The World Bank In Papua New Guinea

Papua New Guinea (PNG) is the most linguistically diverse country with over 850 indigenous languages. It has a remarkable diversity of geographic and natural resources. The country occupies the eastern half of the West Pacific Island of New Guinea, together with the main islands of New Britain, New Ireland, and the Autonomous Region of Bougainville, as well as another 600 smaller islands and atolls.

PNG’s population of an estimated eight million people is young and growing with 85% of Papua New Guinean’s living in rural areas. The country’s rich culture is complex and deeply rooted in tribal and ethnic identity and relationships to the land. These contribute both to the country’s unique challenges as well as its considerable resilience. 

PNG’s growth trajectory and abundant resource potential provides a strong platform for greater economic engagement with Asia and beyond.  

The country’s economy remains dominated by two broad sectors: 

• the agricultural, forestry, and fishing sector that engages most of PNG’s labor force (the majority informally); and 
• the minerals and energy extraction sector that accounts for most export earnings and GDP. 

The economy in PNG is projected to expand by 4% in 2022, up from 1% in the previous year, according to the World Bank’s September 2022 forecast. Despite a challenging external environment, the economic outlook in PNG remains positive, mostly driven by a strong performance in the non-extractive sector, with agriculture being among the key contributors to economic recovery.

To diversify PNG’s sources of revenue and increase employment, investment is needed to strengthen capacity in institutions, human capital, and physical infrastructure like electricity, telecommunications, road and other transport infrastructure that remain critical to supporting private sector-led growth. 

The World Bank continues to support the Government of PNG to strengthen macroeconomic management and improve service delivery to ensure development benefits reach all Papua New Guineans, particularly the 85% living in rural areas.

Last Updated: Nov 28, 2022

The World Bank continues to grow its presence across Papua New Guinea (PNG) and is committed to responding swiftly to the country’s most pressing issues.

Our approach to working in PNG is guided by the 2019-2023 Country Partnership Framework for Papua New Guinea, a five-year strategy that is closely aligned with the country’s development plans, and lays out three focus areas for work by the World Bank in PNG: 

• improve the country’s macro and fiscal resilience; 
• ensure more effective and inclusive services, particularly in remote and underserved areas; and 
• diversify the economy and create jobs, including through the non-resources sector.  

The strategy in PNG is underpinned by aims to strengthen governance in the natural resources sector and across management of public resources, and aims to ensure everyone – regardless of their gender, where they live, or their social and economic circumstances – can benefit equally from the World Bank’s work to support PNG’s development goals. 

Key areas of support

In June 2022, the World Bank approved three new projects with a combined commitment of US$229.55 million (PGK808 million) to support PNG roads, employment and nutrition.

The US$107.55 million (approx. PGK378 m) Resilient Transport Project will fund the rehabilitation of 63kms of the Ramu and Hiritano highways, and fund extended maintenance of nearly 200kms of critical transport links.

The US$32 million (PGK112 m) Enhancing Labor Mobility from Papua New Guinea project will help PNG benefit from rapidly-expanding employment opportunities in Australia and New Zealand. This new project will support the PNG Government to boost equitable access and worker readiness for these programs, with a focus on women and disadvantaged groups, and help workers reintegrate when they return.

The World Bank is also supporting PNG’s pressing health challenges. The US$90 million (approx. PGK318m) PNG Child Nutrition and Social Protection Project will be multi-sectoral and support implementation of the ‘PNG CARES’ (Community-based Approach to Reduce and End Stunting) initiative. This work will deliver improvements to nutrition-focused health services at provincial health centers throughout the country. Additionally, the US$15 million (PGK34m) Emergency Tuberculosis (TB) Project is now in its fourth year and has helped PNG achieve major inroads to reduce the spread of multi-drug resistant tuberculosis in key hotspots throughout PNG.

In June 2021, in response to a surge in COVID-19 cases, the World Bank approved US$30 million (approximately PGK105m) for the country’s COVID-19 response, in addition to the US$20 million approved in 2020. This additional funding supported the scale-up of deployment of COVID-19 vaccines to prioritized communities and training of vaccine delivery workers.

Also in June 2021, a further US$100 million (PGK 352m) was approved to support PNG in its response to COVID-19 and its sustainable economic recovery. The Papua New Guinea Crisis Response and Sustainable Recovery Development Policy Operation is helping to safeguard routine health services while delivering the rollout of COVID-19 vaccinations, and provides financial assistance to micro-, small-, and medium-sized enterprises for job protection and ease the tax administration burden on small businesses.

Through the US$70 million (PGK223 million) Water Supply and Sanitation Development project the World Bank is supporting improved access to clean and reliable water supply services for people in 6 towns across the country.

In 2018, the World Bank launched the Human Capital Project, an ambitious global initiative to accelerate investments in people around the world – work that is critically important in PNG. The Human Capital Index shows that, on average, a child born today in PNG will be only 43% as productive when he or she grows up as they would have been with access to optimal health and education services. Based on these results, PNG was one of the first countries worldwide to commit to the Human Capital Project.  

The World Bank is also strengthening its analysis of PNG’s economic challenges and prospects, with the publication of the twice-yearly PNG Economic Update. 

Last Updated: Nov 28, 2022

The recently-closed Productive Partnerships in Agriculture Project (PPAP) was PNG’s largest agriculture program. Launched in 2010, the project 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 this project, and to also support other crops including coconut and spices, as well as small livestock, in the new five-year, US$40 million (PGK142 million) PNG Agriculture Commercialization and Diversification Project.

A significant rise in cases of COVID-19 in early 2021 has underscored the significance of the threat to public health that the pandemic poses to PNG. The World Bank helped deliver 600,000 pieces of Personal Protective Equipment for health workers and supported the country’s vaccine rollout.

The threat posed by COVID-19 is further compounded by PNG’s high rates of drug-resistant tuberculosis (TB), which 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 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 (PGK35 million) to the multi-partner 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.

In the capital, Port Moresby, the now-closed Urban Youth Employment Project provided thousands of young Papua New Guineans with job opportunities. Jointly funded by the Australian Government (DFAT) and Government of PNG, with support from the Republic of Korea and the private sector, the project has helped 18,500 long-term unemployed young Papua New Guineans – 40% of whom are women – undertake vocational training and fully-subsidized work placements. In doing so, it created 18,000 new bank accounts and over 815,000 days of work, with 85% of community members in project locations reporting that crime and violence had reduced. The US$35 million (PGK79 million) UYEP II extends the program into Lae, PNG’s industrial hub and second largest city.

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. Now in its second phase, the World Bank-supported Road Maintenance and Rehabilitation Project has helped restore more than 160 kilometers of roads across PNG. 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.

Last Updated: Nov 28, 2022