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PAPUA NEW GUINEA

MEDIUM TERM DEVELOPMENT PLAN 2

2016-2017

Department of National Planning and Monitoring

"Pathway to a Responsible Sustainable Future"

A smarter approach to development...

Contents

Acronyms and Abbreviations  ________________________________________________ 06

Introduction by The Prime Minister __________________________________________ 07

Foreword by The Minister For Planning and Monitoring _______________________ 08

Acknowledgements by The Secretary For DNPM ______________________________ 11 

Executive Summary _________________________________________________________ 13

Chapter 1: Planning, Implementation and Monitoring _______ 17

              1.1     Introduction _______________________________________________________ 17

              1.2     The National Planning Framework __________________________________ 20

              1.3     The Medium Term Development Plan2 2016-2017 __________________ 26

              1.4      National Planning Legislation ______________________________________ 27

              1.5     The National Service Delivery Framework ___________________________ 27

              1.6     The National Monitoring and Evaluation Framework ________________ 29

Chapter 2: Resourcing and Implementation  ______________ 33

              2.1     Introduction _______________________________________________________ 33

              2.2     Resourcing ________________________________________________________ 34

              2.3     Implementation ____________________________________________________ 39

Chapter 3: Priority Sectors ____________________________ 47

              3.1     Introduction _______________________________________________________ 47

              3.2     Education _________________________________________________________ 48

              3.3     Health  ____________________________________________________________ 49

              3.4     Infrastructure  _____________________________________________________ 51

              3.5     Law and Justice ___________________________________________________ 59

              3.6     Land and Housing _________________________________________________ 60

Chapter 4: The Economy  ______________________________ 63

              4.1     Introduction  ______________________________________________________ 63

              4.2     Small and Medium Enterprises _____________________________________ 65

              4.3     Strategic Assets  ___________________________________________________ 66

              4.4      Forestry and Biodiversity __________________________________________ 66

              4.5     Fisheries and Marine Resources  ___________________________________ 67

              4.6     Agriculture and Livestock  _________________________________________ 68

              4.7     Water Resources  __________________________________________________ 70

              4.8     Clean and Renewable Energy  ______________________________________ 70

              4.9     Minerals and Petroleum Resources  ________________________________ 73

              4.10   Cultural and Eco-Tourism  _________________________________________ 76

Chapter 5: Monitoring and Evaluation ____________________ 79

              5.1     Introduction  ______________________________________________________ 79

              5.2     Reforming the National Statistical Office and Civil Registry  _________ 82

              5.3     The National Identity Program  _____________________________________ 83

              5.4     Monitoring and Evaluation within DNPM  ___________________________ 83

              5.5     Key Government Targets and Indicators  ___________________________ 84

Foreword by the Minister for National Planning and Monitoring

No amount of development planning will work unless we are committed to them individually and collectively. To really engage us, these plans must be based on principles in terms of who we identify with as Papua New Guineans. Our Constitution, through the National Goals and Directive Principles, speak of integral human development, equality and participation, self-reliance, responsible management of the environment and Christian principles. 

As Papua New Guineans we must contribute individually to development by living such principles in terms of how we look after our own health, our family, the community and the environment.

As leaders at all levels we have an extra responsibility to live these PNG WAYS.

As Planning Minister in the O’Neill/Dion Government I am very pleased to present, on behalf of our Government, the MTDP2.

The MTDP2 follows on from the Medium Term Development Plan1 2011-2015 (MTDP1). These are the Government’s five year operational plans published by the Department of National Planning and Monitoring.

You will note the MTDP2 will be for two-year period only as we move to align the MTDPs with the five-year parliamentary cycle. The Medium Term Development Plan3 will cover 2018-2022. Aligning development plans with the political term of office gives an incoming government the opportunity to write its own plan to underwrite its strategic direction and political support. This MTDP is also written in a partially retrospective manner, describing the priorities and actions of the current Government so it is effectively a fiveyear plan.

These MTDPs will sit within the broader planning context and framework as described under the proposed planning legislation (Papua New Guinea Planning Act).

In 2012, the Alotau Accord established the priorities of the incoming People’s National Congress led Coalition Government, which the Department has captured in a Critical Activities Matrix and in the MTDP2. The Alotau Accord also called for a review of existing government plans to ensure they were truly strategic, given the rapidly changing 

Acknowledgements by the Secretary For The Department Of National Planning And Monitoring 

In response to the needs of our stakeholders, the Department of Planning and Monitoring is undergoing a series of cultural and institutional reforms, which are reflected in the way this MTDP2 has been framed.

We have two important goals that must be achieved in this MTDP. These are:

• Embed the    StaRS principles    into   Sector         and    Provincial    plans and    ensure        that they inform all other development planning; and
• Enhance      our    linkages      with   our    partners      to      improve      implementation,monitoring  and reporting.

In order to do that we recognize our core clients, whose needs we must serve. They are:

• Our    leaders        who   represent    the    views of      our    people;
• The     implementation    agencies      of      the    State, the    community  and    non-state    partners; and
• Our    donor and    development         partners.

All of us together are tasked with providing services to the people of Papua New Guinea. These services will enable them to enjoy the best quality of life possible in an environment that is safe and secure not only for themselves but for their children and their grandchildren.

Under our system of public service delivery, it is critical that someone measures the impact of government decision-making and actions. This is part of our duty to our people. Such measurements will provide us feedback on whether the country is truly pursuing our intended targets and if not, indicate whether to increase our efforts and/ or change our approach.

We acknowledge that our efforts in the past have not always been successful, but we assure our people that we are much more focused on improving the quality of their life than ever before.

We submit to the belief that we are Papua New Guinea and Papua New Guinea is us. Hence we commit ourselves to this new paradigm of principle centred sustainable development, as set out in the MTDP2.

Lastly, we are grateful to all the agencies and sectors that provided information to assist us to produce the MTDP2. This is your plan.

Ms Hakaua Harry Acting Secretary

Executive Summary

MTDP2 will be in place for two years only but is effectively describing the priorities and actions of the O'Neill/Dion Government with a five-year outlook from 2013. This will allow the development planning process to begin to align with the five-year parliamentary cycle. The over arching goals stemming from Vision 2050 and StaRS are: 

-         Increasing the countries Human Development Index (HDI) rating in 2016-2017 towards PNG becoming one of the top 

50 countries on the HDI by 2050; and

-         Achieving this by and through becoming a world leader in responsible, sustainable development.

PNG is turning 40 years old as an independent nation in 2015 and it is important to review its development progress and the objectives and path it has chosen to achieve these objectives. Despite an abundance of natural resources and a relatively low population PNG finds itself off track on all the Millennium Development Goals and ranking poorly on global indicators relating to corruption and human development.

Global circumstances have changed particularly in terms of the consciousness around sustainable development and how it relates to population, the environment and climate change.

The O’Neill/Dion Government has posed these questions with its coalition partners through the Alotau Accord. 

-         Are we pursuing development plans that are truly strategic in the long term?

-         How can we improve on our development performance, position PNG for the long term, and deliver broad based socioeconomic improvements to the lives of our people at a faster rate? 

-         What are our guiding principles as a people and are we being true to them? 

-         Given our natural environmental and cultural assets how can we build a  modern economy that sustains us, provides solutions to the world and is  responsible?

The Vision 2050 establishes an ambitious aspiration - to be in the top 50 countries in the world in terms of the Human Development Index by 2050. 

The subsequent development plans, the Development Strategic Plan 2010-2030, MTDP1 2011-2015, and the body language of successive governments through annual budgets has indicated a heavy reliance on maximizing economic growth based on extractive industries and primary resource exportation. 

The MTDP1 is heavily reliant on the PNG LNG project. Recent budgets have been based on aggressive fiscal borrowing on the back of the impending PNG LNG project proceeds.

Against this background and the directions from the Alotau Accord, the Department of National Planning and Monitoring (DNPM) developed the National Strategy for Responsible Sustainable Development (StaRS) which prescribes new guiding principles for development planning. These principles recognize and elevate the National Goals and Directive Principles of the National Constitution and attempt to align our development actions with them, rather than pay them lip service.  

These development actions must be individual and collective to succeed. They must be based on the new development paradigm and “PNG ways”. StaRS places PNG in a much better position in a long term economic sense.

This will be achieved by continuing to focus on the Government’s sixteen critical activities identified under its Critical Activity Matrix. These activities will deliver expenditure and revenue reforms; and innovate implementation and procurement practices. This allows the Government to maximize investment in critical nation building activities and grow the future of PNG. 

The MTDP2 will begin the move toward a more sustainable economy. It will introduce the necessary indicators and targets that create the enabling environment to grow the economy while ensuring proper management and use of PNGs strategic assets. 

Under the current operational strategy natural assets such as forestry, biodiversity & eco-cultural tourism, fisheries & tuna, agriculture, water resources and clean renewal energy were generally considered to have an ‘exploitation’ value only.

These assets, in particular forestry, tuna, water and biodiversity are considered strategic because they are globally significant. Under the MTDP2 government investment will focus on developing and strategically positioning these assets to meet the needs of current as well as future generations of Papua New Guineans. 

In the new economy, these strategic assets will act as the pillars of equitable and sustainable growth, together with the current growth drivers such as minerals, petroleum (under a new fiscal regime and sovereign wealth fund) and agriculture. Their increasing market value will help to sustain the strength of the PNG economy going forward through the creation of employment and income, generated from these environmentally significant sectors. 

Population is also a priority area for the MTDP2. The population growth rate of a country is a critical development variable. The annual growth rate for PNG is too high (3.1%). There is also a significant impact at the individual level, as large families can fall into the vicious circle of poverty. The MTDP2 has identified the reduction of the country’s fertility rate (3.8 births per female) as an important ‘across government’ policy issue requiring support. 

One example of the Government addressing this issue will be investing in programs and activities during 2016-2017 that increases the availability of modern contraceptives to PNG couples.

For the first time, the MTDP2 will sit within the broader planning framework described under proposed legislation. The Papua New Guinea Planning Bill will give effect to planning and monitoring processes. It will establish the National Planning Framework, the NSDF, the National Monitoring and Evaluation Framework (NMEF), and links the National Budget to the MTDPs through an Annual Budget Framework Paper. 

