NO.017

The Australian Government welcomes the International Monetary Fund (IMF) approval of a

US$115 million Stand-by Arrangement (SBA) for Papua New Guinea. The SBA will support the

.png Government’s reform program and recognises the significant progress made by Papua New

Guinea to date.

The decision signals international support for the strong economic reform program

introduced by the.png government under the leadership of Prime Minister Morauta.

Considerable gains have already been made in stabilising the economy, balancing the

budget, consolidating the independence of the central bank and advancing the urgent task

of structural reform.

The IMF announcement will fortify that progress and will do much to strengthen investor

confidence in Papua New Guinea and to return the Papua New Guinea economy to a path of

sustained growth and prosperity.

Australia has actively supported the.png Government’s reform efforts and has already

provided a A$130 million financial support facility to Papua New Guinea – announced by the

Prime Minister during his October 1999 visit to Papua New Guinea – and would provide

further financial assistance in support of an IMF and World Bank program. Australia also

has an ongoing program of technical assistance in the areas of budget and economic

planning, statistics, privatisation, taxation and other key areas of economic management.

The Australian Government has also encouraged other donors, including the Friends of

Papua New Guinea group, to support the Papua New Guinea Government’s reform efforts. We

hope other donors will now confirm their commitments to provide balance of payments

support for the Papua New Guinea government to finance the US$180 million financing gap

identified by the IMF for 2000.

Australia strongly endorses the IMF decision to renew its partnership with Papua New

Guinea and will now begin discussions with Papua New Guinea on further Australian

financial assistance in support of its reform program.

31 March 2000

Contacts: Innes Willox 02 6277 7500

Niki Savva 02 6277 7340