The World Bank In Papua New Guinea

Papua New Guinea (PNG) is the world’s most linguistically diverse country, with over 850 indigenous languages. It comprises the eastern part of the island of New Guinea; the islands of New Britain, New Ireland, and the Autonomous Region of Bougainville; and another 600 smaller islands and atolls. Its rich geographic and natural resources include large reserves of valuable minerals, vast forests, abundant water and marine resources, and fertile land for agriculture.

PNG’s population of about 11.8 million people is young and growing. The country’s rich culture is complex and deeply rooted in tribal and ethnic identity and relationships to the land, which contribute to the country’s unique challenges as well as its considerable resilience.

Two broad sectors dominate the economy: (a) agricultural, forestry, and fishing, which employ most of the labor force (the majority employed informally), and (b) minerals and energy extraction, which accounts for most export earnings and GDP.

The economy is projected to expand by 4.8 percent in 2024, up from 2.7 percent in 2023, according to the World Bank’s April 2024 forecast. Despite a challenging external environment, the economic outlook remains broadly positive, driven by strong performance in agriculture, a key contributor to economic recovery and long-term prosperity.

PNG’s modest headline economic growth has translated into limited per capita income growth over the past 40 years. Excessive macroeconomic volatility, low productivity growth, excessive reliance on natural resources, and missed opportunities to take full advantage of its human capital have constrained growth, according to the Country Economic Memorandum for Papua New Guinea. To achieve stronger and more inclusive economic growth, the country needs to increase economic stability; boost productivity; nurture human capital, including by improving  gender equality; and enhance physical infrastructure, including electricity, telecommunications, and road and other transport infrastructure that is critical to private sector–led growth.

The World Bank continues to support the government’s efforts to strengthen macroeconomic management and improve service delivery, to ensure that development benefits reach all the people of PNG, particularly the 85 percent of the population living in rural areas.

Last Updated: Sep 20, 2024

The World Bank’s approach in PNG is guided by the Country Partnership Framework for Papua New Guinea, which is closely aligned with PNG’s development plans. It lays out three focus areas:

·       improving macroeconomic and fiscal resilience

·       providing more effective and inclusive services, particularly in remote and underserved areas

·       diversifying the economy and creating jobs, including outside the natural resources–based sector.

The strategy is underpinned by the aims of strengthening governance in the natural resources sector and in the management of public resources. It aims to ensure that everyone, regardless of gender, location, and/or social and economic circumstances, can benefit equally from the World Bank’s work to support PNG’s development goals.

The Australian and New Zealand governments strongly support the World Bank’s work, through the PNG and the Pacific Islands Umbrella Facility (PPIUF), which will be in place until at least 2031. It is funded by a commitment of AUD109 million (US$73.15 million) from Australia’s Department of Foreign Affairs and Trade and NZ$33 million (US$22.05 million) from New Zealand’s Ministry of Foreign Affairs and Trade. These commitments are expected to reach a total of about US$200 million by 2031 as projects grow.

Key areas of support

Working in partnership with the government, the World Bank is currently supporting 10 active projects across PNG, with commitments totaling US$489 million.

In the transport sector, the US$108 million Resilient Transport Project  is funding the rehabilitation of key sections of the Ramu and Hiritano highways and the extended maintenance of nearly 200 kilometers of critical transport links. It builds on the Road Maintenance and Rehabilitation Project (RMRP II), which helped restore more than 236 kilometers of roads across the country and rehabilitated, maintained, and/or replaced more than 50 national and provincial bridges, benefitting  an estimated 1.3 million people (27 percent of the population).

To help strengthen water security and increase access to safe water supply and sanitation in PNG, the US$70 million Water Supply and Sanitation Development Project is improving access to clean and reliable water supply services for people in rural towns across the country, including in Bialla and Bulolo, which now have access to clean, reliable running water.

To enhance PNG’s capacity to prevent, detect, and respond to health emergencies, the Bank is helping the government strengthen health systems through the US$90 million PNG Child Nutrition and Social Protection Project. This project supports the implementation of the PNG CARES (Community-based Approach to Reduce and End Stunting) initiative, delivering improvements to nutrition-focused health services at provincial health centers throughout the country. The US$30 COVID-19 Emergency Response Project, now approaching completion, has strengthened the national health systems for public health preparedness, including by installing medical waste incinerators and laboratory equipment at hospitals across the country.

