNG's national airports. The aid program will also continue to support the Civil Aviation Authority with an increased focus on planning and air safety.
Renewable resources
Australian aid aims to strengthen PNG agencies so they can manage resources in a sustainable manner. In particular, Australia focuses on increasing productivity, creating employment opportunities and generating additional income for the agricultural sector. Achievement of these aims helps raise the standard of living of the rural population.
The aid program's activities in PNG include assisting with agricultural research and planning, agricultural rehabilitation in Bougainville, and fisheries education and training. In the forestry and conservation sectors Australia is supporting the sustainable management of PNG's natural resources and improving governance structures in the forestry sector. This will be achieved primarily through cofinancing the recently approved World Bank Forestry and Conservation Project.
Bougainville peace process
Over the past year, Australia's aid program to Bougainville has contributed significantly to the peace process. Legal assistance provided by Australia played a critical role in negotiating the terms of the Bougainville Peace Agreement signed in Arawa on 30 August 2001, and also in securing the PNG parliament's approval of Bougainville autonomy in early 2002.
As the peace process moves into a new phase, programs in 2002-03 will focus on the need to support communities as weapons disposal progresses, and to support the Bougainville Provincial Administration as it moves towards autonomous government. The establishment of a $5 million Ex-combatants Trust Fund will assist the social reintegration of ex-combatants by providing them with skills and opportunities to engage in productive activities. Programs to assist service delivery by the public sector in Bougainville are also under development.
The Pacific region
Pacific regional development indicators1
|
Country |
GNP per capita |
Access to water |
Life expectancy (years) |
Adult literacy |
|
Solomon Islands |
1,088 |
64 |
65 |
30 |
|
Fiji |
3,159 |
47 |
69 |
93 |
|
Vanuatu |
1,968 |
87 |
66 |
44 |
|
Samoa |
2,521 |
99 |
69 |
80 |
|
Tonga |
2,866 |
95 |
68 |
99 |
|
Kiribati |
1,640 |
76 |
62 |
92 |
|
Nauru |
- |
100 |
58 |
95 |
Source: GNP per capita: DAC, 2000 (except Nauru); other indicators for Fiji & Samoa: Human Development Report, UNDP, 2001; all other data: Pacific Human Development Report, UNDP, 1999.
Estimated total aid flows to the Pacific in 2002-03 $165.0 million
Diagram 10: Estimated total aid flows to the Pacific by country in 2002-03
Regional overview of the Pacific
The island nations of the Pacific exhibit a wide diversity of cultures, languages, and geographic and political characteristics. They face significant development challenges as a result of their economic and environmental vulnerability. Their economies are small and remote from markets, often have a limited natural resources base, rely heavily on costly imports and are highly vulnerable to natural disasters. They tend to be characterised by large public sectors and poorly developed private and informal sectors.
A large proportion of the infrastructure in these countries is inadequate and in need of repair. Health and education systems are not keeping up with the demands of technological advances and growing populations. There is a shortage of skilled personnel to fill key positions in government and the private sector.
Events of 2000 and 2001 highlighted some of the political constraints on development in the region, especially in Melanesia. These include ethnic and community tensions, the dominance of local interests over national interests, and relatively weak institutions of governance, including bodies responsible for law and order. Significant trans-border issues that are an increasing feature of the region include the impact of terrorism, criminal activities, and communicable diseases, particularly HIV/AIDS.
Regional strategy
Australia is one of the leading donors to the Pacific region. Our goal is to assist Pacific island countries achieve the maximum possible degree of self-reliance. Australian assistance will principally be provided in governance and economic reform, education and training, environment and natural resources, health and private sector development.
Australia and New Zealand are endeavouring to improve the impact of both countries' aid to the Pacific through greater harmonisation of policies and procedures. Joint initiatives are being implemented with partner governments to advance these efforts.
Sectoral assistance to the Pacific
Governance and economic reform
In 2002-03, Australia will continue to assist Pacific island countries to develop effective policy, legislative and administrative frameworks for private sector growth and public sector management. The program will continue to support economic and trade reform, public sector reform, law and justice sectors, electoral processes, media strengthening and reform to customs operations. Activities in economic reform and governance now account for over 24 per cent of Australia's aid to the Pacific islands (excluding PNG).
Australia's Policy and Management Reform program provides additional funds for Pacific island countries embarking on economic and public sector reform. In 2002-03, Australia will provide $20 million for the program, which will include support to promote peace- and nation-building. The program will also strengthen the ability of statistical offices throughout the region to collect data that assists Pacific island Governments in decision-making. Australia will continue to help Pacific island countries to better integrate into the global economic community by providing technical assistance in the areas of economic management, budgetary and financial management, public administration and trade.
Education and training
Education and training is the largest element of Australia's aid program in the Pacific. In 2002-03, the aid program will give increased focus to addressing needs in basic education. Improvement of the management and planning capacity of national education departments remains an important area, with projects under way in Samoa and Kiribati. Australia will fund approximately 520 Pacific Islanders (excluding PNG) to undertake tertiary study in Australia and at regional tertiary institutions.