The National Services Delivery Framework will establish minimum basic core services requirements for all levels of government and introduce a Service Delivery Centre network that will be based on population distribution and geography. 

This framework is a big step forward in the delivery of front line services. It provides the vehicle for greater access to goods and services for our people, delivered in an efficient and transparent way. It also aligns our planning processes with the Government’s sub-national empowerment policy of devolved responsibility for service delivery, from national departments to provincial, district and local governments and administrators. 

For this medium term planning approach to yield the desired results it must be properly resourced and effectively implemented. The MTDP2 will be supported by important reforms in public resourcing, implementation and procurement, which are already contributing to the necessary enabling environment. 

The key government reforms supporting this new development paradigm include:

• Setting         debt   and    deficit targets        under the    Medium      Term  Fiscal Strategy      toprovide       ongoing private sector confidence in the Government’s fiscal position and return the National Budget to balance by 2017; 
• Moving        forward       with   the    sub-national        empowerment      policy and    increasingProvince, District and Local Government funding under the PSIP, DSIP and LLGSIP;
• Aligning       donor partner       funding       to      the    Government’s       operational  strategy      and development planning;
• Facilitating  innovative   procurement        strategies,   including    public/private      partnerships, to improve access to goods and services at the local level;
• Reforming    State  Owned        Enterprises to      improve      revenue       returns       and    enhancecompetition;
• Increasing    transparency        and    accountability      of      the    National      Budget        processes to      provide ‘better value’ budget allocations for operational and capital projects; and 
• Establishing the    Sovereign    Wealth        Fund to      manage       mineral       sector revenue       and to insulate the PNG economy and the National Budget from commodity volatility.

The MTDP2 will be a useful tool for Governments and administrations preparing development plans and budgets. It identifies the strategic directions (priority sectors) for Government investment and the main indicators and targets needed to meet development objectives. It also provides agencies with assistance in meeting the new service delivery standards and establishing the NSDF. 

Under the NMEF lead agencies will continue to be responsible for monitoring and reporting on the progress of their program and activities. 

Agencies should note that; under the MTDP2, they need to monitor their inputs/budgets and outputs/outcomes on a quarterly and annual basis and submit them to DNPM for consolidation and reporting to Government.

This MTDP2 will be the road map for a sustainable future towards Vision 2050. It will take effect from the 2016 Budget process. Further advice and assistance on any element of the MTDP2 should be directed to the DNPM.

1.2  The National Planning Framework

The Planning Framework is the first step in the PIM Cycle. It establishes the long-term objectives, the development paradigm and principles, and then the operational strategy of the Government. 

The National Constitution and the National Strategy for Responsible Sustainable Development (StaRS) establish the ‘way’ to the target of Vision 2050 through the 

Medium Term Development Plans and the annual National Budgets. The Annual Budget Framework Paper provides the link between the long and medium term plans to the annual budgets. The National Planning Framework is captured in and includes the proposed Planning Act.

The Alotau Accord

The Alotau Accord outlined the 78 key national priorities of the O'Neill/Dion Coalition Government.

One of the Government’s directions from the Alotau Accord priorities was the review of the MTDP1 and DSP 2010-2030 to ensure the country’s long and medium term plans were truly strategic, given our development experience and changing global circumstances. 

This review was undertaken by the DNPM and has led to the development of the National Strategy for Responsible Sustainable Development (StaRS), the MTDP2 and the National Planning Act.

National Strategy for Responsible Sustainable Development (StaRS)

StaRS revisits the National Goals and Directive Principles of the National Constitution, global development experience and PNGs development experience and outcomes and determines that we have not been pursuing a development path based on principles but rather one based on emulating a growth based paradigm that presumes that an overriding emphasis on wealth generation and endless economic growth will solve development objectives. 

The National Constitution quite clearly states that there are other important considerations that are found in the National Goals and Directive Principles and at the heart of our Christian heritage. Development comprises more than the pursuit of wealth and economic prosperity for this leads to the neglect of other important considerations for human development and well being.

StaRS states that development activities must be based on principles that guide our individual and collective responsibility. Responsible behaviour begins with individual actions towards self, family, community and country. Responsible behaviour extends to all levels of society including the national actions of government to provide the best conditions for human well being for individual citizens now and into the future, but also as a global citizen in the family of nations.

With this in mind, StaRS advocates that PNG chooses a development strategy that recognizes the changing global circumstances that highlight the fragility of the global ecosystem and the additional value being placed on the environment, climate security, food and water security. This approach is smarter even from a pure economic sense.

PNG has certain Strategic Assets of global significance that need to be cultivated and ‘commercialized’ to develop the basis of a new economy of the future. Current development activities are compromising this future and remain short term and symptom driven.

These new development principles identify the issues specific to the needs of the country, external as well as internal. It shifts the development strategy towards a pathway that promotes cost-effective and resource efficient ways of guiding sustainable production and consumption choices (that is, responsible sustainable development). The objective is to ensure that the country stays on the path of long term sustained and equitable economic growth. However, to succeed in this approach the Government understands that it must also engage its citizen and change mind sets and attitudes.

The Government’s model for responsible sustainable development has been formulated around 21 guiding principles that emanated from the Rio+20 Summit. They align with the Five National Goals and Directive Principles of the Constitution which are:

1. Integral Human Development;
2. Equality and Participation;
3. National Sovereignty and Self Reliance; 4. Natural Resources and Environment; and

5. Papua New Guinean Ways.

These goals and principles are the core themes embedded in the development policy of The StaRS. They will underpin the design of all development plans, programs and projects identified under future MTDPs and the allocation of government resources.

Strategic Assets

StaRS elevates the significance of certain natural assets of PNG due to their global significance in magnitude and in respect of the new consciousness around sustainable development.

It prescribes a responsible and sustainable growth pathway for the use of PNG’s natural resources. It also presents the opportunity for PNG to take the lead in offering the rest of the world solutions and products which are sustainably developed.

This natural capital provides the country with strategic assets that have the potential to become the growth drivers in the future. These resources are significant in their abundance, and in some cases unique to PNG. They are:

• Forests and biodiversity;
• Tuna  and marine resources;   
• Fresh  water reserves;     
• Rich cultural and  eco-tourism offered by the authentic rural  communities of the country; 
• Rich mineral deposits;     

Chapter two concentrates on the resourcing and implementation of the plans. It sets out how the Government is undertaking the critical activities of maximizing resources and improving and innovating implementation and procurement. It also provides advice and support in meeting new service delivery standards and establishing the NSDF.

Chapter three provides guidance on the Government’s strategic direction for investment in its nation building activities (priority sectors), including the indicators and targets needed to meet MTDP2 goals. 

Chapter four sets out the strategic direction for growing the economy – focused on the critical activities of investing in small and medium enterprises and re-positioning PNGs strategic assets. 

Under Chapter five agencies are supported to undertake monitoring and evaluation activities – an important component of the MTDP2.

1.4  National Planning Legislation

The proposed National Planning Act will link the long and medium term plans to the annual budget and establish the NSDF and Monitoring and Evaluation Framework. It is the last element of the National Planning Framework.

The proposed National Planning Act will put in place the legislative framework needed to support the new national planning and monitoring structure. This is the first of its kind for PNG.

The proposed legislation will clarify and embed the development principles, establish the Planning, Implementation and Monitoring Cycle with respective supporting frameworks and connect the MTDPs to the annual budgets. 

It will also provide a legislative basis for the Government’s national service delivery requirements and set the minimum level of service delivery and outputs needed from agencies and development partners to roll out its operational strategy.

The operational strategy identified under this legislation also guides the Government’s fiscal strategy and the allocation of annual national budgets, through the Annual Budget Framework Paper. These are linked through the Organic Law on Provincial Governments and Local-level Governments, the Local-level Governments Administration Act 1995 and the Fiscal Responsibility Act 2006.

1.5  The National Service Delivery Framework

The DNPM has developed a framework for delivering services across the nation. This is based on a spatial distribution of service delivery centres beginning with the National level linking down to the Provincial level, and then down to the District and Ward level. 

The NSDF supports the Implementation step of the PIM Cycle. It is based on the existing political and administrative structure in the country and existing logic that requires clarification. 

The NSDF sets out the ‘where’ and ‘what’ infrastructure is needed to allow our people to access services when they need them; and in locations where they are easily accessible. It also identifies the ‘who’ (which administration) is responsible for establishing the service delivery infrastructure and the funding source. 

The NSDF also aligns with the Government’s policy of sub-national empowerment with reduced national government involvement in the provision of goods and services. Under the new Service Delivery Framework:

• The     National      Government         will    be      responsible for     the    provision     andmaintenance        of national services and infrastructure (for example, education and health infrastructure, and national roads);
• Provinces,    Districts      and    Wards         will    be      responsible for     the    delivery       ofgoods and    services at their respective levels (for example, rural class rooms, Aid Posts and local roads);
• Regional      Service        Centres       will    be      linked         to      Provincial    Headquarters       and District       Headquarters will be linked to LLG Headquarters, Ward Zone Headquarters and Ward Headquarters;
• Minimum     basic core   service        requirements        will    be      introduced           (for    example, clean running water in health facilities); and
• New    Service        Delivery      Centres       will    be      established based on     spatial distribution(population and other demographic features of an area) and connected by transport and communication links.

The proposed National Planning Act will provide the legal basis for the framework. All levels of government will be required to contribute to its implementation.

1.6  The National Monitoring & Evaluation Framework

The Monitoring and Evaluation Framework is being finalized through an M&E policy and a National Strategy for Statistics at the DNPM.

The proposed Planning Act establishes the MTDP Tracking Pocketbook to report on an annual basis on the MTDP indicators, the Critical Activity Matrix (CAM) to identify and track the top sixteen program activities of Government and the Public Investment Program reports to track all investment activities of government, supported by all other reporting requirements of government. The Pocketbook, CAM and PIP Budget Book are to be tabled annually with the national budgets.

The development of a population information system through the National Identification Program under the Civil Registry and reforms at the National Statistical Office are described in Chapter 5.

