Papua New Guinea Mid Term Development Plan 2011-2015

1 The alignment of the development partners under the Accra Declaration and other partner agreements will be adjusted and reviewed straight after the adoption and endorsement of the MTDP 2011-2015 by NEC. 1 1.2 Addressing supply-side constraint s The success of the PNGDSP 2010-2030 will depend on how well strategies and expenditures are sequenced for implementation. Although each Medium Term Development Plan (MTDP) is designed to achieve progress in every aspect of the PNGDSP, some parts will be given higher priority in the early MTDPs. In this case, the first MTDP 2011-2015 will concentrate on policy areas referred to as “key enablers” to lay the foundation for the success of all other parts of the PNGDSP. The PNGDSP identifies the key enablers that will establish PNG on a path towards prosperity. The Government will integrate its investment to lay the foundation for growth by addressing the supply-side constraints and expanding the productive capacity of the economy in the first MTDP 2011-2015. As part of laying the foundation for growth the Government will ensure fiscal and monetary stability is attained, land is sufficiently unlocked for development, law and order problems are normalised and quality infrastructure connectivity is established to connect rural populations to markets and services. All of these are essential for attracting investment in agriculture and in other major sectors of the economy. In the same manner, encouraging competition in the first MTDP 2011-2015 period is a low cost policy that facilitates both economic progress and efficient delivery of services. Introducing competition into the mobile phone sector, for example, has generated an unprecedented improvement in phone services throughout PNG. Likewise, education needs to be given high priority in the first MTDP. While the benefits of primary and secondary education will not manifest until about 10 years later, a highly productive workforce will be essential by then to ensure the success of the PNGDSP. Higher and technical education is also a key priority to equip the workforce to implement the PNGDSP and build the nation. Moreover, substantial economic gains from higher education are available by replacing expensive foreign workers. Equally, transport and the provision of key public utilities of electricity, clean water and sanitation are priorities in the first MTDP 2011-2015 as they are required to facilitate investment across the economic sectors of PNG, from agriculture to manufacturing to tourism. However, the costs of providing this infrastructure are lower and the returns are higher when land is accessible, when crime is not an impediment, when funds are well managed, and when providers are competing by offering better service and lower prices. At the same time, effective infrastructure services help to reduce the cost of providing rural education and law and order. Underpinning the Government’s success in implementing these priorities in the first and subsequent MTDPs is the public sector’s performance and governance issues. High standards of public sector management involve high standards in the various institutions, departments and agencies through which the Government conducts its business. For PNG to have a prosperous future, good public sector management is crucial as it is the Government that will be relied upon to deliver the foundations of nation building outlined in the PNGDSP. These aspects of the PNGDSP discussed above will be given the highest priority in the first MTDP 2011-2015 as it will create a virtuous cycle of growth and development. The rationale is that these priority areas are the enablers for growth. They are the policies that will lay the foundation for PNG to progress rapidly towards middle income status by 2030. If significant progress is not made in each of the enablers by 2015, PNG will not realise the status of a middle income country by 2030. Therefore it is in these areas where development budget expenditure will bring the greatest returns. As highlighted in the PNGDSP, the benefits to PNG of these investments will be substantial. For instance, over 710,000 full time equivalent jobs will be created in rural PNG as a result of initiatives to promote rural development, including infrastructure to provide modern amenities and to open up rural access to markets. Infant mortality will drop substantially as investment in roads and law and order ensure mothers have access to health facilities. The causes of cholera and typhoid will be removed by the provision of clean water and sanitation. PNG’s population will be equipped to participate in the nation’s prosperity through investment in quality education, including higher education. 2 1.3 The MTDP framework To outline what will be done over the next 5 years in order to achieve the PNGDSP goals, a framework for each of the sub-sectors has been developed for the MTDP document (figure 1.1). Each framework is accompanied by a short discussion providing an overview of the plan for the sub-sector. The MTDP framework has been developed in line with results-based monitoring and evaluation. The first box of the framework reiterates the PNGDSP goal for the sub-sector. For example, the PNGDSP goal for utilities is “all citizens and visitors to have 1.1 The MTDP Framework access to reliable and affordable public utilities by 2030”. To monitor progress toward the sub-sector goal, indicators and targets have been developed. These indicators are based on those outlined in the 2015targel 2020ta rget 2025 target 2D30DSP targfl 30per1000 2.5per1000 Below17per1000 W vebirths PNGDSP and take into consideration international ~ve oirths live births live births 50r,er1000 40perlive 30perl000 Belowl0per1000 W vebirths obligations and local priorities. The source column ~ve births births livebirth s sco "" 100,000 100,000 300 per BelowlOOperlOO,DOOllve details where the data will come from. 100.000 bi 60yean 65 years 68year:s In the second box of the framework the strategies for the sub-sector strategy are outlined. The third box details the ‘deliverables’ of the 2021-2025 2026·2030MTDP. Subject to the availability of resources, investment will take place in support of the detailed targe t 0SP ta rget 1 0 Land isseru red ; coo 1500 deliverables. The deliverables are in line with the ,,. 95% sub-sector strategies and contribute to the sub- sector goal. Deliverables for the remaining MTDPs App ropriate number avai lable 75' ,co, ,,. ,co, under the PNGDSP are also discussed to ensure we ‘stay on track’ towards reaching the PNGDSP 2030 higher order objectives. Risks and assumptions are "' 100 BO detailed in the third box to ensure sectors link together and that effective sequencing and prioritisation of expenditure within and across MTDPs is followed. Lastly, the agency or government department responsible for ensuring the deliverables are realised is detailed. The fourth box provides information on the estimated resources needed to attain the deliverables. Resources are detailed by amount and by funding option – donor, government or other. 1.4 The economic imp act of the MTDP Implementation of the MTDP will be the first step towards reaching the target outlined in the PNGDSP of Papua New Guinea becoming a prosperous middle-income country by 2030. This will be underpinned by the rapid economic growth driven by the MTDP policies and investments. Over the period 2011-2015, economic growth is expected to average 8.7 per cent a year (figure 2.1 in part 2). This will result in a healthy rise in the average GDP per person from K3430 in 2010 to K4681 by 2015 (figure 1.2). In comparison, economic growth would be much lower in the absence of the MTDP, averaging 5.7 per cent a year. GDP per person in 2015 would be K4065. The MTDP will therefore add an average of 3 percentage points to growth each year, adding K616 to GDP per person by 2015. Importantly the expected economic growth will be shared amongst Papua New Guineans with the MTDP putting in place the PNGDSP policies for broad based and inclusive growth. In fact non-mining GDP growth is expected to exceed total GDP growth over the years 2011-2015, averaging 9.0 per cent (table 2.2). The key principle for achieving this is to bring development to rural areas and this will be done through the implementation of economic corridors and the development of core infrastructure in rural areas. The twin approach of increasing economic growth and spreading the benefits of growth will result in substantial progress in overcoming the poverty of opportunity that exists in Papua New Guinea. In doing this, important progress will be made against the first Millennium Development Goal (MDG) of eradicating poverty. The growth in GDP per person outlined in figure 1.2 and the rise in employment in both rural and urban areas outlined in figure 1.3 are key indicators of progress against MDG 1. 3 1.2 Growth in GDP per person, 2010-2015 Kina per person in 2010 prices 5,000 4681 4,000 4206 3929 3957 3726 3,000 3430 Kina in 2010 prices 2,000 1,000 0 2010 2011 2012 2013 2014 2015 Source: These forecasts are calculated using the Government’s model of the PNG economy, PNGGEM 1.3 Job creation, 2011-2015 Thousands of jobs created by sector 300 7.5 250 3.6 200 1.5 223.2 Mining, oil & gas Thousands of jobs 150 178.2 4.5 ■ Urban 130.7 100 ■ Rural 3.8 96.0 50 52.8 46.4 54.8 60.0 22.2 33.3 0 2011 2012 2013 2014 2015 Village informal 17,500 25,500 31,100 35,800 37,400 Rural formal 4,700 7,800 15,300 18,900 22,700 Mining, oil & gas 3,800 4,500 1,500 3,600 7,500 Manufacturing 4,000 6,700 9,100 12,000 14,800 Construction 16,400 28,000 37,300 51,300 64,300 Commerce 7,900 13,500 18,100 24,600 31,600 Transport 2,900 4,700 5,800 7,700 9,400 Other services 18,500 38,200 54,400 74,600 93,400 Urban informal 2,900 5,000 6,000 8,000 9,800 Total jobs created 78,800 133,800 178,700 236,600 290,800 Source: These forecasts are calculated using the Government’s model of the PNG economy, PNGGEM Perhaps the best way to measure the success of the MTDP is to gauge the number of jobs that are created. By 2015 there will be an additional 290,800 people who will have jobs (figure 1.3). This compares with about 121,700 additional jobs without the MTDP. About 244,000 of these jobs will be in the formal sector with most 4 of the balance representing additional rural employment at the informal level in the village environment (figure 1.2). More than 223,000 jobs are expected to be created in urban based industries. Most of this reflects job creation in services – particularly in construction (see figure 1.2). This is a result not only of the construction phase of the LNG Project, but a surge in MTDP infrastructure investment initiatives and the associated stimulus to private sector investment. Education and health are “other services” industries expected to generate a sharp increase in employment as a result of MTDP initiatives. The commerce industry will also generate strong job growth on the back of higher consumption and investment. Despite the focus of the MTDP on rural development, the gain in jobs for rural based industries is expected to be 60,000, which is less than the growth expected in urban based industries. This is because the emphasis is on the development of rural infrastructure which will take time to build and for which the economic benefits to the rural population will not be felt in full until future years. Much of the employment growth in urban based industries will be due to the development of rural infrastructure. Amongst the initiatives outlined in the MTDP, the areas that will deliver the most impact to jobs and economic growth in the MTDP period will be in land, law and order, higher education, transport and electricity infrastructure. The economic impacts of initiatives in each of these areas are outlined in table 1.1. For example, the economic benefits associated with implementing the MTDP initiatives for higher education will result in an additional K464 million in GDP in 2015, K144 million additional tax revenue, and nearly 30,000 more jobs (table 1.1). Table 1.1 – The economic gains in 2015 from the implementation of selected M TDP initiatives Gain in GDP Gain in tax revenue Number of jobs created K million K million Land 864 460 22,446 Law and order 1002 834 41,947 Higher education 464 144 29,847 Road transport 2362 702 52,396 Water transport 857 266 17,726 Air transport 500 137 10,081 Electricity 572 165 17,522 5 Part 2 Conducive environment required for implementing the MTDP 2011-2015 The first MTDP 2011-2015 is designed to ensure necessary conditions are met, enhancing institutional capacity and key enablers in order for the economy to utilise the gains to advance into high productivity mode. The success of this MTDP will be underpinned by a stable political environment and a productive and proactive public service machinery. The implementation of key impact programs under the MTDP will require accommodative macroeconomic management, especially where both the fiscal and monetary policy regimes are responsive to the development needs of the country, and yet serve the fundamental role of maintaining macro stability. The development of the financial sector to encourage an entrepreneurial culture and a vibrant business and investment environment that competitively promotes private sector led growth is crucial under the MTDP. To lay the foundation for competition and growth, State owned enterprises will be required to play key roles in mobilising resources and investing in the key enablers such as transport infrastructure, utilities and human resources. This also applies for the development of Economic Corridors discussed in Part 6. A pragmatic trade policy regime will have to be pursued under the MTDP to ensure that the Government’s intention for international trade diplomacy is effectively pursued and PNG gains from such arrangements. 2.1 Current p olicies and potential risks The Government will implement the MTDP starting from the existing policy environment. Important policy initiatives of the Government that are already in place will be reinvigorated to accommodate the development agenda of PNG. The policy environment that the MTDP will operate is expected to be responsive, accommodative and pro-growth. Existing policies will be reinforced, while necessary policy initiatives will be introduced to accommodate the pursuit of the PNGDSP for achieving the Vision 2050. The macroeconomic policies of the Government include promoting sustainable growth led by private sector investment in the non-mining sector. This has already proven to be fruitful. Since 2005, non-mining GDP growth has exceeded mining GDP growth, signifying a considerable policy achievement where growth has been broad-based. With the LNG Gas Project coming on stream in 2014 the Government is well aware of some of the adverse impacts of large inflows of foreign currency earnings and will now use the MTDP 2011-2015 to address the constraints in the productive capacity of the economy. The existing macroeconomic policies will provide the umbrella for the MTDP to operate. The economy has enjoyed considerable stability in the Government’s fiscal performance because the Government has adhered to the principles in the Fiscal Responsibility Act and has been guided by both the Medium Term Fiscal Strategy and the Medium Term Debt Strategy. The Government will continue to adhere to the guidelines under these important policy documents and where necessary will review certain aspects to accommodate the agenda under the MTDP. The monetary policy conduct of the Government has also been guided by the objective of attaining price stability and promoting a vibrant domestic financial system, including the payment and settlement systems. The economy has been successful in realising price stability and even safeguarding itself from the adversity of the 2008 global financial meltdown. The challenges in the conduct of monetary policy will be ever increasing as the economy grows under the PNGDSP. It is anticipated that monetary policy will broaden its objective to accommodate the Government development agenda and not just stabilisation. The trade policy initiatives of the Government will be pursued in the MTDP with greater emphasis on trade and investment promotion. The Government will pursue trade liberalisation and export promotion with more vigour and determination under the MTDP. It will continue to pursue its trade and investment strategies through accommodative sectoral policies, especially by making land available in the Economic Corridor areas for special free-trade and industrial zones within those areas and ensuring well connected transport and utilities services throughout PNG. 6 In international trade and relations, PNG has a mutual relationship with all its partners and will continue to engage with them. The ‘Look-North’ policy will be pursued with emphasis on trade diplomacy in order for PNG to become involved in the production network of the East Asian economies. On the domestic front, key sectoral policies and initiatives will continue to be pursued with closer collaboration and coordination among the sectors. Mineral exploitation will follow the existing arrangements with the State taking a larger stake in future project development. Likewise, investment in forestry, agriculture and fisheries resources, and in downstream activities will comply with existing environment law and policy guidelines. The Government will continue to promote income earning opportunities by providing linkages to markets, encouraging provision of credit to small business activities, and encouraging the activities of the informal market to flourish. The Government is committed to pursuing its human development policies through existing health and education initiatives. PNG has taken the challenge to reverse the regressing conditions of human development and will pursue its sectoral policies and strategies to achieve this and meet the ambitious targets of the PNGDSP. By intervening in the ‘poverty hot-spots’ of PNG, mostly in rural areas, the Government will be able to achieve the tailored MDG goals for 2015. The momentum of the reforms pursued since 1995 will continue under the MTDP, where structural impediments to business and investment will be addressed to allow for competition in the economy. State- owned enterprises have been corporatised and in their areas of operation competition has been gradually introduced to the benefit of consumers. The introduction of competition in the telecommunication industry, for example, speaks for itself. The open-sky policy has brought competition, lower prices and increased services to both international and domestic destinations in the airline industry. The Government will continue to promote level playing fields by avoiding preferential treatment, including tax concessions and subsidies. The Government will safeguard investors by enforcing contract and property rights law. In all its endeavours, the objective will be to promote private sector led growth for the economy. Due to instances of market failure, however, competition is not always the panacea for delivering services and improving the living standards of Papua New Guineans. The Government’s role in modern PNG is well defined as it will continue to play its traditional role in delivering basic services to the people. The Government will rely on the Public Private Partnership (PPP) modality discussed in Part 6 and other arrangements to deliver the services to the people of PNG, while providing the necessary conditions and enforcing the rule of law for business and investment to come into play. To effectively deliver results to rural PNG the Government has initiated policies in the PNGDSP. Some of the policy initiatives that will give more weight to the MTDP implementation include: an Economic Corridor Development Policy, an Electricity Development Policy, a Land Use/Development Policy and a Rural and Urban Development Policy. The implementation of the PNGDSP through the MTDPs are subjected to various risks. Paramount on the list of possible risks is political instability or discontinuation of development focused policy initiatives under future political regimes. The political environment has been stable over the last 8 years, largely due to the Political Integrity Act. This was crucial for the reform process and was a core reason for the robust private sector led growth. Sustaining political stability will be necessary for realising Vision 2050. Law and order and social unrest or conflicts are also areas that pose risks, especially for deterring potential investors and inhibiting delivery of services to the rural populace. The LNG gas project is expected to lay the foundation for significant resources to flow into PNG which will be used to leap-frog development. From the construction phase through to production there will be a delicate balance of landowner interest and conflicts which the Government has the prerogative to manage. PNG relies heavily on the exports of its traditional commodities. This exposes PNG to significant risks of negative shocks in commodity markets and in the global economy more generally. Global economic and financial crises have the potential to destabilise the PNG economy because of its integration through trade and financial channels. However, there are also upside risks as commodity prices and the global economy may experience periods of unexpected growth. 2.2 Economic outlook for 2011 -15 Since 2005, PNG has experienced sustained and strong economic growth that has not been seen before. Growth averaged 5 per cent between 2005 and 2009 despite the global financial crisis. This growth can be traced to four key factors: 7 · the new era of political stability that has resulted in improved governance and increased private sector confidence; · a return to macroeconomic stability underpinned by exchange rate and interest rate stability; · improvements in infrastructure, especially telecommunications; and · increased Government development expenditure on public investments. The 2010 Budget forecasts anticipate this rate of average growth to continue in the period 2010-2014 (figure 2.1). These forecasts are based on an assumption of continued political and macroeconomic stability and take into consideration the considerable investments associated with establishing PNG’s first LNG project. Also taken into consideration is the anticipated winding down in production at the Ok Tedi mine by 2013. A surge in development expenditure for MTDP initiatives to improve infrastructure and services points to even higher growth than previously anticipated in the Budget 2010 forecasts. Figure 2.1 outlines the MTDP forecasts for economic growth using the PNGGEM model of the PNG economy taking the additional MTDP initiatives into consideration. Implementing the MTDP is expected to result in an average rate of growth of 8.7 per cent between 2011 and 2015. Growth is expected to average 7.6 percent through to 2014 before surging to nearly 14 per cent in 2015 as a result of production commencing in the LNG Project. 2.1 Growth in real GDP, 2010-2015, Budget 2010 and MTDP forecasts per cent growth 14 12 10 8 Growth (per cent) ■ Budget 2010 forecasts 6 ■ MTDP forecasts 4 2 0 2010 2011 2012 2013 2014 2015 Source: The MTDP forecasts are calculated using the Government’s model of the PNG economy, PNGGEM After navigating through difficult times since 2008, the global economy has begun to recover and is expected to return to normal growth levels during the MTDP period. Importantly, PNG’s main trading partners fared well during the global downturn, with Australia avoiding recession and China continuing on its path of very strong growth. Robust growth in China is particularly important for PNG as the revenues received for PNG’s mineral exports will increasingly become dependent on the dominant China market. Growth in China is expected to underpin robust prices for PNG’s key mineral commodities during 2011-2015. However, the current high level of gold prices is expected to recede until a small recovery after 2012 (table 2.1). Oil prices are expected to rise steadily to approach US$100 a barrel by 2015, and copper prices are expected to remain at current high levels. Strong prices in gold, copper and oil point to a healthy revenue base for the Government over 2011-2015. 8 Table 2.1– Forecast world prices for oil, gold a nd copper, 2010-2015 2010 2011 2012 2013 2014 2015 Oil US$ a barrel $72 $76 $84 $92 $100 $105 Gold US$ an ounce $1118 $1010 $873 $885 $933 $975 Copper US$ a tonne $6762 $7025 $7779 $7434 $7021 $6588 Source: Official forecasts of the Australian Government Table 2.2 provides detailed forecasts of a range of key macroeconomic variables for 2011-2015 with the implementation of the MTDP. Strong capital inflows associated with investment in the LNG Project and robust commodity prices are expected to underpin a strengthening of the exchange rate over most of the MTDP period. This is despite growth in import volumes exceeding growth in export volumes. Strong import growth is associated with a surge in investment driven by the LNG project as well as robust growth in consumption. Papua New Guinea’s national income is expected to expand at an unprecedented pace during 2011-2015, providing the basis for the strong growth in consumption. Table 2.2 – Forecast growth for key macroeconomic variables, 2 011-2015 2011 2012 2013 2014 2015 Real exchange rate (positive is appreciation) 6.7% 2.8% -2.9% 4.2% 2.4% Real GDP 11.0% 7.7% 2.9% 8.6% 13.7% Real non-mining GDP 11.2% 9.1% 7.3% 9.0% 8.4% Real Gross National Income 11.1% 10.5% 3.7% 9.0% 11.9% Real consumption 13.6% 8.9% 2.8% 7.8% 6.6% Real investment 28.6% 12.7% 6.8% 12.0% 6.5% Export volumes 7.6% 5.6% -5.8% 7.4% 23.1% Import volumes 14.5% 11.5% 1.5% 10.8% 12.5% Source: Forecasts are calculated using the Government’s model of the PNG economy, PNGGEM 2.3 Political stability As discussed in the previous section, the sustained, rapid growth experienced by PNG since 2005 can in part be attributed to the nation’s newfound political stability. Prior to the adoption of the Organic Law on the Integrity of Political Parties and Candidates (OLIPPAC) PNG’s political, social and economic conditions were in a poor state. A key problem was political instability resulting from frequent changes of Government through votes of no confidence. Frequent restructuring and policy reversals, ad-hoc decision making processes, unclear policy settings and weak development strategies all contributed to a breakdown in the delivery of vital services such as health, education and infrastructure. In 2001 the Mekere Government introduced OLIPACC to stabilise PNG politics by enhancing the role of political parties in Parliament and at the same time providing a stable political climate. What ensued was almost ten years of political stability under the National Alliance-led Government until the ruling in July 2010 by the PNG Supreme Court which nullified specific provisions of OLIPACC. In the years following the inception of OLIPPAC, investor confidence soared and PNG experienced its longest period of sustained high economic growth since independence. Although the exact impact of OLIPPAC is subject to debate, there is no doubt it provided PNG with the foundations conducive for long term economic growth and prosperity. In the same way, political stability has been essential for the periods of sustained rapid growth achieved by many of PNG’s neighbouring countries in Asia including, Indonesia, Malaysia, Singapore, Korea and China. Interruptions to political stability on the other hand undermine investor confidence and economic growth. 9 It is now a matter for Parliament to review the provisions of OLIPPAC that have been ruled to be unconstitutional, and redraft this very important law. The big challenge is to introduce constitutionally valid legislative settings that will give effect to political stability and set the conditions for positive economic growth aided by clear strategic development policy thinking and settings. 2.4 Fiscal situation The outlook for Government revenue Government revenues are expected to experience robust growth over the years 2011-2015 (figure 2.2). This is in line with the rapid economic growth discussed in section 2.2 and is supported by the expectation that healthy commodity prices will continue as outlined in table 2.1. A surge in revenue in 2015 is associated with production commencing in the LNG Project. Mining and petroleum revenues will continue to be dominant, particularly from 2015 as a result of the LNG Project. However, much of the growth in revenues is expected to be sourced from the broader economy. GST, personal income tax and non-mining corporate tax collections are all expected to rise rapidly during 2011-2015. 2.2 Total revenues, 2010-2015 Million Kina 14,000 12,000 13741 10,000 11418 9943 8,000 8901 K million 7858 6,000 6723 4,000 2,000 0 2010 2011 2012 2013 2014 2015 Source: Forecasts are calculated using the Government’s model of the PNG economy, PNGGEM The existing fiscal regime Since the early and mid 2000s, the fiscal situation in PNG has undergone substantial change. In 2010, the circumstances are very different to what they were when the Medium Term Debt Management Strategy, the Medium Term Fiscal Framework and the Fiscal Responsibility Act (2006) were formulated. PNG is now beginning to outgrow the current system of fiscal management and some adaptations will be needed for implementing the MTDP, as discussed in section 2.1. On the global stage, PNG is in the enviable position where public debt has fallen sharply since the early 2000s to reach 32 per cent of GDP in 2009 (figure 2.3) and is expected to drop further to 29 per cent of GDP in 2010 and then to just 19 per cent by 2014. This positions PNG as a country with very low public debt on the international stage and contrasts sharply with the high public debt levels of many advanced countries – in many cases exceeding 100 per cent of GDP. As outlined in the PNGDSP 2010-2030, PNG is now reaching a position where it may be counterproductive to make any further significant reductions in debt. Borrowing money to finance nation building activities can accelerate economic growth, and when the finance is provided by international institutions such as the World Bank or Asian Development Bank, it is available at very low interest rates. Further discussion on this is provided in part 7 in the context of funding the MTDP. 10 2.3 Public debt, 2000-2009 and Budget 2010 forecasts for 2010-2014 Public debt as a share of GDP 80 70 60 50 Share of GDP (%) 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: 2010 Budget Papers. The Fiscal Responsibility Act has been particularly effective in delivering a stable and prudent Budget bottom line. Since 2005, there have only been two years when the Budget has fallen into deficit. The global financial crisis led to an unexpected slump in revenues late in 2008, resulting in a modest Budget deficit of 2.2 per cent of GDP. A further deficit of 0.2 per cent of GDP in 2009 was a very good outcome, considering the global recession and the difficulty experienced by governments around the globe in reigning in deficits. However, the stability in the Budget bottom line is masking an alarming volatility in government revenues (figure 2.4). In order to maintain a stable Budget bottom line, it has been necessary to match the volatile revenues with equally volatile expenditures. This has significant consequences for macroeconomic stability, including stability in the balance of payments. Government revenues rose from 25 per cent of GDP in 2005 to 33 per cent in 2007 before falling back to 26 per cent in 2009 (figure 2.4). This is because government revenues have increasingly become dependent on taxes and dividends from mining and petroleum. In turn, these revenues depend on global prices for the commodities produced, and the volatile and unpredictable nature of the international commodity markets is reflected in fluctuating government revenues. Of concern is that the volatility in revenues has been largely unpredictable. 