Australia will work with the University of the South Pacific (USP) to improve tertiary education delivery through the USPNet communications network linking 12 Pacific island countries.
Health
Australia will continue its support for reform in the health sector. This will include assistance in developing health information systems and providing capacity building and training in Fiji, Samoa, Solomon Islands, Tonga and Vanuatu. At a regional level, funds will be provided to promote strategies to address non-communicable lifestyle diseases and the control of emerging health problems such as HIV/AIDS. Tertiary health services will continue to be enhanced through visits of volunteer medical specialists and the introduction of systems to maintain essential medical equipment.
After extensive consultation with stakeholders in the region, a design for a new phase of a regional HIV/AIDS project is being finalised. The Pacific Children's Program will continue to support Fiji, Samoa and Vanuatu to reduce the levels of violence against children by strengthening existing community based initiatives and increasing government commitment to child protection. Australia will also support the World Health Organisation (WHO) and the United Nations Children's Fund (UNICEF) to implement an Expanded Program of Immunisation (EPI) in the region. This program aims to strengthen the capacity of partner countries to sustain immunisation coverage for all six core EPI vaccines, and to make informed decisions on new or additional vaccines and vaccine combinations. Australia will continue its support for women's crisis centres in Fiji and Vanuatu.
Environment and natural resources
Australia is responding to priority environmental problems in the Pacific that are placing pressure on natural resources, lifestyles and the economic development of the region. While island nations have a strong economic and cultural dependence on the natural environment, their ecosystems are diverse, fragile and vulnerable to a range of natural and man-made disasters.
Working with key regional organisations in the Pacific, Australia is providing support for waste management, nature conservation, disaster preparedness, sea level monitoring and adaptation to the effects of climate variability and change. Australia's support also enables the Pacific island countries to participate in discussions about global policy issues, particularly in the area of sustainable development.
Maintaining the quality of the Pacific natural resource base is integral to effective development in the region. Australia assists Pacific island nations to conserve and manage their natural resources in a sustainable manner, particularly tuna and coastal fish stocks, food crops and forests.
Private sector development
Australia will support the region's efforts to stimulate trade, investment and private sector development. Australia will continue to support the International Finance Corporation's South Pacific Project Facility and the Forum Secretariat's Pacific Island Trade and Investment Commission. The commission assists export-capable business to develop markets in Australia and promotes viable investment projects to potential Australian investors.
Pacific regional organisations
Australia's support for Pacific regional organisations recognises the important role they play in providing their island members with technical assistance and capacity building. Through its membership contributions and extra-budgetary programs and projects, Australia is a major contributor to the Pacific Islands Forum Secretariat, the South Pacific Regional Environment Program, USP, the Forum Fisheries Agency, the Secretariat of the Pacific Community and the South Pacific Applied Geoscience Commission. Australia monitors closely the performance of each organisation and maintains a keen interest in current efforts by the organisations to clarify their respective functions and priorities.
Current triennium funding arrangements with the regional organisations expire in December 2002. Future support will give increased emphasis to the effectiveness of regional organisations in addressing longer-term trans-boundary programs that complement Australia's bilateral aid priorities and the efforts of island countries. In 2002-03, Australian funding will address a number of key regional issues and development challenges including economic reform, tuna stock management, HIV/AIDS prevention, plant quarantine, distance education, disaster preparedness and climate monitoring.
Bilateral programs
Solomon Islands
Country program estimate $25.0 million
Estimated other flows $11.2 million
Estimated total aid flows $36.2 million
Over 2002-03, the Australian Government will continue to help Solomon Islands deal with the serious economic, social and law and order problems arising from the country's turmoil. The aid program will retain its focus on peace-building through support for the work of the Solomon Islands Peace Monitoring Council and other community, church-based, youth and women's organisations. The Community Peace and Restoration Fund will continue to provide much needed health, education, and water supply facilities to communities disadvantaged by the conflict, and will also provide earning opportunities to help former combatants reintegrate into civilian life.
Assistance to restore law and order will remain a key priority of the aid program. The long-term Law and Justice Institutional Strengthening Program, which commenced in December 2000, is working to rebuild basic police services, reform the judiciary and prison systems, and improve police-community relations.
Further Australian support will be provided to improve basic services for people in Solomon Islands, particularly in the provinces. A major health project and trust fund will work to keep basic medical services functioning. Australia will provide ongoing assistance for economic recovery planning and rehabilitation in key sectors including finance, customs, land administration and forest management.
Fiji
Country program estimate $14.5 million
Estimated other flows $5.2 million
Estimated total aid flows $19.7 million
Australia lifted bilateral sanctions on 5 October 2001 following the return to a democratic government in Fiji. As a result, priorities for 2002-03 will include development of new programs in support of the education, health and governance sectors (including law and justice). New programs will help improve service delivery, especially in rural areas and urban fringes, and support improved governance and accountability. Training programs, including scholarships, will be resumed.