The NMEF supports the Monitoring and Evaluation step in the PIM Cycle. All agencies, 

Low population                                                                      800 tribes and languages

Major river systems                                          7% of the 

We can be world leaders...

                                                                           © David Kirkland                                                                                                                            © David Kirkland

15% of the world’s tuna stock                          Third largest Rainforest in the world

In responsibledevelopment.

Mineral and Petroleum resources                     We are in a unique 

position to choose a future that is responsible and sustainable.

• Increasing    the    number       of      taxpayers    by      introducing series of      measures    thatrequired participants to submit tax file numbers;
• Amending    the    Fiscal Responsibility       Act    2006  to      increase      the    allowable     budgetdeficit and debt to GDP ratios;
• Supporting   the    early  delivery       of      the    PNG   LNG   Gas   Project        and    subsequentadditional trains, and a second major gas project and other projects. 
• Amending    legislation   to      improve      State  Owned        Enterprise   competition and    enhance its privatization policy; and
• Conducting  a       five-year      micro economic    reform        exercise      to      ensure        theeconomic    environment encourages the private sector to flourish (details of this reform is set out in 2014 Budget Book volume one, page 93).

Debt

The Medium Term Fiscal Strategy (MTFS) allows the Government to maintain macroeconomic stability and investor confidence, while supporting government’s high levels of capital expenditure directed at creating the enabling environment for private sector led growth. 

The MTFS has set a ceiling on the level of debt for public spending to “maintain a gross Government debt to GDP ratio of less than 30 per cent, apart from in 2013 and 2014, when it will not exceed 35 per cent.”

The MTFS also anticipates the inflows from revenue from the PNG LNG project (a major activity within CAM), within the framework of maintaining the macroeconomic stability that Papua New Guinea had experienced since 2003. It has also enabled a substantial increase in government deficit driven by financial borrowing. 

To maintain macroeconomic stability and avoid a repeat of the crises of the 1990’s and early 2000’s, the Government will monitor its expenditure program to ensure it is consistent with the evolving economic and fiscal situation. In this way, the Government will achieve the required fiscal discipline, improve the efficiency and effectiveness of its budget strategy and focus its spending on identified targets within Priority Sectors (set out in chapter 3). 

Table 2.1 shows budget forecasts of deficit of 4.44% in 2015, 2.5% in 2016 and moving to a balanced budget in 2017.

Table 2.1: Budget forecasts for 2014-2019

*The forecast deficit as per MTFS

^The forecast debt as per MTFS

Fiscal Strategy

The Government’s budget strategy has been set out in its Medium Term Fiscal Strategy 2013-2017. This strategy sets out the principles under which the Government implements its operational plan and allocates its annual budget. These guiding principles are designed to ensure ongoing business confidence in the Government’s fiscal position and the country’s economy.

For expenditure the principles are:

• Increasing    spending     on     key    economic    enablers      (identified    under MTDP2)      to      two thirds of the total Budget expenditure by 2017;
• Improving    agencies’     public         administration     and    governance  arrangement        byfocusing on expenditure efficiencies, transparency of activity reporting and better public accountability; and 
• Funding       new   infrastructure       projects       only   after  the    proposal      has    been  properlydesigned and fully costed. 

For revenue side the principles are: 

• Maintaining an     equitable     taxation      regime,       with   a       focus on     taxpayer compliance;and
• Limiting       the    categories   of      taxation      exemptions and    special        taxationarrangements.

For debt management the principles are:

• Maintaining a       gross government debt   to      GDP  ratio  of      less    than  30%   apart from  in 2013, 2014 and 2015 (when it will not exceed 35%); 
• Limiting       gross government liabilities     to      less    than  60%   of      GDP; and    
• Greatly        increasing   the    Government’s       average       debt   maturity     profile.        

For deficit management the guiding principle is to return the Budget to expenditure/ revenue balance by 2017.

PNG LNG Venture and Sovereign Wealth Fund

The PNG LNG project and the Sovereign Wealth Fund (SWF) make up one of the Governments 16 Critical Activities. This world-class project has led to an expansion in the domestic economy through the broadening of skills and services, increasing investor confidence and demonstrating that large projects can be successfully rolled out in PNG, encouraging future investment in the country, and underpinning increased revenue flows for the Government over the next three decades. This project was delivered on time and ahead of schedule.

The SWF is being established to manage the revenue from the LNG and mineral sector with a view to insulating the PNG economy and the budget from volatility and to provide intergenerational equity. The design is consistent with international best practices associated with Sovereign Wealth Funds. Generally, this best practice includes: Accepted Practice & Principles (Santiago Principles); the Extractive Industry Transparency Initiatives; and the PNG domestic requirements. 

PNGs mineral and petroleum assets are one of the Strategic Assets under the StaRS and the SWF is set up to convert nonrenewable assets into a sustainable and perpetual income stream into the future.

There will be a single governance framework for the PNG SWF, but it incorporates two funds – a Stabilization Fund and a Savings Fund. The Stabilization Fund will reduce the impact of fluctuating mineral and petroleum revenues on the PNG economy and on the budget, and the Savings Fund will provide a means of preserving the real value of extracted mineral and petroleum resources through long-term investment for the benefit of future generations of PNG.

The overall objectives of the PNG SWF are to: 

• Support       macroeconomic    stability;
• Promote       intergenerational  equity;        and
• Support       asset  management        in      relation       to      financial     assets         accrued from  natural       resources revenue.

PNG’s offshore Sovereign Wealth Fund (SWF) is expected to commence operations by 2016. The projected operations of the SWF’s Stabilization and Savings Funds are based on Treasury’s revenue forecasts. 

Financial details for the SWF are available in 2015 Budget papers, Volume 1, Tables 8, 14 and 15; Appendix 3.

Financial Sector Reforms

The development of the financial sector is a key enabler for government. Under the MTDP2 the Government’s financial services sector policy will be responsive to the need of the public and private sector and individuals at all levels of society. 

Key areas of focus for financial sector development will include:

• Utilizing       the    financial     services       sector to      improve      transparency,       security      and accountability of revenue transfers between levels of government and to other beneficiaries;
• Providing     low    income        citizens,      micro and    small businesses  access         to      adiverse        range of financial products and services; and 
• Developing   policies       that   encourage   greater        access         to      capital        markets      forpublic         and private sector investors.

The Bank of PNG (BPNG) has supervisory and regulatory responsibility for the financial and banking sector and oversees the payments and settlements system in PNG. (The BPNG will, therefore, be an important partner as the Government works to achieve its MTDP priorities.  

Key strategies for the MTDP2 include:

• A        monetary    policy stance         that   targets        a       low    and    stable rate   of      inflation;
• Expanding   the    private        sector’s       access         to      capital,       especially    for investment  in      the    construction, agriculture, extractive, and manufacturing industries;
• Developing   new   financial     products     that   meet  the    demands     of      small enterprises  and start-up companies that struggle to secure investment funds from commercial banks;
• Encouraging innovation   from  the    banking      sector to      reduce        transaction and    overhead costs; and
• Continuing  support       for     the    development         of      financial     services       to      privateindividuals  through micro finance and other facilities.

Development Partners: Loans and Grants

The support provided by our development partners is highly valued by the Government. Currently, this assistance (in grant funding and concessional loans) comprises 33 percent of public sector capital expenditure. The Government is committed to maximizing the benefits of this support by ensuring it aligns with PNGs development plans, is better coordinated and visible.

This has required the Government to examine different modalities of service delivery. This work will continue in 2015 by advancing the targets agreed in the PNG Commitment on Aid Effectiveness, signed in July 2008. 

This will also see the Government finalize its new Aid Policy and allow DNPM to review existing donor partners’ assistance to ensure alignment with the new policy approach. The screening by DNPM of all new donor supported programs, which began in 2014 with the re-institutionalization and strengthening of the PIP guidelines, will continue. 

This work will be supported by the Government’s re-introduction of the Annual Aid Report, which will further improve transparency and accountability of donor grants into the future.

As detailed in the Government’s Consolidated Budget Operating Rules, particular attention is also being paid to the strategic use of consultants/advisors in long-term management and capacity development programs, with the view to reducing the level of assistance as a percentage of foreign aid over time. 

Over the next five years, the Government intends to reduce the total value of these advisors in real terms to less than 20% of total aid budget. Consultants/Advisors will be strategically placed in appropriate locations. All placements will undergo appropriate screening and consultation processes through greater use of the Government’s recruitment practices.

The Government will continue to strengthen national and sector dialogue with its development partners through its biannual donor forums and ongoing funding of the Development Assistance Database.

All development partners are being encouraged to understand and co-ordinate efforts towards building the NSDF. 

2.3  Implementation 

Improvements to the implementation and procurement of Government programs, projects and services is the third stage of the PIM Cycle and one of the 16 activities under the Critical Activities Matrix.

The Government recognizes the difficulties around implementing programs and projects and is exploring a range of innovative modalities for efficient delivery of goods and services in urban and rural areas at reduced costs.

A major initiative is the introduction through the proposed National Planning Act of the NSDF. Against this framework of minimum services delivered at strategic service delivery centres, attempts are being made to better co-ordinate and focus the efforts of all stakeholders to improve outcomes.

Focus is also being given to emphasizing focal activities for particular regions and cities. For example, Port Moresby is the administrative and commercial headquarters; Lae is the industrial headquarters; Hagen the agricultural regional headquarters; and Kokopo the tourism regional headquarters.

The Sepik Plains, Baiyer/Madang valley, Karamui Plains, Whagi Valley, Central Plains and West New Britain are identified as major agricultural focal points, and the provinces of Milne Bay, East New Britain and New Ireland as tourism focal points.

Subnational Government empowerment is a major theme with record funding being provided through the Service Improvement Program and increased functional grants, together with supporting financial delegate powers and ceilings.

To strengthen district administration and streamline processes and practices to improve rollout of services at the district and ward level, the Government has also recently established the District Development Authorities (DDAs). These Authorities are critical to sub-national empowerment.

The DDAs commenced in January 2015 and will replace the Joint District Planning and Budget Priority Committees. They will be responsible for a wide range of activities including delivering services, maintaining infrastructure, disbursing grants, managing budgets and local level development plans. This will allow more services to be delivered where most people live. 

