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Development assistance in Papua New Guinea

Flag of Papua New Guinea

Overview of Australia's aid program to Papua New Guinea

2020-21 bilateral allocation [budget estimate]
$491.1 million
2020-21 total Australian ODA [budget estimate]
$596.0 million
2019-20 total Australian ODA [budget estimate]
$607.5 million

A stable, prosperous, peaceful and resilient PNG is critical to Australia's interests. We are PNG's largest development partner; its main partner on economic and security issues; and its most active supporter in helping it respond to the COVID-19 crisis.

Australia is working in partnership with Papua New Guinea (PNG) to implement the PNG-Australia Comprehensive Strategic and Economic Partnership and address COVID-19.

Management of COVID-19 and the global shutdown is aggravating existing challenges in PNG, including debt, putting strain on already fragile health systems, and impacting exports and revenues.

Australia is using all of its capabilities to work with PNG at this critical time.

Pillar 1 – health security:

Our focus will be on: (i) the prevention, detection and response to COVID-19, while also continuing our work in other communicable diseases, including malaria, HIV, and TB; and (ii) support to Provincial Health Authorities to improve delivery of primary health care services, including immunisation coverage, maternal and child health, access to family planning and other services.

Our focus on government services will be balanced with support for NGO and church-led services, and ensuring marginalised groups including people with disabilities can access health services. Our global partnerships in WASH are providing technical and community WASH support in PNG, including sustainable access to WASH services for women and girls.

We will continue to provide support to workforce training, strengthening women's leadership in health, and improving health information systems, financial management and health governance.

We will invest in health infrastructure, including WASH and portable health clinics, and to improve the reliability of services, such as power, in existing health facilities.

This work will proceed in parallel with Australia's extensive support for COVID-19 preparation and response, which has included deployment of Australian Medical Assistance Teams (AUSMAT) to provide on the ground support and help strengthen PNG government systems; support for COVID-19 testing, provision of PPE and information campaigns, and logistics support.

Pillar 2 - stability:

Australia and Papua New Guinea share an interest in a secure, stable and peaceful region. We will soon commence negotiations on a Bilateral Security Treaty, a key outcome of the Comprehensive Strategic and Economic Partnership, intended to better represent the breadth of our security cooperation.

The Defence Cooperation Program in PNG is providing the Australian Defence Force's largest international response to COVID-19, supporting the PNGDF across operations, infrastructure, equipment and border security. The Australian Federal Police (AFP) has swung in behind the Royal PNG Constabulary's (RPNGC) coordinating role in COVID-19. Longer-term, the AFP, through the Policing Partnership, will continue to support RPNGC to build its capabilities and support its reform ambitions.

We will continue to promote stability and social cohesion by supporting the Bougainville Peace Agreement, following the 2019 referendum and 2020 election.

We are increasing funding for gender equality initiatives and have pivoted existing gender and law and justice programs to provide more protection and services for survivors of family and sexual violence.

Disability inclusive development is an important component of Australia's response. We are working with churches and disability-focused NGOs to build stability through community-based inclusive development and disability awareness, and helping the Government to develop policy in this area.

Australia is playing a key role in supporting PNG's COVID-19 Education Emergency Response and Recovery Plan, as ongoing education promotes stability for children. We are re-orientating existing programs across ten provinces to help students learn safely. With local and international partners, we will focus on WASH, including hand washing stations, hygiene education and products, learning materials and teacher training. We will continue our work in primary and expand our support for secondary education, emphasising girls' access to education.

Social protection programs play a critical role during crises. We are piloting a cash-for-work scheme with local government and the private sector in Lae to help address urban unemployment and stimulate local trade and investment. This pilot will inform a new cash transfer program to tackle malnutrition and stunting.

We have repositioned our program targeting coastal villages on the border with the Torres Strait to focus on COVID-19 prevention and response and address food insecurity and health issues that could drive border crossings into Australia. We will increase our assistance to this region.

Given PNG's vulnerability to natural disasters we are building flexibility into our programming so we can step up our humanitarian assistance to PNG if required. Defence is exploring bilateral mechanisms and working with likeminded partners to deepen cooperation in this area.

Pillar 3 – economic recovery:

The COVID-19 economic shock comes on top of existing fiscal and economic challenges faced by PNG. Australia is providing a comprehensive package of economic support to assist PNG's response and recovery during this challenging period. We have agreed to refinance an existing USD300 million loan (provided in late 2019), and provide a further USD100 million loan, including to assist PNG to continue the delivery of core government services, such as healthcare and education.

Together with loan support we are providing technical assistance towards the Government's reform program including its participation in an IMF Staff Monitored Program to help restore macroeconomic and financial sector stability and lay foundations for future growth. Australia will also continue to advocate for international financial institutions to support PNG's fiscal position and economic reform agenda.

We will enhance support to the informal sector, which provides most of PNG's employment. We are testing new approaches to improve access to finance for small and medium enterprises. We are supporting women business owners with skills training and access to finance.

We will continue to work to increase food production and strengthen linkages between smallholder farmers and markets to improve food security and boost exports.

Building business confidence will be key to attracting new investment, particularly in major pipeline resource projects, and restoring economic growth. We will continue programs to improve the business enabling environment.

We will partner with PNG to build climate-resilient economic infrastructure in core areas, including: telecommunications services for businesses, social services and emergency response; power for health services and other vital functions; water access for hygiene and sanitation; and air, sea and ground transport systems for access to goods and services. We will continue to invest in labour-intensive road maintenance and infrastructure to help create jobs for Papua New Guineans, including in Bougainville and Manus, to boost economic recovery.

We will continue to work through the Australian Infrastructure Financing Facility for the Pacific (AIFFP) to draw in financing for strategic and large-scale quality infrastructure projects, particularly in electrification, which will help economic recovery and local employment. Our investment in the Coral Sea Cable and policy advocacy will improve access to the internet and drive private sector growth.

We will expand our work in technical and vocational education and training (TVET), including through the Australia Pacific Training Coalition, to increase training for jobs in growth industries, including training women in non-traditional areas, and build links between TVET and labour mobility opportunities in Australia.

Australia's development efforts are set out in Partnerships for Recovery: Australia's COVID-19 Development Response

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