PNG Aid Ready - But MPs Slush Funds Must Go

PNG Slush Funds Last Block To Economic Aid

by Selwyn Manning

The Australian is reporting that slush funds provided annually to PNG's 109 national MPs appear to be the last remaining obstacle to a multi-million-dollar aid package.

Reporters were told in Port Morsby on the weekend the slush fund, or Rural Development Fund, which is spent at the discretion of individual MPs in their electorates, would not be supported by the IMF or other international donors.

That was the message of International Monetary Fund deputy managing director Shigemitsu Sugisaki.

Mr Sugisaki hinted at corruption, questioning whether the rural development fund, managed by constituent MPs actually is used for that purpose.

"Like other donors and people in PNG, we have concerns about the way the money is being spent. In order for those monies to be effectively spent, you have to be sure that there is a mechanism in place within the machinery of government.

"That is why the donor community is very much interested in issues such as governance, transparency and accountability."

PNG Prime Minister Mekere Morauta's government is negotiating a 14-month IMF standby arrangement aimed at supporting PNG's economic restructuring.

The negotiations involve the World Bank, the Asian Development Bank, New Zealand, Australia and other bilateral donors including China.

The Morauta government is being praised for its efforts at bringing PNG MPs to account.

Mr Sugisaki, who is in PNG ahead of a two-day consultative group meeting of PNG's international donors, said: "We've had extremely frank and open discussions with authorities concerning the current economic situation, the steps they have taken so far in response, and the efforts now under way to mobilise a concerned international effort to support Papua New Guinea in the recovery and adjustment process."

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