Chapter 3 Public Sector Reform Since 20011

The later years of the 1990s saw a period of deteriorating governance, economic decline, and rising tensions in relations between the Papua New Guinea government and the World Bank and other donors. This culminated in a vote of no confidence against the prime minister, Bill Skate, and in 1999 Sir Mekere Morauta replaced Skate as prime minister. As documented in Chapter 2, Morauta promptly moved to initiate policies designed to achieve reconstruction and development. The Morauta government set itself six objectives: to stabilize the economy; to stabilize the budget; to rebuild the institutions of state; to remove impediments to investment and growth; to reach a peaceful political settlement on Bougainville; and to create political stability and integrity. A number of fiscal and broader economic measures were introduced with respect to the first two objectives and a Medium Term Plan of Action for Public Sector Reform was drawn up for the period 2000–2003; steps were taken to safeguard the independence of, and to strengthen, the Bank of Papua New Guinea (see Kamit 2000), the Ombudsma