The new Service Delivery Framework will identify the infrastructure needed for ensuring citizens have access to the minimum level of services needed to improve quality of life. 

National Service Delivery Framework

Basic services cannot be delivered everywhere but must be strategically located because of resource limitations. 

Eighty percent of Papua New Guineans are socially organized in clans and live in rural areas on communally owned land. This is across 6,131 Wards, 313 Local Level Governments (LLGs), and 89 Districts within 22 Provinces. Effective service delivery must reflect these physical geographic and social demographic contours to ensure maximum accessibility. 

The proposed National Planning legislation provides a way forward for achieving this outcome by establishing minimum basic core service requirements for all levels of Government.   

There is an existing political and administrative system that lends itself to a logical hub and spoke spatial delivery framework. PNG is comprised of households, hamlets, villages, stations, towns and cities. Interventions can take place commencing at household level (roofing iron, water tanks, solar lights). The NSDF however commences at Council Ward Headquarter level. From practical experience common services like education and heath are delivered at central locations and facilities such as Elementary School and Aid Post/ Community Health Posts. 

A Ward may have more than one of these facilities but as a starting requirement and objective under health for example, each Council Ward must have at least one Community Health Post or Aid Post. Continuing with the health example, the Aid Post links (by transport and communication) to a Health Centre at Zone Level Headquarters, to an Urban Health Centre at Local Level Government Headquarters, to District Hospital at District Headquarters Level, to a Provincial Hospital at Provincial Headquarters Level, and to a Regional Referral Hospital at Regional Headquarters Level.

Details on the minimum basic core services required from the national level down to the ward level are set out in table 2.2 for indicative purposes only.

Table 2.2: National Service Delivery Framework - the minimum basic core services

Procurement – Reforming Processes & Creating Innovative Solutions

The efficient procurement of public goods and services has been a serious impediment over recent years. As a result, significant amounts of public funds have been wasted or misappropriated.

The initial task is the required reforms to the Public Finance Management Act to improve the effectiveness and transparency of the Central Supplies & Tenders Board (CSTB).

The CSTB has so far been ineffective for higher-level procurement and reforms are required to improve transparency and independence of the Board and to separate functions such as that of the State Solicitor.

Special Supplies and Tenders Board are required for major procurements at sector levels such as medical drugs that may require specialist knowledge, and should not be subject to unnecessary delays due to their importance (drugs and medical equipment). The Government has mooted the Independent Health Procurement Authority and this should be progressed more rapidly. 

Provincial Governments must have functioning Provincial Supply and Tenders Boards and Provincial Works Units. District Development Authorities should have District Tenders Boards and District Works Units. These have been empowered with additional procurement powers.

The Government understands that streamlined and efficient public sector procurement processes are needed to effectively implement its policies and programs. The Government will amend the legislation and issue non-financial instructions to improve and speed up procurement at both the national and sub national government level.

As outlined in the 2015 Budget Non-Financial Instructions, the Government has commissioned the CSTB to draft a set of clear guidelines on the tender approval process, including the length of time required for each stage of the process. The Government expects the guidelines to be in place by mid-2015. 

The Government has now reviewed procurement modalities and limitation to determine how to better procure public goods and services for PNG citizens. As a result, the Government is moving to forge partnerships with the private sector and other non-state partners who can demonstrate a strong commitment and a proven record of providing goods and services at “value for money” prices. 

One example of this approach is the financial support provided to faith based organizations through the Church Partnership Program to deliver health and education services. Currently, church based programs deliver around 50% of the services across the country, especially in rural and remote areas where the Government is unable to reach. Providing these organizations financial support eliminates the need for the Government to duplicate infrastructure and maximizes access to goods and services.

A further example is the floating hospital program in conjunction with Youth With A Mission and the private sector.

The maintenance of remote airstrips by third level airlines through the newly established Rural Airstrips Authority is also an example of utilizing government funding to deliver services through established and committed partners.

Under the MTDP2 work will continue to review and improve the procurement system so that public goods and services can reach PNG citizens in a timely and cost effective manner.

Public Sector Reforms

The Government is undertaking an extensive legislative program to introduce more transparent and accountable public sector and reduce service delivery costs.

In 2014 Budget, the Government announced a public sector reform program that included a range of legislative and policy reforms. 

Some examples include, amendments to the Public Service Management Act 2014; introducing the Rightsizing Initiative and the Service Improvement Program to restructure the public sector and improve administrative processes; and roll-out of manpower and payroll audits to remove discrepancies and salary over-runs. 

Other major initiatives include the review of the Constitutional Law Reform Commission and the Internal Revenue Commission and changes to the structure of the National Budget. A full list of the Government’s reform agenda is provided in the 2014 Budget Book, volume one, page 90.

In the 2015 Budget the Government announced the reform of the Budget Management Framework with the introduction of the Consolidated Budget Operating Rules to assist agencies to manage their budget expenditure, during the year and in the preparation of Budget submissions.

As part of its commitment to an efficient public sector the Government has announced an efficiency review of the public sector. The Efficiency Review will report on whether the cost, efficiency and functions of National Government and Sub-national Governments are value for money. This important review will help to control public sector expenditure and provide savings, which will contribute to our revenue stream and the economy. 

Under MTDP2, the Government will continue to initiate its legislative and administrative reforms to improve public sector efficiencies during 2016-2017 and beyond. 

Service Delivery and State Owned Enterprise Reform

The Government’s policy objectives in relation to State Owned Enterprises (SOEs) is to reform them to operate as commercial entities and as a principle, not to become operators of business unless the conditions for the provision of an essential good or service cannot be delivered by the private sector in a competitive, commercial space.  

The key strategies under MTDP2 for SOEs are:

•    For     the    Government         to      create the    best   environment         for     service        deliveryand infrastructure development through increasing the efficiency of SOEs, privatization in appropriate cases and constructive partnerships with the private sector. This includes:

» Supporting competition, to encourage SOEs to become more efficient and identify when the private sector can provide quality services at a lower cost; and

» Encouraging private sector partnerships to gain access to the skills, technology and finance that are needed to improve performance and expand infrastructure.

Where service delivery is not commercially viable, the Government will continue to subsidize investments to fulfil Community Service Obligations.

Parliamentary Legislation Supporting the Enabling Environment

A program of policy reviews and legislative reforms underpins the Government’s development strategy, including its resourcing and implementation reform agenda. 

This policy and legislative support has contributed to the success of the fiscal strategy through political stability and enhanced governance. It is also contributing to Government efforts to address existing institutional and legislative inefficiencies.

A range of legislative amendments and reviews has supported the Governments policy of macroeconomic stability. These included:

• Amending    the    Integrity      of      Political       Parties        and    Candidates  Act    to      improve political       stability and accountability of the Parliament; 
• Introducing  the    Independent         Commission         Against       Corruption  Bill    to      improvethe integrity of public administration among public sector organizations in the country by exposing corruption and corrupt practices; and
• Amending    the    Public         Service        Management        Act    to      streamline   governmentappointments. 

Amendments to the Fiscal Responsibility Act have also been undertaken to enable major investment and improve service delivery. These amendments included:

• Introducing  the    Medium      Term  Fiscal Strategy      to      enable         the    Government         toproperly plan, resource and implement its intervention Programs;  
• Establishing the    Organic       Law   on     the    Sovereign    Wealth        Fund to      manage       the revenue from the LNG and mineral sector with a view to insulating the PNG economy and the budget from volatility and to provide intergenerational equity; 
• Amending    the    Public         Financial     Management        Act    to      improve      themanagement        of      public finances - revenue and expenditures;
• Converting   the    IRC    to      a       Statutory    Authority    to      improve      the    operationalefficiency     of the organization and its tax collection role; and
• Conducting  the    Tax    Review        to      improve      the    collection    systems      and    processes and    to broaden the tax base.

Table 3.2: Key indicators and targets on education infrastructure.

*Existing education facilities in the country.

Source: DOE (2013)

Higher & Technical Education

The higher and technical education and training institutions supply the critical human resources needed for nation building. 

The Government recognizes the need for universities and colleges to step-up and meet this demand and is responding by increasing the number of scholarships; reintroducing the student loan scheme; increasing the number of new higher learning and training institutions as well as the capacity in existing institutions. This work will also be undertaken in partnership with church and private sector training providers. In addition, the Government is significantly rehabilitating post-secondary institutional infrastructure, most of which was built in the 1970s. 

Total expenditure for the education sector has increased during the period of this Government by 62%. This level of support will continue under MTDP2. Table 3.3: Key indicators and targets for Higher and Technical Education

*Source: Department of Higher Education, Research, Science and Technology.  

3.3  Health

MTDP2 Goal: To improve access to and quality of healthcare. 

The Government’s long-term plan is to provide an efficient and effective health system that delivers internationally acceptable standard of health services across PNG. This will also ensure that PNG meets its Millennium Development Goals on maternal and child health (MDG 4 and 5) and HIV/AIDS, malaria and other diseases (MDG 6). as well as human development goals such as life expectancy at birth. All these contribute to improvement in HDI that moves the country towards Vision 2050 goals. 

3.4.1 Transport

A good transport system allows for the effective movement of goods from the point of production to where they are consumed, facilitates the effective delivery of social services such as education and health and enhances community interactions and well being.

The transport system comprises infrastructure (roads, jetties, wharves, airstrips) and services (ships, planes, PMVs) to move people and cargo. It also includes the regulatory framework and standards that ensure the safe and correct use of the transport system. 

Coordination of transport infrastructure and services both within and between modes is essential to an effective Transport System.

To deliver an effective and well-coordinated transport system the Government is committed to improving three modes of transport; air, sea/ waterways and land.

Land Transport

MTDP2 Goal: To restore and expand the national road transport network to increase access to socioeconomic services with improved road safety. 

The construction of roads is important for facilitating transportation services, setting up agro-processing and SMEs, and generating income and employment in rural and urban areas. In the rural areas, it shortens the time taken to reach health and education institutions and markets, thus improving health, education and income generation. 

