Australian Aid to PNG - AusAID

4 THE CHANGING FOCUS OF AUSTRALIAN AIDSINCE 1975This section of the report aims to trace the history of Australia’s aid assistanceto Papua New Guinea since independence (1975) and, where information isavailable, Section 5 assesses the impact of that assistance on Papua NewGuinea’s development. To do this, it is necessary to understand the fundamentalshifts that have occurred in the aid relationship over the years. It is notappropriate to judge the impact of aid provided ten or more years ago againstcurrent objectives and priorities. Impacts, both positive and negative, need tobe placed in the context of Australian and Papua New Guinean government aidpolicies, objectives and strategies at the time the aid was programmed anddelivered. Also, it should be noted that this analysis is restricted to informationthat is publicly available, in particular AusAID’s project completion reports,project and sector reviews and evaluations, and activity monitoring briefs. Theconclusions drawn from this information are intended to form the first step in alonger-term process aimed at improving the performance information availablein AusAID to assess the effectiveness and impact of Australian assistance onPapua New Guinea’s development.4.1 Political ContextAustralia has consistently been Papua New Guinea’s largest developmentpartner. Since it attained independence in 1975, Australia has provided morethan A$14 billion 6 in real terms (A$8.1 billion in nominal terms) as officialdevelopment assistance to Papua New Guinea. 7 In 1975–76, Australia’s aid toPapua New Guinea accounted for 60% of the overall Australian aid budget.Today, it still accounts for about 20%, and Papua New Guinea remains thelargest of Australia’s bilateral aid programs.Australian aid was crucially important for the Papua New Guinea economy atthe time of independence, accounting for 41.4% of central government’sexpenditure in 1974–75 8 . Based on Australia’s historical relationship with PapuaNew Guinea and its responsibilities under the United Nations Charter, Australiaassured Papua New Guinea in 1974 that it would have first call on Australia’said program after independence. Although successive reviews of Australia’s aid6Constant 2001–02 prices, covering expenditure from 1975-76to 2001-02 inclusive.7 All expenditure figures used in this report have been compiled from project-level expenditure data reportedin Australia’s Overseas Aid Program Statistical Summary (“the blue book").8 Australia’s Overseas Development Assistance 1975–76, Budget Paper No. 10, Australian GovernmentPublishing Service, 1975.24 The Contribution of Australian Aid to Papua New Guinea’s Development 1975–2000