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Eleventh Australia-PNG Ministerial Forum.

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Ministers from Australia and Papua New Guinea, led by the Hon Alexander Downer MP, Minister for Foreign Affairs of Australia, and the Hon Roy Yaki MP, Minister for Foreign Affairs of Papua New G uinea, met from 21 to 22 December 1998 in Cairns for the eleventh annual Australia-PNG Ministerial Forum. PNG ministers warmly welcomed the hospitality extended by the Australian Government and the people of North Queensland.


Ministers noted that this had been the best-attended Forum to date, with twenty ministers from Australia and Papua New Guinea attending. They indicated that this reflected the weight and significance both sides placed on the relationship and the strength and maturity of the ties between the two countries. Ministers were extremely pleased with the open and productive exchanges on a broad range of issues. They underlined the importance of contacts between both countries at such senior levels and of the development of personal links between counterpart ministers.


Ministers noted the difficult regional economic conditions over the past year and the implications of this for the economies of both Australia and Papua New Guinea. They highlighted the importance in this context of governments adopting sound economic policies. They noted that this often obliged governments to take decisions, which, although tough in the short term, nevertheless produced strong long-term gains.


They welcomed, against this background, the efforts of the PNG Government to undertake far-reaching economic reform through the introduction of a budget that provided a framework for tackling structural weaknesses in the economy and promoted broad-based development, especially in rural areas. They also commended the passage of VAT legislation and the introduction of tariff reforms in Papua New Guinea. Effective implementation of the budget and the VAT legislation will lift investor confidence, in an environment in which regional countries are competing for foreign investment.


Ministers noted that many of the budgetary reforms introduced by Papua New Guinea responded to concerns raised previously by the IMF and World Bank. They agreed that early conclusion of negotiations with the IMF and World Bank would send a strong message to foreign investors about Papua New Guinea’s commitment to an economic reform program that would provide macro-economic stability and boost standards of living.


Ministers welcomed participation in the Forum of representatives from the business community for the first time. This reflected the very strong — and often under-rated -trade and investment links between Australia and Papua New Guinea, with total two-way trade amounting to $1.9 billion in 1997/98, with Australian exports higher for example than Australia’s exports to France, Norway and Brazil combined. They agreed that this business involvement should be a feature of future Forums and resolved to give careful consideration to the issues the business representatives had raised.


The business representatives of Papua New Guinea and Australia welcomed the invitation to participate in the Ministerial Forum and saw it as an opportunity for government and business to engage in dialogue to improve the trade and investment links between Australia and Papua New Guinea. Ministers and the business community agreed that public and private sector goals could be met through enhanced consultation and partnership.


The business representatives identified six areas of priority concern: law and order; the investment environment; infrastructure; governance; education and training; and year 2000 compliance. To meet these concerns the business representatives proposed an Action Plan which they conveyed to the leaders of the Australian and PNG delegations at the conclusion of the Forum. Ministers agreed that business representatives and government officials should jointly review progress by the end of July 1999 and report to Governments at the 1999 Forum.


Ministers confirmed the importance of supporting growth in two-way trade and to advance this they agreed that a trade delegation, led by a senior minister, visit Papua New Guinea in 1999.


Ministers re-affirmed their strong commitment to the Papua New Guinea-Queensland gas pipeline project, which will bring great benefits to the people of both countries. They noted that both Governments had achieved important progress in advancing the proje ct, while recognising that the project will only proceed if it is commercially viable.


Ministers agreed to maintain the Treaty on Development Cooperation for the aid arrangements post-2000.


Subject to formal confirmation by the National Executive Council of Papua New Guinea, ministers agreed to the principles that will underlie the aid relationship post-2000. These principles would include:


* a strengthened benchmark system of sectoral performance targets consistent with the World Bank and IMF economic r eform program and linked to the level and composition of the program;


* a growing proportion of the program devoted to rewarding and encouraging good performance by agencies inside and outside the PNG Government (Incentive Fund);


* a maximum indicative a nnual planning figure for the period July 2000 to June 2003 of S300 million in nominal terms;


* where appropriate, a sectoral investment approach will be promoted in the future;


* increasing levels of participation in the aid program by PNG agencies, com panies and individuals; and


* continual refinement of the program to meet PNG development priorities.