2.4 Government revenue, excluding grants, 2002-2009 Revenue as a share of GDP 34 32 30 28 Share of GDP (%) 26 24 22 20 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Budget Papers for 2002-2010 and PNGGEM modelling for 2011-2015 The result has been that forecast government revenues can differ sharply from actual revenue outcomes. For example, in 2007 the forecast in the budget was for revenue to reach K4.5 billion but actual revenues in 2007 were in fact K6.3 billion. Since 2004, government revenues have exceeded the amounts forecast in the annual Budgets by K4.8 billion in aggregate – equivalent to 22 per cent of 2009 GDP. This is a considerable discrepancy that has had to be dealt with through supplementary budgets and allocations to trust accounts. This makes expenditure planning very difficult. When the LNG project comes on stream this situation is expected to worsen as a result of the direct link of the revenue stream to global prices for oil. 11 During the years 2011-2015, Government revenue is expected to steadily increase to 32 per cent of GDP. However, this remains subject to uncertainty as long as world commodity prices are unpredictable. In section 7.4 of Part 7 alternative revenue projections are provided to account for alternative commodity price scenarios. Moving forward to a new fiscal regime A plan for moving the fiscal regime forward to accommodate the new circumstances and to fund the MTDP is described in Part 7. This includes a discussion on the adaptations needed in the legislation that governs fiscal responsibility. A way forward for dealing with the uncertainty of Government revenues is outlined in section 7.4 of Part 7. The key elements are: · to identify areas of expenditure that are made flexible so that expenditure in these areas is increased if revenues are higher than anticipated and reduced if revenues are lower than anticipated; and · to allow flexibility in borrowing for MTDP initiatives so that borrowing is reduced when revenues exceed forecasts and increased in the event of low revenues. 2.5 Monetary situation Price stability and low interest rates Achieving and maintaining an economic environment of stable prices and lower interest rates is critical in order to implement the key sectoral strategies outlined in the first MTDP period and onwards. This is because stability in prices will support further investment expansion in key infrastructure that PNG urgently needs in order to lay the foundation for future growth in other sectors of the economy. Stable prices will also help maintain the real value of the kina, providing certainty for Papua New Guinean wage earners. As outlined in section 2.2, low and stable interest rates have been central to the recent period of healthy economic growth. It will be important to maintain this in order to underpin investor confidence. High or volatile interest rates would deter businesses from borrowing and investing in PNG and would increase the cost of living for most citizens. PNG’s policy approach thus should put an emphasis on addressing the causes of inflationary pressures rather than relying solely on monetary policy to treat rising inflation with high interest rates. Monetary policy PNG’s inflation rate was high and volatile from the 1990s until 2002 as demonstrated in figure 2.5. However, this changed with the introduction of the Central Banking Act 2000 which removed political interference and granted full independence to the Bank of PNG in conducting monetary policy. This has continued to make the Bank of PNG successful in managing the exchange rate with an emphasis on stability and preventing the sharp fluctuations that prevailed before 2002. As a result, inflation since 2003 has been low and stable, apart from 2008 when global fuel prices surged – a factor outside the control of PNG. Similarly, interest rates have become stable. It is important to maintain the independence of the Bank of PNG, as consistency in monetary policy gives businesses the confidence to invest. 12 2.5 Annual per cent inflation rate, 1990-2009 20 18 16 14 12 Per cent 10 8 6 4 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 As experienced in the late 1990s, movements in the Kina are a major influence on inflation. When the Kina depreciates, imports become more expensive in Kina terms, fuelling inflation. This explains the high degree of correlation between the exchange rate and PNG’s inflation rate. The Bank of PNG has moderated short term fluctuations in the exchange rate, and in that way has helped to cushion PNG from short term inflationary impacts. However this policy would be more effective if the exchange rate was stable against a trade weighted mix of currencies, rather than the existing emphasis on stability against the US dollar. Alleviating inflationary pressures Monetary policy can be effective as a short term response to inflationary pressures, but there are limits to how much monetary policy can control inflation when it is caused by factors outside of PNG’s control – for example rises in global oil prices. Over the medium to longer term, other policy measures rather than monetary policy are required. In particular, policy measures are needed that boost productivity, lower costs of production, and address supply constraints that lead to inflationary pressures. Supply constraints are among the key causes of inflation in PNG due to the lack of productive capacity to respond to rising demand. In particular, land is not available for productive development, resulting in high and rising costs for real estate. Further, there is a severe shortage of skills in PNG that imposes a high cost on the economy from having to import labour. Addressing these two supply constraints would bring important benefits in lowering inflation and are among the key policy initiatives of the MTDP 2011-15. Maintaining an open and competitive economy is another key element of the MTDP 2011-15 that will be important in keeping prices down. This is because the threat of competition provides a strong incentive for businesses to be innovative in order to ensure their prices and products are attractive to customers. 2.6 Financial sector develop ment The development of the financial and banking sector is an essential element of the growth and prosperity espoused under the PNGDSP 2010-2030 to achieve the objectives of Vision 2050. This MTDP is to be implemented under an environment where the financial sector is responsive to the transaction and investment demands of both the private sector and the people at all levels of society. The payment and settlement systems should operate with a level of efficiency that is comparable to international standards. Transaction costs and other unnecessary overheads or hidden costs to the sector and the economy should be minimised. The Bank of PNG (BPNG) has supervisory and regulatory responsibility of the financial and banking sector and oversees the payments and settlements system in PNG. As part of developing the sector, the BPNG is to ensure that innovation and competition are encouraged, including diversification of financial products that not only give more opportunities to business and investment but open up access for the rural communities to integrate their informal systems to the financial and real sectors. 13 In the MTDP period the BPNG is expected to consolidate its policy initiatives and reforms while at the same time lay the foundation for the sector to attain the depth, buoyancy, and elasticity that is comparable to global best standards. The medium term strategies for consolidation · Stable interest rates underpinned by the pursuit of an optimal inflationary target. · Expansion of credit to the private sector, especially for productive investment in the construction, extractive, agriculture, and downstream manufacturing industries. · Further development of financial products that meet the demands of small enterprises and newcomers that have difficulty securing investment funds from commercial banks due to their higher risk premium. · Encouragement of innovation and initiatives from the banking sector to improve efficiency in services by cutting down on transaction and overhead costs and other hidden costs, such as waiting-costs, that add inefficiency to the economy as a whole. · Continued encouragement of the outreach of financial services to the grassroots level through microfinance and other credible facilities. The medium term initiatives for long term growth · The depth of services remains thin in the formal sector by international comparison. As the economy grows and expands, complexity and diversification of products should be tailored to meet specific demands. · Financial services to rural areas are still underdeveloped and the majority of the population is cut off from the formal market system. Product diversification is to be encouraged to meet the demands of informal business activities and, for more rural outreach, aimed at integrating the non-monetary sector to the formal sector. · A review of the financial sector is to be immediately undertaken with the objective to develop strong capital markets with sufficient liquidity that will meet domestic credit demand as well as attracting foreign investors. 2.7 Business and investment The PNGDSP goal for business and investment is for PNG to offer an attractive environment that encourages business in PNG. The Government will ensure rules on governance, institutions, and legislation are enforced. The law and order problem must be kept at bay while investment in public infrastructure and utilities is undertaken to accommodate the growth of economic activities. The Government, in partnership with development partners and state-owned enterprises, will invest broadly in the key enablers to pave the way for business activities and investment to take place in the 10 Economic Corridors outlined in the PNGDSP and discussed later in Part 6. The Government will continue to supervise the free market to ensure it functions efficiently with clear rules and regulations, while at the same time intervening in areas where markets fail to work effectively to maximise the welfare of Papua New Guineans. Competition promotion – discussed in the next section – is a crucial ingredient to the effective operation of markets. Medium Term strategies to promote business and investment activities · Ensuring administrative and institutional systems and processes that facilitate business and investment attain levels of efficiency compatible with international standards. This MTDP will focus on promoting: o a sound legal system; o well-defined and protected property rights; o a transparent and mature property market; o a reliable and competitive financial system; and o low transaction costs in setting up and running businesses. · Investment in transport infrastructure and connectivity. · Investment in utilities, energy, telecommunication, and information and communications technology (ICT), through PPP. · Investment in human resource to build a local skilled workforce. · Promotion of domestically owned businesses to invest abroad. 14 2.8 Competition and consumer protection Recent successes PNG has achieved success in competition policy in recent years, showing the way forward for other developing nations. The introduction of competition into the mobile phone sector, for example, has resulted in the proliferation of mobile phone services throughout the country. Similarly, competition in the international and domestic air sectors has resulted in lower fares, and more innovative service, helping to connect the nation. Similar success is envisaged under the MTDP 2011-2015 across a broader range of industries. The way forward Fair competition and consumer protection policy are key elements of the MTDP 2011-2015. Fair competition and consumer protection will provide the right environment for businesses to flourish to the benefit of all Papua New Guineans. Businesses will focus on serving their customers well and on investing for growth instead of on keeping competitors out of their industry or on attempting to influence Government administration in their favour. In this regulatory environment, PNG’s economic growth will be enhanced and will lead to higher living standards for all Papua New Guineans. The Independent Consumer & Competition Commission (ICCC) plays an essential role in enforcing competition, fair trade and consumer protection regulations. The ICCC will be well resourced under the MTDP to fulfill this role effectively, particularly in the key service sectors of information and communication technology (ICT), transport, electricity and construction and in the key goods sectors of processed foods and construction materials. The introduction of mobile phone competition has delivered substantial efficiency and lifestyle dividends across the country. Under phase 2 of the Government’s ICT policy, competition will be extended to the provision of internet services and to the international gateway, helping to substantially lower ICT costs in PNG and allowing service providers to extend services across PNG. Where the provision of internet and phone services is not commercially viable, public private partnership will be considered to enable all Papua New Guineans to have the opportunity to share in the gains from ICT. Tenders for private participation in PPP will be competitive in order to obtain the most beneficial partnership outcome for PNG. As outlined in section 2.9, competition has a role in key sectors that are overseen by State owned enterprises, including air transport, electricity supply and water and sewerage services. State owned enterprises will use a competitive tender process to identify the most cost effective options for the Government to provide essential infrastructure and essential services. Through this competitive process, private parties will be contracted to help State owned enterprises meet the MTDP targets for their sectors. PNG’s future living standards depend on the construction undertaken through the MTDP 2011-2015. The construction sector will be relied upon to build the roads, airports, water ports, ICT networks and electricity infrastructure identified as critical in the MTDP. However, there is a serious shortage of skills within PNG that will prevent the domestic sector from delivering the level of service that PNG needs. Given the extent of infrastructure development required under the MTDP 2011-2015, there is also likely to be a shortage in equipment and finance in the domestic sector. PNG will therefore need foreign construction businesses to operate in PNG. The Government will actively pursue foreign participation by advertising all construction tenders overseas. Tenders will provide clear guidelines about the taxation and legal treatment of businesses. Conditions on tenders will be designed both to encourage foreign participation and to encourage investment in the development of local skills, for example through joint venture arrangements. Furthermore, because of the importance of construction for PNG’s future, it is critical that construction materials are readily available at a reasonable price. Therefore the ICCC will be tasked to ensure the supply of construction materials is competitive. The ICCC will also be tasked to focus on the processing food sector to ensure the business environment allows new entrants into every part of this important sector. The development of this sector will pave the way for value adding to PNG’s agricultural sector. Raising awareness is a key strategy of the PNGDSP for improving consumer protection and fair trade practices. For this reason, the ICCC will be mandated and resourced to raise awareness of rights and responsibilities among businesses and among consumers. The ICCC has, to date, played the additional role of reviewing and recommending competition policy reform. This responsibility was conferred on the ICCC because of both its expertise and its independence from industry. The ICCC has performed remarkably well, contributing key reports such as the PNG Housing and Real Estate Industry Review of 2010. However, it is good practice in policy formulation for this role to be 15 undertaken independently of both industry and of the ICCC. The ICCC’s role in prosecuting anti-competitive behaviour often puts ICCC in legal conflict with business, and this could in the future lead the ICCC to recommend policies or regulations that unfairly undermine the rights of business. To avoid this situation, under the MTDP the responsibility for reviewing and recommending competition policy reform will be vested in a body that is independent of both industry and of the ICCC. To this end, a Competition for Development Branch will be established in the Department of National Planning and Monitoring to advise on how to achieve the ultimate goal of the PNGDSP through competition and consumer protection policy. 2.9 State owned enterp rise reform State owned enterprise policy framework The PNGDSP outlines the broad policy framework to position State owned enterprises (SOEs) as crucial institutions for PNG’s development into a middle income country by 2030. The key ingredients are as follows. · Public enterprises will play a pivotal role in service delivery and infrastructure development, although privatisation may be further considered as a means for improving efficiency and effectiveness. · Private sector competition will impose an ongoing obligation for SOEs to operate efficiently using cutting edge industry technology. This is because the performance of SOEs can be measured against their private sector competitors. The substantial benefits of this approach have already been proven with private sector competition leading to the revolution of the telecommunications industry. As a result, the efficiency and effectiveness of Telikom have improved substantially. · Through partnership with the private sector, SOEs can gain access to the skills, technology and finance that is needed to improve performance and expand infrastructure. · In areas where service delivery is not commercial, the Government will subsidise investments by funding SOEs to fulfil Community Service Obligations. State owned enterprises in 2011-2015 Since 2002, the main SOEs have been placed under the control of the Independent Public Business Corporation. This institutional arrangement will continue as it has been effective for better organising SOEs, improving their accountability and governance, and raising their standard of performance. Air Niugini has faced much tougher competition on international air routes since 2008, resulting in significantly lower airfares. But in the face of competition, Air Niugini has become stronger, recording a healthy profit in 2009 in a year when most international airlines suffered heavy losses, while still managing to lower airfares and improve service. As outlined in section 2.8, the success of competition will be continued by welcoming new carriers on international routes, while encouraging Air Niugini to expand its reach in the Asia- Pacific region. Barriers to domestic competition will also be broken down to ensure that Papua New Guineans receive a highly competitive and low cost service. The PNGDSP outlines a broad plan for a national grid with an electricity transmission super-corridor. The investments required in 2011-2015 and beyond for electricity generation, transmission and distribution infrastructure will require financial resources beyond the capacity of PNG Power Ltd. Partnership with the private sector will be needed for PNG Power to have the desired financial capacity. In areas where building transmission and distribution lines are less commercial, partnership with donors may be needed. Alternatively, dividends may be reinvested for this purpose. The scope for competition in electricity generation is high, so private sector investment under competitive conditions will be relied upon to build generation capacity. For PNG Power, the bulk of its financial capacity for investment should be directed towards building the grid where competition is less feasible. The rapid improvement in the performance of Telikom since the introduction of competition will need to continue. Over the period 2011-2015, Telikom will be required to focus on the process of building and extending a reliable and technologically advanced internet service. This will need to track closely the extension of electricity services into rural areas. Through B-Mobile – the 50 per cent Telikom owned mobile phone company established in 2008 – Telikom will need to pay attention to ensuring that those rural areas that are yet to receive mobile phone services get connected. This may require reinvesting dividends in cases where building the infrastructure is not commercial. PNG Ports Corporation Ltd operates 16 of the 21 major ports in PNG. Implementation of the PNGDSP will result in rapid growth in the demand for port services driven by rapid and broad based economic growth. It is estimated in the PNGDSP that throughput will nearly double by 2015 and increase five-fold by 2030. As such, 16 PNG Ports Corporation Ltd has a responsibility to build the capacity to meet the demand. The extent of the investments required will mean that partnering with the private sector will be essential. The National Development Bank was established in 2007 to provide financial services to small and micro businesses, with a particular focus on rural areas. This is a valuable institution as making finance available to small and micro businesses will be the cornerstone of broad-based growth that benefits the whole community. Over the period 2011-2015 there will be a continued focus on building the strength of this institution both by securing more resources to make available for lending, and by facilitating private sector competition to ensure the efficiency and effectiveness of the National Development Bank. The MTDP 2011-15 will be a period in which the substantial upgrading of water and sewerage services envisaged by the PNGDSP will get underway. Eda Ranu Ltd is responsible for water and sewerage services in Port Moresby and should be able to extend services across the Port Moresby population on commercial grounds. Partnering with communities may be needed to extend services into settlements. The provision of water and sewerage services to the rest of PNG is the responsibility of the PNG Waterboard. Much of the investments required for extending water and sewerage services will not be commercial which will require the PNG Waterboard to engage with communities, the private sector and development partners. Competition is generally not feasible in the provision of water and sewerage services. The efficiency and effectiveness of Eda Ranu and the PNG Waterboard will therefore need to be measured against key indicators – in particular, the standard of service delivery and the extent of infrastructure investment to extend services. 2.10 Trade In the PNGDSP the goal for trade is for PNG to realise the benefits of trade by effectively engaging with the rest of the world through international and regional trade negotiations. Trade provides PNG with market opportunities to have its products exported to earn foreign exchange and to import essential goods and services, including the transfer of technology and skills. The world has recently become more integrated with considerable reductions in trade barriers and the new and emerging markets in East Asia and other regions have provided PNG with many opportunities for trade. Strategies under MTDP The Government will continue to concentrate on trade facilitation and bilateral negotiations to promote private sector led integration with the global economy. The priority areas to be pursued in 2011-2015 are summarised in the following. a. Initiatives for immediate action · Development of transport infrastructure and utilities to facilitate trade and give cost advantages to domestic exporting industries. · Opening up of access to export markets by: o developing domestic marketing and technological capabilities to improve productivity; o implementing programs and initiatives to minimise the burden on export oriented businesses; and o providing a low cost, low risk environment to run a business to enable export oriented businesses to be highly competitive. · Promoting export led growth in all industrial sectors through careful planning and sequencing. · Promoting targeted investment through the economic corridors, and establishing at least 3 free trade and export processing zones within the corridors. · Establishing international standards in the handling and marketing of agricultural produce in order to gain access to foreign markets. · Establishing a Trade Development Board that will effectively and strictly coordinate and pursue trade, with particular focus on the promotion of exports. · Encouraging the integration of small and medium enterprises in foreign markets by promoting their off-shore investments and partnerships. 17 b. Promoting strategic policies · Pursue trade diplomacies where PNG’s foreign policy will be focused on supporting PNG’s trade and development in the following areas: o addressing both trade barriers and technical barriers to trade through systematic reforms and trade dialogue; o proactively engaging in global integration through regional trade agreements and regional production networks, including taking a leadership role amongst Pacific island countries in global and regional trade negotiations. · Promote outward-oriented trade policies by moving away from liberalisation of imports to facilitation of exports. · Pursue accommodative trade policies that are aimed at supporting trade and growth by strengthening institutions, improving governance and ensuring macroeconomic stability 18 Part 3 Key sectors Unlocking land for development, normalising law and order issues, investing in primary, secondary, higher and technical education, health, utilities and a quality transport infrastructure are all crucial enablers that will lay the foundations for PNG’s prosperity. As such, they have been grouped together in Part 3. While the benefits of primary and secondary education will not manifest until about 10 years later, a highly productive workforce will be essential by then to ensure progress is made in achieving the higher order objectives set out in the PNGDSP. Higher and technical education is a key priority to equip the workforce with the skills needed to implement the PNGDSP and build the nation. 3.1 Land development Goal: Provide a secu re, well administered land market that serves the needs of landowners and contributes to the nation’s strategic developmen t Introduction Crucial for development is the availability of productive land which is a key input to socio-economic activities. The growth and progress of PNG relies on making more land available for productive use. PNG has unique and diverse arrangements in the ownership of land, which complicates the process of making the land readily available for productive use within the formal market. About 97 per cent of land in PNG is customarily/communally owned by tribes and clans, and only 3 per cent is alienated land owned by the State. Unlocking land for productive use is a key challenge for PNG, and the Government is approaching the process with care to ensure landowners have the freedom to make land available in the formal market and benefit from it, while retaining ownership of the land. Among the key challenges are the identification of landowners and the attachment of records against their clan membership through to the surveying and servicing of the land. Skilled personnel such as physical planners, surveyors and engineers are all essential for land development, but are in short supply. MTDP 2011-2015 Informed by the PNGDSP’s land development goal, the MTDP initiatives on land are built around four pillars to be implemented by the Government’s National Land Development Program (NLDP) through the NLDP 1 Implementation Plan 2011-2015. These are: (1) land administration and support; (2) customary land development; (3) dispute resolution; and (4) developing land markets. Land administration initiatives will include decentralising land administration to the provincial and local levels. The MTDP will ensure resources are mobilised to making land available for development. Additional strategies and initiatives of the MTDP that go beyond the NLDP 1 Implementation Plan 2011-2015 will address the supply side. This includes producing a sufficient number of land experts to all the provinces to help with the processes involved in the provincial and corridor land development, including assisting landowners in surveys and land use planning. The key areas of land development in the MTDP are summarised as follows. · Land administration and support – Strategic components include establishing provincial land offices in the four priority economic corridors, strengthening lands record maintenance and storage, strengthening the land services function of the Department of Lands and Physical Planning (DLPP), reviewing the land administration legislation, and development of a National Land Information System. · Customary land development and ILGs – One of the key objectives is to unlock customary land for development and to ensure that the arrangements under which this is undertaken is satisfactory to all stakeholders, especially the indigenous landowners. The Incorporated Land Groups (ILGs) mechanism formalises a group of landowners to engage in leasing their land for development. The economic corridors will be implemented on customary land; therefore, the Economic Corridor Implementation Authorities (ECIA) must have the capacity to deal with land issues. The current pilot projects on customary land development in will continue and will be useful for providing lessons on customary land issues to the economic corridors. A special land development advisory service will be established. 19 The Land Group Incorporation (Amendment) Act and the Land Registration (Customary) (Amendment) Act will be fully implemented within the medium term. · Alienated land developmen t – Weak administration and land use planning is preventing the effective development of alienated land. The work on improving land administration will therefore be crucial in the development of alienated land, including developing market based mechanisms for releasing land to developers. · Dispute resolution – The work on dispute resolution will be pursued in alignment and coordination with work on land administration and customary land development. · Institutional development and capacity building – Institutional development and capacity building will be undertaken to strengthen partner agency operational and management capacity. This component will include land related training and education. The NLDP Office will be operational and will coordinate the various aspects of the land program in the first five years. · Land use planning – The Government will develop a Land Use Planning Scheme to guide the best use of land. This will ensure that the natural environment supporting the diverse culture is protected, that a particular economic activity is suitable for the designated parcel of land, and that there is sustainable economic development. · Housing and land – The housing shortage has a strong correlation with the land shortage. Therefore the Government will need to address land supply as the first step in addressing housing. · Supply of skilled land planners and surveyors – Increasing the supply of the required numbers of key skilled personnel in land management will require expansion of both physical infrastructure and spaces in the tertiary education system in PNG. Challenges in implementation The MTDP will emphasise effective implementation of the NLDP to deliver on the key result areas. There are many challenges and obstacles facing the implementation of land reform. They include building the support of NGOs, securing adequate funding for the program, and obtaining active participation and commitment by implementing agencies. Another important risk is that foreign influences could begin to undermine the current PNG driven land reform initiatives. The current NLDP is driven by the PNG government and must continue to be driven by PNG in order to manage well the cultural sensitivities and obtain outcomes appropriate and effective for PNG. 20 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Provide a secure, Land available in the formal market DLPP 3% 7% 11% 15% 20% well administered land market that Land administration and decentralisation serves the needs of landowners and Installation of computerised land titling DLPP 40% 95% 99% 100% 100% contributes to the and land use recording systems and nation’s strategic maintenance of systems development Provincial land offices providing DLPP, DPLGA 0 5 12 20 20 mandated services New land parcels available for DLPP, DPLGA Audit 1,000 additional 5,000 additional 10,000 additional 20,000 additional development on alienated land Provincial parcels from base parcels from base parcels from base parcels from base Governments, NCDC Customary land and dispute resolution Customary land available for DLPP approx. 1,000 ha 1,800 ha 3,300 ha 5,500 ha 9,100 ha development (hectares) Number of ILGs registered in DLPP 0 7,000 15,000 20,000 25,000 accordance with legislation Backlog of unresolved land related MS Audit 13,000 7,000 2,000 1,000 disputes (more than 6 months) DPLGA 15,000 Urbanisation and physical planning Number of approved urban plans on OoU, NCDC, DPLGA 0 10 30 50 70 alienated and customary land Provincial Governments Lead government Department of Lands and Physical Planning (DLPP), Office of Urbanisation (OoU), Magisterial Services (MS), National Capital Development Commission (NCDC), department Office of Civil Registry (OCR), Department of Provincial and Local Government Affairs (DPLGA), National Research Institute (NRI) No. Sector Strategy

