THE Asian Development Bank says the economies of Papua New Guinea and Nauru could benefit from their new asylum seeker deals with Australia, but it cautions there are also risks for both nations.
Since the PNG asylum seeker arrangement was announced in July, the Australian Government has promised to increase its aid spending, mainly on infrastructure projects.
Nauru receives big visas fees, with each asylum seeker costing the Australian Government $1000 (K2161.29) a month.
Vice President of the Asian Development Bank, Stephen Groff, told Pacific Beat that it will be some time before the economic impact of the deals becomes apparent for PNG and Nauru.
“With any kind of new inflows of capital in any country, there are both upside and downside risks,” he said.
“You need to be making sure you can put those funds in ways that maximise the upside and minimise the downside risk and it is very difficult to say at this point because of this is such a new policy, what those impacts might be.”
Mr Groff says the ADB will continue to work with the governments of both countries to provide advice as to how best manage the financial windfall of their new agreements with Australia.
“We will be working with both the Government in PNG and Australia how we can inclusive and sustainable growth in PNG. You can generalise that the biggest challenge to PNG at the moment really is inclusive growth,” Mr Groff said.
“With or without this new policy, with or without this new approach, that will continue to be a major challenge in PNG and one that’s going to require not just investment in infrastructure but investments in education, investments in health, investments in social safety net, investments in access, and investments in opportunities.”
Source: Australian Network News