Ministers also endorsed the outcome of the Meeting of the High Level Consultations on the aid program, which was signed by officials on 8 December 1998, and the benchmarks in education, health and infrastructure for 1999.


Ministers noted that Papua New Guinea had suffered a series of major natural disasters in recent years: the Rabaul volcano eruptions; the drought; and the Aitape tsunami. PNG ministers thanked Australia warmly for the prompt and generous assistance provided in response to these emergencies. To help in improving PNG’s capacity to manage such disasters, Ministers noted the start of a project to strengthen Papua New Guinea’s disaster management system in early 1999.


Australian ministers congratulated the PNG Government on its constructive and flexible approach to the Bougainville peace process, in pursuit of a peaceful, negotiated settlement to this tragic conflict. All the parties — in Port Moresby and on Bougainville — had demonstrated impressive commitment and leadership. Australian ministers reaffirmed their readiness to continue to facilitate the peace process through the Peace Monitoring Group and the aid program. PNG ministers noted the continuing important role of the Peace Monitoring Group on Bougainville but agreed that it must not become a permanent fixture in the province. They welcomed progress towards establishing the Bougainville Reconciliation Government.


Ministers emphasised that the Bougainville aid program remained an extremely high priority for both Governments, especially in delivering a peace dividend in the form of restoration and reconstruction. Against this background, Australian ministers agreed to accelerate the roads project and supplement the Peace Travel Fund. Ministers agreed that the primary focus on health, education and humanitarian assistance in Bougainville was appropriate and that this would be further strengthened with the implementation of infrastructure projects in various parts of the province. They also agreed to continue to assist with the training of police for Bougainville.


Ministers noted the importance of the mutually-beneficial bilateral defence arrangements - the New Defence Partnership. Australian ministers confirmed their commitment to working with the Papua New Guinea Government to Strengthen the PNG Defence Force. They underlined the importance of designing and implementing projects in accordance with the New Defence Partnership principles in an environment of continuing budgetary restraint and respect for the constitution.


Ministers agreed that concerns about law and order deterred foreign investors. They noted the steps the PNG Government was taking to tackle the problem in difficult budgetary circumstances. Australian ministers reiterated their desire to work closely with the PNG Government on this issue, including through the design and timely implementation of Phase III of AusAID’s Royal Papua New Guinea Constabulary (RPNGC) assistance project.


Australian ministers expressed their concern about outstanding debts owed to Australian companies by the PNG Government. PNG ministers agreed to continue to work to resolve outstanding claims.


Ministers noted that aviation relations between Australia and Papua New Guinea had progressed solidly in recent months, with Australia and Papua New Guinea negotiating new and more liberal air services arrangements in 1998. Ministers agreed that the safety of operations between Australia and Papua New Guinea was of the highest priority and that the PNG Office of Civil Aviation and the Australian Civil Aviation Safety Authority were working closely together to deal with various concerns in this area.


Ministers expressed warm appreciation for the increased level of co-operation in the Torres Strait border region. Regular joint border patrols by Australian and PNG immigration, police and foreign affairs officers are strong evidence of constructive working relations on the border. Ministers welcomed the decision to extend the prohibition on mining and drilling in the Torres Strait for another five years. They also acknowledged the importance of protecting the region from the serious threat of oil spills. Ministers agreed to give a high priority to improving health services in Western Province.


Ministers agreed that events over the year had demonstrated both the importance and the strength of personal ties between Australia and Papua New Guinea. The visit of the Hon Bill Skate MP, Prime Minister of Papua New Guinea, to Australia in August had given renewed impetus to political relations. This had been reinforced throughout the year by bilateral visits, including visits to Papua New Guinea this month by the Ministers for Foreign Affairs, Trade and Defence. Ministers underlined the continuing importance of personal contact at ministerial level, including at the annual Ministerial Forum.



Alexander Downer MP

Roy Yaki MP