1 Land administration and decentralisation

2 Incorporated Land Groups and dispute resolution

3 Customary land and alienated land development

4 Expedite economic corridors 21 PNGDSP 2030 deliverables No. 2011-15 2016-2020 2021-2025 2026-2030 Risks and assumptions Land administration and decentralisation Accurate and updated land records that meet user 1.1 95% of data accurately 99% of data 100 % of data 100 % of data requirements updated accurately updated accurately updated accurately updated Land services meeting the needs of clients 1.2 - DLPP effectively and Land services transparently performing installed and its core functions operational - Pilot Provincial Land Offices established Decentralise core land administration and management 1.3 Pilot Provincial Land Establishment of All Provinces have functions Offices established Land Offices in more land offices provinces Incorporated Land Groups and dispute resolution Successfully resolved disputes through mediation / land 2.1 - Backlog of disputes are courts settled - Mediators are trained and resourced Customary land and alienated land development Develop alienated land 3.1 Audit of alienated land is completed More customary land available for development 3.2 Customary owners are aware of their land rights and land 3.3 development opportunities Economic Corridors Expedite Economic Corridor development through the 4.1 support of land administration and land management services Responsibility DLPP, OoU, MS, NCDC, OCR, DPLGA, NRI Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding option(s) Total 34 I 37.1 I 27.8 I 19.7 I 18.2 I 136.8 I GoPNG/Donor 22 3.2 Law, Order and Justice Goal: - -- Provide a safe, secure, and stable environment for all citizens, visitors, communities, and businesses to conduct their affairs freely. Introduction The issues of law, order and justice have a significant impact on the social and economic development of PNG. Order and justice are both basic human rights and fundamental preconditions for a well functioning market economy. Law and justice have therefore been identified as a Government priority under the PNG Development Strategic Plan 2010-2030. The rule of law is necessary to maintain the incentive to save, invest and accumulate the necessary assets that underpin higher living standards. The ease of doing business in PNG depends critically on the maintenance of law, order and justice. Organised crime, fraud and illegal trafficking of guns and drugs are all rising threats, raising the cost of doing business in PNG and ultimately deterring investment. Even for semi-subsistence village communities, the rule of law is essential for encouraging participation in the market economy. If cash incomes and assets (such as coffee trees) are under constant threat of destruction or theft, smallholders are likely to withdraw from the cash economy and revert back to conservative, but low risk subsistence livelihoods. The quality of life in both rural and urban communities also is compromised by crime and violence. Women in particular face the greatest risk of violent assault. More broadly, individual communities and the nation as a whole bear the cost of the destruction of public assets, including lack of access to essential services. Local disputes that result in the destruction of community assets such as aid posts and schools directly deprive the disputing communities from health and education services, undermining opportunities to improve their living standards. MTDP 2011-2015 A sector wide approach is required to address the law and justice issues confronting PNG. For example, by removing the large backlog of cases in the National and Supreme Courts, the large population of detainees awaiting trial will be reduced, relieving the pressure on Correctional Services. To this end, under the MTDP 2011-2015, at least two resident judges will be located in each region to attend to cases in a timely manner. Moreover, the growth in cases reaching the higher courts will be slowed by focusing on early resolution of disputes, beginning at the community level through raising the skills of police and village court officials, and by improving the payments system of village court officials. Furthermore, to ensure a higher number of offenders re-enter society fully rehabilitated, reintegration of offenders back into the communities will be facilitated through partnerships with community based organisations (CBOs), faith based organisations (FBOs) and civil society organisations (CSOs). A cost effective and sector wide approach to investment and operations will characterise the first MTDP. Early emphasis will be given to rehabilitating much of the sector’s infrastructure that has been poorly maintained. Central agencies then need to coordinate their resource allocation to ensure infrastructure remains in good condition. To economise on the costs of new construction and of maintenance, new infrastructure of different law and justice agencies will be co-located wherever this lowers the overall cost or improves the effectiveness of service delivery. For example, rural police stations, district court facilities and housing for police and court personnel will often be co-located to economise on the cost of negotiating for land and to simplify maintenance work. Similarly, joint capacity will be built within strategic government agencies to fight corruption at the highest level and to ensure a high rate of disposition of fraud and corruption cases in the courts. Building on MTDP 2011-2015 From 2015 on, the focus will turn from rehabilitation of infrastructure and removing the backlog of cases, to greatly expanding access to law and justice services across the nation. This will require careful coordination to take advantage of economies of scale and scope, to target areas of need and to ensure sufficient growth in manpower and equipment to resource the new infrastructure. Improvement in partnerships with CSOs, FBOs, and CBOs will increase community awareness and involvement in dispute resolution and crime prevention activities. Challenges in implementation A number of challenges confront the law and order sector. A key issue has been poor routine maintenance of infrastructure, resulting in the deterioration of much of the sector’s infrastructure to the point that renovation is no longer possible. This is a very expensive way to provide a service, as it is far more cost effective to extend the life of infrastructure through routine maintenance, than to rebuild or rehabilitate. Improved coordination between central agencies is required to address this issue. 23 Effective financial management is essential for ensuring resources are well utilised. Managing the implementation of activities, especially under the development budget has not been effective in the past and must be resolved to ensure the effectiveness of expenditure on law and order. Considerable attention has been given in the past to organisational governance and structure, but with little return in terms of the indicators of crime and justice. In the future, a balance must be struck between finding the ideal structure and getting on with the job. This challenge is best approached by ensuring the sector is led by experienced and well paid Papua New Guineans who are committed to a sector wide approach and who will work tirelessly to achieve a safe and just society for all. 24 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Provide a safe, Crime rate (crimes per 1000 Crime Survey 91 per 1000 (9.1%) 70 per 1000 50 per 1000 (5%) 40 per 1000 30 per 1000 (3%) – crime secure and stable population) Report (7.1%) (4%) at reasonable rate) environment for all citizens, Incidence of major crime Police Annual 600,000 estimated; 550,000 (reduced 380,000 (reduced 320,000 270,000 (reduced by 55%) visitors, Report 150,000 reported in by 8.3%) by 36.7%) (reduced by communities and 2005 46.6%) businesses to Number of well trained and Annual Report & 5,160 police, but few 8,440 police, all 13,230 police, all 17,020 police, 24,000 police all highly conduct their well equipped police officers Police Review well trained highly trained highly trained all highly trained trained (equivalent to affairs freely (see Annex 1 for regional & Report world standard of 1 police provincial targets) officer to 400 people) Number of police stations 184 300 470 610 850 (see Annex 1 for regional & provincial targets) Number of village courts 1190 1950 3050 3930 5540 (see Annex 1 for regional & provincial targets) Backlog of District Court NJSS Annual cases Report, MS annual report Number of remandees in CIS 60% remandees and prison awaiting trial 40% convicts awaiting trial Rate of disposition of fraud RPNGC, OC & and corruption cases Public Prosecutor Lead government Law & Justice sector agencies department No. Sector Strategy

1 Coordinate law, order and justice agencies in order to be cost effective

2 Improve access to law and justice services

3 Effective law and justice services by enhancing skills and improving incentives of key personnel

4 Effective use of restorative justice, early dispute resolution and crime prevention to minimise the incidence and seriousness of crimes

