PNG CABINET MINISTER LAUDS WORLD BANK

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Development commitment improves relations

PORT MORESBY, Papua New Guinea (The National, April 21, 2011) – In Papua New Guinea (PNG), a senior government minister has applauded efforts by the World Bank to rebuild its relationship with Papua New Guinea "as a mutual and valuable development partner".

Finance and Treasury Minister, Peter O’Neill, commended the bank after attending the International Monetary Fund and World Bank annual spring meetings in Washington DC.

The treasurer and his secretary, Simon Tosali, returned to Port Moresby on Tuesday.

O’Neill said it was the first time in five years a finance minister and his departmental head had attended such a high-level bilateral meeting.

He described the meetings as very successful, expressing general satisfaction on their outcome.

While in the United States, O’Neill held bilateral discussions with senior management of the International Monetary Fund (IFM) and the bank, including frank discussions with the World Bank managing director, Sri Mulyani Indrawati and Vice-president Jim Adams.

O’Neill said the relationship with the bank had not been the best in the past but that had now changed.

The bank reaffirmed its commitment to supporting PNG’s development agenda outlined in the development strategic plan (2010-2030) and medium-term development plan (2010-2015).

The bank has since increased its presence in the country with the recent establishment of an International Financial Corporation (IFC) office, the commercial investment arm of the bank, in Port Moresby.

"This is a significant step in the right direction as far as raising the profile of PNG as a prospective investment destination for potential investors in the region as well as globally, and the development of vibrant and dynamic private sector in the country," O’Neill said.

The World Bank has 11 programs under way in Papua New Guinea which, among others, included the PNG productive partnership in agriculture project, rural communications, urban youth employment (UYEP) and flexible open distance education (Fode).

The government had recently approved two other projects; the small to medium enterprises (SME) access to finance project (establishment of a risk-sharing facility) and the roads maintenance and rehabilitation phase II project.

Mulyani Indrawati commended the government on its economic management and leadership, noting PNG’s impressive economic performance, which is forecasted to grow uninterrupted for the 11th consecutive year this year.

"It is an impressive achievement considering that, over this time, there have been a number of challenges, especially with the global financial crisis in 2008 and subsequent global recession in 2009, she said. Inflation, however, remains persistent and the treasurer acknowledged this as a key challenge for the government to contain inflation so that it does not accelerate rapidly."

O’Neill also held bilateral talks with his Australian counterpart and Deputy Prime Minister Wayne Swan.

Both leaders exchanged valuable insights to challenges being posed by events of global economy, particularly civil unrest in the Middle East, sluggish recovery from advanced economies and rapid growth in the emerging economies.

They talked about the likelihood of commodity prices, particularly oil, remaining high and agreed it would directly impact of food prices.

Another economic challenge facing the country is the inflationary outlook.

O’Neill acknowledged a key challenge for the government "is to contain inflation so that it does not accelerate rapidly".

O’Neill took the opportunity to express on behalf of the people and government of Papua New Guinea their sincere gratitude and appreciation to the people and the government of Australia for their continued support and assistance "in developing our great nation".

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