Australian Aid to PNG - AusAID

New Guinea needs donor financing for maintenance, essential equipment andbasic service delivery in its present circumstances. But this is, in effect, a moreconditional form of budget support. In the interests of self-reliance, Papua NewGuinea will need to consider the desirability of continuing reliance on such aid.In addition to being unsustainable, donor financing to meet recurrent budgetitems over the longer term could well entrench dependency.The scale of Australia’s continuing role also raises questions about prospects forself-reliance in Papua New Guinea. In spite of various efforts to expand PapuaNew Guinea’s range of donor partners, Australia remains very much thedominant influence. Even if inadvertently, this dominance is likely to skew aidprogramming and implementation priorities in Papua New Guinea in favour ofAustralian priorities, working against efforts to promote local ownership.Continued attention to broadening Papua New Guinea’s donor base is in bothcountries’ interests, and would enhance Papua New Guinea’s prospects forsustainable development and self-reliance.The gradual shift from project aid to a program approach through the 1990swas specifically structured and managed to help reduce absorptive capacityproblems and thus improve the prospects for generating sustainabledevelopment gains. This was a mammoth task given the volume of Australianfunding to be absorbed in development programs rather than the recurrentbudget, magnified further by increasing economic and social problems.However, it was considered necessary to enhance prospects for thesustainability of aid activities over the longer term. Traditional projectstructures have often imposed parallel management systems and overburdenedalready weak capacity within Papua New Guinea. They have also been toodispersed, often putting pressure on marginal areas. These are criticisms thatcan be levelled at all donors in Papua New Guinea, and are not specific toAustralian aid. They have led to negative impacts in areas such as capacitybuilding and priority setting, reducing prospects for sustainability. Within aprogram approach, joint programming seeks to ensure local ownership ofactivities and is targeted to help strengthen Papua New Guinea’s own capacityto deliver basic services. It is still too early to judge Australia’s impact onimproving absorptive and delivery capacity through these programs, many ofwhich are still underway. However, the emerging trend towards sector-wideapproaches that are led by Papua New Guinea, and more fully integrated withits own policy and program priorities, will further assist this process.Australia’s role as a major aid donor must be to respond to the country’sdevelopment needs, providing services and facilities where they are needed toprevent declines in living standards while, at the same time, helping to buildPapua New Guinea’s capacity to deliver these services itself. Australia fullyThe Contribution of Australian Aid to Papua New Guinea’s Development 1975–2000 51