US$ 130m Boost for PNG’s Sustainable Economic Recovery

World Bank announces additional support for COVID-19 response and vaccine rollout

PORT MORESBY, updated at 0111 GMT on 2nd July, 2021 – By E K Benj

 The World Bank Board of Executive Directors has approved a US$100 million (PGK 352 million equivalent) operation to support Papua New Guinea in its response to COVID-19, and to lay important foundations for a sustainable recovery.

Women and Poverty in Rural Papua New Guinea – Courtesy photo

With Papua New Guinea’s economy entering the COVID-19 crisis with limited resilience to external shocks, the pandemic has led to a sharp economic contraction, higher unemployment and considerably more Papua New Guineans falling into poverty, particularly women and young people.

The Papua New Guinea Crisis Response and Sustainable Recovery Development Policy Operation aims to strengthen PNG’s health system, support livelihoods of vulnerable households and small businesses; and lay vital foundations for a more sustainable economic recovery.

“There’s no denying that the COVID-19 pandemic has had a severe impact on our country,” said Papua New Guinea Minister for Treasury, Hon. Ian Ling-Stuckey.“However, we have been proactive in taking steps to lay out a clear recovery plan to help stabilize the economy, maintain frontline health services and provide support to the business sector especially those in the MSME space among others.

“Beyond the COVID crisis, the Marape Government has made a firm commitment to resume fiscal consolidation to ensure fiscal and debt sustainability and this operation is a strategic partnership with the World Bank to achieve this.”

Stefano Mocci, World Bank Country Manager for Papua New Guinea said “Globally, the COVID-19 crisis has tested the resilience of many economies; and PNG is no exception.

“To prepare PNG’s economy for a sustainable recovery, this operation supports the PNG Government’s efforts to strengthen the country’s medium-term fiscal and debt sustainability, improve the efficiency of the financial sector, ensure more people – particularly PNG’s most vulnerable families and communities – have better access to the finance, and to address the impacts of climate change.”

This financing 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 (MSMEs) 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.

Beyond the current crisis, the World Bank operation is closely aligned to the PNG Government’s National Plans, and will support the PNG Government’s commitment to resume much-needed fiscal consolidation in the post-crisis period, to address key structural challenges of fiscal and debt sustainability.

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The operation is in line with the World Bank Group’s Country Partnership Framework for Papua New Guinea 2019-2023, and will be delivered through a highly concessional credit through the International Development Association (IDA), the World Bank Group’s fund for the world’s most in-need countries.

The World Bank is working in close coordination with key development partners, including the International Monetary Fund, the Asian Development Bank, the Australian Government, the Japan International Cooperation Agency, and the United Nations to boost support for Papua New Guinea’s resilient recovery.

The World Bank works in partnership with 12 countries across the Pacific, supporting 85 projects totaling US$2 billion in commitments in sectors including agriculture, aviation and transport, climate resilience and adaptation, economic policy, education and employment, energy, fisheries, health, macroeconomic management, rural development, telecommunications and tourism.

The World Bank on 25th June 2021 also approved an additional US$30 million (approximately PGK70m) in funding for Papua New Guinea (PNG) to provide additional support for the country’s COVID-19 response.

Since February 2021, PNG has seen a sharp escalation of COVID-19 cases and reported deaths due to widespread community transmission. This rapid increase in COVID-19 cases has put significant pressure on an already-stretched health system.

“Now is the time for us to collectively build a stronger and more resilient health system for all Papua New Guineans, particularly the most vulnerable,” said Stefano Mocci, World Bank Country Manager for Papua New Guinea. “Pandemic preparedness is about people’s access to the most basic of health care systems and their ability to access the information, the prevention and the services they need.”

“We look forward to further supporting PNG’s health authorities to build the capacity of front-line health workers, and to strengthen public health systems to put the local health system on a better platform to combat COVID-19, and potential future pandemics.”

This additional funding to be delivered through the Papua New Guinea COVID-19 Emergency Response Project, will also support the scale-up of deployment of COVID-19 vaccines to prioritized communities, prepare communities for vaccine delivery, support improvements to the accountability and oversight of resources for the rollout, as well as the training of vaccine delivery workers.

Further support will also go towards the delivery of COVID-19 infection prevention and control messages, testing, waste management and clinical management of patients with mild symptoms.

The Papua New Guinea COVID-19 Emergency Response Projectis funded through the World Bank Group’s $125 billion global COVID-19 response package. An initial package of support to PNG was announced in 2020, which included the purchase and distribution of over 200,000 pieces of Personal Protective Equipment throughout the country, funding for a new container-based laboratory in the capital, Port Moresby, together with other lab equipment, medical supplies and funding to transport COVID-19 samples to laboratories within PNG and to Australia.

In addition, the project has also funded an extensive nation-wide public education and community engagement campaign, delivered through UNICEF across television, radio, social media and SMS aimed at reducing the spread of coronavirus across the country.

The World Bank’s commitment to the COVID-19 response effort in the health sector in PNG is part of a wider package of World Bank support to tackle a number of PNG’s most pressing health challenges. The US$30 million IMPACT Health Project, when implemented, will address the quality and efficiency of health services being delivered in community health posts, health centers, and district hospitals across the country, with a focus on improving the quality of frontline health services.

According to the multi-dimensional poverty measure, 85.7 percent of the population is living in poverty. This is due to the high rate of monetary poverty, low educational achievement and most of the population (82.1 percent) having no access to electricity.

The World Bank Group’s Operational Response to the COVID-19 Pandemic

“Since the start of the COVID-19 pandemic, the World Bank Group has committed over $125 billion to fight the health, economic, and social impacts of the pandemic, the fastest and largest crisis response in its history. The financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jump start a climate-friendly recovery. The Bank is also providing $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests, and treatments.”

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