5 Appropriate measures for weapons control, private security services and other emerging issues

6 Public made aware of rights and responsibilities in all spheres of society 25 DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and Assumptions Clear and effective strategy for 1.1 Develop a law, order and Implement strategy, Implement, monitor and Implement, monitor Papua New Guineans are best delivering law, order and justice strategic plan for monitor effectiveness and update. and update. placed to develop, monitor and justice to PNG effectively addressing update where necessary. update a law, order and justice current and future issues. strategy as they have a vested interest in the nation’s security and they understand the culture. Hence handing this responsibility to foreign consultants poses a significant risk to progress. Improve village courts 2.1 –Ensure village court –Village court systems are –All village courts are 5540 village courts officials and village law effectively operating fully resourced enforcers are paid –Maritime provinces and –3930 village courts appropriately and on time. isolated villages have easy –Ensure village courts in access to village court maritime provinces are services –Lack of effective coordination easily accessible –3050 village courts between agencies and different –1950 village courts levels of governments Adequate District Court 2.2 17 well resourced District 30 well resourced District 50 well resourced 70 well resourced –Lack of ownership by the resources Courts Courts District Courts District Courts sector agencies Capacity building for legal aid 2.3 Incorporate Provincial 5 Provincial Justice Centres 10 Provincial Justice 22 Provincial Justice and public awareness of legal and Justice Centres with Centres Centres rights in provinces 6.1 District Courts in 2 provinces. Land mediation capacity 2.4 Support the work of the National Land Development Program building Increased manpower 2.5 –8,440 police (1:860) –13,230 police (1:610) –17,020 police –24,000 police –160 District Court –250 District Court (1:530) (1:400) magistrates magistrates –320 District Court –450 District Court –2 resident judges in each –1 resident judge in each magistrates magistrates region province –2 resident judges in –3 resident judges in –Increase State and –Increase State and most provinces most provinces Government civil litigation Government civil litigation –Increase State and –Number of State and lawyers lawyers Government civil Government civil litigation lawyers litigation lawyers are at desired level Law and justice facilities of –Upgrade existing run –Facilities are fully adequate standard and 3.1 down facilities maintained to good maintained –Improve office standard infrastructure, information –Agencies fully equipped technology systems and with office infrastructure, logistics information systems and logistics Provision of new infrastructure 3.2 –Erect Supermax at prisons as needed based on –New police headquarters prioritisation with Law and –1 detention centre for Justice Secretariat juveniles in each region –Barracks and housing provided to new intakes 26 Develop database system for 3.3 A database system for the law and justice agencies Ombudsman Commission and other law and justice agencies to prioritise the backlog of complaints All personnel highly trained 3.4 –All police, village court with emphasis on early and officials and CIS well lasting resolution trained from 2012 onwards –Police know and abide by standing orders –Fraud squad in place and effective Government is provided with 3.5 –Public Prosecutor, State excellent legal service Solicitor General, State Solicitor lawyers and Government civil litigation lawyers paid according to performance –CLRC well resourced and their services strategically prioritised Develop and implement guns –Develop policy as part of and weapons security policy 4.1 overall law and justice following gun summit strategy. –Increase border surveillance with Defence Force and other border agencies. Develop and implement private 5.1 Develop and implement Private security services to Private Securities are Security Industry Authority Security Industry Act as cooperate and work along guided by the Act Act to ensure it is in national part of overall law and with the police to combat interest justice strategy. crime. Responsibility Law and Justice sector agencies Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 2015 I 2011-2015 I Funding Option(s) Total 170.4 I 175.4 I 175.4 I 270.4 320.4 I 1112.2 I GoPNG/Donors 27 3.3 Health Goal: ---- Achieve an efficient health system which can deliver an internationally acceptable stan dard of health services. Introduction The current status of the health sector is depicted by unfavourable human development indicators such as high infant and neonatal mortality rates, high maternal mortality as well as deteriorating conditions of infrastructure such as roads and bridges, health centres and hospitals. Unfavourable economic conditions in terms of access to markets, and opportunities for economic activities (mainly through paid jobs) also contribute towards the status of the quality of lives of the people. PNG has one of the highest maternal mortality rates in the world and currently a woman in rural PNG has a one in 25 chance of dying in her lifetime as a result of childbirth. Immunisation coverage has been low over the past few years and hence a high number of children die before they reach their fifth birthday. According to the 2006 Demographic and Health Survey, infant mortality was reported to be 57 deaths per 1,000 live births, child mortality for those aged 0-5 years was 75 deaths per 1,000 live births, and maternal mortality was reported to be 733 deaths per 100,000 live births. The fragmentation of health service delivery at the provincial level has contributed towards the deterioration in health service delivery in the provinces, districts and local communities. Furthermore, other challenges facing the health sector include a high population growth rate (2.7 per cent), HIV/AIDS (1.61 per cent of adults), deteriorating law and order, transport, communications and other infrastructure, and low provincial capacity to finance, manage and deliver social services. Within the next 20 years the Government aims to achieve an efficient health system which can deliver an internationally acceptable standard of health services by rehabilitating aid posts, health centres and district hospitals as well as trialing community health posts in strategic locations. Furthermore, there will be improvements in the storage, distribution and procurement of basic drugs, vaccinations and medical equipment through the rolling out of the Provincial Health Authority reforms. The proposed Pacific Medical Centre will also enhance delivery of health services and promote training of health personnel, while the capacity of Angau Memorial Hospital will be developed further to distinguish it as the first “specialised” hospital equipped with modern medical equipment for the Momase Region. The other 3 “specialised” regional hospitals will be a refurbished Port Moresby General Hospital (Southern), Mount Hagen Hospital (Highlands) and the Nonga Base Hospital (New Guinea Islands). The national MDG targets and indicators associated with the health sector (MDG 4, 5 and 6) have been integrated into the sector framework within the MTDP 2011-2015 as well as the PNGDSP 2010-2030. As such, over the next five years key interventions will contribute towards achieving the ultimate goals of the PNGDSP 2010-2030, Vision 2050 and the MDGs. MTDP 2011-2015 In order to achieve the PNGDSP goal for health by 2030, the Government will over the next 5 years focus on getting ‘back to basics’ with rehabilitation of the foundations of our primary and preventative health care system, focusing on improving maternal health and child survival, and reducing the burden of communicable diseases. Infectious disease and maternal and child health matters account for the greatest burden on health services and by addressing these concerns PNG will also achieve MDG 4, 5 and 6. The Government will focus on rehabilitating the current system to a level where each facility is fully operational. As such, key deliverables during the next five years will include rehabilitation of aid posts, the trialing of community health posts in strategic locations and rehabilitation of health centres and district hospitals. Alongside these deliverables will be improvements in the storage, distribution and procurement of basic drugs, vaccinations and medical equipment. These interventions will be enhanced through the implementation of the provincial health authority reforms, which will commence during MTDP 2011-2015 and will be rolled out across the country over the next ten years. This reform will be a cost effective way of strengthening management of the health system. Work will commence on ensuring key provincial hospitals (Kerema, Goroka, Angau and Nonga) are fully operational over the next twenty years and feasibility studies will be conducted on the four regional hospitals’ ability to be upgraded to become specialised hospitals in later MTDPs. The Angau Memorial Hospital will be the first hospital to be recapitalised as a specialised regional hospital. Alongside these interventions the 28 proposed Pacific Medical Centre will be constructed and will be the nation’s leading referral hospital with respect to urgent and critical care needs. The Pacific Medical Centre will work in collaboration with public hospitals and some of the world’s leading teaching hospitals. Partnerships with the private sector, churches and non-governmental health service providers will remain important during this time, at all levels of service delivery. Building on MTDP 2011-2015 The Government will, over the years 2016-2030 continue to rehabilitate and open aid posts, health centres, and community health posts, taking advantage of prior investment in the transport and utilities sector. Pending the success of the community health posts, aid posts and sub-health posts will progressively be replaced with community health posts. Health facilities will also be modernised. Moreover, district health centres will be upgraded to hospitals in districts without ready access to provincial hospitals and in accordance with population and geographical requirements. Rehabilitation of key provincial hospitals including teaching hospitals and Port Moresby General Hospital (PMGH), as well as the construction of the Pacific Medical Centre, will take place during the first 10 years. The following 10 years will focus on the remaining provincial hospitals as financing allows. Challenges in implementation For effective implementation of deliverables over the years 2011-2015, recruitment and training of health personnel (doctors, nurses and community health workers with midwifery skills) within hospitals and community health posts is paramount. By 2015, 325 physicians and 3,600 nurses will have to be recruited, while these numbers will increase to 4,900 physicians and 19,500 nurses by 2030. Moreover, the provision of transport infrastructure and key utilities – water, sanitation, telecommunications and electrification – to health facilities, a functioning cold-chain for transport and storage of refrigerated products, and consistent government funding for operations are essential. 29 DSP goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Achieve an efficient Infant mortality rate Census/DHS 57 deaths per 1000 43 deaths per 1000 35 deaths per 1000 26 deaths per Below 17 per 1000 health system which live births (2006) live births live births 1000 live births live births can deliver an Neonatal mortality rate (%) DHS 29 deaths per 1000 22 deaths per 1000 18 deaths per 1000 13 deaths per 9 deaths per 1000 internationally live births (2006) live births live births 1000 live births live births acceptable standard of health services Under 5 mortality rate (refer Census/DHS 75 deaths per 1000 56 deaths per 1000 44 deaths per 1000 32 deaths per Below 20 deaths per Appendix table for regional live births (2006) live births live births 1000 live births 1000 live births and provincial targets) Maternal mortality rate DHS 733 deaths per 500 deaths per 360 deaths per 230 deaths per Below 100 per 100,000 live births 100,000 live births 100,000 live births 100,000 live births 100,000 live births (1994) Life expectancy Census/DHS 57 years Males: 62.2 years Males: 64.2 years Males: 66.2 years 70 years Females: 62.7 Females: 64.7 years Females: 67.2 years years Proportion of 1 year old NHIS/DHS 58% (2009) 73% 80% 87% 94% children immunised against measles Proportion of 1 year old NHIS 70% (2009) 80% 86% 92% 97% children immunised with 3 doses of DTP-HepB-Hib Proportion of children NHIS, TB forthcoming 75% 80% 87% 95% immunised against TB Program Proportion of births attended DHS/NHIS 40% (2009) 54% 68% 81% 95% by trained health personnel Contraceptive Acceptor Rate NHIS 263 per 1000 WRA 320 360 400 450 (per 1000 women of (2009) reproductive age) Contraceptive Prevalence Rate DHS 32% (married women 40% 65% 67% 70% (%) 15 – 49 yrs) Couple years of contraceptive NHIS 105/1000 WRA 115 125 135 145 protection2 Proportion of children born to DHS/Census 28% 25% 22% 20% 18% mothers outside the age range 20-34 Percentage of children born to DHS 30% women aged 15- 27% 24% 20% 15% mothers with 4 or more 49 children Proportion of births with birth DHS 27% (2006) 24% 21% 18% 15% interval < 2 years Proportion of pregnant women DHS/NHIS DHS (2006), 84% 70% 75% 82% 88% who received at least one NHIS (2009), 59% antenatal care visit 2 Couple years of contraceptive protection, otherwise known as couple years of protection, is a measure of the amount of effective contraception supplied in PNG. It is the number of couples who could be provided with the available contraception for a whole year per 100,000 couples. 30 Women aged 15-49 with DHS 27.4% (2006) 25% 22% 18% 15% unmet need for family planning (%) Underweight births as a NHIS 9.4% 9.1% 8.9% 8.6% 8.2% proportion of total births Proportion of underweight NHIS 28% 26% 24% 22% 20% children under 5 years of age Proportion of children under 5 NHIS/MNS forthcoming who are significantly below average height for their age Proportion of children under 5 DHS/IMR 40% 80% 90% 95% 95% sleeping under long life survey impregnated nets (LLIN) Proportion of households DHS/IMR 38% 65% 85% 90% 95% owning mosquito nets survey Proportion of children under 5 NHIS/IMR 22% 80% 90% 100% 100% with malaria who are treated Survey with anti-malarial drugs Incidence of malaria by sex NHIS Total = 230 (2009) Total = 180 Total = 150 Total = 120 Total = 100 (cases per 1000 population) F and M forthcoming Incidence of TB per 100,000 NHIS 475 400 330 240 150 TB case detection rate NHIS 33.2 (2007) 35 40 50 75 Treatment completion rate (%) NHIS 71% (2007) 75% 85% 90% 95% Case fatality rate (%) of NHIS Total = 3.0% Total = 2.9% Total = 2.7% Total = 2.4% Total = 2.1% pneumonia by sex (children F and M forthcoming under five) Proportion of population with DoH 75% 78% 80% 85% 90% access to affordable essential drugs on a sustainable basis Lead government Department of Health (DoH) department No. Strategies for developing a world class health system

1 Improve service delivery

2 Strengthen partnership and coordination with stakeholders

3 Strengthen health systems

4 Improve child survival

5 Improve maternal health

6 Reduce the burden of communicable diseases

7 Promote healthier lifestyles

8 Improve preparedness for disease outbreaks and emerging population health threats 31 DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and Assumptions Outreach services: rural outreach 1.1 30 clinics per 1000 40 clinics per 1000 50 clinics per 1000 80 clinics per 1000 clinics for children under 5 years children under 5 yrs) children under 5 yrs children under 5 yrs children under 5 yrs 95 per cent of health facilities with 1.2 –50% provincial transit –100% provincial transit –100% provincial –100% provincial adequate medical supplies and stores operational stores operational transit stores transit stores equipment –Rationalise to 3 AMS. –Rationalise AMS to 2 operational operational –Access roads are built and –75% of all facilities have –90% of all facilities –Rationalise AMS to 2 –Rationalise AMS to 2 maintained adequate medical have medical supplies –95% of all facilities –95% of all facilities –Trained personnel present supplies. have medical supplies have medical supplies –Cold-chain developed and –7,500 aid posts and community 1.3 –Rehabilitation of 25% of –Rehabilitation of 50% –Rehabilitation of All aid-posts and sub- maintained health posts (CHP) established aid posts of aid posts 100% of aid posts centres progressively –Effective utilities and fully operational (refer –Trial and establishment –Minimum 178 CHPs –1000 CHPs replaced by CHPs in –Funding is secured and released on Appendix for national, regional of 20 CHPs in strategic built and functioning. established. all districts and LLGs. time and provincial targets) locations –Aid posts and sub- –Land is secured –rehabilitation of 2672 aid posts centres progressively –Provinces take up the Community and construction of new CHPs replaced by CHPs Health Post initiative requiring additional CHWs. 50% of district health centres 1.4 50% of existing district –100% of district health Continued expansion All districts have –Security is guaranteed, particularly upgraded to hospitals health centres centres rehabilitated. of district hospital access to functioning for the Pacific Medical Centre rehabilitated. –At least 5 district network. health centres. health centres upgraded to district hospitals. 100% of district hospitals 1.5 50% of district hospitals rehabilitated 100% of district hospital rehabilitated rehabilitated. Rehabilitation of provincial 1.6 Rehabilitation of key provincial hospitals (Kerema, Rehabilitation of remaining provincial hospitals hospitals Goroka, Angau and Nonga) and of PMGH Four regional specialist hospitals 1.7 Feasibility studies 4 regional hospitals 4 regional hospitals 4 regional hospitals established and fully equipped conducted on all four upgraded to become maintained as maintained as regional specialist specialist hospitals over specialist hospitals specialist hospitals hospitals. 20 years starting with Angau Memorial Hospital Upgrade training institutions 1.8 –20 doctors a year –200 doctors a year –500 doctors a year –600 doctors a year (refer Appendix tables for national, commence training commence training commence training commence training regional and provincial targets for –500 nurses a year –750 nurses a year –1000 nurses a year –1400 nurses a year doctors, nurses and CHWs) commence training commence training commence training commence training –500 CHWs a year with –750 CHWs a year with –1000 CHWs a year –1400 CHWs a year midwifery skills midwifery skills with midwifery skills with midwifery skills commence training commence training commence training commence training Pacific Medical Centre constructed 1.9 –Feasibility study Pacific Medical Centre Pacific Medical Centre Pacific Medical Centre and operationalised conducted and constructed operationalised operationalised construction commences Strengthen partnership and 2.1 –PPPs in the health –PPPs in the health –PPPs in the health –PPPs in the health Funding is secured and released on coordination with stakeholders system investigated. system investigated. system investigated. system investigated. time –Improved purchaser- –Improved purchaser- –Improved purchaser- –Improved purchaser- provider relationships provider relationships provider relationships provider relationships between private health between private health between private between private providers, CSOs and providers, CSOs and health providers, health providers, churches churches CSOs and churches CSOs and churches 32 Governance reform: Provincial 3.1 PHA reforms begin. PHAs established and PHAs established and PHAs established and –Political and administrative support Health Authorities (PHA) rolled out At least 5 PHAs fully operational in all fully operational in all fully operational in all –Existing legislations are amended to all provinces. established in 5 provinces. provinces. provinces. accordingly provinces. –Smooth transfer of personnel 95% children under the age of 1 4.1 –73% of all children –80% of all children –87% of all children –95% of all children –Access roads are built and immunised in accordance with immunised. immunised immunised. immunised. maintained childhood schedule –1 SIA completed –2 SIA completed –100% of all health –100% of all health –Trained personnel present (note that vaccines are likely to –100% of all health –100% of all health centres, aid centres and CHPs –Cold-chain maintained change over time in accordance centres able to provide centres, aid posts/ posts/CHPs able to able to provide –Effective utilities with epidemiology, available immunisation. CHPs able to provide provide immunisation. immunisation. –Funding is secured and released on vaccines etc) immunisation. time 450 per 1000 women of 5.1 –320 per 1000 WRA –360 per 1000 WRA –400 per1000 WRA –450 per 1000 WRA –Access roads are built and reproductive age access family –50 % of facilities capable –75% of facilities –100% of facilities maintained planning each year (contraceptive of delivering family capable of delivering capable of delivering –Trained personnel present acceptor rate) planning services family planning services family planning –Communities have positive services. perception of family planning 95% of deliveries supervised 5.2 –80% of hospitals and –90% of hospitals and –100% of hospitals –100% of hospitals –Access roads are built and health centres capable of health centres capable and health centres and health centres maintained providing quality service of providing quality capable of providing capable of providing –Presence of reliable means of and support before, service and support quality service and quality service and transportation during and after before, during and after support before, during support before, during –Trained personnel present pregnancy pregnancy and after pregnancy and after pregnancy –Effective utilities –55% of health facilities –55% of health facilities –58% of health –68% of health –Funding is secured and released on capable of providing capable of providing facilities capable of facilities capable of time supervised deliveries. supervised deliveries. providing supervised providing supervised deliveries. deliveries. All households have access to at 6.1 70% 80% 90% 100% –Access roads are built and least 1 mosquito net. maintained –Funding is secured and released on 100% of provinces with TB Dots 6.2 50% 75% 100% 100% of provinces time with TB Dots Responsibility Department of Health Estimated inputs (K million) Focus Area Budget line 2011 2012 2013 2014 2015 2011-2015 Funding option(s) Personnel (all) Recurrent 397 397 397 397 397 1,985 GoPNG/Donors Medical supplies (1.2,4.1) Recurrent 177 177 177 177 177 885 GoPNG/Donors Operating costs (all) Recurrent 410 410 410 410 410 2,050 GoPNG/Donors Rural health services (1.3,1.4) Development 78 78 78 78 78 390 GoPNG/Donors Rural water supply Development 22 22 22 22 22 110 GoPNG/Donors General hospitals (1.5,1.6,1.7,1.9) Development 150 350 250 250 250 1,250 GoPNG/Donors Central (3.1) Development 6 6 6 6 6 30 GoPNG/Donors Total 1240 1440 1340 1340 1340 6700 33 3.4 Primary and Secondary Education Goal: ---- Achieve a better future by promotin g and enhancing integral human developmen t. Introduction Since 1995 the education systems has faced difficulties in the effective delivery of its reform agenda. While access to education has improved significantly, the quality of education has become a concern as the school population has increased and the system has struggled to adequately plan for, fund and administer those increases. There is considerable pressure in areas such as infrastructure and teacher numbers, teacher training, materials development and distribution, and the capacity at all levels to monitor and administer the education system. Moreover, there are now greater community and parental demands for access to education. Other challenges for the education system include: improving retention through the years of basic education; improving delivery of education services in rural and remote areas; completing reform of the secondary curriculum and supporting effective implementation of the curriculum at all levels; strengthening the vocational education and training sector; make better use of partnerships with the private sector and community agencies; and securing adequate government budget support to match the growth in enrolments. The net enrolment ratio in grade 1 was 52.9 per cent in 2007, while the net admission rate for children between ages 6-14 years was only 11.5 per cent. The average class size in 2007 was large at 45 students, calling into question whether teachers are able to attend effectively to the needs of individual students. The Government aims to develop a highly literate and numerate workforce within the next 20 years by providing universal access to quality basic education. This will require building capacity within the education system through investment in the training of teachers, rehabilitation of existing primary and secondary school infrastructure, investment in new classrooms and dormitories, and a phased reduction in school fees. The Government will also rehabilitate the existing National high schools to ensure that students entering university are well prepared. Secondary schools in turn will be well integrated with vocational and technical colleges to ensure students have the opportunity to acquire much needed skills. MTDP 2011-2015 The immediate focus of the Government within the next five years will include: implementing education reforms to improve service delivery; strengthening and coordinating partnerships with stakeholders at all levels; enhancing universal access to primary education, ensuring effective distribution of education materials and supplies and implementing necessary legislative reforms. These interventions will be supported by curriculum reform across all levels of schooling and legislative changes to ensure educational materials can be easily distributed throughout the country. Another legislative change critical during the next five years is the centralising and standardising of education functions as part of a process of developing effective management and administration. The costs and benefits of publishing uniform exam results will be investigated through trials with interested provinces. Similarly, an incentive fund to reward well-performing schools will be piloted during this 5 year period. Partnerships with the private sector, churches and the International Education Agency will also be pursued. Interventions in the 2011-2015 period will strengthen education pathways into higher education institutions and technical and vocational colleges. In particular, the flexi-high school system will be developed during this period and will be rolled out to secondary school students as well as to school leavers. Moreover, National high schools will be rehabilitated and re-established in order to improve the standards of year 12 students entering university. Building on MTDP 2011-2015 The Government will in the next 15 years continue to build the capacity of the education system through the expansion, rehabilitation and upgrading of education institutions. Moreover, the Government will provide quality educational materials and supplies across the country, taking advantage of prior investment in the transport and utilities sector. Universal access will be expanded to encompass secondary education through to year 10 and mechanisms that retain students to year 12 will be improved and expanded. Challenges in implementation For effective implementation of deliverables within 2011-2015, the education and training of teachers, improved transport links, the provision of safe learning environments free from violence, land reform to enable construction of new classrooms and teachers’ houses and effective management and administration of the entire education system are of utmost importance. 34 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Achieve a better Youth literacy rate (% of ages 15-24) Census Below 64% 70% 75% 85% 90% future by promoting (indirect) and enhancing integral human Adult literacy rate (% of ages 15 and over) Census forthcoming development (indirect) Science, numeracy & literacy performance, for PISA (OECD), n.a. Participate in 1 or Perform above Perform at level example on OECD’s PISA test and the TIMSS/PIRLS more international international consistent with middle International TIMSS or PIRLS assessments (IEA) testing regimes average income countries. Net admission rate (% of ages 6-14) SS-DOE 11.5% 30% 50% 60% Close to 70% Gross enrolment ratio in first grade of primary SS-DOE 52.9% 74.3% 85% 100% 100% school (start age is 6) Gross enrolment ratio in grade 1 to 8 SS-DOE forthcoming Net enrolment ratio in grade 1 to 8 (see SS-DOE 53% 72% 90% 95% 100% Appendix table for regional/provincial targets) Cohort retention ratio (%) between grade 1 and SS-DOE 30% 40% 50% 60% 70% grade 8 Gender parity ratio of students in basic SS-DOE 91% 97% 100% 100% 100% education Pupil-teacher ratio SS-DOE 1:45 1:44 1:43 1:42 1:40 Completion rate to level 8 45.4% 49.4% 77.5% 80-90% Close to 100% Lead government Department of Education (DOE) department No. Sector Strategy

