AUSTRALIA AND PNG DISCUSS AID PACKAGES

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PORT MORESBY, Papua New Guinea (November 23, 1998 - Post-Courier)--- Australian aid to Papua New Guinea is to be guarded against being used as a "milking cow'' by politicians, says Australian High Commissioner David Irvine.

Mr. Irvine told the annual accountants conference in Port Moresby that like all relationships between friends, the aid relationship needed continuous refinement and communication.

"The AusAid presence in PNG is so large that we must guard against it being seen by politicians and service deliverers as simply a milk cow to be called upon whenever the national or provincial government fails to provide funds for this or that worthy endeavor,'' said Mr. Irvine. "In this sense, we have to avoid becoming a political football within PNG,"

The Australian government this year brought forward its financial assistance for the 1998 financial year to PNG after requests from the Government because of cash flow problems.

Earlier in the year, AusAid also came to the Government's rescue by funding K19 million (US$ 8.9 million) in school fees for the third term when the government could not finance it.

Mr. Irvine said that given the development challenges facing PNG and the strong bonds and mutual interests between the two countries, Australian aid to PNG was likely to continue, and that PNG would remain by far Australia's largest bilateral partner. Australia provides a massive 16 percent of the total PNG government budget, but most of the funding is now being shifted from budgetary support to project aid.

Mr. Irvine said his government's current aid program in PNG comprised 110 projects being implemented in six sectors. These are infrastructure, education, health, law and justice, renewable resources and the private sector.

He said there were good reasons why PNG should be the focus of more than 20 percent of Australia's total world-wide aid budget.

"PNG, even with its substantial mineral and renewable resources, still has profound development needs,'' Mr. Irvine said.

Australia and PNG are negotiating the aid treaty between the two countries as the current treaty is to expire in 2000.

Mr. Irvine said while the new aid treaty is still being negotiated, he would personally like to see a focus on improving governance to help PNG become a strong and vigorous civil society.

"Governance is about the efficient and transparent management of a country's resources; strengthening the processes and institutions by which the PNG government manages the economy is vital,'' he said.

Mr. Irvine said Australia's future program can be expected to support basic community development, substantial poverty alleviation and improvements in the delivery of basic services, particularly in the rural areas.

He said these programs may include:

Mr. Irvine said it was inevitable that Australia and PNG might not agree on issues, but that was the way of politics in democratic nations.

For additional reports from The Post-Courier, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The Post-Courier (Papua New Guinea).

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