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Papua New Guinea Overview

    Context

    Papua New Guinea (PNG) is rich in gold, oil, gas, copper, silver, timber, and is home to abundant fisheries. Its population of just over 7 million is strikingly diverse, organized in small, fragmented social groups and speaking over 800 distinct languages.

    Papua New Guinea’s economy performed strongly from around the mid-2000s. While higher commodity prices acted to support incomes, much of the growth in recent years has been attributable to the non-minerals sector, and in particular large-scale private investment in mining and gas production capacity. That said, PNG’s economy remains dominated by two sectors: the agricultural, forestry and fishing sector, which engages most of the labor force (largely informally); and minerals and energy extraction sector which accounts for the majority of export earnings and, from 2015, GDP as well.

    2014 saw the completion of a large LNG plant which started exports and are expected to boost overall GPD growth to 16 percent in 2015.  However, growth of the non-resource economy has slowed since 2012, mainly a result of the PNG-LNG project moving from construction to production. While exports from LNG will eventually provide revenue to the state, they are unlikely to be felt in the short term. Non-mining GDP is forecast to grow by 4 percent in 2015, supported by a re-bound in the construction sector driven by increased infrastructure expenditure associated with the 2015 Pacific Games facilities, and the ongoing upgrading of the roads.

    To diversify the country’s asset base and increase employment, investment is needed in both high quality human and physical capital and institutions. Developing infrastructure – electricity, telecommunications, road and other transport – continues to be a critical precondition for accelerated private sector-led growth.

    Translating strong macroeconomic performance and extractive industry revenues into a broad improvement in living standards remains the key challenge for PNG. Ensuring the integrity of the public financial management for service provision, improving effectiveness and 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 the forthcoming windfall revenue into inclusive growth and, consequently, a palpable improvement in the livelihood of ordinary citizens.

    Last Updated: Apr 08, 2015

    LENDING
    Papua New Guinea: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    The World Bank Group has dramatically scaled up its engagement in PNG, and is committed to continuing this support as part of a renewed longer-term commitment.

    In November 2012, the Bank approved the Country Partnership Strategy (CPS) for Papua New Guinea. This strategy will guide the Bank’s engagement in the country for the period of 2013 to 2016.

    Ensuring women and men, girls and boys benefit equally from Papua New Guinea’s development goals is central to the CPS. It also aims to further promote prudent management of revenues.

    The CPS focuses on three main pillars.

    1)      Increased and more gender-equitable access to inclusive physical and financial infrastructure. The first pillar of WBG’s partnership in PNG will focus on providing increased access to inclusive physical and financial infrastructure in ways that benefit women and girls as well as men and boys by providing support to:

    •        improve and upgrade key national and provincial roads

    •        increase coverage of rural areas by mobile networks and/or broadband

    •        increase access to credit for SMEs, increase the number of women with bank accounts, and increase access financial institutions in rural areas

    •        update policies to facilitate investments that contribute to an increased access to electricity.

     

    2)      Gender-equitable improvements in lives and livelihoods. The second pillar will contribute to improvements in the quality of life and livelihoods of women and girls as well as men and boys through interventions that will:

    •        expand yields of smallholders growing cash crops, improve sustainability and resilience to price and weather volatility, and improve market chain infrastructure

    •        provide disadvantaged youths in urban areas with trainings and short-term employment apprenticeships to increase their employability, and provide job opportunities.

    •        encourage public-private mechanisms that facilitate business and investment while removing impediments and inefficiencies in regulation and reducing business costs.

     

    3)      Increasingly prudent management of revenues and benefits. The third pillar will sustain support to the prudent management of revenues and benefit streams by providing support to:

    •        minerals revenue management and extractives industries transparency, to strengthen the engagement on quality of public expenditures and public finance management, and leverage pilots in gender-equitable community development and benefits management

    •        improve sustainability through attention to environmental and social performance standards by extractives companies.

    Last Updated: Apr 08, 2015

    LENDING
    Papua New Guinea: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    Poor road conditions means, for many people in Papua New Guinea, travel by road can be impossible, unsafe or expensive. Without reliable access to roads, people cannot reach schools, hospitals or markets when needed. Now in its second phase, the World Bank’s Road Maintenance and Rehabilitation Project has restored 600 kilometers and maintained 450 kilometers of national roads, annually. 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 the country’s largest agriculture program. Launched in 2010, the project aims to improve the livelihoods of smallholder cocoa and coffee producers. More than 20,500 smallholder coffee and cocoa farmers (participating in 32 approved partnerships) have benefited from various activities supported under the project. The number of farms adopting improved farming practices is estimated at over 3,600. With additional financing of US$30 million, the project will be expanded into other areas of the country and increase its support to women farmers.

    In Port Moresby the Urban Youth Employment Project is supporting young people, who make up about 35 percent of the capital’s population, to gain work experience and income through temporary employment. So far 650 youth have graduated from on-the-job training and a total of 6,600 youth have benefited from the project through a combination of training and work experience, bank accounts have been established for almost all youth participants.

    In Bougainville a World Bank project is supporting inclusive development and strengthening women’s participation in development activities. As a result of a nine year civil conflict, Bougainville is now an autonomous region within PNG. However, women’s roles in community-level decision-making and development activities have weakened. Through the Inclusive Development in Post-Conflict Bougainville project, training has been delivered to 450 participants, exceeding the original goal of 400 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, which is nearly 25 percent of the population.

    Through the Gender in Extractive Industries Program, the World Bank supports the social and economic empowerment of women in oil, gas, and mining communities in PNG. The Social and Economic Empowerment of Women in Mining and Petroleum Areas project, aims to improve the livelihood and quality of life for the poorest women and their families in 16 selected communities of PNG working in the extractive industries. This is being done through women’s business development training, capacity building, empowerment, and community-based advocacy.

    Last Updated: Apr 08, 2015

    LENDING
    Papua New Guinea: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
Country Office Contacts
Port Moresby, +675-321-7111

Deloitte Tower, Level 13, Port Moresby NCD

pacificmedia@worldbank.org
Washington, +1 202-473-4709

1818 H Street NW, Washington, DC 20433