1 Education reform

2 Universal access to quality education

3 Effective distribution of school materials and supplies

4 Partnering with the private sector

5 Other legislative reforms DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Quality elementary, primary 1.1 –English literacy, and not local Quality primary and Quality primary and Quality primary and Curriculum reform is and secondary curriculum vernacular will be taught in elementary secondary curriculum secondary curriculum secondary curriculum supported by legislative developed, implemented schools. implemented and implemented and implemented and changes and monitored –Quality primary curriculum developed. monitored monitored monitored –Secondary curriculum panel established with university and technical college representation Publish school results each 1.2 Publish school results annually from all Reform is supported by year from all national national exams in newspapers. legislative changes; exams funds are available 35 Establishment of incentive 1.3 Incentive fund piloted Learn from pilot project National incentive Incentive fund Funds are available fund for performing schools and expand incentive fund established and established and fund to other schools functioning functioning Reinvigoration of National 1.4 National high schools will be well National high schools –Consistent government high school system resourced to prepare students for will be the main source funding towards national higher education. Selection for entry of university entrants. high schools; into National high schools will be by National high school –No land issues; performance in national grade 10 students will not pay –Students take their exams on academic subjects. school fees. studies seriously Science and technology 1.5 National high schools will be equipped research incorporated into with high standard laboratories to train National high school students in science research. All curriculum and into all schools will be equipped with libraries schools through libraries to train students in research and technology. Universal education access: 2.1 –Primary school entry age will be 6. Sufficient number of –Access roads are elementary and primary –Existing primary schools will be primary schools maintained and built –Sufficient primary schools extended to accommodate growth. established –Sufficient resources established –Existing public elementary schools will (financial and human) –An appropriate amount of be converted into primary schools are made available teacher housing Universal education access: 2.2 –Six National high schools upgraded –Upgrade 2 secondary –Sufficient number of Sufficient number of –Access roads are secondary –Existing 191 secondary schools schools to National high secondary schools secondary schools maintained and built –An appropriate number of maintained school status to provide established established and all well –Sufficient resources secondary schools 2 National high schools –Appropriate number resourced. (financial and human) established in every region of secondary schools are made available –Maintenance of all –189 secondary schools upgraded consistent secondary schools maintained with National high school system and Flexi Technical training system. Development of flexi-high 2.3 –Pilot the provision of technical training Implementation of key Based on results from Flexi high school- –Access roads are school / vocational training by colleges to secondary school recommendations of pilot projects, technical institution maintained and built system students as part of their secondary review in pilot projects. implement review training system that –Sufficient resources studies nationally. supplies young people (financial and human) –Review how best to develop high with the skills PNG are made available quality technical skills through needs. secondary schools and technical training institutions. No school fees for children 2.4 Abolition of primary school fees for Abolition of school fees aged 6 to 15 in grades 1 to children aged 6 to 10 years. for children aged 11 to 10 15. Parents value education of 2.5 Advocate and raise awareness on value Advocate and raise Advocate and raise Advocate and raise Consistent government their children of education awareness on value of awareness on value of awareness on value of funding; change in mind- education education education set of parents Quality teachers with 2.6 26,000 teachers 35,500 teachers 40,900 teachers 48,200 teachers Universities expand education and training pre capacity and in-service (refer appendix table for regional & provincial targets) 36 8532 well maintained 2.7 5,070 schools, 40% with safe drinking 6,790 schools, 60% with 7,620 schools, 80% 8,560 schools, all with –Access roads are schools with safe drinking water. safe drinking water. with safe drinking safe drinking water. maintained and built water (refer appendix table water. –Sufficient resources for regional & provincial (financial and human) targets) are made available Enhance equity 2.8 There are schools in every major city There are schools in All primary aged All children aged 6-14 that provide access to children with every province that children with special with special needs have special needs. provide access to needs have access to access to school and children with special primary school. vocational training. needs. All schools well resourced 3 Provision of education materials and Provision of education Provision of education Provision of education –Access roads are supplies to all schools materials and supplies to materials and supplies materials and supplies to maintained and built all schools to all schools all schools –Sufficient resources (financial and human) are made available Partnership and 4 Enabling environment developed and Extend incentive fund to Include private schools Enabling environment Political commitments coordination with strengthened selected private schools in incentive fund developed and stakeholders strengthened strengthened Legislative reforms 5 Legislative change to centralise and n/a n/a n/a Sufficient resources are standardise delivery of education made available passed Salaries and other costs 6 Recurrent budget Recurrent budget Recurrent budget Recurrent budget met Responsibility Department of Education, Department of Works and LLGs Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding Option(s) 1.1 n/a n/a n/a n/a n/a n/a GoPNG/Donors 1.2 n/a n/a n/a n/a n/a n/a GoPNG/Donors 2.1 60 60 65 70 75 330 GoPNG/Donors 2.2 41 55 60 70 80 306 GoPNG/Donors 2.3 14 30 35 45 60 184 GoPNG/Donors 2.6 20 20 25 40 50 155 GoPNG/Donors 3 60 60 60 70 80 330 GoPNG/Donors 4 5 5 5 5 5 25 GoPNG/Donors 5 n/a n/a n/a n/a n/a n/a GoPNG/Donors 6 n/a n/a n/a n/a n/a n/a GoPNG/Donors Total: 200 230 250 300 350 1,330 Total incl. colleges from higher 230 275 360 505 630 2,000 education section 37 3.5 Higher education Goal: ---- To develop th e higher skills needed for PNG’s prosperity w ith a world class tertiary education sector Introduction Papua New Guinea’s higher education institutions made significant contributions to nation building in the early years of PNG’s independence. The universities and colleges adequately met the extraordinary demands that were placed on them during this time, providing well educated leaders for public institutions and skilled personnel for other important spheres of society. They can do so again but, right now, the quantity and quality of graduates is far short of what is needed due to inadequate resources and a range of governance and general service quality issues. Major changes in the institutions of higher education are necessary if PNG is to be successful in meeting the challenges set in the Vision 2050 and the PNGDSP 2010-2030. Over the next 20 years, the Government aims to develop the higher skills needed for PNG’s prosperity with a world class tertiary education sector. Having a national manpower plan in place to estimate the required number of personnel in technical and professional fields — such as medical doctors, nurses, teachers and engineers — is crucial to overcome the problem of uncoordinated and fragmented provisions of higher education. MTDP 2011-2015 In the next five years institutions of higher education will be moving down the path towards self-financing with the establishment of a Higher Education Endowment Fund. The Higher Education Endowment Fund Trust will become a major source of funding for new capital investment, maintenance of faculties, twinning arrangements with foreign institutions, industrial partnership, course field work and a wide range of scholarships to meet the needs of both industry and the public service. The priority expenditure areas of the Fund will be clearly outlined and managed by the Commission for Higher Education, under the general supervision of the Department of National Planning and Monitoring. The Fund will be financed by contributions from the universities business’ arms, contributions from the private sector, revenue from a Higher Education Contribution Scheme (HECS), the 2 per cent training levy, and assistance from development partners. The Government will provide support for the Fund during the first MTDP while the HECS scheme is set up and until the HECS scheme generates sufficient revenues. The introduction of a government-supported loans scheme to students in the form of HECS will enable higher education students to defer the cost of their studies. The HECS scheme will provide loans to cover tuition fees imposed by universities, accommodation, plus a specified maximum “incidentals allowance”. Public funding for higher education will be realigned towards targeted training scholarships. Together with other measures, the National Government will help provincial and district authorities to establish scholarship systems for their students. Before investing in the expansion of universities and colleges, the Government will fund the recapitalisation of existing institutions and will also ensure they have the management capacity to oversee the expansion. The focus of government funding will therefore be on raising the quality of graduates. To this end, the Government will also support universities to improve internet access and communication technologies, and to forge strong partnerships with relevant stakeholders (both within and outside PNG), including dialogue with PNG industry. The Government will ensure that all training standards are aligned to the PNG National Qualification Framework by 2015. Building on MTDP 2011-2015 Under subsequent MTDPs, the expansion of universities, technical colleges, business colleges, polytechnic colleges, teachers’ colleges, nursing colleges and vocational training institutions will be the focus of government priorities. Forging partnerships with relevant stakeholders and engaging in twinning arrangements with reputable international institutions of higher education will also be encouraged and supported. Challenges in implementation The higher education sector in PNG has been faced with many challenges and difficulties relating to insufficient financing of higher education institutions, quality and access to tertiary education, staff development, skills-based training, enhancement and preservation of quality in teaching, research and services, relevance of programs, employability of graduates, establishment of efficient co-operation agreements, and equitable access to the benefits of international co-operation. External challenges include adequate provision of key utilities (water, sanitation, telecommunications, electrification and information and communication technology) for higher education institutions. 38 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target To develop the higher skills Number of graduates from OHE 6,496 graduates 52,000 112,000 183,000 graduates 265,000 graduates needed for PNG’s prosperity institutions of higher education in 2008 graduates since graduates since since 2010 between 2010 and with a world class tertiary (including colleges) 2010 2010 2030 education sector Proportion of graduates absorbed OHE (Tracer n/a More than 95% More than 95% More than 95% More than 95% into the workforce annually Study) Lead government Office of Higher Education (OHE)/ Department of Education / Department of Community Development department No. Sector Strategies

1 Higher education reform to reach international standards of good management by institutions.

2 Highest performing students funded to undertake tertiary studies to acquire skills that are required for development in PNG.

3 Education institutions recapitalised and expanded to provide the graduates and skills PNG needs for development.

4 Flexi high school system strengthened and expanded, providing linkages for national high and secondary students into tertiary and technical training.

5 Access to internet and communication technologies to improve higher education outcomes.

6 Partnerships and twinning arrangements forged with reputable international institutions of higher education.

7 Government and industrial partnerships forged to ensure courses deliver the skills required.

8 Training standards aligned to the PNG qualification framework to ensure standards are high throughout PNG. DSP DELIVERABLES No. 2011-15 2015-2020 2020-2025 2025-2030 Risks and assumptions Effective coordination and oversight of 1.1 Revamp Commission for Higher Education and Office of institutions of higher education and trade Higher Education in overseeing assessment standards - - - skills colleges and external auditing for all higher education and technical institutions. Commence annual external audits of each institution and review of legislation Improved administration and management 1.2 Train officers in financial skills and from 2012 require Not being receptive capacity of all higher education institutions institutions to account for funds as a precondition to to change funding from the Development Budget Courses and number of places aligned to 1.3 Develop, implement and keep up to date the human resource strategic plan funded under Part 3.6 of MTDP skills requirements in PNG “Human Resource Development and Training” Higher Education Endowment Fund fully Establish and operationalise the Higher Education functioning and supporting majority of 2.1 Endowment Fund including legislation as required. higher education expenditure University infrastructure are well maintained Recapitalise 4 state and 2 private universities. and universities meet international 3.1 standards 21,500 university places (including open and 3.2 Expand to 14,400 places by 2015. 17,200 places 19,600 places 21,500 places distance learning) by 2020 by 2025 by 2030 6,800 technical and business college places 3.3 –Recapitalise 4 technical colleges, 2 business colleges 4,900 places 5,900 places 6,800 places with infrastructure well maintained and high and 1 polytechnic college by 2020 by 2025 by 2030 international standards of teaching –Expand to 3,800 places by 2015 8,000 teacher places where teachers are 3.4 –Recapitalise facilities of teachers’ colleges. 7,200 places 7,700 places 8,000 places delivering high learning outcomes in PNG’s –Expand to 6,300 places by 2015 by 2020 by 2025 by 2030 schools and infrastructure is well maintained 39 5,000 nursing places where nurses are 3.5 –Recapitalise nursing colleges. 2,700 places 3,900 places 5,000 places delivering high standards of health services –Expand to 1,600 places by 2015 by 2020 by 2025 by 2030 and infrastructure is well maintained. 3,700 places in other training institutions 3.6 –Recapitalise other training institutions, particularly 2,600 places 3,200 places 3,700 places including vocational colleges with high vocational training by 2020 by 2025 by 2030 international standards of teaching and –Expand to 2,000 places by 2015 especially in where infrastructure is well maintained. vocational training Open and distant learning used wherever 3.7 Recapitalise open and distant learning facilities and cost effective to improve access. expand delivery of services where cost effective Flexi high school system provides students 4.1 Funded under Part 3.4 of MTDP: “Primary and with clear linkages to tertiary and technical Secondary Education”. training. Improved access to internet and 5.1 Increase in procurement and installation of ICT facilities and equipment Quality national communication technologies internet services PNG institutions performing at high standard 6.1 Australian and other internationally reputable institutions provide lecturers and trainers to PNG institutions. Donors are willing as a result of strong connections with world to assist. leading institutions All provinces and districts accessing higher 7.1 –Establish a scholarship fund for provinces and - - education opportunities with the support and districts. National budget will match provincial and commitment of province and district district contributions by a standard ratio. administrations –Scholarships only provided for priority courses as identified under deliverable 1.3 Alignment of training standards to the PNG 8.1 Increase in number of training standards aligned to PNG qualification framework qualification framework Responsibility Office of Higher Education / Department of Education / Department of Community Development Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding option(s) 1.1 10 10 10 10 10 50 GoPNG; Donors 1.2 80 70 60 50 40 300 GoPNG; Donors 2.1 3 3 6 GoPNG 3.1 100 115 125 140 170 650 GoPNG; Donors 3.2 1 5 10 20 30 66 GoPNG; Donors 3.3 5 8 40 45 50 148 GoPNG; Donors 3.4 5 11 20 50 70 156 GoPNG; Donors 3.5 10 12 20 50 70 162 GoPNG; Donors 3.6 10 14 30 60 90 204 GoPNG; Donors 3.7 2 2 4 5 5 18 GoPNG; Donors 5.1 2 3 15 30 40 90 GoPNG; Donors 6.1 5 10 20 50 100 185 Donors 7.1 10 12 20 20 20 82 GoPNG; Donors Total Tertiary 213 230 264 325 415 1447 Total Technical/College 30 45 110 205 280 670 Grand Total 243 275 374 530 695 2117 40 3.6 Human resource development and training Goal: - -- Provide a workforce that is professional and skilled by developing a coherent human resource development strategy Introduction Human resource development and training is a long-term investment and is central to sustainable economic development and the wellbeing of PNG. It must therefore be promoted as an integral part of any development initiative. Over the years, human resource development has become increasingly fragmented. There is a lack of coordination amongst industry, the public service and various training institutions. Consequently, investment in training and human resource development is undertaken in almost total isolation of the requirements of the private and public sector employers. In the absence of a National Human Resource Strategy tailored to development and industrial needs of the country, coordination of resource assistance is distorted. Providing a workforce that is professional and skilled by developing a coherent human resource development strategy is the aim of the agencies that are responsible for human resource development and training. The establishment of a human resource scholarship fund for both domestic and international training will further enhance the skills and knowledge base of officers. The existing cadetship scheme will also be enhanced to allow for a systematic inflow of competent staff to replace outgoing retired or retrenched staff. Collaborative programs with the private sector and other institutions for in-country and overseas training through twinning arrangements will be fostered in order to enhance new knowledge, skills and experience of officers. The major strategies to be employed across the sector agencies include: (i) implementing the Public Sector Reforms; (ii) improving service delivery mechanisms within and between the sectors; (iii) strengthening and formalising partnerships and coordination with stakeholders at all levels; (iv) building capacity and developing skills at all levels; (v) mobilising resources for effective service delivery at all levels; (vi) expanding and enhancing opportunities and incentives to rural areas; and (vii) enhancing and developing a coherent strategy for the sector to guide its efforts towards implementing and achieving the vision and mission of the MTDP 2011-2015, PNGDSP 2010-2030 and the Vision 2050. MTDP 2011-2015 PNG lacks a labour market information system. To plan for the human resource development needs of the workforce, information is needed about employment, wages, skill requirements and other labour market characteristics of various industries. Such information was compiled in 2010 by the Department of National Planning and Monitoring and the Office of Higher Education and can be combined with data on the public sector held by the Department of Personnel Management. This information will be used to form a coherent human resource development strategy that coordinates the development of institutions and training services across primary and secondary education, universities, technical colleges and on-the-job training. This strategy will seek to improve communication between training providers and employers to better ensure that the skills needed in PNG are supplied by Papua New Guineans. Moreover, the strategy will consider how best to locate or otherwise provide services to address the training needs of rural populations and of those without the means to pay up front. Importantly, the strategy will seek to engage development partners in the critical work of developing PNG’s own human resource capacity through formal training. Building on MTDP 2011-2015 Formulating and implementing PNG’s human resource strategy will be the first step in coordinating human resource development efforts. Data must be regularly updated and then used to advance the human resource strategy. This will be the way in which PNG ensures Papua New Guineans themselves are skilled and employed throughout the country. Challenges in implementation For effective development of the human resource strategy, coordination between key agencies is critical. The Department of National Planning and Monitoring, the Department of Personnel Management, the Office of Higher Education, the Department of Education and the National Training Council all have a part to play to ensure their coordinated efforts provide the nation with a clear guide to human resource development. 41 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target I Provide a workforce that is professional and skilled by Shortage in skills National Adequate supply developing a coherent human resource development strategy Lead government departments No. Sector strategies Manpower Study Department of National Planning and Monitoring, Department of Personnel Management Department of Education, Office of Higher Education, National Training Council, Department of Education I

1 Develop coherent human resource strategic plan

2 Expand and enhance human resource training in rural areas

3 Ensure private sector is well engaged in the resourcing and provision of training to better ensure private sector skills requirements are met

4 Use policy and fiscal incentives for employers to provide accessible and effective in-service training, including in the Public Service

5 Encourage the development of clear training plans with targets for all training institutions

6 By aligning training standards to the PNG qualifications framework, improve flexibility and smooth the transition between different training institutions

