Promoting trade for development

Interview with Martin Dihm, EU Ambassador to the European Union in Papua New Guinea Newly-appointed Ambassador of the EU in PNG, German national, Martin Dihm, has previously held senior posts in the EU’s delegations in Barbados and Abuja, Nigeria. From 2001, he was on the trade desk and EPA negotiator for the Pacific and from 2005, Deputy Head of Unit in the EU’s Directorate for Trade dealing with relations and EPA negotiations with Eastern and Southern Africa and the Pacific.

In what respects have the priority areas for EU cooperation with PNG evolved from the respective 9th to 10th EDFs?

Under both the 9th and 10th EDFs, the main themes have been education and rural development although some changes in the specific orientation have occurred. Under the 10th EDF, support for the education sector is evolving towards a sector-wide approach and for rural areas the emphasis has changed from water supply and sanitation to income-generating opportunities. There was also a focus on support for capacity building under the 9th EDF which has laid the foundations for more effective implementation of 10th EDF interventions.

Two further important changes were introduced following the Mid-Term Review of the 10th EDF. They concern climate change, identified as a key challenge to be addressed under the rural economic development programme and "good governance" to support accountability and transparency.

How is the EPA benefitting Papua New Guinea’s people?

So far, the main benefit generally highlighted derives from a special provision in the agreement on the rules of origin which allows for increasing exports of processed tuna to the EU. Several thousand jobs, in particular for women, have been secured or created and significant further investments with many more jobs have been announced. This is a most interesting case of trade being utilised for development and a study will soon be conducted to analyse it in more detail. But the EPA arrangement provides benefits beyond just the export of tuna. It opens the whole EU market, one of the largest in the world, to all exports from PNG including for example, exports of palm oil and other agricultural produce benefitting people in the rural areas where most of PNG's population live. The agreement opens a window for PNG to diversify its exports and could help trigger investment in new products and processing. The EU has allocated aid under the 9th and 10th EDFs to assist with capacity building and infrastructure development so that the opportunities offered by the new trade agreement can be fully exploited.

Are there any plans to expand the scope of the EPA?

Yes. EU Commissioner for Trade, Mr Karel De Gucht, raised the matter with the Minister of Foreign Affairs, Immigration and Trade, Don Poyle, when he visited PNG in March 2011. In particular, the twin issues of investment and services were discussed. Both are of crucial importance for development. There is also interest to include other issues such as fisheries, or development cooperation. Obviously by deepening the agreement through the inclusion of further important issues, its potential to help the country's development could be further enhanced. A trade-related assistance programme under the 10th EDF is currently being designed and will explore how to tackle these subjects and provide capacity building where this is required.

Are there any EU initiatives in view to prevent illegal logging in the country?

The issue of sustaining forestry resources for future generations has a significant importance in PNG. After all, PNG is the country with the worldwide highest percentage of population living on rain forest-based subsistence. De-forestation has hence not only serious implications for climate change and biodiversity but there are also direct linkages to social issues and food security.

The EU stands ready to support PNG in its efforts to sustain its vast rain forest resources. We have offered PNG the possibility to enter into negotiations on a Voluntary Partnership Agreement (VPA) under the Forest, Law Enforcement, and Governance and Trade (FLEGT) mechanism. It would help to put in place a comprehensive timber legality assurance system based on a broad consensus of all stakeholders in PNG. This would also keep EU markets open for PNG timber products which, following the adoption of the new EU timber regulation, will have to be accompanied as of March 2013 by a proof that they come from legally-harvested timber.

The EU has also supported a range of relevant activities such as support for the nation-wide satellite-based monitoring of the state of PNG’s forests and the dialogue between stakeholders. A further project will help to measure the amount of carbon stored in PNG’s forests to understand PNG’s greenhouse gas (GHG) emissions caused by current levels of logging. It will be central to discussions on reducing PNG’s forest-related carbon emissions in more concrete terms.

The country has considerable mineral wealth and Australia’s aid is significantly higher than that of the EU. Why is it important that the EU remains an assistance partner?

It is true that there have been significant revenues from the exploitation of mineral and other natural resources as well as sizable inflows of aid over the years. Nevertheless, development results and broadly-based wealth creation have not been up to expectations. Growth has to a large degree been limited to urban areas and a limited number of sectors in the economy. Although there have been some improvements in key social indicators, PNG is ranked 137 out of 169 countries in the United Nations’ 2010 Human Development Index.

The situation requires our continued engagement and the EU has been a faithful development partner under the Cotonou Agreement. We are particularly committed to supporting the government’s efforts to achieve the MDGs. Other donors indeed devote by far larger amounts of aid to the country, but there are a number of important areas where there is little or no support or where the EU has special experience and can play a useful role.This includes, for example, water supply and sanitation, trade, capacity building of state and non-state actors.
water supply and sanitation,  trade,and capacity building of state and non-state actors or education.

At the gathering organised by the delegation for Europe Day on May 9th you addressed concerns about the role of women in PNG society. How is the EU helping to promote women’s position in society?

As numerous studies have shown, women have a crucial role to play in the development process. The EU therefore considers gender systematically as a key cross-cutting issue in the design of any development project. The EU Gender Action Plan 2010-2015 is our basis for this and has specific benchmarks and reporting requirements.

Within PNG we target gender primarily within the Non-State Actors programme, where funding is provided to support non-state actors that empower women and address gender-related issues. The topic is also addressed through specifically targeted components in larger programmes such as the Mining Sector Support Programme. In the Education programme, 50 per cent of the primary teacher training scholarships were awarded to women and school dormitories were built for girls. And we support and promote the drafting of gender policies within the key departments that implement EU-funded projects and initiatives.

We grasp every opportunity to draw attention to the issue, such as during our Europe Day event where we initiated an exhibition of contemporary painters on ’rethinking the role of women in PNG‘. [Ed: see article in this issue on contemporary artist, Jeffry Feeger]

Breakdown of €116.3M 10th EDF National Indicative Programme for PNG (2008-2013)

€41.5M - Rural economic development (inclusive economic growth in rural areas and climate-change related activities)
€39M - Human resources development
€17.5M - Good governance
€5M - Non-state actors 
€12.5M - Institutional capacity building (of National Authorising Officer and country systems)
€6M - Trade
€12.3M - ‘B’ envelope

Debra Percival