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PORT MORESBY, Papua New Guinea (May 24, 2000 - Post-Courier/PINA Nius Online)---The National Executive Council has approved a report on negotiations between a Papua New Guinea delegation and World Bank officials in Washington during the past two weeks.

Cabinet endorsed a recommendation by the delegation, led by Treasury Secretary Koiari Tarata, to take up a proposed $US 90 million governance promotion adjustment loan, Prime Minister Sir Mekere Morauta said.

He said the loan, to help finance the government's structural reform program, would form a vital part of the budget.

"It will help us to proceed with a number of the key elements of reconstruction and development of the country. The loan will be used to strengthen the Privatization Commission and allow it to go ahead with the sale of all significant government assets.

"This is a critical part of economic reform and will help relieve the huge debt burden imposed on Papua New Guineans by previous governments.

"Public service reform, in particular the orderly and fair retrenchment of public servants, will also benefit.

The previous government, when it decided to sack 7,000 public servants, had no means to pay them out.

"Part of the loan will allow us to carry out that program so that those who have been retrenched are paid what they are due, not just thrown out on the street."

Sir Mekere said other sectors to which the money would be applied were forestry, the census and the strengthening of the institutions of state.

When the government was elected in July last year, Sir Mekere promised the government would strengthen some institutions, including the public service.

"The public service and our institutions of state had been destroyed by years of mismanagement, incompetence, corruption and political interference," Sir Mekere said.

"Part of the loan will go to repairing the bodies that allow the state to function so that all people will benefit in a fair, transparent and accountable fashion.

"The World Bank loan will help us to strengthen the Office of Rural Development so that RDP funds are disbursed in a fair and timely way and their use is made fully transparent and accountable under the Public Finances (Management) Act.

"The same applies to the administrative framework of the Central Supply and Tenders Board. Because of a lack of capacity its processes have been slow and cumbersome, and loopholes have been found so that unscrupulous people can avoid accountability.

"Members of Parliament and the people in their electorates have been complaining about this for years.

"The rebuilding of these institutions will enable development funds to be used properly and fairly and without the sort of delays that have been occurring . . . watchdogs such as the Auditor-General, the Parliamentary Public Accounts Committee and the Ombudsman Commission will benefit."

He said Cabinet had been briefed on the progress with the loan negotiations and details of arrangements.

He expected the World Bank board would approve the loan on June 13.

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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