Re-building key road infrastructure will continue under MTDP2. During 2016-2017, the country will add at least 250 kilometers of national roads per year. The provinces are also expected to add 50 kilometers of road per province per year during the period. 

In addition, the Government will continue its emphasis on road durability (sustainability) and maintenance. 

Under MTDP2 the priority areas are: 

• Increasing    the    total   length         of      national      and    provincial    roads to      cater  for     the needs of the people;
• Increasing    the    proportion   of      roads that   are    in      good  condition;
• Improving    the    assessment of      major rehabilitation       and    new   construction         projectsusing a two staged Business Case approach to ensure value for money and enhanced socioeconomic returns for the people of Papua New Guinea;
• Maintaining the    value of      existing       investments in      road   infrastructure       through      anemphasis on maintenance;
• Encouraging a       quality-based       focus on     new   road   construction         through      integrated construction and maintenance contracting arrangements;
• Encouraging the    development         of      industry      standards   on     long   lasting        andappropriate durable materials and methodologies to improve road construction reliability;
• Developing   policies       to      grow  the    capacity      of      local  industry      to      build  andsustainably maintain completed roads; and
• Improving    road   safety infrastructures.

Table 3.6: Key indicators and targets for road transport in MTDP2

*Source: Department of Works (2013).

Maritime Transport 

MTDP2 Goal: To enhance the role and effectiveness of the maritime transportation network 

With its dispersed population in different islands, PNG’s maritime transport comprising ports and port operations, marine navigation infrastructure, coastal maritime activities, international and coastal shipping, river transport and river ports and landings takes on special significance in providing maritime transport services to urban and rural populations. It increases access to markets as well as education, health and family planning services. It allows for increased participation of people in income generating activities and growing the national economy. 

PNG’s maritime infrastructure also supports the nation’s domestic and international trade with ports like Lae providing a conduit for resource exports.

Some facts about maritime transport:

• 115    ports  and    jetties are    located        throughout  the    Maritime     Provinces;
• 23      ports  are    within         the    15     Maritime     provinces;   16     of      them  are    declaredports  operated and managed by PNG Ports Corporation Limited;
• 99      ports  and    jetties are    undeclared. These could be      owned         and    managed     byprivate company, provincial governments, churches or individuals;
• Most   of      the    ports  and    jetties in      the    country       are    rundown     or      are    in poor   condition    due to lack of repair and maintenance; 
• In       2014, there  were  375    domestic     vessels        operating    within         PNG   coastalwaters        shipping routes including inland waterways; and
• Due    to      the    LNG   project,       the    coastal        fleet   of      vessels        operating    alongthese routes         is expected to increase to 700 vessels by 2017.

A network of smaller ports, innumerable small wharves, and jetties support the major ports. These maritime facilities are often backed by both public and private owned infrastructure such as cranes, storage facilities and a complicated network of service providers ranging from tug boat operators to freight forwarders. The international and coastal shipping services are augmented by inland river transport systems predominantly on the Fly and Sepik Rivers.

Under the MTDP2, the Government will continue its Port Development program. Key priority areas are: 

• Increasing    the    capacity      of      ports  in      Lae    and    Port   Moresby      to      supporteconomic    growth and particularly export industries;
• Rehabilitating       infrastructure       and    in      particular    undertaking         maintenancedredging for smaller non-commercial ports to ensure ongoing serviceability; and
• Improving    inland         river  and    coastal        infrastructure       such  as      jetties to      supportservice delivery. 

To complement the infrastructure investment there will also be a focus on improving services to maritime users. Under MTDP2 the priority areas are:

• Consolidating        the    maritime     regulatory   and    safety functions    to      deliver        betterand more consistent services to the maritime sector; and
• Establishing the    Marine        Industry      Advisory      Group         to      enhance      public/privaterelationships across the maritime sector.

An improved maritime transport system will ensure greater access and efficiency within the maritime transport sector. Currently, the turnabout time for export and import of cargos within ports of call is approximately 4 to 5 days. 

With the introduction of 20 and 40 foot container storage facilities at all international and local port terminals and freight movement to remote areas including inland waterways, the turnabout time will be reduced to 2.5 days by 2017.

Table 3.7: Key indicators and targets for maritime transport 

*Source: Department of Transport, Maritime Transport Division.

DNPM RMF Pocketbook 2013/2014

Air Transport 

MTDP2 Goal: To improve and maintain air safety and security and increase air transport services throughout the country, especially into rural areas, and increase the capacity of international airports to meet emerging demands. 

Airports historically and continuously link PNG’s widely dispersed population over isolated areas. The Government has adopted a system of certification that requires airports to achieve and maintain compliance with minimum international operating standards. Certification standard is required for PNG’s 22 national airports. 

A quality air transport sector is critical not only for access to services by citizens but for attracting tourists and foreign investment to help build the future. The priority 

Table 3.9: Key indicators and targets for water, sanitation and hygiene

*Source: JMP 2014 Update, Department of Health. Department of Education.

Electricity 

MTDP2 Goal: To increase access to and capacity of, reliable and affordable electricity supply to meet current needs and projected future demand.

Electricity is a critical input for economic activities. It also enhances quality of life through improved health and education service delivery. PNG currently has four main sources for electricity generation: gas, hydro, geothermal and diesel.  Current electricity generation capacity is insufficient to meet current and future demand.

Progress in providing electricity to rural PNG has been slow and exacerbated by inadequate maintenance of existing generation and reticulation infrastructure.

The abundance of the strategic assets of water and gas must be considered as a basis of cheaper power for domestic consumption and export as prescribed by StaRS.

The Purari hydro project has the potential to host five dams, each generating 800 MW of power. The on and off grid requirements of PNG is currently 600 MW. There are environmental considerations and capital costs that may make this and other such mega projects non feasible in a long-term sense. Mega dam projects in other developing countries have not delivered the benefits in the manner touted.

It is desired that provincial and district townships establish standalone, sustainable power generation systems where possible. Large-scale agricultural projects with processing systems such as the oil palm industry lend itself to biogas electricity generation at sustainable and cheap rates. This is demonstrated in Kimbe and can be extended to Popondetta, Kavieng and Alotau. 

The Government is funding a range of projects with the intention of improving generation and distribution capacity. These include, Hela and Southern Highlands Electricity Project, PNG Towns’ Electricity Investment Project, Port Moresby Grid Development Project, Upgrading the Power Distribution System of Ramu Grid and Urban Grid Electrification Extension Project. 

The Government will continue this investment under MTDP2. 

Table 3.10: Key indicators and targets for electricity

*Source: Asian Development Bank Key Indicators 2014. DNPM, PNG

Information Communication Technology (ICT)

MTDP2 Goal: To improve, expand and increase access to an affordable ICT network.

Effective communications is a necessary enabler for socioeconomic development. Costeffective, efficient and reliable ICT services such as voice telephony, internet access and broadcasting services are important for economic growth, social development and environmental protection. It supports the delivery of a range of services such as education and health into rural and more remote areas. It also supports participation of women and men in activities as diverse as elections and business. 

The proportion of population who subscribed to mobile telephones was 35% in 2013. During the same year, the proportion of population covered by at least one 3G network (proxy to internet coverage) was 30% and the proportion of population with access to internet (mobile & fixed broadband) was 15%. 

The Government’s objective under its ICT policy is to provide cost efficient, reliable and effective ICT services through the development of ICT infrastructure in the public and private sector. This will help to bridge the ICT divide between communities and overcome communications barriers created by geographic isolation in the country. 

Table 3.11: Key indicators and targets for ICT in MTDP2

*Source: NICTA PNG.

Sports Infrastructure

MTDP2 Goal: To deliver a successful 2015 Pacific Games.

It is to be noted that a special intervention is being made to upgrade sports infrastructure because of the 2015 Pacific Games. These Games will cost the Government at least K1.2bn. This infrastructure will be used to leverage sporting events and activities into the future providing direct and indirect benefits to the country. The games village will be utilized by the University of PNG to accommodate their students at the conclusion of the games. 

3.5  Law and Justice

MTDP2 Goal: To reduce crime and corrupt practices and to promote good corporate governance across all sectors.

Law and order is a critical enabler for socioeconomic and political development. Justice is both a basic human right and a fundamental precondition for a well-functioning market economy and orderly society. 

The rule of law is necessary to provide the impetus to save, invest and accumulate the necessary assets that underpin better living standards. It is also critical to encourage private sector investment in the economy. Petty and organized crime, fraud and illegal trafficking of guns and drugs increase the cost of doing business in PNG. This also deters foreign investment. 

Rural communities also require the rule of law to enable them to participate in the formal market economy. If cash incomes and assets (such as coffee trees) are under constant threat of destruction or theft, smallholders are likely to withdraw to subsistence livelihoods. 

More broadly, individual communities and the nation bear the cost of the destruction of public assets, including impeding access to essential services. Community violence that results in the destruction of assets such as aid posts and schools deprives the communities of essential services and undermines the potential for citizens to improve their quality of life.

The Government recognizes the importance of this sector and is investing significantly in it. This includes the PNG-Australia Law and Justice Partnership, Waigani Court House Complex and an increase in the number of Judges and Court circuits held in Provinces and Districts. In 2015 Budget the Government fully funded allowances for village court officials.

The Government is also providing significant financial support to modernize the Police, Defence and Correctional Services and meet the security costs of the 2015 Pacific Games and APEC (Asia-Pacific Economic Cooporation). 

The Government has increased expenditure in this area by 95%.  

Under MTDP2 the Government will continue this support by:

• Modernizing the    police force;
• Establishing the    office of      the    Secretary    for     Police to      oversee       the    effectiveadministration and management of the force;
• Reviewing     the    process       for     recruiting    police Commissioners     and    DeputyCommissioners;
• Repealing     the    legislation   passed        in      the    last    Parliament  (Judicial      Conduct      Act, Supreme Court Amendment Act, Parliamentary Privileges and Immunities Act);
• Establishing, on     an     ongoing       basis, the    Inter-Agency         Committee  AgainstCorruption; and 
• Introducing  the    Independent         Commission         Against       Corruption  Bill    in Parliament

Table 3.12: Key indicators and targets for law and justice

*Source: Law and Justice Report, 2014.