To support transition, efficiency, and access in the energy sector, the US$30 million Energy Utility Performance and Reliability Project is supporting the rehabilitation, reinforcement, and upgrade of infrastructure on the Port Moresby, Ramu, and Gazelle grids owned and operated by PNG Power Limited.

The US$40 million PNG Agriculture Commercialization and Diversification Project builds on the success of the US$75 million Productive Partnership in Agriculture Project, which supported efforts to build the skills, productivity, and access to markets of more than 67,000 coffee and cocoa farmers. The new project continues to support coffee and cocoa growers as well as farmers of small livestock and crops such as coconut and spices.

The US$32 million Enhancing Labor Mobility from Papua New Guinea project is helping PNG benefit from rapidly expanding employment opportunities in Australia and New Zealand by helping the government ensure equitable access to these programs, with a focus on women and disadvantaged groups, and preparing workers for deployment to Australia and New Zealand and reintegration on return to PNG.

In June 2021, the Bank approved US$100 million to support PNG’s recovery from the economic impact of the COVID-19 pandemic. The Papua New Guinea Crisis Response and Sustainable Recovery Development Policy Operation helped safeguard routine health services while the COVID-19 vaccine was being rolled out and provided financial assistance to micro-, small-, and medium-size enterprises to protect jobs and ease the tax administration burden on small businesses.

The World Bank is also strengthening its analysis of PNG’s economic challenges and prospects, with the publication of the Country Economic Memorandum in 2023 and the annual PNG Economic Update.

Last Updated: Sep 20, 2024

For many people in PNG, travel by road can be impossible, unsafe, or simply far too expensive due to poor road conditions. Without reliable access to transport infrastructure and roads, people cannot reach schools, hospitals, or markets when they need to. Under the recently closed Road Maintenance and Rehabilitation Project more than 236 kilometers of critical road links across PNG was restored. More than 50 national and provincial bridges have also been rehabilitated, maintained and/or replaced as part of this project, with an estimated 1.3 million people (27% of PNG’s population) benefitting from this support.

PNG’s high rates of drug-resistant tuberculosis (TB), remains a significant health threat in several of PNG’s provinces. TB is a leading cause of death in PNG, with the country having the highest proportion of children in the world affected by TB. A successful community-based TB treatment program funded by the World Bank is effectively supporting communities across the National Capital District (Port Moresby) to help eradicate this deadly disease. The program was first piloted in Western Province on Daru Island, where the World Bank contributed US$15 million (PGK57m) to the Emergency Tuberculosis Project to help kick TB out of PNG with improved screening, diagnosis and treatment programs. Patient treatment drop-out rates have now reduced from 30% to zero on Daru Island, previously one of the world’s most significant hotspots for multi-drug resistant TB.

Through the PNG Water Supply and Sanitation Development Project, a number of key rural towns across PNG are now being connected to clean, reliable running water supplies. Today over 5,000 residents of the West New Britain town of Bialla, for example, now have water connections – as do the town’s health center, school and local market; delivering significant knock-on impacts for health and education.

In the capital, Port Moresby, the US$35 million (PGK134m) Urban Youth Employment Project II is helping improve the capacity of young men and women to engage in productive income generating activities. Its predecessor, the Urban Youth Employment Project, helped 18,500 unemployed Papua New Guineans, -40% of whom are women, to undertake vocational training and fully subsidized work placements, creating over 815,000 days of work. UYEP II extends the program into Lae, PNG’s industrial hub and second largest city.

The Productive Partnerships in Agriculture Project (PPAP), which was completed in 2022, supported more than 67,000 smallholder cocoa and coffee producers with income and yields increasing, on average, by 40% across 12 provinces. The project also supported 24,000 women to earn an income, save money and strengthen their roles in coffee and cocoa growing industries. The World Bank is now supporting the PNG Government to build on the successes of PPAP, and to also support other crops including coconut and spices, as well as small livestock, in the five-year, US$40 million (PGK153 m) PNG Agriculture Commercialization and Diversification Project, which is now underway.

Last Updated: Mar 30, 2024