Papua New Guinea receives international assistance in various forms and from numerous sources. Australia, the only donor which provides direct budget support, is the biggest contributor to Papua New Guinea's development assistance programme. Other major sources of assistance are Japan, the European Union (EU), the Asian Development Bank (ADB) and The World Bank. These countries and agencies provide technical and financial assistance.

Technical assistance, mainly in skills, knowledge and institution building, is normally provided through the following methods:

The importance of technical assistance has been increasingly recognised for its success in the transfer of skills to Papua New Guineans and for institutional building.

Financial assistance which addresses investment in capital works, for example, may also be provided as part of a technical assistance programme.

Bilateral and multilateral agencies, including the Australian Agency for International Development (AusAID), the EU, the United Nations Development Programme (UNDP), the ADB and the Commonwealth Fund for Technical Co-operation (CFTC), provide financial assistance through grants. Procurement of goods and services involves internationally competitive bidding covering at least the member countries of the agency concerned.

Papua New Guinea also receives concessional loans because of its status as a middle class income country. The lenders generally meet all foreign exchange costs and some of the local costs. Papua New Guinea is expected to meet the balance of local costs. The concessions received vary, but generally involve low interest rates and long pay back periods. The World Bank, the ADB and the EU are the most important financiers.

Bilateral Development Programmes

The objective of Australia’s development co-operation is to promote the sustainable economic and social advancement of the people of developing countries, as well as to pursue its own foreign policy and commercial interests.

The country's development co-operation programme is managed by an autonomous body within the Australian Department of Foreign Affairs and Trade, AusAID. It was formerly known as the Australian International Development Assistance Bureau (AIDAB).

The objective of Japan’s Overseas Development Assistance (ODA) is to support self-help efforts of developing countries, based on environmental conservation, humanitarian considerations and recognition of interdependence in the international community, as stipulated in the ODA charter adopted in 1992.

The overall objective of China's aid policy is based on an ideology to foster equality and mutually-beneficial development through an open door foreign policy, enhancement of self-reliance and economic development and complementary development co-operation programmes with partner developing countries.

China is an aid recipient as well as a donor. Its expertise is mainly in the agro-based industries such as agriculture, forestry, manufacturing and medicine. It provides opportunities for human resource development in the fields of food production and processing, fisheries, agricultural mechanisation and small hydro power plants.

Germany's development co-operation focuses on areas such as food security, rural development, environmental protection, improved energy supply and population policy. Special emphasis is placed on women and other disadvantaged sections of the population.

As a donor, Korea aims to foster international co-operation and assist developing countries to overcome difficulties caused by disease, poverty, unemployment, population explosion, environmental pollution and degradation. This is addressed through technical co-operation, human resources development and technology transfer.

The objective of New Zealand’s ODA is to provide assistance to developing countries, strengthen the links with its development co-operation partners and contribute to New Zealand’s own external relations and trade policies in terms of international economic prosperity, maintenance of peace, security, political stability and global environmental protection.

Key areas of support are human resource development, agriculture, forestry, environmental management and technical assistance.

The major objective and commitment of the United States of America’s assistance programme is to promote and consolidate democracy and governance, population and family planning, market principles, conservation and environmental considerations. It also promotes peace to achieve the stability essential for economic growth and political freedom, sustainable development, protection against transitional threats and meeting urgent human needs.

Other Bilateral Donors

The Papua New Guinea and Israeli Governments have a Memorandum of Understanding (MOU) relating to agricultural co-operation. Projects funded under the MOU include a citrus project in the Central province.

Papua New Guinea has in place a technical co-operation agreement with a consortium of French banks known as the Caisse Francaise de Developpement (CFD). The agreement allows for the funding of projects in PNG which have been approved by the national government.

Under the provisions of a memorandum of understanding, the Malaysian Government is providing assistance towards an institutional housing project for the disciplinary forces (defence and police).

Canada and Spain have sought possibilities for co-operation with the Papua New Guinea Government. These are still in the negotiation stages.

Multilateral Development Programmes

Multilateral development assistance programmes are funded by various agencies and institutions.

The objective of the ADB's strategy in Papua New Guinea is to assist the Government in diversifying and expanding the non-mining opportunities and to improve its absorptive capacity by overcoming the shortage of skilled personnel.

The bank's assistance to the agriculture sector continues to contribute to improving productivity, strengthening the export development base, increasing employment opportunities and raising the per capita income in the rural sector.

Papua New Guinea is a signatory to the EU’s Lome II, III and IV Conventions. The Government has consistently identified rural and human resources development as principal sectors for development assistance through the Lome conventions.

The Bank's relationship with Papua New Guinea can be seen as adviser, co-ordinator of donor assistance, facilitator of aid mobilisation and a source of programme financing.

This programme assistance has been directed towards agriculture, forestry and fisheries, labour development and training, strengthening of financial management and preparation of pre-investment studies and industrial development in Papua New Guinea.

The International Fund for Agricultural Development (IFAD) provides assistance towards expanding and improving food production, nutrition, combating rural poverty and supporting landless people.