3.6  Land and Housing

MTDP2 Goals: To improve access to affordable housing for citizens: and to free up and mobilize alienated and traditional land for development.

One of the fundamental subsistence needs of every human is shelter and the physical and economic safety it provides. Availability of land and land tenure is a critical element for providing shelter in PNG. 97% of the land in PNG is owned by traditional clan landowners, with only 3% available for the State.

Land and a functioning land tenure system is a fundamental element of a productive economy.

The Government has recognized the chronic shortage of affordable land and housing in PNG and has adopted the Land and Housing policy. This critical intervention combines the existing National Land Development Program with Affordable Housing initiatives under one umbrella - the Affordable Land and Housing (ALH) Program. 

Cabinet has established a Ministerial Committee under the Chairmanship of the Minister for Planning and Monitoring. The Office of Urbanization provides the Secretariat. The Committee has been tasked to take carriage of matters relating to the provision of affordable land and housing and to specifically deliver 40,000 housing units/land allotments.

Funding provided to this program is supporting the Land Reform Program to progress the mobilization of customary land, institutional housing of at least 10 houses per district, and the capturing of existing alienated land to develop affordable housing. Pilot programs at Duran Farm and Gerehu 3B in Port Moresby will provide 10,000 allotments. 

The Gerehu 3B project will pilot the provision of free titles to qualifying Papua New Guineans to access funding provided to commercial banks at 4% interest with 40 year terms. Housing designs of concrete, steel and timber construction have been developed with the private sector at minimum costs of K160,000.00 for a two bedroom home, to provide options to citizens.

This program commenced in 2014 and will continue under MTDP2. Total expenditure for the sector during the period of this Government increased by 67%.  

The Department of National Planning and Monitoring is coordinating the program with direct input from the implementation agencies, including the Department of Lands and Physical Planning, the National Housing Commission, the Magisterial Services, the NRI and the Office of Urbanization.

Key priority areas under the MTDP2 are:

• Increasing    access         to      State  and    traditional   land   for     affordable    housing      inurban areas and institutional housing at sub-national level;
• Improving    access         to      affordable    financing     by      improving   the    land   titles  systemand    enhancing Government incentive schemes for major banks; 
• Reviewing    government policies       and    practices     to      encourage   greater        competitionand efficiency in the housing construction industry;
• Building      the    capacity      of      the    Department of      Lands and    Physical      Planning     toeffectively contribute to the delivery of the program 
• Piloting        customary   land   development         models        using the    Incorporated        LandGroups as the mechanism and establishing the special land development advisory service;
• Implementing        the    Land  Group         Incorporation       (Amendment)        Act    and    theLand  Registration (Customary) (Amendment) Act; and
• Producing    a       “Land Use    Planning     Scheme”     to      guide the    use    of      land   that   isconsistent with the StaRS. 

Table 3.13: Key indicators and targets for land & housing

*Source: DNPM, PNG.

Chapter 4: The Economy

4.1  Introduction

A small government and efficient private sector supporting a smart economy based around Strategic Assets that is responsible and sustainable and provides inclusive and broad based development needs that are human development rather than economic development focused.

Papua New Guinea has a population of 7.3 million according to the 2011 census. This population is currently growing at an unsustainable rate of 3.1% per annum, and will double every 22 years if the present rate of growth continues. Each of these citizens are entitled to the basic human rights of food, shelter, education, health, security and the means to pursue a meaningful and productive life.

The Government is obliged to build, sustain and administer and facilitate for the socioeconomic rights of this population. There remains a capital deficit in delivering the required standard of these fundamentals and the Government is challenged with making up this deficit within the current economic and productive capabilities of the economy. The heavy reliance on non renewable resource extraction and primary resource harvesting, combined with the rapid population growth makes the current approach unsustainable. 

The country needs to understand this and begin a transition to a smarter development pathway.

Initially PNG should empower every family and every citizen with the knowledge and access to contraception and begin the process of breaking the poverty cycle at individual and family level. This will take the burden off the health and education systems and lead to better-educated children and stronger family units. In a national sense it will reduce the pressure on Government. This pressure makes it hard for Government to make responsible, sustainable development choices for the longer term. It also places the Government in weaker bargaining position with multinational agencies and corporations.

The Government must build and encourage an economy based on PNGs competitive strengths within the global village. These competitive strengths are based on the usual productive capabilities and resources of a nation but for PNG more particularly they are based on its Strategic Assets.

These Strategic Assets can be used to develop a competitive and sustainable economy that provides the needs of its people and the basis for export income in a manner that is self-perpetuating.

In this economy the Government should act as a facilitator and allow the private sector to be the generator of wealth. The Government should not attempt to duplicate the role of the private sector. It should be an operator of business only when there is no commercial basis for a competitive business in a sector or space.

These Strategic Assets are; Mineral and Petroleum deposits, Water, Tuna, Forestry and Biodiversity, Agriculture and Eco-Cultural tourism. 

Carefully harvested, non-renewable mineral and petroleum assets, under an improved fiscal regime including a sovereign wealth fund, can fund our capital deficit (stabilization fund) and provide investments to maintain that capital in the future (savings fund). These resources cannot be harvested in a manner that significantly undermines the environmental stock.

Water is available in abundance in PNG and clean water must be made available to all citizens. It provides a simple, clean, cheap solution for electricity generation based on small and medium sized hydropower solutions throughout the country. Water at higher elevation in the Highlands region can potentially be piped to Australia whilst generating power at the same time. Water and fertile soil provides the basis for our Organic Agriculture.

PNG has 15% of the worlds tuna stocks and 30% together with the Parties To The Nauru Agreement. The global tuna stock is being depleted every day. The country needs to see the significance of this renewable resource and act to protect it, bring the harvest onshore, and create a sustainable protein source for our population and the rest of the world.

PNG combined with West Papua has the third largest rainforest in the world. This forest is a carbon sink, oxygen generator, and together with our reefs contains 8% of the world’s biodiversity. It is also the home and garden to many of our people. In a world seeking climate stability and environmental protection, we need to seek an international financial mechanism to encourage us to preserve these forests. In addition, PNG needs to move to only allow onshore processing of logs as soon as possible.

Small scale agriculture has been the mainstay of Papua New Guineans for centuries and remains that way for many people today. In an increasingly urban scenario, the Government is required to develop better systems to mobilize land, organise farmers, create nucleus estates, improve productivity, efficiency and also to encourage entrepreneurship and development of small to medium enterprises as vehicles for participation in this effort.

With a productive land mass and good water source, PNG should be able to produce its own food requirements for a stabilized population and export the surplus. 

Biodiversity, the environment and PNGs culture provide the basis for an education, research and tourism industry.

The National Strategy for Responsible Sustainable Development (StaRS) sets out the underlying principles supporting the Government’s intention to shift its development (operational) strategy from the current ‘brown only’ growth model, of resource extraction and export, to a more sustainable ‘greener’ economy. 

The two primary drivers of this new economy is the sustainable development of PNG’s natural resource (its strategic assets) and creating the enabling environment for a flourishing Small & Medium Enterprise sector.

In the medium term, the economy will remain heavily reliant on the revenue inflows from the extractive industries, particularly from the PNG LNG Venture. However, over the longer term the Government’s operational strategy will shift the economy towards a more sustainably robust model, which is SME enabling and climate resilient. In this way, the Government will move towards attaining its goals to be: 

• World leader in      promoting   and    establishing the    responsible sustainable development paradigm; and
• Among         the    top    50     countries    on     Human       Development        Index by      2050.

This chapter provides details on the Government’s investment priorities, indicators and targets for growing the economy under MTDP2.

4.2  Small and Medium Enterprises (SMEs)

MTDP2 Goal: To increase the participation of citizens in business activities.

The development of SMEs in PNG has been sluggish due to policy, institutional, environmental and structural constraints. This Government has recognized that a competitive, dynamic and diverse private sector is an important driver of economic growth. The SME sector is recognized as the vehicle for empowering citizens by promoting self-reliance, job creation and reducing poverty. 

The Government remains committed to creating an environment that is conducive to SME development. This includes a robust SME policy and establishing the necessary legislative framework to guide and grow the sector. It has also started to build small business capacity through support for training programs such as Know About Business and Start, Improve Business.  

In 2013, there were 49,500 registered SMEs in PNG. However, it is estimated that only half of those were operating well. For our economy to continue to grow, we need a vibrant and profitable SME sector that provides employment and tax revenue.

Agencies with prime responsibility for implementing SMEs policy are the National Development Bank and Small Business Development Corporation under the coordination of the Department of Commerce and Industry.

The Government will continue to encourage emerging SMEs under MTDP2.

The key priority areas are:

• Continuing  to      improve      SMEs access         to      markets      and    financial     credit;
• Encouraging and    promoting   SMEs to      be      internationally      competitive;
• Encouraging the    operation    of      the    informal      economy     and    streamlining         thetransition process for SMEs from the informal to the formal economy; and
• Reducing     the    cost   of      doing business     and    streamlining         the    administrativeprocesses (“removing red tape”) 

Table 4.1: Key indicators and targets for SMEs

*Sources: IPA Database 2013, Small and Medium Enterprise Master Plan 2014-2030 (Draft), Department of Trade, Commerce & Industry Papua New Guinea; Tebbutt Research Baseline Survey on SMEs in PNG 2013.

Note: The baseline values are estimates.

4.3  Strategic Assets

It is anticipated that as the world shifts, in terms of changing values, towards more sustainable use of natural resources, there will be an economic benefit for PNG. Natural capitals such as clean water/river systems, coastal beaches and marine life, forests and biodiversity, and cultural diversity are in abundance in PNG and will increase in value with government investment. 

The sustainability of these strategic assets is underpinned by the guiding tenet of the moral contained in the analogy of the fable of the goose and the golden egg.

Under the new global economy these assets will be positioned to be pillars of economic growth, together with a more sustainable management of the current drivers of growth, mineral and petroleum and agriculture. 

The Government has identified these strategic assets for investment:

• Forestry       and    Biodiversity;
• Fisheries      and    Marine        Resources;
• Agriculture  and    Livestock;
• Fresh  Water Resources;
• Clean  and    Sustainable Energy;       and
• Minerals      and    Petroleum   Resources.

