The World Bank In Papua New Guinea

Papua New Guinea (PNG) is the most linguistically diverse country in the world, 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 over 11.78 million people is young and growing with 85% of Papua New Guineans 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 4.8% in 2024 (compared to 2.7% in 2023), according to the World Bank’s April 2024 forecast. Despite a challenging external environment, the economic outlook in PNG remains broadly positive, mostly driven by a strong performance in the non-extractive sector, with agriculture seen as one of the key contributors to PNG’s economic recovery and long-term prosperity.

In the last 40 years, PNG’s modest headline economic growth has translated into limited per capita income growth. Papua New Guinea’s economic potential is restrained by excessive macroeconomic volatility, low productivity growth, and excessive reliance on natural resources, while at the same time missing opportunities to take full advantage of its human capital, according to the report, Country Economic Memorandum for Papua New Guinea.

To achieve stronger and more inclusive economic growth, Papua New Guinea should seek to maintain greater economic stability, boost productivity, and nurture human capital – including significant work to deliver gender equality – 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: Mar 30, 2024

The World Bank continues to grow its presence across Papua New Guinea and is committed to responding swiftly to the country’s most pressing issues. Our approach to working in PNG is guided by the Country Partnership Framework for Papua New Guinea, a strategy that is closely aligned with PNG’s development plans, and lays out three focus areas for work by the World Bank in: 

·       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. 

The World Bank’s work across the Pacific (including Papua New Guinea) is also strongly supported by the Australian and New Zealand governments, through the PNG and the Pacific Islands Umbrella Facility (PPIUF), which will be in place until at least 2031, and supports World Bank projects across the Pacific and PNG through a commitment of AUD109 million from the Australian Government (DFAT) and NZ$33 million from the New Zealand Government (MFAT); commitments that are expected to grow to an combined estimated US$200 million by 2031 as projects grow.

Key areas of support
Working in partnership with the PNG Government, the World Bank is currently supporting 11 active projects across the country, with commitments totaling approximately US$503 million (PGK1.928 billion)

In the transport sector, the US$108 million (PGK414m) Resilient Transport Project is funding the rehabilitation of key sections of the Ramu and Hiritano highways, and funding extended maintenance of nearly 200 kilometers of critical transport links. The project builds on the Road Maintenance and Rehabilitation Project (RMRP II) which has helped restore more than 236 kilometers of roads across PNG. More than 50 national and provincial bridges have also been rehabilitated, maintained and/or replaced as part of RMRP II, with an estimated 1.3 million people – 27% of PNG’s population – benefitting from this support.

To help strengthen water security and increase access to safe water supply and sanitation in PNG, the US$70 million (PGK268m) Water Supply and Sanitation Development Project, is supporting 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 World Bank is supporting the strengthening of PNG health systems through the US$90 million (PGK345m) PNG Child Nutrition and Social Protection Project . The 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. Additionally, the US$15 million (PGK57m) Emergency Tuberculosis (TB) Project is now in its fifth year and has helped PNG achieve major inroads to reduce the spread of multi-drug resistant tuberculosis in key hotspots throughout PNG. The COVID-19 Emergency Response Project, now approaching completion, also strengthens the national health systems for public health preparedness including through installing medical waste incinerators and laboratory equipment in hospitals across the country.

To support energy transition, efficiency and access sector, the US$30 million (PGK115m) Energy Utility Performance & 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 (PPL).

The US$40 million (PGK153m) PNG Agriculture Commercialization & Diversification Project builds on the success of the Productive Partnership in Agriculture Project, which supported more than 67,000 coffee and cocoa farmers to build their skills, productivity, and access to markets. The new project is continuing to support coffee and cocoa growers, as well as farmers of small livestock and crops such as coconut and spices.

The US$32 million (PGK123m) Enhancing Labor Mobility from Papua New Guinea project is helping PNG benefit from rapidly-expanding employment opportunities in Australia and New Zealand. This project is helping the PNG Government ensure equitable access these programs, with a focus on women and disadvantaged groups, and helping prepare workers for deployment to Australia and New Zealand, and for their reintegration on return to PNG.

In June 2021, US$100 million (PGK 352m) was approved to support PNG for its recovery from the economic impact of the pandemic on PNG. The Papua New Guinea Crisis Response and Sustainable Recovery Development Policy Operation helped to safeguard routine health services while the COVID-19 vaccine was being rolled out across PNG, and has provided financial assistance to micro-, small-, and medium-sized 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 and annual PNG Economic Update. 

Last Updated: Mar 30, 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