Manila, July 26, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) will work with Papua New Guinea (PNG) on implementing its Medium Term Development Strategy (MTDS) under a new Country Strategy and Program endorsed today by ADB's Board of Directors. ADB will focus on supporting improvements in public financial management, private sector development, the transport sector, and health, including efforts to combat the spread of HIV/AIDS.
ADB's new Papua New Guinea strategy and program (2006-2010) anticipates total grant and loan financing of US$290 million for 2006-2008, with one major new priority investment per year supplemented by grant assistance and additional funding for successful ongoing projects.
Support for PNG will include $77 million from the Asian Development Fund, ADB's concessional lending window. Priority projects being discussed with the PNG Government include possible ADB participation in the PNG Gas Project, expansion of the capacity of Lae Port, and upgrading of sections of the Highlands Highway and additional feeder roads in the Highlands region.
"PNG is an important member of ADB and we are determined to help the country achieve its medium-term development goals," says Philip Erquiaga, Director General of ADB's Pacific Department.
The strategy notes that PNG's poor economic performance during the 1990s led to a significant increase in poverty in the country. Estimates suggest that in 2003, 54% of the population lived in poverty, up from 37.5% in 1996. Public surveys have identified the priorities of the poor as the creation of jobs and economic opportunities, and rebuilding the delivery of public services such as health and education. Deteriorating transport infrastructure has been identified as a major impediment to development. Also, a generalized HIV/AIDS epidemic poses a significant threat to the country's development prospects.
"After a difficult period in the 1990s, the economy has performed well in recent years and the Government now has an opportunity to invest in rehabilitating roads and maritime infrastructure, to rebuild health and education services and to strengthen PNG's governance," Mr. Erquiaga adds.
He notes that PNG's MTDS focuses on the right areas and has wide support throughout the country. "ADB will work with the Government and our development partners to ensure that our assistance supports the PNG Government's own efforts in these priority areas, is focused in our areas of expertise, and results in the greatest possible benefit to the people of PNG," he says.
The strategy suggests that to achieve broad-based and consistent development, PNG must address three critical challenges. It must find ways to convert its natural resources into sustainable, concrete development results for its people. It must work to broaden the base of the economy and its basis for growth and job creation. And it must improve its health and education services. In each area, firm action to strengthen governance will be required.
"We have noticed a clear improvement in the performance of a number of ADB financed projects in the past two years" says ADB's Country Director in PNG Steven van der Tak. "With a new country strategy now in place, ADB and the Government can focus on building upon these recent successes and delivering even better results for the people of PNG. The recent approval of additional finance for repairing rural feeder roads in the Highlands is an example of this approach."
Papua New Guinea joined ADB in 1971 and had received US$927.6 million in total assistance at the end of 2005. PNG's borrowing from ADB has lowered considerably in recent years, with only four new loan projects approved since 2001.
Contact
David Kruger
Email: dkruger@adb.org
Tel:+632 632 5204; Mobile: +63 920 938-6490
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; +632 898 3413; Mobile: +63 920 938-6487
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