PORT MORESBY, March 7 (Reuters) - Australia offered more money to help Papua New Guinea combat HIV/AIDS on Friday, saying more needed to be done to fight the growing epidemic in the South Pacific island nation.
PNG has the South Pacific's highest rate of HIV/AIDS, with about 64,000, or 2 percent of the adult population, officially living with the disease.
AIDS experts believe under-reporting and a reluctance to be tested means the real number ranges from 80,000 to 120,000 and up to 500,000 people could be infected by 2025 if nothing is done.
Australian Prime Minister Kevin Rudd, on his first official visit to PNG since he won power in November 2007, said Australia would give an extra A$13 million ($12 million) to help non-government aid agencies fight the spread of HIV/AIDS.
"The overall challenge of HIV/AIDS infection is a significant one for us all," Rudd said in a speech to a business breakfast in the PNG capital of Port Moresby.
"Of course we have a feeling of compassion towards our combined humanity to act effectively with people who are suffering this terrible disease," he said. HIV/AIDS has found fertile ground in Papua New Guinea, a jungle-clad, mountainous nation, where polygamy is common and rape and sexual violence widespread. AIDS experts say Papua New Guinea is on the verge of an African-style epidemic that could kill millions and destroy the economy.
Rudd said even with a heightened response on AIDS education and prevention, PNG was likely to have at least 220,000 people with HIV/AIDS by 2025.
Australia is PNG's biggest aid donor, spending about A$355 million ($332 million) a year in the country of about 6 million people, where 40 percent of the population live on less than $1 a day despite the country's vast mineral wealth.
Rudd also announced a small increase in Australia's overall aid programme, ahead of a visit to aid projects in Goroka in PNG's rugged highlands.
Rudd was greeted in Goroka by warriors wearing only feathers and loincloths, carrying spears and bows and arrows, as well as near-naked warriors smeared with white mud and wearing mud masks.
Rudd's two-day visit to PNG was designed to help Australia repair frosty relations with Pacific Islands neighbours, after tensions under Australia's previous conservative government over its efforts to stamp out crime and corruption in the Pacific.
On Saturday, he will visit the Solomon Islands, where Australia has about 200 police and troops as part of an international mission sent in 2003 to maintain law and order after the country nearly collapsed.
Australia considers PNG, the nearby Solomon Islands and Fiji to be part of an arc of instability due to volatility, crime and ethnic violence in the region. Fiji, for instance, has had a series of coups and army rebellions since 1987. (Writing by James Grubel; Editing by Michael Perry)
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