The World Bank In Papua New Guinea

Papua New Guinea (PNG) 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 eight million people is young and growing. 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. 

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. 

PNG has complex cultural dynamics deeply rooted in tribal and ethnic identity, traditional social institutions, and relationships to the land. These contribute both to the country’s unique challenges as well as its considerable resilience. 

There are limited formal job opportunities for the growing, relatively young population, and other risks include environmental management, urbanization, political fragmentation, social exclusion, and inequalities in PNG’s resource dominated economy.  
  
As a result of pandemic-related restrictions and weaker demand, it is estimated that PNG’s real GDP contracted by 3.8% in 2020. In March 2021, the World Bank forecast that economic growth is expected to rebound to about 3.5% in 2021–22, but the economy will be nine percentage points smaller in 2023 compared to the World Bank’s pre-pandemic forecast.

With 87% of Papua New Guineans living in rural areas, a significant COVID-19 outbreak in PNG (ongoing as of September 2021) has the potential to be devastating, with the future resilience and economic growth of the country depending on how its health system responds to the pandemic.

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

Last Updated: Oct 17, 2021

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 2019-2022 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 April 2020, in response to the COVID-19 pandemic, the World Bank approved an emergency US$20 million project for PNG focused on protecting health workers and others in the response effort. In June 2021, due to widespread community transmission, an additional US$30 million (approximately PGK 70m) was approved for the country’s COVID-19 response. This additional funding is supporting the scale-up of deployment of COVID-19 vaccines to prioritized communities, preparing communities for vaccine delivery, and training of vaccine delivery workers. Further support is helping the delivery of COVID-19 infection prevention and control messages, testing, waste management, and clinical management of patients with mild symptoms.

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 will help safeguard routine health services while delivering the rollout of COVID-19 vaccinations, help provide financial assistance to micro-, small-, and medium-sized enterprises for job protection and ease the tax administration burden on small businesses. It will also support the government’s commitment to ensure fiscal and debt sustainability, enhance women’s voice and opportunities in decision making, improve financial sector efficiency and financial inclusion, and prepare PNG for the impending impacts of climate change.

The World Bank is also supporting PNG’s pressing health challenges. The US$15 million Emergency Tuberculosis (TB) Project is now in its third year, and in April 2020, the US$30 million IMPACT Health project was announced with the aim of strengthening the quality of health services, particularly in clinics and hospitals in rural areas. The project is being piloted in two PNG provinces – Enga and East New Britain – with the plan to expand to other provinces in coming years.

Through the Water Supply and Sanitation Development project the World Bank is supporting improved access to clean and reliable water supply services for people in nine provincial towns and ten rural districts 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 38% 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 twice-yearly PNG Economic Update reports. 

Last Updated: Oct 17, 2021

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 Papua New Guinea (PNG). The World Bank helped deliver 600,000 pieces of Personal Protective Equipment for health workers, critical supplies and facilities for testing, as well as funding for extensive public education activities, all across the country.

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 PNG’s provinces. Daru, a small island in Western Province, is a global hot spot for multi-drug-resistant TB. The World Bank has contributed US$15 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, one of the world’s most significant hotspots for multi-drug resistant TB. Since first hitting the road in late 2017, the project’s mobile X-ray screening van has already screened more than 6,500 people – nearly half of the entire population of Daru – with the project now expanding to other parts of the country, including the National Capital District (Port Moresby). 

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 across PNG, with more than three million cocoa trees and more than seven million coffee trees replanted or rehabilitated as part of the project. The project also included a strong focus on increasing support to women farmers, and has 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 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 PNG Agriculture Commercialization and Diversification Project.

In the capital, Port Moresby, the Urban Youth Employment Project has provided thousands of young Papua New Guineans with social protection and 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 second phase of the project will support 6,700 young people in Port Moresby and the country’s second largest city, Lae.  

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: Oct 17, 2021