Japan’s Helping Hand To PNG
p. 29 · Read in the full issue
A ‘fine example”for Tokyo.
PAPUA New Guinea set an example to other Pacific countries when it recently earned SUS2OO million in development aid funds for this year from the Consultative Group for PNG. The Group’s first meeting, held in Tokyo, also agreed to consider extending financial and technical aid to PNG in 1989-90.
The World Bank chaired the meeting as one of the Group’s members, along with six nations, four international agencies and the International Monetary Fund. South Korea was for the first time a donor: it had formerly been an aid recipient.
A ministerial-level delegation from Port Moresby told the group PNG’s external financing needs over the next five years are estimated at SUS4.S billion, and that of-
ficial development assistance (ODA) will be needed to cover half that.
Group members commended the Port Moresby case as an example for other Pa cific countries seeking ODA, and congrat ulated PNG on recent progress in managing its economy, especially in re ducing fiscal and current account deficits, on adopting prudent borrowing policies and keeping inflation down. Aggregate gross domestic product is expected to grow to 3.4 per cent a year until 1995, notably higher than the 2 per cent growth of the 1980 s, allowing growth in per capita in comes. If the PNG government continues its development strategy and investment levels are adequate, the non-mining sector could grow by 2.7 per cent each year to 1995
and the mining sector by 7 per cent, Because the mining sector will provide only a limited number of jobs, however, growth in the non-mining economy holds the key to higher employment.
Japan is a major fund provider to the World Bank, whose Tokyo office organ ised the consultative group meeting that approved the PNG funds: so far the bank and its affiliate, the International Devel opment Association, have approved 18 loans and 13 developments totalling SUS44O million to PNG, most for agri culture and rural development.
A Foreign Ministry spokesman said the PNG case was a fine example of what To kyo would prefer to be involved in for de velopment aid to Pacific countries. □