4.4  Forestry and Biodiversity

MTDP2 Goal: To ban export of logs and build the forestry and biodiversity sector that is environmentally sustainable and profitable.

The forest sector is very important for PNG because of the following reasons:

• People in      rural  areas largely        depend       on     the    forest.         The    forest provideswood  for     housing, fuel for cooking, fodder, forest-based medicines, food and meat as well as forest products for internal consumption and exports;
• Forest-based         industries   such  as      saw   mills  depend       on     forest products;
• Seven per    cent   of      world’s        biodiversity is       found in      PNG   with   most  of      thesewild plants and animals found in our forests;
• The     forest absorbs       carbon-dioxide,    supplies      oxygen,       preserves    the    environment,and contributes to the reduction of global warming; and
• The     forest helps to      maintain     soil    fertility.       

According to the data from Papua New Guinea Forest Authority (PNGFA), the country’s forest cover was 71.7% in 2014 and is recognised as a significant contributor to the containment of global warming. However, in recent years the forest has been greatly degraded and depleted due to excessive logging. This trend needs to be stopped.

The priority areas for MTDP2 are:

• Banning      the    export         of      old     growth        logging;
• Processing   of      logs   and    forest products     within         the    country       to      generateincome        and employment;
• Maintaining areas under forest cover through      afforestation/reforestation;
• Increasing    the    income        of      landowners through      carbon        trading;
• Increasing    areas under national      parks and    protected    areas to      protect        biodiversity;and
• Increasing    the    number       of      eco-tourists per    annum.

Table 4.2: Key indicators and targets for the forest and biodiversity sector

*Sources: PNGFA; Asian Development Bank Key Indicators 2014

4.5  Fisheries and Marine Resources

MTDP2 Goals: To ban the transshipping of tuna and build an onshore sustainable fisheries and marine resources industry.  

The fisheries sector has been a source of revenue through the export of processed and unprocessed fish and other marine products, particularly tuna. PNG’s Exclusive Economic Zone (EEZ) of 2.4 million square kilometres for fish catch is the largest in the South Pacific region. Around 15% of the world’s total tuna stock is found in this EEZ. 

According to the estimate of Pacific Tuna Forum, the raw value of PNG’s annual catch is about US$1.5 billion per annum. Of the 550,000 tons of tuna caught in PNG waters annually more than 70% is taken to other countries for processing. The European Union estimates that 53,000 jobs could be created in the PNG tuna industry if more on-shore processing was undertaken. 

The Government’s long-term objective is to attain 100% in country processing of the tuna catch from within its EEZ. In addition both commercial and artisanal harvesting of fisheries should not exceed the biological limits of regeneration of the stock. 

Under the STaRS the Fisheries Sector has been classified as a strategic asset and is expected to be one of the drivers of growth in the new economy going forward. Sustainable management of the sector is needed so that the regeneration capacity of the resource and its ongoing contribution to economic growth is maintained.

Key priority areas for MTDP2:

• Reviewing,   developing   and    implementing       a       Sustainable Marine        Resource     plan;
• Creating      awareness   on     responsible management        and    use    of      fishery        andmarine        resources;
• Combating   and    monitoring  of      illegal unreported  unregulated fishing;
• Introducing  a       restricted    licensing     system;
• Developing   the    human        capital        and    institutional capacity      for     the    NationalFisheries Authority and related stakeholders of the fishery sector. E.g. Subnational governments;
• Increasing    teaching      and    researching of      fishery;
• 50%   onshore      processing   of      fisheries      by      2017;
• Development         of      recreational and    eco/marine tourism       (with  Tourism      Authority);
• Development         of      aqua  culture        and    coastal        fisheries;     and
• Development         of      enabling      support       infrastructure.

Table 4.3: Key indicators and targets for fishery & marine resource sector

*Sources: National Fisheries Authority; Asian Development Bank Key Indicators 2014.

4.6  Agriculture and Livestock

MTDP2 Goal: To support large scale agricultural enterprises and smallholder growers more generally to meet domestic and international needs.

The agricultural sector in PNG continues to be the social safety net of PNG society. This sector employs about 50% of the working age population and provides income earning opportunities and subsistence for 85% of the population who live in rural areas. 

The sector contributes about 15% of the nation’s GDP. While an estimated 30 percent of the land in PNG is suitable for agriculture, only 2.2 percent is currently being utilized for commercial agricultural production. In addition, PNG’s agricultural sector is low yielding due to poor farming practices and hence is less profitable, compared to other countries.  Poor infrastructure and market access are also contributing factors (MTDP1, 2010).

Enablers such as roads, bridges, extension service, access to markets, with appropriate regulatory policies will enable the sector to grow.

In terms of production performance, Palm Oil and Coffee had gains in volume and value while cocoa production declined due to cocoa pod borer, poor yields and low prices.  The coconut industry continues to decline due to low prices, high production and transport costs and declining yields due to aging palms.  Production of other minor crops such as vanilla, rubber, chili, etc. are also in decline for similar reasons.

The Alotau accord called for; 1) increased capitalization of national development bank; 2) priority attention to rehabilitation of cash crops, fresh food storage, infrastructure, research and restructuring of commodity boards; 3) a promotional program to be undertaken seeking foreign investment in production and processing. 

The key strategic priorities for the MTDP2 are: 

• Improvement         of      institutional capacity;
• Improvement         of      access         to      land;
• Development         of      key    supply        chains        to      link   producers   to      markets;
• Provision     of      appropriate extension    services;
• Development         of      coping         and    mitigation   strategies    for     pests and    diseases      and climate change; 
• Funding       of      research      and    development;
• Enforcement of      CODEX       marketing   standards;  and
• Utilization    of      Economic    Corridors    for     agricultural development

Agricultural practices have always been sustainable and responsible mostly out of the need to survive.  This can be seen by the production of electricity from oil palm wastes and bio diesel from coconuts by some innovative participants.  

Table 4.4: Key indicators and targets for the agriculture & livestock sector

*Sources: MTDP RMF Pocketbook 2013/2014; Asian Development Bank Key Indicators 2014.

4.7  Water Resources

MTDP2 Goal: To improve the management of our fresh water resources and catchment areas.

Papua New Guinea (PNG) has a substantial amount of fresh water resources (underground, rivers and lakes). According to the Department of Environment and Conservation (DEC, 2006), there are nine hydrological drainage divisions (basins) in the country, which make it a water rich country. The largest river basins of the country are: Sepik, Fly, Purari and Markham. The Sepik has the largest catchment area with 78,000 km², followed by Fly with 61,000 km², the Purari with 33,670 km² and Markham with 12,000 km². The other catchments are less than 5,000 km² and are very steep. 

There are 5,383 freshwater lakes in the country. However, most are small. Only 22 of them have a surface area exceeding 1,000 ha. Lake Murray is the largest with surface area of 64,700 ha. Internal renewable water resources are estimated at 801.0 km² per year and the bacteriological and chemical quality of most of the surface and underground water is safe. Consumption of water is as follows: Agriculture: 48%, Domestic: 28%, Industrial: 22% and others at 2% (Dec, 2006).

This abundant water resource presents PNG with great potential for generation of clean hydro-electricity and bottling and exporting of fresh water. It is classified as a strategic asset of the country.  

Strategic policy and action plan is needed to guide the development and management of the resource. 

The key strategic priorities for MTDP2 are:

• Development         of      strategic      policy and    action plan   on     the    water resources    and    its implementation;
• Increasing    the    access         of      rural  and    urban households and    schools       and    healthinstitutions on improved water source;
• Increasing    cultivated    area   under irrigation;
• Increasing    the    proportion   of      hydro-electricity   in      the    energy        sector;        and
• Increasing    bottling       of      PNG’s fresh  water for     drinking      in      the    country       andexports.

Key indicators and targets for the water resources sector are provided in the water and sanitation section of Chapter 3, and clean and sustainable energy section in Chapter 4.

4.8  Clean and Renewable Energy 

MTDP2 Goal: To produce and supply clean, reliable and affordable energy to all households and enterprises today and in the future.

Approximately 83% of the population does not have access to energy/electricity, and progress in providing electricity to rural PNG has been slow. In some cases the level of electricity services has been deteriorating because of insufficient funding for maintenance.

The four main sources for electricity generation are: bio-gas, hydro, geothermal and diesel. The electricity produced through these sources is still not enough to meet the growing demand due to increased population growth and economic development. 

A large proportion of the current electricity/energy produced in the country is through the use of fossil fuel that increases carbon dioxide and global warming. This has to be reversed and cleaner energy sources need to be developed.

Providing affordable power supply to the people of Papua New Guinea is a priority item in the Alotau Accords (# 8). MTDP2 will continue the process begun by MTDP1 on increasing access to electricity for all households in the country but with greater focus on the generation and supply from cleaner sources of energy. Generating electricity from gas to meet growing demand is necessary in the medium term but commitment by Government is needed to shift away from fossil fuel reliance and towards cleaner sources of energy. 

Greater understanding through research and development is needed on the cost and effectiveness of alternative sources of cleaner power such as bio-fuel, hydro, geothermal, biomass, wind and solar. This will guide increased investments in the generation and distribution of alternative cleaner sources of energy. For the transport sector, bio-fuel will be assessed as a low cost cleaner alternative to diesel. 

Power generation needs to be opened to independent power producers in order to increase both the amount of electricity generated and the share of renewable energy in the national energy mix. Restructuring of the sector by separating generation, transmission and distribution services can have a significant effect on electric power technologies, costs, prices, institutions, and regulatory frameworks, and can create more space for renewable and clean energy in the national energy mix.

Ongoing work on the set up of regional grids will continue as part of the strategy to provide access nationwide. Meanwhile, major maintenance will be undertaken on the existing regional grids — the Port Moresby Rouna grid, the Ramu grid and the Gazelle grid. The consolidation of regional grids into a national grid should provide for potential international connection and export to Eastern Australia. 

Table 4.5: Key indicators and targets for the clean renewable energy sector

*Sources: Asian Development Bank Key Indicators 2014.

