Aid Program Performance Report, 2016-17 – Papua New Guinea: Introduction & Executive Summary. Read the complete report here
CANBERRA - Papua New Guinea, positioned as the gateway between Asia and the Pacific, has immense economic potential driven by its significant natural resource endowment.
This brings opportunities for economic growth, but also economic, social and political challenges driven by issues such as population growth, urbanisation, and ageing infrastructure.
Australia’s relationship with Papua New Guinea is maturing, reflecting this transition, by our closest neighbour, to an integrated Asia Pacific developing economy.
This Aid Program Performance Report summarises the performance of Australia’s aid program in Papua New Guinea from July 2016 to June 2017 against the Papua New Guinea Aid Investment Plan 2015-16 to 2017-18.
A Performance Assessment Framework (PAF) for Australia’s development assistance to Papua New Guinea sets indicators of progress across the three outcome areas: promoting effective governance, enabling economic growth and enhancing human development.
In 2016-17, Australia’s performance against the enabling economic growth outcome area was on track, with the completion of critical infrastructure and improved access to markets. The promoting effective governance and enhancing human development outcome areas made steady progress but did not meet some expectations due to challenges that included the slow roll out of new programs and monitoring of outcomes.
Significant achievements were made in each of the three outcome areas as well as in the crosscutting objectives of gender, Bougainville, and climate change and disaster resilience. In partnership with Papua New Guinea, Australia is helping to create a motivated and capable Papua New Guinea public service.
In total, Australia’s development assistance contributed to the training of 14,990 public servants – including police, teachers and health workers – who were engaged in positions where they could practice new knowledge and skills.
Through the Pacific Leadership and Governance Precinct (the Precinct) alone, Australia supported training and capacity-building activities to 894 public servants. Since its inception in 2015, the Precinct has helped train over 1,950 public servants in Papua New Guinea.
Australia provided better access to markets and essential services by completing the reconstruction of six major bridges along the Kokoda and Northern Highways in Oro Province. These bridges have transformed the region’s growth prospects by reducing travel times, enabling safer crossings and reconnecting businesses and 97,000 people.
Across Papua New Guinea, the PAF indicates that Australia contributed to 324,459 women and men having better access to markets in 2016-17.
Papua New Guinea’s business-enabling environment improved in 2016-17. Its ‘ease of doing business’ rank in the World Bank’s Doing Business 2017 report improved from 145 out of 189 countries in 2016 to 119 out of 190 countries in 2017, placing it in the middle of similar economies in the Pacific.
Papua New Guinea reduced the time required to start a business by streamlining business registration and it was among nine economies to implement reforms to strengthen access to credit.
Australia supported the business-enabling environment through multilateral partners including the Asian Development Bank (ADB) and the International Finance Corporation (IFC).
Through supporting Papua New Guinea’s coordinated response to tuberculosis, patient outcomes for multidrug resistant tuberculosis (MDRTB) improved significantly in the focus areas of Western Province and National Capital District. The proportion of patients completing TB treatment in Daru, Western Province, increased from 67% in 2013 to more than 99% in 2016.
Australia continued to work with the Papua New Guinea Government and other development partners, including the World Bank, to bring additional resources and expertise to the response. The Papua New Guinea Government has agreed to a loan of USD15 million to address MDRTB in the three most affected provinces. This was brokered by Australia, which will match this funding.
Through Australia Awards scholarships, Australia assisted Papua New Guinea to address its critical shortage of qualified health workers. The scholarships assisted 122 midwives, 146 Community Health Workers and 126 nurses to graduate from Papua New Guinea institutions in 2016-17.
Australia provided training to 1,500 midwives, nurses and community health workers between 2012 and 2017—exceeding the target of 1,400. We refurbished eight health training institutions, significantly contributing to Papua New Guinea’s efforts to help ensure health workforce numbers do not fall below current levels.
Australia contributed to women’s economic empowerment by training more than 33,000 women in financial literacy or business development skills and increasing their access to financial services, through programs including the Microfinance Expansion Project.
A Safe Public Transport initiative provided 62,000 safe trips for women and girls in Port Moresby to schools, services and jobs.
Australia assisted Papua New Guinea to address gender-based violence by supporting more than 2,000 women and girls to access crisis support services and reaching 239,000 men and women in community awareness and outreach activities that challenged social gender norms and violence.
Recognising the importance of youth to Bougainville’s peace, stability and economic development, Australia continued to implement the $4.5 million Bougainville Youth Initiative. This support was implemented through our delivery partners: the Adventist Development and Relief Agency; Caritas; Credit Union Foundation Australia; Plan International; and World Vision Australia.
Nearly 9,000 youth have benefited from financial and entrepreneurship training, agricultural opportunities and leadership training including a mock parliament and youth congress. We provided on-the-job training through career-readiness programs, which, for some, led to permanent jobs.
Australia’s collaboration with UNDP helped build the capacity of Papua New Guinea’s Climate Change Development Authority (CCDA). The CCDA was formally established in 2016.
