OBG talks to Julie Bishop, Australian Minister for Foreign Affairs

Interview: Julie Bishop

What, in your view, are the key priorities in Australia’s relationship with Papua New Guinea, especially in light of the growing trade and investment ties between the two countries?

JULIE BISHOP: Australia’s relationship with PNG is one of this government’s highest foreign policy priorities. It is not defined as an aid donor to aid recipient relationship – it is broader and deeper than that, as a relationship that is built on an economic and strategic partnership and strong people-to-people and historic ties. PNG is going through an economic transformation, experiencing a decade of strong economic growth as a result of a resources boom.

Australia’s investment in PNG is worth more than $19bn – almost the same as Australia’s investment in China. Open, transparent and trade-led economic growth will also ensure that PNG’s emerging economic strength is sustained.

At the same time, we want to make Australia an attractive destination for foreign investment, trade and business, as well as take advantage of the shared opportunities that are presented to us in the growing economies of Asia.

How is Australia’s bilateral aid programme helping to address PNG’s development priorities of health, transport, infrastructure and justice?

BISHOP: Australia has invested $1.37bn into PNG’s development over the last three years, and we are investing some $527.7m in total development assistance in PNG in this financial year.

Australia is PNG’s largest donor, which is a reflection of our close historical, geographical and economic links. However, despite the decades of aid investment by Australia, PNG is not currently on track to meet any of its Millennium Development Goals, with many people in the country still lacking access to basic services or transport.

Our closest neighbour should be both a safe and prosperous nation. Through the aid programme the governments of Australia and PNG work in partnership to raise living standards in PNG, and we are committed to more closely aligning the aid programme with PNG’s development priorities.

A more educated and healthier population with efficient transport infrastructure and an effective law and justice regime will help grow PNG’s private sector, promote economic development, make it a better place for PNG’s citizens to live, and encourage foreign investment and trade. We are also assisting PNG in addressing gender inequality and violence against women, recognising that these are also critical barriers to the country’s development.

As PNG’s economy diversifies, what opportunities are there for Australian companies beyond mining and hydrocarbons?

BISHOP: The resources sector in PNG is important for job-seekers and exporters, and it provides a solid base for government revenue. However, there are other tangible and immediate opportunities in the country beyond this sector. PNG’s proximity and close relationship with its neighbours to the north, and the economic rise of the Indo-Pacific region, provides a potentially important market for the country’s products and services. Australian businesses are well placed to partner with PNG companies to take advantage of these opportunities. PNG has recently built up considerable capacity in the business services sector, driven by construction of the PNG Liquefied Natural Gas project. Business services will remain important in supporting the private sector to grow and flourish. These services, including transport, communications, financial services and construction, provide a solid foundation on which to further diversify PNG’s economy. Making sure that the business climate continues to improve and that the country attracts further investment will be an important role for the government if it is to sustain PNG’s remarkable economic performance.