Aid may ease PNG tension

By Robin Bromby

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PAPUA New Guinea ms to receive < an m i

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from the European Community and Japan money which is expected to help create a substantial number of new

jobs throughout the country.

The new aid deals come against a background of growing government alarm about the rapidly deteriorating unemployment and crime crises which now afflict the country.

The European Community is making

available another kIOO million in sup port grants which will be used to fund small-scale rural industries as well as training and tertiary education for Papua New Guinea students.

Part of the money (k 39 million) is in the form of a soft loan from the European Investment Bank which will be used to back small business ventures and development of the new industrial centres at Lae and Port Moresby. The remaining k6l million in EC grants will go towards funding the government’s structural adjustment programme. After signing the agreements with EC rep resentatives, Foreign Minister Sir Michael Somare said the money would be used to support human resources

development, development of rural

areas, mini hydro schemes, solar energy and national parks.

Roads and agriculture in Papua New Guinea will be boosted by a huge loan negotiated with a Japanese institution.

The Japanese government-owned Over seas Economic Co-operation Fund will put up klo9 million, a decision which

was greeted by Prime Minister Rabble Namaliu as a sign there was still international confidence in his country’s econ Repayments are scheduled to A begin in the year 2000 and would be a-—»>»"■ About k 67 million will be spent on continuing the trans-island highway project, and will finance 75 per cent of the cost of the Berema-Malalaua and Aseki-Latep sections. Another k 23 mil hon will be used to build the Mumeng- Wau and Rigo-Kwikila roads, while the Kl 9 million will be provided as a contribution to the government’s agn cultural adjustment pro- Bram8 ramm r e and wlll cover im P ort P a V ments for farm equipment, Somewhat unusually for Japanese loan funds, the money is untied, which will allow Papua New Guinea contrac tors to bid for much of the work. The 25 per cent of the reading work which will have to be paid by the government m Port Moresby is already provided for in the 1991 budget. Namaliu said he expected road works to start at the earliest possible time, The influx of more than k2OO million comes at a time when Namaliu himself has joined the chorus of voices raising the alarm about Papua New Guinea’s

growing unemployment problem. Ad

dressing a recent meeting of government leaders and officials, the Prime Minister sa id the country was facing social and political catastrophe because of the

“ever-increasing pool of unemployed”.

He said Papua New Guinea could not go on turning out thousands of school leavers who had little prospect of finding jobs, and no hope of playing a useful and productive role in society. □