Medium Term Development Plan, 2011-2015 - UNDP in Papua New ...

5.13 Foreign aid
Goal:
Advanced stage of foreign aid management and ultimately attain independence from foreign
aid
Introduction
PNG still depends on foreign aid in areas such as transport and energy, telecommunication, health and
education, food security and good governance. As prescribed in the PNGDSP, external aid can be viewed from
two specific angles: resources for development programs such as health, education and transport; and
technical expertise and skills to provide advisors and training for delivering services and executing investment
in development.
The proportion of technical assistance to aid varies between development partners but the total percentage
amongst all donors is estimated to be above 50 per cent which is considered to be too high. To reduce the
dependence on foreign aid, PNG will need to drastically reduce the skills gap in the first five years, and
simultaneously transfer the resources expended on technical assistance into boosting technical and higher
education and training, as well as into the development of infrastructure.
Over the next five years the level of technical assistance as a percentage of total foreign aid will decrease. In
addition, the first MTDP intends to significantly address aid effectiveness issues. Current weaknesses in
monitoring and evaluation of international aid undermine efforts to improve its effectiveness. All assistance
programs of donor partners will need to be aligned to supporting the realisation of the PNGDSP in a
coordinated and joint manner. In addition, an enabling environment will need to be established for PNG to
graduate to a donor partner within the Pacific region.
MTDP 2011-2015
As from 2011, all foreign aid will need to comply fully with the PNGDSP and MTDP 2011-2015. This will
require radical change in the way donors operate in PNG, including a dramatic shift away from the focus on
technical assistance for filling the skills gap. The new direction outlined in the PNGDSP, and to be
implemented in the MTDP, is for all aid to be used to help fill the resources gap in the current and future
MTDPs (see Part 7 for more details). This will mean technical assistance in its current form will largely be
replaced by technical assistance required to implement the strategies of boosting technical and higher
education within PNG, including implementing short term training programs. It will also mean a shift away
from technical assistance and towards resourcing projects in building infrastructure, including infrastructure
in health and education.
By 2015, expected targets are: (a) less than 50 per cent of foreign aid will be for technical assistance, and
most technical assistance will be in the areas of education and training; (b) the total value of technical
assistance in education and training priority areas will increase, with a corresponding reduction in lower
priority areas, and a greater utilisation of technical assistance from developing countries; (c) increased
number of scholarships and quality graduates in professions identified in the skills gap analysis, consistent
with the national human resource requirements; (d) a national and sectoral dialogue system established and
operationalised for development partners; (e) central and line agencies of the PNG Government to meet the
principles of the Paris Declaration, the Accra Agenda for Action, and the PNG Commitments to Aid
Effectiveness; (f) as an expression of a mature level of aid alignment to national development strategies, a
single Joint Assistance Strategy for PNG (JAS PNG) is adopted to complement the 2016-2020 MTDP, in place
of individual country assistance strategies; (g) a significant and measurable reduction in aid fragmentation is
achieved, and distribution of labour among development partners is agreed with the Government; (h) new
modalities of aid and technical support are adopted, including the contracting by the Government of
development partners to produce specific developmental outcomes and the adoption of co-financing schemes;
(i) South-South Cooperation agreements are negotiated, subscribed, and substantially implemented, with
proper monitoring and evaluation procedures to guarantee its value-for-money impact.
In order to achieve these, the MTDP 2011-2015 will focus firstly on taking firm measures to:
· undertake a comprehensive assessment of the skills gap and to establish — through partnership with
donor partners — education, training and scholarship programs to reduce this skills gap;
· simultaneously undertake a sectoral analysis of technical assistance requirements and to redirect
technical assistance away from low priority areas with a low education basis, to priority areas with
capacity building through education and training;
· establish an advisory procurement and management system that is accountable to GoPNG systems;
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