Australian Aid to PNG - AusAID

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When programmed assistance was introduced in 1986, Papua New Guinea’spriority areas for Australian assistance were aimed at accelerating progresstowards self-reliance:• Revenue generation;• Institution strengthening for key economic departments;• Technical assistance for state enterprises; and• Management development in the health, works, police and justicedepartments.The first Treaty Review (1992) identified six priority areas for the sectoral focusof Australian aid: health, education and training, transport and communication,renewable resources, law and justice, and the private sector. Since then,programs targeting governance and rehabilitation on Bougainville wereintroduced, along with expanded and more targeted programs in traditionalareas of Australian assistance, such as basic education, maintenance oftransport infrastructure and primary health. Since July 2000 under the secondTreaty, the total Australian aid program ($300 million per annum) has beenapplied to programmed assistance activities, and is focused on four agreedobjectives:• Strengthening governance;• Improving social indicators;• Building prospects for sustainable economic growth; and• Consolidating the peace process in Bougainville.The agreed priority sectors for future Australian assistance continue to includebasic education, primary health, maintenance of infrastructure, ruraldevelopment, and law and justice, but now also include a significant focus ongovernance and on development of the provinces.New and flexible operational strategies are being adopted across AusAID’sprogram, aimed at increasing the level of Papua New Guinean participation inaid activities, reducing complexity, strengthening performance benchmarks, andlinking performance more closely to funding decisions. An Incentive Fund hasbeen established, for example, which enables Australia and Papua New Guineato direct Australian aid through the most capable Papua New Guinea agencies.The Fund aims to promote contestability among service providers by fundingagencies (inside and outside government) with a proven track record of goodprogram management or policy reform.32 The Contribution of Australian Aid to Papua New Guinea’s Development 1975–2000
5 THE IMPACT OF AUSTRALIAN AID INPAPUA NEW GUINEAAlthough aid will never be the primary determinant of development progress inan independent nation such as Papua New Guinea, it plays a strategic role inhelping to reduce poverty, improve quality of life, promote equity, and buildmanagement capacity to enable the government to influence developmentprogress through effective policies and service delivery. As noted earlier, Australiahas consistently been Papua New Guinea’s most significant donor sinceindependence, both in terms of the volume of aid and the breadth of coverage ofits assistance. While the lack of data makes firm conclusions difficult, the sectoralassessment in this section supports the trends identified in Section 3. In essence,it is fair to conclude that Australian aid has genuinely been responsive to PapuaNew Guinea’s own development needs and priorities. It has been appropriatelytargeted to prevailing circumstances in Papua New Guinea, while also generallyensuring appropriate focus on longer-term objectives for self-reliance andsustainable development. At a sectoral level there are important examples of thepositive impacts of Australian aid and, across most of the key sectors, Australianaid has been a major influence on Papua New Guinea’s developmentachievements to date. Anecdotally at least, Australia’s support has beeninstrumental in helping Papua New Guinea to achieve what development progressit has, maintain a vibrant and relatively stable democracy post-independence, andstem the declines occurring in basic service delivery.5.1 EducationThe education sector has consistently accounted for at least 25% of Australia’sprogrammed assistance in Papua New Guinea, with funding totalling almostA$540 million since independence. 16 More than half of this has supportededucation at the elementary, primary and secondary levels. Australia has alsoconsistently been the largest provider of tertiary scholarships for Papua NewGuinea, with about 100 students graduating each year from tertiary institutionsin Australia, and up to 150 new places now being offered each year. AusAIDfunding has helped to upgrade several provincial high schools, suppliededucational materials to selected primary schools, supported the training ofelementary teachers, established a vocationally-oriented trade testingcertification system, developed a program for lecturers at the CommunityTeachers College and helped improve the Department of Education’s capacity toplan and monitor its education reform agenda.16At least a further A$80 million has been provided for other sector-specific training (eg: in health,governance, infrastructure and renewable resources).The Contribution of Australian Aid to Papua New Guinea’s Development 1975–2000 33
Page 5 and 6: BOXESBox 3.1 The Dutch Disease in P
Page 7 and 8: FOREWORDAs part of a broader focus
Page 11 and 12: programs to improve living standard
Page 13 and 14: sector since independence, 65% has
Page 15 and 16: 1 INTRODUCTIONThis report provides
Page 17 and 18: Figure 2.1 Real GDP per capita in P
Page 19 and 20: 1985 1990 1995 2000PNG HPC LIC LMC
Page 21 and 22: significant strain on the budget an
Page 23 and 24: • Improved central coordination a
Page 25 and 26: Connell (1998, pp. 311-2) highlight
Page 27 and 28: y the successful mobilisation of cu
Page 29 and 30: 3 INTERPRETING THE DEVELOPMENT ANDG
Page 31 and 32: The estimated increase in private c
Page 33 and 34: 3.4 Reconciling the Growth and Deve
Page 35 and 36: 3.5 Implications for AidTo summaris
Page 37 and 38: Although the precise extent of the
Page 39 and 40: program saw a decline in the overal
Page 41 and 42: criticism that the withdrawal of Au
Page 43 and 44: Ministerial Forum found that real p
Page 45: management for Papua New Guinea, ov
Page 49 and 50: • Improved retention rates at sch
Page 51 and 52: • Achieved operational efficienci
Page 53 and 54: policing are being introduced, alon
Page 55 and 56: deliver community and public servic
Page 57 and 58: BOX 5.5 HEALTH IMPACTS OF AUSTRALIA
Page 59 and 60: also improved 24 , and there is evi
Page 61 and 62: 5.5 Renewable ResourcesIn total, Au
Page 63 and 64: Land Use Management• Established
Page 65 and 66: New Guinea needs donor financing fo
Page 67 and 68: only assist within the context of t
Page 69 and 70: Both within sectors and more broadl
Page 71 and 72: However, it seems reasonable to arg
Page 73 and 74: useful to document the findings of
Page 75 and 76: ANNEX A EVOLUTION OF AUSTRALIAN AID
Page 77 and 78: ANNEX B SECTOR BREAKDOWN OF AUSTRAL
Page 79 and 80: 8 REFERENCESAhai, N., 1988, The Dev
Page 81 and 82: Garnaut, R., and Baxter, P., 1984,
Page 83 and 84: Growth Strategy, Final Report, prep

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