7 Establish a Human Resource Training Scholarship Fund DSP 2030 deliverables No. 2011-2015 target 2016-2020 2021-2025 I 2026-2030 Risks and assumptions Human resource strategy tailored to 1.1 Use national manpower study to HRD strategic plan regularly updated with new –All stakeholders are consulted and committed. – industries and development needs develop HRD strategic plan. data and further analysis and implemented Funding is released on time Implement to better match accordingly training to skills requirements Rural populations have access to 2.1 In HRD strategic plan, training strategise how to best deliver training opportunities in rural PNG and implement. Private sector well engaged 3.1 Private sector to have input into course development through National Training Macroeconomic and political conditions remain Council, colleges and universities, including by providing funding, resources and stable, providing employers with confidence to trainers. Progress through the HRD strategic plan. invest in PNG. Enhance and expand human resource 3.2 Subject to HRD strategic plan, increase the number of current scholarship holders –NTC is fully funded training for workforce through the NTC co-funded by the private sector –All training providers are accredited; Employers provide extensive and 4.1 HRD strategic plan to Implement strategies. Revise strategies towards Macroeconomic and political conditions remain effective in-service training recommend how to encourage better achieving 2030 deliverables stable, providing employers with confidence to employers to fund in-service invest in PNG. training for Papua New Guineans. Appropriately skilled public service 4.2 All training focused on the skills that officers Most training provided cost –Regular appraisals are done which is not dependent on foreign lack but need for their work outputs. Effective effectively by Papua New –Recommendations are implemented; technical assistance training to be provided at minimum cost. Papua Guinean trainers. New Guineans to be equipped with the skills to provide the training. 42 Remuneration and conditions in the 4.3 HRD strategic plan Implement strategic plan. Revise strategies to better Budget is well managed so that officers are Public Service attract and retain to advise how to achieving 2030 deliverables remunerated according to the conditions of their committed and effective public servants attract and retain employment. committed and effective public servants. There is little to no skills gap in PNG 5.1 All training institutions are well informed about what skills they need to develop Plans and schedules are realistic, well informed because training institutions are and are effective in meeting those targets and fully costed achieving the right targets Training standards are well aligned to 6.1 Increase in number of training standards aligned to PNG qualifications framework The PNG qualification framework is always current the PNG qualifications framework and to the extent that the PNG qualifications framework is aligned to the HRD strategic and is sufficiently flexible to ensure PNG’s skills PNG qualifications framework aligned to plan. requirements are met by training within PNG. HRD strategic plan Skilled labour accredited by higher 6.2 Increase in current proportion of skilled labour accredited by higher learning –Clear pathways are set by higher learning learning institutions institutions institutions –There is interest by workers to progress further Human Resource Training Scholarship 7.1 Subject to HRD Implement Scholarship Fund in line with HRD strategic –All stakeholders are consulted Fund strategic plan, plan. –Consistent government funding is released on time establish Fund and award scholarships I Responsibility Department of Personnel Management, Department of National Planning and Monitoring I Collaborating agencies Department of Education, Office of Higher Education and National Training Council Estimated Inputs (Kmillion) 2011 2012 2013 g 2014 2015 2011-2015 Funding Options 15.5 0.5 0.5 0.5 0.5 17.5 GoPNG/ Donors 43 3.7 Research, science and technology Goal: - -- To accumulate a world standard science and technology pool through adaptation, research and development that drives strong and sustainable growth Introduction Research, science and technology will provide the basis for PNG to advance. It is fundamental for giving the country’s industry and Government the understanding needed to make the most of development opportunities and to respond effectively to challenges. At a broad level, to become a middle income economy by 2030, PNG will need to undergo rapid economic development, progressing from a primary commodity based economy to a broad-based industrialised economy. A prominent example is PNG’s agricultural sector which requires effective science and technologies to protect industries against pests and diseases such as the cocoa borer, and to otherwise enhance the productivity of the sector. PNG also needs to adapt to climate change and to otherwise address challenges that constrain living standards, for example to reduce the incidence of TB. To do this, PNG requires a pool of science and technology created by a knowledgeable, innovative and entrepreneurial workforce. Over the five year period 2011-2015, the Government will ensure that the agencies responsible for research, science and technology aim to accumulate a world standard science and technology pool through adaptation and research and development processes which can be effectively and competitively utilised to drive strong and sustainable growth. Collaborative programs with research and teaching institutions for in-country and overseas training, through twinning arrangements will be fostered in order to enhance new knowledge, skills and experience. Research institutions and universities will be encouraged to undertake innovative and applied technological research through the provision of government grants to support research. Increased investment in new technology and knowledge will be needed to enhance the availability of a skilled workforce essential in improving the business environment and attracting more foreign direct investment to increase employment growth. The Government will also focus on developing laws on patent rights and copyright laws to safeguard the originality of discoveries, development and composition of items and prevent exploitation by foreign entities and non-related businesses for commercial purposes. MTDP 2011-2015 The focus of the Government in the next five years will be to establish research coordination mechanisms supported by prudent governance and administration followed by research in industrial technology, infrastructure technology, science technology and knowledge based technology including the establishment of research incentives to encourage more research in all fields. To lay a strong foundation for sustainable and strong economic growth in the longer term, the Government will, in the first 5 years, promote and pursue strategies that increase the promotion of scientific research and development of new technologies that are relevant, affordable and easily accessible to local industries and the people of PNG. The Government will also pursue this with a global perspective to enhance its participation in global trade by using appropriate technology to raise productivity in areas in which PNG has a comparative advantage. Building on MTDP 2011-2015 Future plans of the Government will continue to develop and enhance the capacity of institutions that focus on research and development. Incentives in the form of research grants will be given to institutions that undertake applied and innovative technological research to encourage them to pursue further and develop innovative ideas and technologies. The Government will also continue to develop legislation on patent rights and copyright laws to protect new ideas and technologies that are endemic to PNG. Challenges in implementation To set the foundation and build the capacity of science and technology and effectively implement government policy, prudent administration, improved coordination and systematic planning are essential. 44 DSP sector goal Indicator Baseline 2015 target 2020 target 2025 target 2030 DSP target To accumulate a world standard science and Government expenditure Lack of government At least double public and technology base through research and development on research and investment in science private sector investment in to drive strong and sustainable growth development and technology science and technology Lead government department Office of Higher Education / Department of Education / Department of Community Development No. Sector strategy

1 Mobilise resources and strengthen capacities of all research institutions

2 Develop strategic partnerships and alliances with internal and external research and development organisations and institutions as well as PNG universities

3 Reinforce research, science and technology in secondary and tertiary institutions

4 Prioritise and coordinate funding of research and development programs aligning to PNG development needs

5 Increase private sector contribution and participation to ensure better alignment of research and technology development to industrial requirements

6 Prioritise research that involves the adaptation of existing technologies for PNG (rather than the development of world first technologies) because the returns are far higher for PNG

7 Enforce auditing of all research and development expenditure

8 Ensure researchers and end users of research have ready access to relevant information and technologies

9 Develop “Patent right” and “Copyright” laws to protect scientific and technological discoveries, including the protection of rights over traditional herbs and information DSP Deliverables No 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions –Increase capacity of research institutions to conduct research, 1, 7 Allocate research funding to Consistent increase in communicate results and to encourage young researchers research agencies that satisfy government funding –All research and development expenditure fully accounted and external financial audit all research institutions satisfy external auditing standards. standards. PNG research institutions, including universities, have strategic 2 Encourage research institutions to work with PNG universities and international Consistent increase in alliances with local and international institutions research and development organisations, to help develop local outcomes. government funding Research, science and technology are part of secondary school 3 Outlined already in the deliverables of the sections on primary and secondary Consistent increase in curriculum and tertiary institutions are contributors to research. education and higher and technical education government funding Private sector is well engaged in research and development. 4.1, Trial measures to increase private sector Consistent increase in 5 funding of research government funding Research concentrated on adapting existing technologies. 4.2, Prioritise expenditure on adapting existing science and technologies to the needs of Funding allocated to institutions with strong financial 6, 7 PNG. Funding provided to research agencies that satisfy external financial audit management record. standards Information and technologies are readily accessible to 8 Co-fund internet and effective technologies for Consistent increase in researchers and end users of research information and communication purposes government funding Scientific and technological discoveries are protected, including 9 Develop patent and copyright Implementation and awareness of patent and Consistent increase in the rights over traditional information passed down by ancestors Law. copyright laws government funding Responsibility Office of Higher Education / Department of Education / Department of Community Development/ Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding Option(s) 1, 4.2, 6 and 7 10 10 17 17 27.9 81.9 GoPNG/Donors 4.1 0.4 0.4 2 2 2 6.8 GoPNG/Donors 9.1 0.5 0.5 1 1 0.1 3.1 GoPNG/Donors Total: 10.9 10.9 20 20 30 91.8 45 3.8 Road transport Goal: ---- Establish a transportation network that links all of PNG Introduction Transport infrastructure facilitates social development and economic growth. It enables improvements in international competitiveness, exports, imports, investment, employment, accessibility to vital services and markets, and increases in household incomes. Poor transport infrastructure is an impediment to these improvements and imposes high economic and social burdens, especially on the poor. Well-maintained transport infrastructure is essential for the efficient flow of produce to markets and for the flow of consumer goods and services to village communities. The decline in the quality of PNG’s transport infrastructure over the years has had a major adverse impact on service delivery and on the capacity of Papua New Guineans to earn cash incomes. As part of the MTDP 2011-2015, policies will be developed to grow the capacity of local industry. This will be assisted by the introduction of appropriate sized contracts and multi-year funding to create the certainty that industry needs. A full review of all transport related legislation will be completed and an efficient framework within which to operate the transportation sector will be developed. The Department of Transport currently undertakes a coordination role for the sector. This role will continue and be strengthened. There are approximately 30,000km of roads in PNG. Of these, 8,460km are national roads and about 22,000 km are provincial and district roads. The condition of roads in PNG is measured by the Roads Asset Management System (RAMS). Currently the national roads are assessed as 29 per cent in good condition, 37 per cent fair and 34 per cent in poor condition, while other roads are in critical need of urgent maintenance. The transport sector will achieve the PNGDSP goal through the implementation of the MTDP sector strategies and deliverables. The MTDP 2011-2015 will lay the foundation for further expansion of the national roads network that will link all of PNG. Roads will be in good condition, properly planned and with prioritised rehabilitation and maintenance. Improved road transport infrastructure will improve access to markets and improve the flow of essential goods and services (including basic services such as health, education and law and order) to both rural and urban communities. Specifically, improved transport infrastructure will help address the Millennium Development Goals (MDGs) for poverty alleviation and improved education and health outcomes. MTDP 2011-2015 To achieve the 2030 target of 25,000km of national roads in good condition, work must commence immediately on several fronts. Government has identified the Economic Corridors and missing link roads as very important to the country’s future. Work will commence immediately on feasibility studies, route identification, road survey and design, and land acquisition. It is likely, however, that these activities — in particular land acquisition — may take some years to complete. It is possible to commence work immediately to bring the existing national roads (8,460km) to good condition. Maintenance, rehabilitation and an upgrade of the existing network will be a significant contribution to the final target and will quickly deliver real improvements to citizens. Routine maintenance of roads already in good condition provides a very large return to the people of PNG, sustaining the value of PNG’s investments in road rehabilitation and construction. Routine maintenance of national roads will therefore be fully funded under each MTDP. The focus of the land transport sector is primarily on roads which are strategically aligned to the overall development of PNG and are of national importance. The roads that are inherent in the deliverables for the PNGDSP 2030 have been selected based on the populations served and economic potential. Building on MTDP 2011-2015 There are four sector strategies which are consistent with the overall PNGDSP goal of expanding the national road network to good condition. These are as follows. · Rehabilitate and upgrade priority national roads and other national roads to good condition. · Undertake feasibility studies and construct missing link roads to good condition. · Undertake feasibility studies and construct Economic Corridor roads to good condition. 46 · Rehabilitate and upgrade provincial and district roads. The PNGDSP 2030 deliverables as per the MTDP sector strategies are as follows. · Rehabilitate, upgrade and maintain 16 priority national roads. · Rehabilitate and maintain other national roads. · Construct and maintain 16 missing link roads. · Construct and maintain 4 additional Economic Corridor roads. · Develop road safety initiatives. Challenges in implementation The major challenge facing the transport sector is the Government’s funding priorities. Past experience shows that where resources were diverted to other non-core areas, development was not being achieved. The other challenge is for Government to demonstrate adequate funding to the sector so that donors and the private sector will be able to commit their financial and technical resources to achieving the deliverables by 2030. Compensation claims and availability of land are also development constraints with 97 per cent of PNG’s land held under customary tenure. The challenge is for the Government to ensure certainty and gain prompt access to land for Government use in road transport. Fully implementing the National Land Development Program will be crucial for this. The capacity for local contractors in PNG to implement large and multiple projects is limited and, as such, there are inevitable delays in completion of projects. A commitment to longer term program funding will provide the confidence industry needs to build its capacity. 47 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Expand PNG’s national road Length of network NTDP (2006-2010) 2010: 8,460km of 10,000 km of 15,000 km of 20,000 km of 25,000km of national network that links all of PNG PNGDSP national roads national roads national roads national roads roads and maintain it in good condition. Quality of national NTDP (2006-2010) 29% are in good 65% are in good 80% are in good 95% are in good 100% are in good roads – sealed, good PNGDSP condition. condition condition condition condition drainage, good bridges Lead government department Department of Works and Implementation No. Sector strategy

1 Improve conditions of 16 priority national roads and other national roads to good condition

2 Construct 16 missing link roads

3 Construct 8 Economic Corridor roads

4 Construction of additional provincial/district roads and upgrade existing roads to attain an overall length of national roads in good condition of 25,000km by 2030

5 Enforce road safety and awareness DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Rehabilitate and upgrade the 16 national 1.1 2500 km sealed and in good 3500 km sealed 4000 km sealed 4216 km sealed –Adequate funding priority roads to a good condition (4216km) condition and in good and in good and in good –Industry capacity condition condition condition Rehabilitate and upgrade the remainder of 1.2 1000 km sealed and in good 2000 km sealed 3000 km sealed 4244 km sealed –Adequate funding the current national road network to a "good" condition and in good and in good and in good –Industry capacity condition (4244 km) condition condition condition Construct the 16 "missing link” roads to good 2.1 Undertake survey and feasibility 5 missing link 5 missing link roads 5 missing link roads –Land is secured condition (approximately 2,280 km) studies for 16 missing links roads. roads constructed constructed constructed –Adequate funding Acquire land. Construct 1 road –Industry capacity Construct the 4 additional Economic 3.1 Undertake survey and feasibility 2 roads 1 road constructed. 1 road constructed. –Land is secured Corridor national roads to good condition studies for 4 Economic Corridor constructed. –Adequate funding roads. Acquire land. Construct 1 –Industry capacity road Construction of additional provincial/district 4.1 2000 km upgraded 3000 km upgraded 4000 km upgraded –Land is secured roads and upgrade existing roads and sealed and sealed and sealed –Adequate funding –Industry capacity Conduct regional awareness, enforcement 5.1 Conduct road safety education, road Conduct road Conduct driver Traffic rules –Adequate funding and road safety audits safety promotion, random vehicle safety audits on education enforcement inspections national roads Responsibility Department of Works Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding Option(s) 1,569.8 I 3,832.6 I 4,922.3 I 5,267.6 I 5,764.9 I 21,357.2 I GoPNG/Donors 48 3.9 Water transport Goal: ---- Establish a transportation network that links all of PNG Introduction With its dispersed population, PNG’s coastal shipping services take on special significance in providing access to rural communities. PNG’s maritime infrastructure also supports the nation’s domestic and international trade. Seventeen commercial ports, mostly very small, and innumerable small wharves, jetties and beach landings provide the basic infrastructure for maritime services, but the majority of these are in poor condition and carry very little traffic. Based on the current schedule of fees and user charges, only Lae and Port Moresby ports are financially viable. The other 15 ports are smaller and subsidised by these two operations. The international port turnaround time is currently about three days and only five per cent of shipping route services are being provided. The current conditions of the international ports limit the accommodation of an increased number of vessels and as such the handling time for transiting vessels is high. MTDP 2011-2015 There are three sector strategies for achieving the PNGDSP sector goal of a reliable water and sea transport system. · Rehabilitate and upgrade all national ports and associated facilities where this is necessary to cater for increased traffic and cargo. · Improveme inland and coastal water transport infrastructure for marginalised communities. · Provide an adequate system of navigational aids and otherwise ensure safety compliance of maritime vessels and facilities. The total estimated cost of upgrading the maritime transport sector is K2.0 billion, K1.4 billion of which will be funded in the MTDP 2011-2015 and the remainder carried over into MTDP 2016-2020. At K1.3 billion, rehabilitation and upgrade of ports comprise the bulk of the cost. The expenditure is targeted at urgent maintenance and rehabilitation of the priority ports in the first MTDP. Feasibility and design studies will also be funded for the relocation of the Port Moresby port with construction to follow in the next MTDP. The other expenditure area is the completion of the ADB Community Water Transport Project which will see the rehabilitation of jetties to serve the commuting public. Challenges in implementation The major challenge facing the maritime sector is adequate resourcing for port rehabilitation and extension. Due to the magnitude and urgency associated with port development, resources need to be secured in the first MTDP to avoid rapidly increased costs in the following MTDPs and to prevent the prospect of severe capacity constraints. Compensation claims are also a hindrance but will be addressed by the Government. As only two ports are financially viable, the remaining fifteen ports are serviced as a community service obligation (CSO). Adequate budget funding is required until trade levels increase to the point where these ports are financially self supporting. 49 DSP sector goal Indicator Baseline 2015 target 2020 target 2025 target 2030 DSP target Establish a water and sea Domestic Water –25% increase in the –75% increase in the –Double the number of –Triple number of routes transport system that links transport capacity number of routes and number of routes and routes and vessels serviced and, number of vessels all of PNG and is secure, safe vessels vessels –75% of ports upgraded –all ports upgraded and efficient –25% of ports upgraded –50% of ports upgraded International port 3 days 2½ days turnaround 2 days turnaround 1½ days turnaround 1day turnaround turnaround time turnaround Lead government department PNG Ports Limited, Department of Transport, IPBC and NMSA No. Sector strategy I 1 2 3 I Rehabilitate and upgrade all national ports facilities Provide community water transport services Rehabilitate navigational aids DSP 2030 deliverables No. 2011-2015 2015-2020 2020-2025 2025-2030 Risks and assumptions I Rehabilitate and upgrade 16 national ports 1.1 4 4 4 4 –Adequate funding –Industry capacity Ports relocated where cost effective 1.2 Undertake feasibility Relocation of POM Undertake feasibility Relocation of –Adequate funding study for relocation of port study for relocation Madang port –Industry capacity POM port of Madang port Rehabilitate 200 jetties 2.1 10 50 60 80 Adequate funding Rehabilitate and restore small navigational aids 3.1 Restore 47 small Adequate funding navigational aids Responsibility PNG Ports Ltd, Department of Transport, IPBC, NMSA Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding option(s) 167.2 I 145.7 I 210.6 I 131.7 I 721.5 I 1376.7 I GoPNG/Donors 50 3.10 Air transport Goal: ---- Establish a transportation network that links all of PNG Introduction Airports play an important role in linking PNG’s widely fragmented population. The Government of PNG has adopted a system of certification that requires airports to achieve and maintain compliance with minimum operating standards. Compliance with these certification standards is required for all 22 national airports. Airport certification is a process whereby the Civil Aviation Authority Regulator approves airports for use by civil aircraft. Currently 12 airports are certified out of the 22 national airports. In addition, almost 95 per cent of rural airstrips are closed. Properly planned and prioritised rehabilitation and maintenance of the existing air transport infrastructure is an essential part of PNG’s relationship with countries in the region and indeed the global perception of PNG. A quality air transport industry is critical not only for access to services by citizens but in attracting tourists and foreign investment to help build the future. MTDP 2011-2015 Maintenance and rehabilitation of all national airports will be central for the MTDP 2011-2015. This will include navigational aids and communication and surveillance systems to ensure compliance with international operating standards. In addition, rehabilitation of rural airstrips will be undertaken to allow access to populated rural areas that are inaccessible by road or sea. Regional airports will be upgraded to allow higher seating capacity jets to cater for the anticipated increase in the number of passengers as a result of increased economic activities. With the timely support of the Asian Development Bank (ADB), the Government is investing close to K2.0 billion to rehabilitate and upgrade the 22 national airports to comply with international safety and security standards and to serve future needs. This will help to realise the majority of the deliverables. This program is implemented in three phases with the first phase in the MTDP 2011-2015. 51 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Improve and expand air All national airports complying with 15 airports 22 airports 22 airports 22 airports 22 national airports complying transport services so that international safety and security certified certified certified certified with safety certification it is safe, dependable, standards affordable and accessible to all sections of the Number of unused airstrips rehabilitated 10 10 20 20 50 airstrips rehabilitated community to basic safety levels Number of regional airports upgraded for 1 3 3 4 10 airports upgraded for larger higher seating capacity jets jets Lead government National Airports Corporation department No. Sector strategy

