Foreign minister wants private sector to be more involved, particularly in area of health services

The Australian foreign minister, Julie Bishop, has said the way aid is delivered to Papua New Guinea must change after the country dropped down the UN development rankings, despite receiving more than $500m a year from Australia.

At the Australia Papua New Guinea business forum in Cairns, Bishop said a “new approach” was needed that would see the private sector more heavily involved in promoting growth after concerns continued to be raised about high infant mortality rates and maternal health in the country.

In 1975, when Australia began providing aid to PNG, it ranked 77th on the UN’s human development index. This year it is ranked 156 and concerns have continued to be raised about health services in the country.

''I am troubled by the fact that, despite a significant investment in aid into PNG over many decades, in some vital areas there has been no discernible progress,” Bishop said at the forum.



From 2012 to 2013, PNG received $501m in aid from Australia. Bishop said the figure was expected to increase to $577m in the next year, with half of the aid provided for infrastructure projects. She said it would be “based on economic development as the key driver for poverty reduction”.