Australia Adds New Rules To Aid for Former Colony

AUSTRALIA will no longer give Papua New Guinea a blank check. After years of offering budget assistance with no strings attached, Canberra has tightened its aid program to its former colony.

Both countries signed the recent agreement, but PNG Deputy Prime Minister Sir Julius Chan expressed deep reservations about the change.

PNG became independent from Australia in 1975. It receives $337 million (Australian; US$222.4 million) in aid, a quarter of Australia's monetary aid of $1.4 billion and one of the highest percentages of aid any donor country gives to a single recipient.

Over the last five years, says one observer, corruption in PNG has grown, and officials have made it hard for outsiders seeking to conduct business by increasing license fees and adding red tape. Amnesty International recently accused PNG soldiers of more than 60 extra-judicial killings on the island of Bougainville, which is seeking independence from Papau New Guinea, and holds the PNG government responsible.

Despite fairly strong economic growth, the country suffers from low social indicators, including high infant mortality and illness rates. Uneducated, unskilled youths pour into the towns looking for jobs that are seldom available. Crime is a major problem, and the police force is underfunded.

``At the moment, we can't point to the effect that the aid has had with any degree of confidence,'' says Richard Moore, spokesman for Gordon Bilney, minister for Development, Cooperation and Pacific Island Affairs. ``In order to increase the accountability of funding to the Australian public and point conclusively to the impact it's having, we want to convert into program aid.''

The new aid agreement favors development assistance directed at specific sectors. By the year 2000, all of Australian aid to PNG will be program aid. The two countries jointly agreed on six sectors: health, education, infrastructure, law and order, renewable resources, and the private sector.

``We'll make sure our assistance gets to the village level, and we aim to be sensitive to the needs and concerns of women,'' Mr. Moore says.

One of Australia's leading charitable organizations, Community Aid Abroad (CAA), is concerned about this shift in aid delivery. ``We have deep concerns that PNG will be overrun with white, highly paid consultants [who will carry out the aid programs] living isolated lifestyles and creating greater inequalities through their lifestyle,'' says Jeff Atkinson, spokesman for CAA.