PNG’s Foreign Aid

2 November, 2006

This threat by the PNG government to suspend government aid they were receiving is quite remarkable and potentially telling.

PAPUA New Guinea is threatening to dramatically reduce the money it receives from Canberra, suspend all official visits by Australians or impose onerous travel restrictions, and recall its high commissioner.

If no satisfactory response is forthcoming, PNG will retaliate, instituting a range of measures that promise to create havoc for Australia’s $300 million annual aid program to PNG.

The most serious step being contemplated is the suspension of significant elements of Australian aid deemed not essential to PNG, the Herald understands.

Normally its a threat to not pay aid, rather than not receive it, which kind of suggests that PNG thinks Australia regards the influence they are getting as more valuable than the aid money. Rather than charity it is money spent in the national interest. It will be interesting to see how the Australian government reacts to such a threat and whether it is a massive misjudgement on the PNG government side.

Of course it should be noted, that the aid could still be good for the people of PNG, even if the government rejects it because they resent the influence it grants to Australia.