Existing assistance will continue in priority health and governance areas. Activities in the health sector will continue to improve community health on Taveuni Island, and encourage decentralised management of health services throughout Fiji. In the governance sector, Australia will continue to help Fiji improve revenue services and procedures and increase the level of taxpayer compliance. The aid program will also build public confidence in Fiji's legal system by boosting expertise in the Office of the Director of Public Prosecutions.
Vanuatu
Country program estimate $14.5 million
Estimated other flows $7.6 million
Estimated total aid flows $22.1 million
The Government of Vanuatu's Comprehensive Reform Program aims to promote private sector-led growth and provide infrastructure and social services. A range of donors, led by the Asian Development Bank, support the program. Australia and Vanuatu have agreed that Australian aid should focus on the needs identified in the program. In particular, Australia will support Vanuatu's attempts to improve public sector efficiency and fiscal and economic management. Australia will also help strengthen the police service and other key legal institutions, especially the State Law Office, the Public Prosecutor's Office and the Public Solicitor's Office.
In 2002-03, Australia will encourage an increased focus on the delivery of key government services, especially to rural areas. The education sector will benefit through the refurbishment and expansion of secondary schools in outer islands.
Samoa
Country program estimate $11.5 million
Estimated other flows $4.3 million
Estimated total aid flows $15.8 million
In 2002-03 Australia will continue to support Samoa's ongoing and successful economic and public sector reform efforts through institutional strengthening and capacity building activities. Australia and Samoa will carefully monitor these activities to ensure achievements are consolidated and improved systems and skills are sustained. In particular, Australia will continue to assist the education and health ministries to improve service delivery, with a heightened emphasis on ensuring the benefits are as widely distributed as possible. Australian institutional strengthening assistance to the Public Service Commission will support the Samoan Government's renewed efforts to rationalise public administration.
Australia has commenced new activities aimed at strengthening the management of the agricultural sector, including quarantine services. The design of a longer-term activity to improve the professionalism of the Samoan Police Service will be completed in 2002-03.
Tonga
Country program estimate $9.0 million
Estimated other flows $2.4 million
Estimated total aid flows $11.4 million
Australia's assistance to Tonga focuses on economic reform, health, education, private sector development and natural resource management. Priorities for 2002-03 include strengthening institutional capacity in performance budgeting across the Tongan Government, and increasing public awareness of legal rights and responsibilities.
The Health Planning and Management Project will continue its focus on improving financial and human resource management in the health sector. Australia will continue to provide technical assistance and training to key public and private sector organisations through the In-country Training Program. In 2002-03, Australia will pilot a distance education program to improve cost effective access to higher education and professional development by middle level professionals.
A project aimed at improving management of marine resources will assist the Ministry of Fisheries to manage in-shore fisheries on an effective and sustainable basis. The aid program will continue to provide support for Tonga's outer islands through the Ha'apai Development Fund, which aims to strengthen community based development, and through the Ha'apai Outer Islands Electrification Development Project.
Kiribati
Country program estimate $7.8 million
Estimated other flows $3.3 million
Estimated total aid flows $11.1 million
One of Australia's key priorities for the Kiribati program for 2002-03 is to strengthen institutional capacity of key ministries to meet the needs of the Kiribati people more effectively. In particular Australia is assisting Kiribati to improve education planning and the quality of education services.
Outer island development will continue to be supported through better school facilities, health services, new water supply and sanitation services and more effective land management and planning. The provision of water and sanitation services to Kiritimati Island will pave the way for the continued development and economic growth of the island. A second phase of the Public Utilities Board project will assist the maintenance of power generation infrastructure on Tarawa.
Nauru
Country program estimate $0.2 million
Estimated other flows $3.3 million
Estimated total aid flows $3.5 million
2002-03 additional aid $6.8 million
Australia is working with Nauru to address a number of the development challenges it faces as its economic position continues to deteriorate. Nauru recognises reforms are needed and has indicated a firm intention to work with Australia and the Asian Development Bank to improve its economic management. Australia is providing targeted technical assistance to support these efforts. Australia is also helping Nauru address its chronic power and water shortages, and is providing technical advice and assistance in aviation and telecommunications. Particular attention will also be given to improving the sustainability of service delivery in the health and education sectors.
In 2002-03, Australia will provide $6.8 million in additional aid flows to Nauru to fund the balance of the $10 million development assistance package agreed between Australia and Nauru in December 2001. All aid funding for this package has been in addition to the aid budget.
Other island nations
Country program estimate $7.2 million
Estimated other flows $3.2 million
Estimated total aid flows $10.4 million
In 2002-03, Australia will continue to provide assistance in the form of scholarships to enable students from Tuvalu, Federated States of Micronesia, Marshall Islands, Palau, Cook Islands, Niue and Tokelau to study at tertiary education institutions in the region.
In Tuvalu, efforts will continue to improve the delivery of education services. Assistance to the Federated States of Micronesia, Marshall Islands and Palau will support economic reform initiatives and service delivery in education and health. In the Cook Islands and Niue, there will be an ongoing focus on public sector reform.
1 Development indicators from the Pacific are often unreliable and should be treated with caution. In addition, they do not reflect the vulnerability of small island states.