1 Rehabilitate and upgrade all national airports to international safety standards

2 Regional airports upgraded for larger seating capacity jets

3 Upgrade annual routine maintenance for national airports

4 Rural airstrips rehabilitated to basic safety operational levels DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Rehabilitate and upgrade all national airports 1.1 22 national airports certified –Adequate funding –Industry capacity Rehabilitate and upgrade all navigation aids, 1.2 –Replace ATM at POM –Adequate funding surveillance and communication systems in –Install ADS at Wewak, Tokua, Momote, –Industry capacity all national airports Alotau & Nadzab –Install GNSS in 20 national airports –Upgrade Radio Navigation Aid in POM, Madang, Gurney, Buka, Momote, Girua and Finschafen Upgrade, extend and expand regional airports 2 2 2 3 3 –Adequate funding for larger jets –Industry capacity Annual routine maintenance for national 3 Selected national airports Selected national Selected national Selected national airports airports airports airports Rehabilitate rural airstrips to basic operating 4 Rehabilitate 10 airstrips Rehabilitate 15 Rehabilitate 15 Rehabilitate 10 –Adequate funding levels airstrips airstrips airstrips –Industry capacity Responsibility National Airports Corporation Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding option(s) 378.8 I 395.5 I 383.4 I 386.1 I 375.0 I 1918.8 I GoPNG/Donors 52 3.11 Utilities Goal: ---- All citizens and visitors to have access to reliable an d affordable pu blic utilities by 2030 Introduction Access to public utilities such as water and sanitation, postal services, electricity and communication are becoming an increasing necessity in today’s modern society. PNG’s ability to provide these services is well below international standards for a developing country. The goal for the utilities sub-sectors is to ensure that there is wide access to reliable and affordable public utilities for all citizens and visitors by 2030. Papua New Guinea is ranked low in terms of access to clean water and safe sanitation in the Pacific Region. Only 30 per cent (3.5 million) of the total population have access to clean water and just 22 per cent have access to adequate sanitation services. Unsafe drinking water and poor personal hygiene practices contribute to water and food borne diseases including diarrhea, dysentery and typhoid. Diarrhea accounts for 1,610 per 100,000 deaths in the country and is ranked as one of the main causes of deaths. Typhoid accounts for 2.9 per cent of all deaths as indicated in the National Health Plan 2001-2010. The limited access to clean water and safe sanitation poses major risks of cholera and other related epidemics. Just 20 per cent of the rural population have access to clean and safe water and 15 per cent have access to safe sanitation disposal options. Only 60% of the urban population have access to safe water, while only a minority has access to proper sanitation disposal facilities and services. The delivery of postal services in PNG is also an area that needs considerable improvement and the Government is committed to providing a reliable service to all the 89 districts in the long term. MTDP 2011-2015 In the next five years, the main focus will be on access to safe water and sanitation by the urban and rural populations. Access to clean water and sanitation will increase the standard of living in PNG by reducing the incidence of diseases. To this end, a clear water and sanitation strategic plan is required. As a first step in implementation, the provision of services in urban areas to paying customers is important. However, much more is required to realise the PNGDSP targets which aims to increase the proportion of the population having access to improved water and sanitation to over 70 per cent. A second aim of the PNGDSP is that all education institutions will have access to safe water. These targets are ambitious, but are achievable, particularly with Public Private Partnerships (PPP) where the private sector will partner with the Government to invest in the expansion of the reticulated water and sewerage system, especially in the burgeoning urban centres. The vast majority of the population does not have the capacity to pay for the critical services of clean water and sanitation. Under the Community Service Obligation framework, State owned institutions vested with the responsibility to provide water and sanitation services will be strengthened and accountable to provide services that are not commercially viable. Under the first MTDP, the provision of utilities to education institutions will be provided on request from institutions with the ability to pay. Postal services are important for communications and trade. Cost effective extension of postal services will therefore be supported. A postal service policy will provide the framework for guiding development. Building on MTDP 2011-2015 The subsequent MTDPs will concentrate on developing rural water and sanitation infrastructure to achieve the PNGDSP targets. Partnership with communities and provinces to improve rural and peri-urban communities with proper water and sanitation methods and technologies will also be pursued. Investigations and feasibilities studies will be undertaken to pilot and implement water and sanitation services in urban settlements. Septic and waste treatment methods that address environmental and health issues will also be implemented in rural areas. Sanitation and safe water services will be extended to all education institutions. Challenges in implementation The rugged terrain and remoteness of most districts in PNG pose a real challenge to roll out basic services such as utilities. In rural areas, rainwater, shallow wells, springs and creeks are the main sources of potable water but they have their own water quality problems. Rainwater stored in tanks is potentially the safest, most cost efficient and sustainable option for improving rural water access. However, the average rural household finds the cost of owning and maintaining water tanks unaffordable. Large water tanks located at public buildings may therefore be provided as a community service. The issue then is whether a small access fee will generate enough revenue to cover the cost of the infrastructure, including maintenance. Reticulated water supply services are provided in most rural district centres but most of those reticulated services need urgent maintenance and upgrading. This highlights the issue of ensuring that infrastructure is maintained. 53 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Citizens and visitors to have Access to improved water PNG Water 39% of total population 47% of total 55% of total 62% of total 70% of total access to reliable and source Board (30% of rural population population population population affordable public utilities by population in 2008) 2030 Access to improved PNG Water 44% of total population 51% of total 57% of total 63% of total 70% of total sanitation Board population population population population Proportion of education DOE 30% of education 50% of education 75% of education 100% of education 100% of education institutions having access Eda Ranu institutions in 2008 institutions institutions institutions institutions to safe water Access to reliable postal PNG Post 72 districts have access 77 districts 82 districts 86 districts 89 districts services to formal postal services Lead government department PNG Water Board, IPBC, Post PNG No. Sector strategy

1 Increase in access to proper and safe water supply

2 Increase in access to proper sanitation system

3 Increase in proportion of education institutions having access to safe water supply

4 Increase in number of districts having access to formal postal services. DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions 70% of population with 1.1 Develop water strategic plan to guide Provide clean water Provide clean water Provide clean water Lack of funding and access to clean water sector development and implement services throughout major services in major cities services in all cities, delay in implementation cities and in densely and densely populated major towns and densely populated rural areas of rural areas of Economic populated rural areas of key Economic Corridors. Corridors Economic Corridors. 70% of population with 2.1 –Develop sanitation strategic plan to Provide sanitation services Provide sanitation services Provide sanitation Lack of funding and access to improved guide sector development and in major cities and densely in major cities and services in all cities, delay in implementation sanitation implement populated rural areas of densely populated rural major towns and densely –Rehabilitate and expand Port key Economic Corridors. areas of Economic populated rural areas of Moresby sewerage system Corridors. Economic Corridors. All education 3.1 Dept of Education to ensure all All education institutions All education institutions Maintain high standard. Lack of funding and institutions with access institutions have access to safe water, in cities and in key have access to safe water delay in implementation to safe water and with priority given to those in Economic Corridors have and sanitation. sanitation communities with the greatest need. access to safe water and Coordinate with deliverable 1.1. sanitation. Postal services in all 17 4.1 Develop postal services policy to guide Implement policy and Implement policy and Implement policy and Lack of funding and districts sector development and implement. revise as needed. revise as needed. revise as needed. delay in implementation Responsibility PNG Water Board, IPBC, Post PNG I Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding option(s) I Total: 1.1, 4.1 2.1 41.8 41.8 41.8 41.8 41.8 41.8 54 25 66.8 91.8 25 25 50.0 50.0 217.2 267.2 GoPNG/Donor GoPNG/Donor 3.12 Information communication technology Goal: ---- A modern and affordable in formation and communications technology that reaches all parts of the country Introduction Information Communication Technology (ICT) has transformed the world. Many countries have harnessed technology to improve business, open access to market places, access a wealth of information, enhance social interaction and enable far greater community participation. For PNG to achieve the level of development envisaged in the PNGDSP there must be efficient ICT infrastructure with the use of technology that is appropriate to PNG’s circumstances. The objective of ICT policy is centred on ensuring availability of ICT infrastructure to as many Papua New Guineans as possible and at affordable prices. This will assist the people of PNG to face the many challenges associated with the economy and geographical isolation, and will facilitate education, health and the delivery of other services of the Government. MTDP 2011-2015 Proper planning and implementation of ICT policy in a timely manner is critical in the first MTDP. The targets set for the next five years are ambitious and involve a lot of challenges considering the current low geographical coverage of telecommunication services including in larger population centres, the poor quality of service and the lack of institutional capacity. These limitations result in the high retail charges associated with ICT which impede the development of broadband services. Consequently, PNG has one of the lowest levels of voice and internet penetration in the world and there are very limited broadband services available. With the launch of the ICT policy in 2008, a number of reforms have taken place. The Government allowed private sector competition in the mobile phone sector and this resulted in a dramatic increase in the use of mobile phones. Since entering the market in 2007, Digicel now has over 4 million active subscribers and 1.5 million Digicel phones are used, on average, every day. Furthermore, B-mobile currently has 300,000 subscribers, having been established in 2008. Given that mobile phone infrastructure can support wireless broadband services, radio and even TV, the extensive provision of mobile phone services represents an enormous potential for rolling out competitive and low cost access to internet broadband and for realising the PNGDSP goals for radio and television coverage. Currently the cost of broadband access is high, at about 20 times that of Australia for example. To remedy this, under the phase 2 reforms of the Government’s ICT policy, access to mobile phone and broadband internet services will be promoted through a competitive market. In particular, access to the international gateway will be opened and other measures to raise private competition will be taken so that internet access can be raised from the current 2.3 per cent to 70 per cent of the population by 2030. PNG’s ICT sector will be well integrated with ICT internationally, and in that way the Government will ensure compliance in PNG with international conventions, standards, practices and trends. A potential project is to have all government departments and agencies integrated into one government information platform. The cost benefit of this project will be analysed and, where possible, quantified in a feasibility study. Pending the outcomes of the feasibility analysis and subject to budget priorities, this will be implemented in subsequent MTDPs. Building on the MTDP 2011-2015 By promoting private sector competition, the first MTDP will provide the foundation for realising the PNGDSP targets for phone and internet access, and will contribute to PNGDSP targets for radio and television access. If it becomes apparent that the PNGDSP targets for ICT access will not be achieved by 2030, then the Government will utilise Public Private Partnerships to invest in further extending services. To this end, the feasibility of satellite access will be investigated and implemented accordingly to further the interests of PNG. Subsequent MTDPs will ensure the regulatory environment remains conducive for investment so that PNG keeps abreast of international ICT technologies. An emphasis in future MTDPs will be on delivering Government services to rural PNG through the extensive mobile phone and internet coverage. Challenges in implementation Despite marked progress in mobile phone access, the level of access to fixed telephone and internet services across PNG is very low by world standards. Remedying this is a key challenge of the first MTDP. Specific challenges include accessing land, political support for policies and strategies that promote ICT development, resource availability, and potential legal issues. 55 DSP sector goal Indicators Sourc Baseline in 2010 2015 target 2020 target 2025 target 2030 DSP target e A modern and affordable Access to a telephone DCI 650 700+ 750+ 780 + 800+ mobile subscribers information and (mobile subscribers per per 1000 people communication technology 1000 people) that reaches all parts of the country. Percentage of DCI 2.3% 20% 50% 60% 70% of people using population with access internet to internet Percentage of DCI 55% access to radio; 26% –Radio: 65% –Radio: 75% –Radio: 85% 100% access to radio population with media DPM access to television, mostly –Television: 45% –Television: 65% –Television: 85% and television coverage in urban areas. Lead government department Department of Communication and Information (DCI) No. Sector Strategies to achieve goal

1 Carry out phase 2 reforms of the Government’s ICT policy, introducing a competitive market in the provision of internet and fixed landline services

2 Utilise PPP to provide services where they are otherwise commercially unviable in order to achieve the PNGDSP targets by 2030

3 Maintain mutually beneficial relationships with international ICT organisations. Ensure compliance with international conventions, standards practices and trends

4 Expand government services to rural communities using mobile phone and internet technologies DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Close to 100% of population 1.1 Establish NICTA to oversee If access to phone and internet Implement findings of –Land is secured with access to phone and competitive rollout of phone and services do not meet 2030 feasibility study to –Improve project management 70% with access to internet internet services. Ensure regulatory target, undertake feasibility of achieve PNGDSP targets. unit and capacity framework is conducive for private options for extending access –Policies and legal issues are sector investment. including satellite and addressed with political telecentres. support 100% of population with 1.2 Rehabilitation of provincial radio Continue rehabilitating Sustainable level of –Sustainable management access to radio and television stations on the basis of satisfactory provincial radio stations. management performances service. performances. –Sufficient funds are allocated Integration of Government 1.3 Cost benefit scoping study of IGIS Full integration of management Management information Policy and legal issues are Information Systems (IGIS) network infrastructure and data Information system at national systems fully integrated addressed and E-Government management centre in NCD and 6 level at provincial and district selected provinces. level Responsibility Department of Communication & Information, Estimated inputs (K million) 2011 2012 2013 2014 2015 2011-2015 Funding Option(s) 25.2 29.0 5.0 5.0 5.0 69.2 GoPNG 56 3.13 Energy development Goal: ---- All households have access to a reliable and affordable en ergy supply, and sufficient power is generated and distributed to meet fu ture energy requirements and demands Introduction Electricity is a crucial input to production and modern society cannot function without it. Electricity is essential for improving living standards by supporting economic growth and providing access to technology and services that otherwise would not be available. PNG currently has four main sources for electricity generation: gas, hydro, geothermal and diesel. With the anticipated rise in demand due to economic growth and an increasing population, the current capacity of energy is lacking and in urgent need of upgrading and rehabilitation. Approximately 90 per cent of the population do not have access to electricity, and the 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. MTDP 2011-2015 The MTDP 2011-2015 will focus on increasing access to electricity for all households in the country. There will be a focus on infrastructure that is quick to construct, while at the same time feasibility studies will assess large scale developments. Electricity will be provided to rural aid centres and schools by using renewable energy such as solar, wind and micro hydro. Diesel will also be used but only as an interim measure while renewable sources are developed. The MTDP will also address the establishment of clear and specific frameworks for utilising gas in electricity generation. New investment from the private sector in solar technology is also expected during the period of the first MTDP. A feasibility study will be undertaken as a first step to developing a national grid. While this study is underway, major maintenance work will be undertaken on the existing regional grids — the Port Moresby Rouna grid, the Ramu grid and the Gazelle grid. Priority will be give to Rouna, followed by Ramu and then Gazelle. The maintenance work will help prepare the grids for national connection. Pending the outcome of the feasibility study and available resources, work may commence on the national interconnection in the first MTDP, but will otherwise commence in the second MTDP period. Importantly, the viability of the national grid will be boosted with the prospect of exporting electricity, particularly to Australia. Planning for export will commence during the first MTDP.. The connection of PNG’s national grid to the eastern Australia grid will provide tremendous potential for export earnings while locking in low cost electricity for Papua New Guineans. Comprehensive analysis is also required into the cost effectiveness of various alternative sources of power. This analysis will then form the basis for investment planning in generation and distribution capacity. The emphasis will be establishing hydroelectric, geothermal and other renewable energy technologies to replace diesel. For the transport sector, bio-fuel will be assessed as a low cost alternative to diesel. Inefficiencies in the electricity systems will also be addressed in the first MTDP. In particular, 50 per cent of technical losses in electricity systems will be rectified and a framework will be established for eradicating non-technical losses. Building on MTDP 2011-2015 Subsequent MTDPs will progress the initiatives of the first MTDP. Establishing the national grid for the country and connection to international grids will be a priority of the second MTDP. In all MTDPs there will be a focus on expanding gas, hydro and other renewable generation capacity and on increasing provision to domestic customers through the easipay system. Research and development will have a key role in identifying appropriate and feasible technology options in various locations. Challenges in implementation There is a lack of investment in maintaining infrastructure and performing operational maintenance on existing generation, transmission and distribution assets. This contributes to the frequency of power shortages and ultimately means higher social and economic costs are borne by the country. Revenues raised by PNG Power Limited need to be fully reinvested into the sector so that PNG Power can better achieve its objectives. Engaging the private sector through PPP will provide the investment capacity required to achieve the objectives for energy supply. The private sector will play a dominant role in electricity generation and in building the infrastructure for the export of electricity. Hence, maintaining an environment conducive to private sector investment will be crucial. Inefficient operation by power companies contributes to higher costs and reduces the monies available in the sector for reinvestment. 57 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target All households have Access to electricity PNG Power, DPE-ADB 12.4% of 27 % of 41% of 55% of At least 70% of access to reliable Power Sector Report households households households households households and affordable energy supply and Capacity of gas generation PPL 70 MW 130 MW 280 MW 390 MW 390 MW sufficient power is Capacity of hydro generation PPL 215 MW 430 MW 580 MW 750 MW 1020 MW generated and distributed to meet Capacity of geothermal generation DPE 56 MW 63 MW 112 MW 196 MW 350 MW current and future Capacity of solar installations DPE 0 MW 4 MW 8 MW 14 MW 25 MW energy requirements and demands. Capacity of wind power technologies DPE 0 MW 7 MW 13 MW 22 MW 40 MW Capacity of biomass generation DPE 0 MW 14 MW 24 MW 42 MW 75 MW Capacity of biogas generation DPE 0 MW 2 MW 3 MW 6 MW 10 MW Capacity of diesel- generation PPL 160 MW 100 MW 60 MW 40 MW 30 MW Capacity of coal-generation DPE 0 MW 30 MW 30 MW 30 MW 30 MW Existence of a national grid DPE NIL nil nil nil exists Percentage of households installed with PPL 4% 9% 18% 23% >50% easipay (pre-paid) system Lead government Department of Petroleum and Energy (DPE) department No. Sector strategy 1 1.1 Increase the number of independent power producers (IPPs) in generation market to feed power into existing electricity systems. 1.2 Increase numbers of private sector investments in isolated market pockets/enclaves, (with state subsidies provided where necessary). 1.3 Increase public investments in rural electrification (by the Government) in target areas and groups (schools and health posts) where commercial investments are not viable. 2.1 Increase capacity of gas-based electricity generation. 3.1 Increase electricity-generation capacity utilising hydro. 4.1 Increase electricity-generation capacity utilising geothermal. 5.1 Increase use of solar photovoltaic technology for electricity generation. 6.1 Increase electricity generation capacity utilising wind. 7.1 Increase biomass-based electricity generation capacity. 8.1 Promote/increase biogas-based electricity generation capacity. 9.1 Relegate the importance of diesel-based power generation to strategic niches of “rapid-response capacity”, buffer-capacity and/or backup (standby) capacity. 10.1 Introduce clean coal generation technology that underpins both energy security and competitive electricity tariffs. 11.1 11.1 Rehabilitate the three main grids of Rouna, Ramu and Gazelle. 11.2 Feasibility study into establishing a national grid. 11.3 Establish a national grid. 12.1 Increase number of households utilising easipay (pre-paid) system for payment of electricity charges. 13.1 Create, establish and operate a robust system for data collation, analysis and storage to inform policies and strategies. 58 DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Conclusion of feed-in tariffs, 1.1(a) Advent of 2 IPPs Advent of 2 new IPPs Advent of 1 new IPP Existing 5 IPPs –EIP is approved by NEC and its access arrangements, and employing “rapid with established with established increase their implementation, monitoring and evaluation regulatory contracts and response” sources of feed-in feed-in generation capacities framework is established before end of 2010 issuance of licenses for new IPPs power generation such arrangements and arrangements and by the quotas –The feed-in tariff, access arrangements and feeding electricity into Port as diesel generators regulatory contract regulatory contract allocated by the regulatory contracts are accepted and Moresby system under feed-in tariff Government to meet implemented arrangements and growing demand short-term regulatory contract Conclusion of feed-in tariffs, 1.1(b) As above As above As above As above As above access arrangements, and regulatory contracts and issuance of licenses for new IPPs feeding electricity into Ramu system Conclusion of feed-in tariffs, 1.1(c) Advent of 1 IPP Existing IPP Advent of 1 new IPP Existing 2 IPPs As above access arrangements, and employing “rapid increases its with established increase their regulatory contracts and response” sources of capacity by the feed-in capacities by the issuance of licenses for new IPPs power generation such quota allocated by arrangements and quota allocated by feeding electricity into Gazelle as diesel generators the Government to regulatory contract the Government to System under feed-in tariff meet growing meet growing arrangements and demand demand short-term regulatory contract Isolated market enclaves 1.2(a) 5 isolated market 15 new isolated 15 new isolated 15 new isolated –CSO model well promulgated to the developed using the CSO model enclaves developed and market enclaves market enclaves market enclaves acceptance of stakeholders under the EIP, and appropriate established developed and developed and developed and –Funding is available from the State to licenses issued to IPPs established established established finance the capex subsidy component of the construction phase of CSO projects –Markets are assessed and proven to be feasible for the CSO model –Provincial governments are willing to allow this model to be implemented at “C” centres Large load power purchase 1.2(b) 2 new large load 2 additional large- 2 additional large- 2 additional large- –Large loads are conducive for attracting agreements (PPAs) with existing markets established load markets load markets load markets IPPs to supply the markets IPPs or PPL, and appropriate established established established –IPPs are keen to invest in large load licenses issued markets Rural schools have access to 1.3(a) 200 rural schools 400 rural schools 600 rural schools 800 rural schools –Funding is available from the Budget to electricity from small renewable electrified through electrified through electrified through electrified through carry out these projects energy systems (solar, wind, and renewable energy renewable energy renewable energy renewable energy –Costs of generation technologies do not rise micro/pico- hydro) systems systems systems systems significantly over the years –Sufficient manpower in the DPE to implement these projects Rural health posts have access 1.3(b) 200 rural health posts 400 rural health 600 rural health 800 rural health As above to electricity from small electrified through posts electrified posts electrified posts electrified renewable energy systems (solar, renewable energy through renewable through renewable through renewable wind, and micro/pico- hydro) systems energy systems energy systems energy systems 59 Increased electricity output 2.1 approx.130 MW approx. 280 MW approx. 390 MW approx. 390 MW –Private sector is willing and prepared to generated from gas using invest in gas fired power plants efficient and modern technology –There is sufficient gas made available for use in PNG Increased electricity output 3.1 approx. 430 MW approx. 580 MW approx. 750 MW approx. 1020 MW –Private sector is willing and prepared to generated from hydro, using invest in hydroelectric plants cost-effective means and appropriate technology Export of clean electricity to 3.2 Feasibility study of neighbouring countries export of hydro power to Australia. Commence construction subject to findings,. Increase electricity output from 4.1 to approx. 90 MW approx. 160MW approx. 280MW approx. 500MW Government, development partners and other renewables (geothermal, 8.1 private sector are willing and prepared to solar, wind, biomass, biogas, invest in renewable energy development wave, etc) Significant reduction in diesel- 9.1 100 MW of diesel- 60 MW of diesel- 40 MW of diesel- 30 MW of diesel- –Options for replacing diesel plants are thermal generation, replaced by thermal plants thermal plants thermal plants thermal plants economically more attractive renewable energies and other operational in PNG operational in PNG operational in PNG operational in PNG –Finance is available to fund capital sources of electricity intensive renewable Introduction of clean coal 10.1 0 MW 30 MW 30 MW 30 MW Coal is economically more attractive than technology alternatives and is otherwise accepted by PNG. National electricity grid 11.1 –Rehabilitate the three Link the three main Expand national grid National grid is –A national electricity grid is feasible established main grids. grids, subject to to service Economic established –Private sector is willing and prepared to –Conduct feasibility findings of feasibility Corridors. enter into PPP arrangement with PPL to study to guide study. develop national grid development of national grid. Growth in share of households 12.1 9% of households 18% of households 23% of households More than 50% of Household capacity to pay supports this with easipay systems installed households growth in easipay installations. Establish systems and processes 13.1 –Develop systems and –Review systems and –Review system and –Review system and –Capacity is available to establish the of energy data collation, processes for data processes for data process for data process for data systems and processes of data collation analysis, storage and use collation, analyses, collation, analyses, collation, analysis, collation, analysis, –Constraints relating to data collation are (retrieval) storage and use storage and use storage and use storage and use removed (e.g. reluctance by private sector to –Develop and –Review and –Review and –Review and release data) “operationalise” work “operationalise” work “operationalise” work “operationalise” work plan for data collation, plan for data plan for data plan for data processing and use collation, processing collation, processing collation, processing and use and use and use Responsibility Department of Petroleum and Energy (DPE) Estimated inputs 2011 2012 2013 2014 2015 2011-2015 Funding options (K million) 59.9 59.9 59.9 59.9 59.9 299.5 GoPNG/donors/public private partnership/ Private sector investments 60 3.14 Rural Develop ment Goal: ---- Rural prosperity Introduction Economic development in rural areas has been slow and stagnant since independence, despite the fact that the vast majority of the population lives in rural PNG. The Government’s priority is to improve service delivery in rural areas. For this reason, deliverables in all sectors of the MTDP are focused on rural communities. Rural prosperity can therefore be seen as an overarching goal of the PNGDSP and hence of the MTDP 2011-2015. Therefore, the resourcing of rural development is captured under almost all of the sectors and comprises the bulk of expenditure under the MTDP. MTDP 2011-2015 In the first five years of the PNGDSP, service delivery to rural PNG will be enhanced. Roads will be rehabilitated and maintained to ensure that communities have reliable access to markets so that their business ventures are profitable. Reliable access to services will also be important, supporting higher health and education outcomes. These will also be delivered by improving and properly resourcing rural health services and rural education opportunities. Services to rural PNG will be expanded. New maritime services will support coastal, island and river communities. New roads will be planned to provide access to new markets and key service centres. Land development opportunities will arise as the National Land Development Program is implemented, particularly in Economic Corridors. The provision of rural electricity will support entrepreneurs in rural PNG and the supply of clean water and sanitation will significantly improve rural health and lifestyles. Many of these developments will be implemented through Economic Corridors, including the Petroleum Resource Area Economic Corridor (PRAEC) which will be the first of the ten Economic Corridors identified in PNGDSP. Building on MTDP 2011-2015 Building on the foundation of the first MTDP, subsequent MTDPs will expand services, particularly in the Economic Corridors. Within the Economic Corridors, the priority regions will be the hot spots where population density and income potential or low health and education indicators warrant investment. Public private partnerships (PPPs) and partnerships with non-government organisations (NGOs), churches and civil society will assist to progress such development in the remotest areas where the Government cannot reach. The construction of the national road network integrated with the development of water and air transport linkages will support economic development in rural PNG, connecting fertile lands and fishing communities with major markets. In addition, a national, well maintained electricity grid will support the investment of entrepreneurs in rural locations. Social indicators will also improve as communities are provided with access to well resourced health and education facilities, as well as to clean water and sanitation. Challenges in implementation The major challenges to providing better services and economic opportunities in rural PNG are achieving effective financial management of resources by the Government, obtaining sufficient access to customary land, and the commitment of local communities to maintain the infrastructure that is provided. 61 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Rural prosperity Household income and wage NSO Parity with urban areas, rates adjusted for the cost of living Proportion of population HIES forthcoming under the national poverty line in PNG Poverty gap ratio forthcoming Gini Coefficient HIES forthcoming Share of poorest quintile in HIES forthcoming national consumption Proportion of population HIES forthcoming under the poverty line in rural areas Access to electricity PNG Power Only 3.7% of PNG’s More than 60% of PNG’s rural Limited rural population have population will have access to access to electricity electricity Lead government department Office of Rural Development Collaborative dept/agency Department of Personnel Management, Office of Higher Education, Labour Department, and DNPM No. Sector strategy