It is responsible for administering the Climate Change (Management) Act 2015, implementing climate change-related policy, strategies and plans, managing climate change information, and coordinating Papua New Guinea’s climate change action.
Establishment of the CCDA was an important step for Papua New Guinea to gain access to international climate finance, particularly through the Green Climate Fund (GCF).
Australia has an enduring partnership with Papua New Guinea. With less than four kilometres separating the two countries, Papua New Guinea will always be of critical strategic importance to Australia.
Our relationship is broad and growing, characterised by strong trade and investment ties, growing cooperation on security matters and expanding people-to-people links.
Our mutual interests lie in supporting Papua New Guinea, as an emerging economy, to take full advantage of its economic and human potential.
Australia implements an integrated set of foreign, trade, security and development policies to support Papua New Guinea’s development, in line with Australia’s national interest.
Development assistance alone cannot meet Papua New Guinea’s development financing needs. Australia’s development program is being reshaped to better support and align with Papua New Guinea and Australia’s contemporary economic and strategic relationship.
The focus areas of this transition include helping to improve governance systems, training and supporting future leaders; trialling innovative solutions; building and supporting institutional partnerships; assisting Papua New Guinea to attract and leverage better quality international financing; and increasing cooperation in areas that will help to grow the economy.
With growing links to Asia and a positive mid-to-long term economic outlook, Papua New Guinea’s strategic and economic interests – and its partnerships in the region – are growing. Papua New Guinea is demonstrating increasing leadership in the region including through hosting the APEC leaders’ summit in 2018.
A strong relationship with a stable and prosperous Papua New Guinea is now, more than ever, squarely in Australia’s interest. Our development cooperation must keep pace with this changing context.
As a resource dependent economy, Papua New Guinea is however facing a challenging economic outlook over the short to midterm. Economic growth (Gross Domestic Product) fell from an average of seven per cent for the five years to 2016, to a projected two per cent for 2017. It faces significant fiscal challenges with declining international commodity prices and increasing public debt levels.
Official debt levels have tripled since 2011, and Papua New Guinea’s official debt-to-GDP ratio is currently 32.6%. While Papua New Guinea’s mid to long-term economic outlook is positive, taking account of its natural resource wealth and 4 growing links to Asia, it continues to face significant development challenges.
Over three million people – 40% of its population - remain poor.
Papua New Guinea’s challenges include: fragile institutions; a weak public service, ageing infrastructure; poor health and education services; a rapidly growing population; and vulnerability to natural disasters.
Gender inequality is a major social, political and economic issue in Papua New Guinea, where violence against women is unacceptably high, women’s access to economic development opportunities is much less than men’s and women are often excluded from leadership roles.
Approximately 80% of the population of 7.5 million live in rural and remote coastal communities.
These communities’ dependence on subsistence farming, fishing and small-scale cash crops exacerbates their vulnerability to climate-related threats such as cyclones, droughts, floods and landslides, as well as to non-climate related disasters such as earthquakes, tsunamis and volcanic eruptions.
Papua New Guinea’s economic and social infrastructure is also highly exposed to these hazards.
Climate change is exacerbating the intensity of some natural hazards that affect Papua New Guinea, including drought and other extreme weather related events.
Australia is the largest donor to Papua New Guinea. Our development assistance is valued at nearly 70% of Papua New Guinea’s total Official Development Assistance (ODA), which equates to around eight percent of Papua New Guinea’s national budget.
Australian aid to Papua New Guinea in 2016-17 (forecast) was $547.1 million, with $478.7 million delivered bilaterally. The Asian Development Bank (nine per cent of total ODA) and World Bank (four per cent) are the next largest donors.
Our development assistance is guided by the Aid Investment Plan Papua New Guinea 2015-16 to 2017-18, which outlines the three strategic priorities of promoting effective governance, enabling economic growth and enhancing human development.
To achieve this we invest in health, education, governance, law and justice, and social and economic infrastructure. Gender equality and climate change cut across all sectors. Our investments align with Papua New Guinea’s existing frameworks and strategies including Papua New Guinea Vision 2050.
Our joint priorities are discussed and agreed with Papua New Guinea, most recently in the Papua New Guinea-Australia Aid Partnership Arrangement 2016.
PROGRESS TOWARDS AID INVESTMENT PLAN OBJECTIVES
This Aid Program Performance Report describes the performance of Australia’s aid program against the strategic objectives set out in the Aid Investment Plan Papua New Guinea 2015-16 to 2017-18.
These objectives align with the priority outcomes agreed by the two countries in the Aid Partnership. This report draws on a range of internal and external reporting, including Aid Quality Checks and partner performance reports.
Green. Progress is as expected at this stage of implementation and it is likely that the objective will be achieved. Standard program management practices are sufficient.
Amber. Progress is somewhat less than expected at this stage of implementation and restorative action will be necessary if the objective is to be achieved. Close performance monitoring is recommended.
Red. Progress is significantly less than expected at this stage of implementation and the objective is not likely to be met given available resources and priorities. Recasting the objective may be required.