Supporting a stable and prosperous Papua New Guinea is one of our most important foreign policy objectives. The Torres Strait is the closest thing Australia has to a land border—it is less than four kilometres from the Papua New Guinea mainland to the nearest populated Australian island. Developments in Papua New Guinea have substantial implications for Australia, including our defence, border security, health security and economy.
It is in our shared interest that Australia remains Papua New Guinea’s principal security partner. We will continue to pursue close defence cooperation and build capacity in policing and law and justice. We will work with Papua New Guinea to tackle illegal fishing, trans-national crime and people smuggling. Ensuring the integrity of the Torres Strait Treaty, the foundation of our border arrangements, will remain a priority.
Notwithstanding its current fiscal challenges, Papua New Guinea has considerable economic potential and a growing number of trade and investment partners.
In this changing economic landscape, Australia will have to compete harder for business. Australian companies have already invested $18 billion in Papua New Guinea. Some 4,600 Australian firms do business there.
A significant part of Papua New Guinea’s economy relies on foreign investment in resource projects. While this offers potential for growth, a more diverse economy also focused on agriculture, fisheries, services and tourism, as well as better governance, will be essential for Papua New Guinea to convert its natural endowments into sustained, broad-based economic growth.
Papua New Guinea continues to face serious development challenges. Its population of about 8 million—40 per cent under the age of 15—is projected to reach 18 million by 2050. The delivery of services is suffering because of a shortage of capacity and a constrained budget. Many development indicators—such as maternal, child and infant mortality, the rate of communicable diseases, and access to clean water and sanitation—are poor.
Reflecting its challenges and the closeness of our relationship, Papua New Guinea is our largest development partner, with Australia investing around $550 million a year in assistance. We work together to encourage economic growth, improve governance, and support health and education. Australia is also helping Papua New Guinea to empower women and foster a new generation of leaders.
Australia will continue to support the Papua New Guinea and autonomous Bougainville governments to implement the 2001 Peace Agreement, which underpins peace and stability in Bougainville.