Overview

Papua New Guinea’s population of 7.5 million is young and growing. The country is rich with a vast endowment of natural resources and geographic proximity to rapidly growing Asian markets. Its population is strikingly diverse, speaking over 800 distinct languages.

Economically, despite some recent diversification, PNG’s economy remains dominated by two sectors: the agricultural, forestry and fishing sector, which engages most of the labor force (the majority informally); and the minerals and energy extraction sector which accounts for the majority of export earnings and Gross Domestic Product (GDP).

The successful development of the US$19 billion ExxonMobil LNG investment in 2014 ahead of schedule and within budget is expected to provide significant boost to PNG’s overall GDP. Yet while exports from this project will eventually provide revenue to the state, they are unlikely to be felt in the short term. Non-mining GDP was forecast to grow by 2.9%in 2016, supported by a rebound in the construction sector.

To diversify PNG’s asset base and increase employment, investment is needed to strengthen capacity in institutions and physical infrastructure. Electricity, telecommunications, road and other transport infrastructure remain critical to enabling private sector-led growth.

Translating macroeconomic performance and revenues from the extractive industry into strong, tangible improvements to living standards for all Papua New Guineans remains the key challenge for the Government of PNG, yet other challenges are also immense. Improving public financial management, efficiency of public spending and service delivery, raising the performance of the civil service, and improving transparency and accountability in budget management will be crucial in converting resources revenue into inclusive growth and, consequently, a genuine improvement in the livelihoods of ordinary Papua New Guineans.

Last Updated: Apr 14, 2016

The World Bank Group has dramatically increased its engagement in PNG in recent years, and is committed to continuing this support long term.

In November 2012, the Bank approved the Country Partnership Strategy for Papua New Guinea. This four year (2013-16) strategy guides the Bank’s engagement in the country.

The Strategy ensures women and men, girls and boys, will benefit equally from Papua New Guinea’s development goals. It also seeks to promote prudent management of revenues. The Strategy focuses on three main pillars:

1)  Increased and more gender-equitable access to physical and financial infrastructure by:

•  improving and upgrading key national and provincial roads;

•  increasing coverage of rural areas by mobile networks and broadband;

•  increasing access to credit for small-medium enterprises, the number of women with bank accounts, and access financial institutions in rural areas;

•  updating policies to support increased access to electricity.

 

2) Improved gender equity in livelihoods projects by:

•   expanding yields for smallholders growing ‘cash crops’ such as coffee, copra, cocoa; improving sustainability and resilience to price and weather volatility; and improving market chain infrastructure;

•   providing disadvantaged young people in urban areas with training, apprenticeships and short-term employment to increase their employability, and create job opportunities;

•  encouraging public-private collaboration opportunities to facilitate business and investment, while removing impediments and inefficiencies in regulation and reducing business costs.

 

3)  Increasing prudent management of revenues and benefits by providing support to:

•   improve minerals revenue management and extractives industries transparency, strengthen the quality of public expenditure and public finance management, and supporting gender-equitable community development and benefits management;

•    strengthen environmental and social performance standards by extractives companies.

Last Updated: Apr 14, 2016

Poor road conditions mean that for many people in Papua New Guinea, travel by road can be impossible, unsafe or simply far too expensive. Without reliable access to roads, people cannot reach schools, hospitals or markets when they need to. Now in its second phase, the World Bank’s Road Maintenance and Rehabilitation Project has already restored more than 700 kilometers of national roads. Forty-six national and provincial bridges have been rehabilitated, maintained and/or replaced and an estimated 1.3 million people (27 percent of the population) have benefitted.

The Productive Partnership in Agriculture Project is Papua New Guinea’s largest agriculture program. Launched in 2010, the project aims to improve the livelihoods of smallholder cocoa and coffee producers. More than 23,000 smallholder coffee and cocoa farmers have benefited from various activities supported under this project, with the number of farms adopting improved farming practices now estimated at more than 3,600. And with additional funding of US$30 million, the project will be expanded into other areas of Papua New Guinea, increasing its support to women farmers.

In Port Moresby, the Urban Youth Employment Project is providing thousands of young Papua New Guineans with life skills and employment training. The project has been extended to 2018 with additional funding support of US$10.8 million from the Australian Government. An estimated 15,000 young Papua New Guineans are set to benefit from the expansion of employment and training program.

In the Autonomous Region of Bougainville, a World Bank project is supporting inclusive development and strengthening women’s participation in development. Through the Inclusive Development in Post-Conflict Bougainville project, training has been delivered to 450 participants, and small grants have been awarded to 41 women’s groups, including at least one project in each of Bougainville’s 13 districts. It is estimated that over 48,000 people have benefitted from completed grant projects, representing nearly 25%of the Bougainville population.

Last Updated: Apr 14, 2016


LENDING

Papua New Guinea: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments