PNG PM wants more Australian investment, China aid

Papua New Guinea's Prime Minister, Peter O'Neill, says Australia and China should examine each other's models for assistance to the Pacific.

PNG is the second largest recipient of Australian aid after Indonesia, with the majority of it spent on good governance and health programs.

Mr O'Neil says most of the Australian aid currently goes towards health and education, while China's model of low-interest loans tends to target infrastructure.

He's told Australia Network's both countries could learn from the other's model.

"China doesn't invest in education, China doesn't invest in health programs in our country," he said.

"They invest in infrastructure through a loan scheme, which we need to build infrastructure...so I see these two programs as two separate programs.

"But I'm also trying to encourage the Chinese to engage in more aid." Australia gives $500 million in aid to PNG each year.

Mr O'Neill says he wants Australia's aid program to reflect his government's focus on rebuilding the country's crumbling infrastructure, including roads, airports and ports.

"We see that the Australian taxpayers also wanting some accountability and the AusAid program in Papua New Guinea, and they want to see visibility in the projects that they have done through these funds," he said.

"So we are talking to the Australian Government that we become partners in some of these major infrastructure programs that we are embarking on, so Australian taxpayers and also the Papua New Guineans can see projects that are visible.

"We are spreading the development program too thinly and although the program is very much appreciated, the effect of it is not being felt by the population of Papua New Guinea." Mr O'Neill says while there's substantial Australian investment in PNG's mining sector, he'd also like to see investment in sectors where there's little competition, like agriculture and construction.

He says he would also like to see more of the money and ownership from those projects stay in PNG.

"In terms of resource development, we would like to encourage partnership, rather than investing directly and taking full ownership of those programs and projects themselves," he said.

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