**http://mdgs.un.org/unsd/mdg/SeriesDetail.aspx?srid=71

It is anticipated that the proportion of energy/electricity produced from clean renewable energy sources such as hydro, solar, wind, tidal, geo-thermal, biomass and biogas will be increased. The use of wood for cooking and slash and burn in agriculture will also be reduced. 

Petroleum & Gas

MTPD 2 Goal: Maximize socioeconomic and environment benefits from the petroleum and gas industry.

In May 2014, PNG exported its first gas from the US$19 billion PNG LNG project. This project has an expected lifespan of 40 years. A second LNG project (Elk/Antelope) is in the process of final reviews for development. These two projects alone have the potential to provide most of the Government’s revenue for many years to come.

The petroleum and gas sector is expected to fund the PNG economy for the next 50 years. The expansion of the petroleum & gas sector will provide the impetus and raw materials for the development of the petrochemical industry and the feedstock for the energy sector.

Key challenges for the Government to harness the full potential of the petroleum and gas industry include strengthening the institutional capacity of state institutions mandated with the administration of the sector; a review of petroleum & gas policies and supporting legislation to address the findings of the taxation review and adopting the StaRS, and developing adequate stakeholder engagement mechanisms to address landowner concerns.

The key strategic priorities under MTDP2 are:

• Strengthening       state  institutions responsible for     policy,         administration,     regulation,compliance and enforcement;
• Reviewing    and    aligning      industry      plan   with   StaRS;
• Encouraging continued   investment  in      exploration;
• Ensuring     equitable     distribution of      benefits       and    participation;
• Establishing of      the    Sovereign    Wealth        Fund to      provide       equitable     benefits       for the    current and future generations;
• Reviewing    of      the    Oil     &       Gas   Act    to      capture       the    recommendations from  the tax     review and adopting principles of sustainable development;
• Facilitating  downstream         processing   for     petroleum   and    gas    products;    and
• Ensuring     that   environmental      impact        and    risks  are    mitigated. Table 4.7: Key indicators and targets on the petroleum & gas sector

*Source: DNPM MTDP RMF Pocketbook 2013/2014.

Benefits from our gas industry must reach every Papua New Guinean

An informed government 

is an effective government

Chapter 5: Monitoring and Evaluation

5.1  Introduction

Monitoring and Evaluation provides the last stage in the four stage PIM Cycle and informs the process of the execution of the plans so that implementation can be improved.

Monitoring is defined as the regular collection of information needed to assess the progress of implementing work-plans, projects or programs. Evaluation is defined as the periodic collection of this information to assess whether the project or program is improving the well being of the targeted population. Monitoring and Evaluation allows Government to gauge whether a project/program has been implemented and what has been achieved.

The information to be collected to undertake monitoring and evaluation assessments are: inputs, activities, outputs, outcomes and impacts of each work-plan, project or program. Details on the collection of this information are set out below. 

• Inputs are the financial, human, material, technology and information resources needed to implement a project/program. For example, the inputs for a family planning program are funding, equipment and medical supplies, number of workers trained in the program. The inputs are monitored during the life of the program.
• Activities are the actions taken or work performed that mobilizes the inputs to produce specific outputs. For example media campaigns, community meetings to educate couples on family planning, the number of health workers attending refresher training on family planning. These activities should be monitored during the life of the program.
• Outputs are the products and services that result from completing project/ program activities. For example, increased understanding by people of the importance of family planning, and increased access to and use of family planning methods. The outputs should be measured and monitored during the life of the program.
• Outcomes are the short or medium-term effects of an output. Outcomes under the family planning example would be: reduced number of children per childbearing aged female; and increased age gap between each child born. Outcomes are generally measured 1-5 years after the program has been implemented.
• Impacts are the long-term effects (positive or negative) on the target group for the project/program. For example, the impact of family planning would be: reduced fertility on individual; household savings & investments; population growth rate; social equity and the environment. The impacts are generally measured 5 years after the program has been implemented.

The results chain diagram (below) shows a Monitoring and Evaluation framework in  

The project/program is said to be effective if 100% of the targeted results are achieved on the prescribed time. It is efficient if the results are achieved at the least cost.

An example of this would be an measles immunisation program for 10,000 primary school children with a budget of K20,000. If this program meets it’s target within budget, than it is considered both effective and efficient. Post program evaluation showing a reduction in the number of cases of measles in villages and town across the country would be considered as positive outcome indicator.

Some outputs and outcomes are measured on an annual basis, such as amount of coffee produced per year (is an output) and percentage of dropouts in grade 1-8 per year (is an outcome). Implementing agencies will need to collect data annually to report on these outputs and outcomes. All reports should include an analysis of the data collected and the results provided for review and assessment of project/program implementation guidelines.

Implementing agencies are also required to send progress reports on inputs, outputs and outcomes to the Department of National Planning and Monitoring (DNPM) for consolidation. The DNPM will provide implementation progress reports to the Government through the National Executive Council.

Some data can be collected only through periodic censuses and surveys. These includes; the National Population and Housing Census (Census) and Demographic and Health Surveys (DHS) which are conducted every 10 years. 

Data obtained from the censuses include all data relating to population, such as: total population by age and sex; change in population growth rates per year; fertility; mortality and migration rates; literacy rates; etc. The data obtained under the DHS relates to fertility, contraceptives use, maternal and child health, infant and maternal mortality rates, etc. The next DHS is scheduled to be undertaken in 2016 and the next Census in 2020.

It is the responsibility of the National Statistical Office (NSO) to collect data through censuses and surveys, undertaken the analysis and report to the Government. Under MTDP2 the Government will provide necessary funding to NSO for this purpose.

The NSO is also required to produce data on the social, economic, demographic, Millennium Development Goals, human development and the responsible sustainable development indicators. This has not occurred to date. 

To improve the reporting capability of the NSO the Government has provided necessary financial support, including:

• Reforming    the    NSO;
• Introducing  the    National      ID      Program      to      provide       unique        electronic    ID      to all      PNG   citizens to improve service delivery; 
• Delegating   the    Civil   Registration System       (CRS) to      the    DNPM         and    amalgamating the CRS and NSO to eventually form the Bureau of Civil Registry and National Statistics; and
• Establishing the    Population  Information System

5.2  Reforming the National Statistical Office And Civil Registry

Reforming the NSO

Because of the poor state of statistics in PNG and the inability of the NSO to produce timely and quality economic and social demographic statistics, the Government has recognized the need to overhaul the NSO with reinvigorated legislation, structure and management. The following capacity building reforms are being put in place:

• Reviewing    the    endemic      problems     facing the    NSO   and    the    formulation of      amultiyear Action Plan to address these issues following a review with the support of the IMF and the Australian Bureau of Statistics;
• Formulating a       Steering      Committee  comprising  the    Department of      National      Planning & Monitoring (Chair), Department of Treasury (Deputy Chair), Bank of Papua New Guinea and the National Statistical Office;
• Setting         up     a       Secretariat  to      be      run    by      the    Department of      Treasury     andincluding    the DNPM;
• Keeping       relevant      stakeholders        informed     of      the    reform        progress      andensuring     stakeholders are consulted on relevant issues throughout the process; and
• Preparing     a       joint   National      Planning/Treasury        NEC   Submission outlining     the    final plans for overhauling the NSO. 

Progress has been made with the conclusion of the 2011 Population Census, the updating of the Consumer Price Index and the conduct of the Business Activities Survey. 

Reforms To The Civil Registry System

A Civil Registration System is designed to record births, deaths, marriages and divorces. The CRS should provide a continuous data base for the monitoring of fertility, maternal and marital status. Unfortunately, most these are not officially recorded by the CRS in PNG. To date, CRS statistics cannot be meaningfully used for the monitoring of these indicators. 

In 2014, the CRS was moved from the Department for Community Development to the 

DNPM. In order to improve performance on data, the Government will amalgamate the CRS and NSO to eventually form the Bureau of Civil Registry and National Statistics during the MTDP2 period. 

Establishing the Population Information System

A Population Information System (PIS) is a national database that contains basic information on individuals, including nationals and foreign citizens residing permanently in PNG. The PIS will be established at the reformed National Statistics Office. Information for this system is obtained through the National ID and civil registry programs.

Information on individuals in the PIS database could include:

• Full    name
• Personal      identification        number
• Sex
• Date   of      birth  (day,  month,        year)
• Full    name and    personal      identification        number       of      father
• Full    name and    personal      identification        number       of      mother
• Marital        status         (never married,      currently     married,      living in      consensual  union,divorced, widowed)
• Personal      identification        number(s)   of      spouse(s)
• Names         and    personal      identification        number(s)   of      children      born  alive  (in     case of      woman)
• Names         and    personal      identification        number(s)   of      children      dead  (in     case   ofwoman) •    Place of      birth  (village/town,       ward, LLG/municipality,         district,       province)
• Place  of      current       residence    for     more  than  one    year   (village/town,       ward, LLG/ municipality, district, province) 
• Mother        tongue
• Occupation  (agriculture,         industry,     services)
• Years  of      school         attended     
• Home country       at      birth
• Citizenship
• Mailing        address,      including    email
• Information  on     death (day,  month,        year), in      case   of      death

Progress on establishing the Population Information System will be measured by information collected on funding spent (inputs) and the progress made on achieving targeted outputs. DNPM will be responsible for monitoring and reporting on the progress of this program.

5.3 The National Identity Program

The Government is implementing a K270m National Identification Program. 

The objective of the program is to provide unique electronic ID to all PNG citizens to assist them to obtain access to public goods and services more efficiently. Some of the key information captured in the Population Information System, such as date and place of birth is very important for receiving many of the services, including school enrolments and opening of bank accounts. This program will also involve the establishment of permanent offices in every province under the Civil Registry Office where NSO and Planning staff can also be located.

Monitoring of the inputs and outputs of the National ID Program is essential for ensuring the integrity of the program over time. This activity is the responsibility of the DNPM.

5.4 Monitoring and Evaluation within DNPM

The DNPM is currently finalizing the National Strategy for Statistics and the M&E Policy.

Under the MTDP2 officers from DNPM will regularly liaise with agencies to monitor the progress of their M&E activities. The DNPM will also organize training on data collection