Address to Economic and Policy Update
11 April 2007; University of Papua New Guinea, Port Moresby, PNG
Australian High Commissioner to PNG, HE Mr Chris Moraitis
Thank you for inviting me to speak at the Australian National University annual PNG updates. ANU’s long period of commitment to PNG and the depth of knowledge of ANU researchers has enriched debate on PNG’s development challenges in many ways and over many years.
This PNG Update is a timely event given the big year ahead for PNG. The development challenges facing PNG remain substantial but Australia is committed to assisting PNG to address those challenges. I would like to touch on just a few key issues in my opening remarks.
I note that the Somare Government will conclude its five year term in May when writs are issued for the 2007 elections. It is significant to note that it will be the first Government since Independence to serve a full five year term. This stability of Government coupled with strong commodity prices and good fiscal and macro-economic management has contributed to sound economic growth, in the region of 4% this year. Whilst positive, the fact is growth rates of 6-8% per annum are needed to make inroads into poverty and address major deficiencies in service delivery, particularly with population continuing to grow at nearly 3% per annum. There is a need for PNG to develop a concrete, broad-based economic growth strategy to sustain and build growth for the future and to build an economy resilient to future downturns in commodity prices.
PNG should be congratulated on its allocation of increased funding to the Medium Term Development Strategy (MTDS) priorities in the 2007 budget. This means more funding for health, education, law and justice and transport – all essential for growth and development. PNG’s larger than expected revenue in 2006 has also led to the development of two significant supplementary budgets. This commodity boom windfall also provides PNG with an opportunity to make a substantial development investment in upgrading health, education and road infrastructure. The challenge for PNG is to address the constraints to effective implementation to ensure the foundations for better service delivery are built upon.
PNG faces another litmus test this year – its capacity to manage free, fair and credible elections. The elections face the usual suite of considerable challenges of which I am sure you are all aware and with three additional risk factors: the new electoral roll; the introduction of a new voting system (LPV); and a new ballot paper. It is encouraging to note that the elections have been resourced to the tune of K130million in the 2007 PNG budget. However, effective government resourcing and coordination, particularly in relation to security, is going to be essential to mitigate the risks in the Highlands and National Capital District.
HIV/AIDS continues to be the biggest threat to PNG’s continued development and an increased sense of urgency in combating the epidemic is required on the part of us all, including the Government of PNG. The epidemic has the potential to erode hard won development gains and to impact heavily on all aspects of PNG society. An increased budget allocation of over 300% in 2007 towards addressing HIV/AIDS is encouraging but overall PNG resources remain inadequate when seen in light of the scale of the epidemic. In addition to improved resourcing of the fight against HIV/AIDS there is a critical need for strong and effective leadership.
I would like to note the strength of the development relationship between PNG and Australia in spite of other challenges which arise from time to time in the bilateral relationship. Good progress has been made in implementing the new Development Cooperation Strategy (DCS) which cements Australia’s commitment to supporting PNG meet MTDS priorities. Both governments have recognised that the Enhanced Cooperation Program (ECP) is having a positive impact and have committed to further alignment between the ECP and the broader aid program. A performance incentive component was successfully included in the aid program in 2006. The Government of PNG has successfully met three of the four requirements for accessing the $30million Performance Grant included in the aid program in 2006 and we are confident the fourth will be met shortly. Australia and PNG recently agreed a series of new triggers for accessing the Performance Grant in 2008 which build on the achievements to date.
In conclusion I would like to express our commitment to continued engagement with the current and incoming PNG governments this year towards the objectives of strengthening governance, boosting economic growth, delivering essential services and addressing PNG’s growing HIV epidemic. These objectives are the building blocks for a growing prosperous society where people live decent lives free of poverty.
Thank you.