1 Strengthen lower levels of government

2 Extend basic services to all districts

3 Promote cooperative societies in all rural areas as an effective mechanism for developing agriculture and fishing enterprises

4 Establish microfinance banking agencies in all districts by 2030

5 Encourage eco-tourism and cottage industries as these open up opportunities for employment and income for many locals

6 Deliver specific training programs at the district level

7 Create growth centres in all key areas in all districts

8 Ensure that programs introduced by foreign stakeholders are culturally sensitive and consistent with traditional structures, PNG values and local ways of life Note: Rural development is the core of MTDP expenditure and therefore there are no specific expenditure measures in the rural development section of the MTDP. Instead, rural development initiatives are shown in the tables in other sections of the MTDP — for example, in the parts dealing with health (part 3.3), education (part 3.4), transport (parts 3.8-3.10), utilities (part 3.11), ICT (part 3.12), and energy (part 3.13). 62 3.15 Urban development Goal: ---- Urban centres developed accordin g to international town planning standards in order to cater for urbanisation and socioeconomic progress and deliver quality of life for all u rban people Introduction PNG’s urban population is growing rapidly in all towns and major cities. The estimated urban population of PNG was 1 million persons in 2010, with many migrating from rural villages to towns and cities. The large flow of people into cities and towns is giving rise to urban settlements, which in turn makes urban planning complex and challenging. It is likely that the urban population will more than double between 2010 and 2030 — the NRI (2010) estimates the urban population as being 3.5 million persons by 2030 — putting greater pressure on urban services and urban management. Land and housing prices in urban centres are already extremely high, exacerbated by a dysfunctional land titling system. Accessing customary land in urban centres is problematic. As a result, most city residents, including many public servants, are forced to live in settlements, many with inadequate access to electricity, water and sanitation, and secure land tenure. MTDP 2011-2015 The Government adopted its National Urbanisation Policy for PNG, 2010-2030, in June, 2010, and this sets the framework for the proper planning and development of town and cities, including those in rural areas, over the next 20 years. The National Urbanisation Policy is based around coordinating the implementation of projects and programs addressing the following five components. · The provision of primary and trunk infrastructure and services such as water supply, power, roads, and sanitation. · The development of sites and services on freehold and customary land, including upgrading of unplanned settlements. · The development, rejuvenation and strengthening of provincial and district service centers, especially investments enhancing the economic base of the towns. · Building local and community capacity to better manage urbanisation, urban management and urban development at national, district, provincial and local levels. · The development of local urbanisation, urban management and urban development policies, plans and programs. The implementation of reforms of the land titling system is also needed as a matter of urgency, to release land and thereby relieve the extreme shortage of adequate housing. Regulatory and legislative reforms are also needed to facilitate developments, for example, by allowing for strata title. Private sector investment is needed, not just in the construction of homes, but also in the construction of residential estates whereby accommodation will include sewerage, water, road and electricity infrastructure. The Government’s role in defining and enforcing property rights will also be important for giving businesses confidence to invest in expanding PNG’s cities. In this context, foreign investors will bring considerable experience in large scale residential estate developments, resources and financing, and will therefore be encouraged. Given that constrained access to land and adequate housing is an issue for many people in urban centres, including public servants, a national coordinated response is warranted. In urban locations, public private partnerships will be trialed to sub-divide and develop affordable accommodation exclusively for purchase or rent by public servants. The government agency responsible for public service housing will have high standards of transparency and efficiency so that funds are well managed. It will be accountable for achieving the rapid growth in housing for public servants that is required. Individual agencies will determine what assistance they provide to public servants in purchasing or renting housing that is made available under this scheme. Many who live in urban areas have low incomes and about 50 per cent of Port Moresby’s population live in settlements. This presents a major challenge for housing affordability. Careful research and management is needed to devise, pilot and implement economically, politically and socially sustainable approaches to ensuring the health of low income communities through the provision of basic sanitation, water services and other infrastructure. 63 Building on MTDP 2011-2015 Subsequent MTDPs will learn from the implementation of the National Urbanisation Policy for PNG, 2010- 2030 and continue to enhance the quality of living in PNG’s cities. This includes the pilot projects undertaken under the NLDP. If land reforms have been implemented effectively and the private sector has responded well, then attention may need to turn to monitoring the release of land so as to avoid boom-bust cycles. Under the National Urbanisation Policy, greater emphasis may be given to the evolving standards of housing and infrastructure that city populations may come to expect. Challenges in implementation The immediate challenge for implementation is twofold. Firstly, adequate budget resources are needed to implement the approved National Urbanisation Policy and secondly, realigned institutional arrangements need to be put in place to address an integrated approach to resolve urbanisation, physical planning, land mobilisation, land development and housing issues. A national approach is urgently needed to ensure priority towns and cities have an adequate supply of land, infrastructure, services and housing. A national physical plan is needed to give a spatial dimension to the economic policies contained in the MTDP, the PNGDSP and the National Urbanisation Policy, including the mega cities concept. Access to securely titled land remains the central risk in achieving the aspirations of the urban development plan, hence the need for a national coordinated response. Within the peripheries of the metropolitan centres, land owners must be willing to lease their land in order for urban planning to be effective. They will remain unwilling until the DLPP that administers land titles demonstrates the capacity to facilitate land registration and land transfers with integrity and efficiency. A second challenge arises from the large disparity in living standards within PNG’s cities. Catering for the needs of all income levels is important not only to realise the Constitutional goals of integral human development and equality and participation but also to promote social harmony. How to plan and provide services for very low income earners is financially, politically and socially challenging and raises issues regarding the distribution of GDP and how best to support human development in PNG. Urban areas are increasingly becoming a focus for poverty, and poverty reduction strategies will need to address this in parallel with development in rural areas. If these challenges can be met, the standard of living will dramatically improve for all Papua New Guineans living in urban areas. 64 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Urban centres developed Population living in Census 28% of the urban 25% 20% 15% Less than 15% of the according to the National urban settlements population live in urban population Urbanisation Policy for PNG settlements live in settlements in order to cater for urbanisation and Proportion of HIES forthcoming socioeconomic progress and population under the deliver quality of life for all poverty line in urban urban people areas The supply of Rent and purchase prices Adequate supply of affordable housing very high relative to affordable housing average earnings Town spatial Very weak Urban development Urban development Urban development Meet minimum planning plans in the major plans in all cities plans in all cities international city or town of each and towns and towns standards province Lead government department NCDC and Provincial Government Town Councils No. Sector strategy

1 City authorities to plan urban development, to zone land, to work with customary land owners and to ensure coordination of infrastructure providers

2 Increase private sector investment in housing by implementing National Land Development Program, enforcing clear property rights and facilitating foreign investment

3 National response to public service need for adequate housing, including by taking advantage of PPP

4 Research and carefully implement sustainable service delivery to low income communities

5 Legislate the National ID card system DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Number of 5 year urban 1.1 21 In every city and major In every city and In every city and DNPM to guide the development plans town major town major town development of these plans Number of residential estates on 1.2 At least 2 in the major cities of At least 5 in each region in As needed As needed Land title agency becomes customary land in urban areas each region response to demand effective. Effective housing policy for 2.1 Housing policy in place and Review of housing policy Housing policy kept Housing policy kept sustainably relieving housing implemented (amended if necessary) current and current and shortage implemented. implemented. Adequate private sector investment, 2.2 Clear and well enforced property –Several large scale Housing shortage Housing situation Land title agency becomes including foreign investment, in the rights giving investors confidence residential developments in alleviated. remains stable. effective. construction of new residential in this sector. each city alleviates housing estates and accommodation shortage. generally. –Low income housing also provided on large scale. 65 Public servants are housed in safe, 3.1 –Trial PPPs to supply The accommodation offered Housing shortage No longer a need for Agency overseeing public hygienic and well serviced accommodation that public equals 80 per cent of the alleviated and living a housing program servant housing program conditions servants can purchase. number of public servants. conditions suitable for public servants. transparent and efficient –The accommodation offered for all public and committed to achieving equals half the number of public servants. its objectives. servants. Sanitation and clean water services 4.1 Research how best to extend Expand on pilot projects, Extend clean water Extend clean water are provided throughout all cities sanitation and clean water learning from experience. and sanitation and sanitation and major towns services to low income Focus investment in major services throughout services throughout communities, integrating with cities and key economic major cities and in all cities and major water and sanitation strategic corridors. economic corridors. towns and in plans. Pilot projects including a economic corridors. major town in PRAEC. Number of urban areas fully 5.1 2 5 10 21 utilising the National Identification System I I Responsibility Office of Urbanisation, Department of Treasury Estimated inputs (K million) 2011 2012 2013 2014 2015 2011-2015 Funding option(s) Total: 10 15 14 10 8 57 GoPNG 66 Part 4 Economic sectors The overall objective of economic sector strategies is to diversify the economy so that production is not overly reliant on any one sector, for example, the minerals sector. Parts 2 and 3 of the first MTDP 2011-2015 set the policy and legislative framework for enabling economic development. However, direct government involvement is also needed in the economic sector to ensure the development and progress required to deliver jobs and sound investment opportunities. Guided by the PNGDSP, the MTDP 2011-2015 has identified key deliverables for agriculture and livestock, fisheries, petroleum, minerals, manufacturing, small and medium enterprises, tourism, and the non agricultural informal sector. Major projects within the economic sector that will have a significant impact are the PNG LNG Project, Pacific Marine Industrial Zone and special free trade and export zones within the Economic Corridors. 4.1 Agriculture and livestock Goal: A world class agricultural sector that is responsive to in ternational and domestic mark ets for a diverse ran ge of produ cts and provides t he best available income and job opportu nities Introduction The agricultural sector in PNG continues to be the backbone of the economy. This sector provides employment, income earning opportunities and subsistence consumption for the rural majority. In addition, the sector generates significant revenue for the country from its commodity exports. Of the tree commodities, the main exports are timber, oil palm, coffee, cocoa, rubber and coconuts. The sector contributes 19 per cent of total exports and 25 per cent of GDP. Though an estimated 30 per cent of the land in PNG is suitable for agriculture, only 4 per cent is currently being utilised for commercial agricultural production. In addition, PNG’s agricultural sector is generally less productive, and thus less profitable, compared to many other countries due to poor key infrastructure like roads. MTDP 2011-2015 To achieve the agricultural sector goal, the first MTDP will focus on a number of key strategies. One that is critical is the Government’s current land development program which will ensure that appropriate incentives are provided to customary landowners in order for them to release their land for agricultural purposes. Providing adequate extension services will assist landholders to replant with new, high yielding varieties of cash crops. At an institutional level, the roles and functions of the Department of Agriculture and Livestock (DAL) and other agencies within the sector need to be clarified. Role clarity will improve the delivery of the essential support functions of providing extension services, credit services and training. Developing and improving roads and other agricultural infrastructure in the first MTDP is also crucial for the sector’s development. Roads are critical in connecting fertile regions of PNG with markets. Without roads, fertile land will remain idle or under-utilised, despite extension services. The better the roads, the easier it is for farmers to supply markets, and the more profitable farmers will be. Other strategies for implementation are major rehabilitation and development programs in the tree crops and livestock industries, control and eradication of exotic pests and diseases and enforcing Codex food safety and fair trade standards which, in turn, will support the marketing of PNG’s food exports Building on MTDP 2011-2015 Subsequent MTDPs will focus on transforming the subsistence rural agricultural sector into semi-commercial and commercial farming. Priority will be given to extension services to continue improving and maximising output of all agriculture and livestock enterprises. Research will focus on producing high yielding varieties of commodity tree crops and improved breeds of livestock. Extension services will impart adaptable practices to farmers with the latest technologies and information. Further research and extension strategies will be directed towards the containment and eradication of pests and diseases currently affecting the tree crop industry. Major quarantine facilities will be built to ensure that exotic pests and diseases are identified immediately and contained. 67 Organic certification will be required for both organically produced crops and processing facilities to attract organic markets. The MTDPs will ensure that organic certification is awarded to areas where it is due and institutions such as NARI will be expanded to facilitate internationally recognised organic certification. Commercialisation of agricultural products, with a greater emphasis on accredited handling and packaging methods, are a norm in food processing. To ensure a high level of food security, increased production and downstream processing of staples that have a competitive advantage will be promoted for domestic demand and international markets. The National Food Authority will be established to enforce Codex food standards that will enable access of PNG’s food products competitively to global markets. The impact of the current and future MTDPs on the agricultural sector will be a five-fold increase in the level of production by 2030, worth K7.2 billion and contributing 267,000 additional jobs. Challenges in implementation Land accessibility and land administration, along with the lack of infrastructure development, remain key sector challenges. Establishing a well coordinated transport network is a pre-requisite to ensure growth in the sector. Continuity of government funding to fully implement sector strategies will be another challenge to address. Complementing this is the need to ensure impact evaluation, monitoring and reporting of achievements in the sector to be done regularly so that government funding is justified and sustained. Lack of role clarity and lack of compliance in institutional responsibilities and mandates between DAL and subsidiary agencies compound the implementation challenges. Collaboration between DAL and its subsidiary agencies still remains weak. Exotic pests and diseases can adversely reduce the potential of commodity crop production. Containment and eradication is of great importance prior to redevelopment and expansion of current and new plantations and smallholder establishments. Climate change remains a key challenge in this sector. The El Nino and various other climatic extremes continue to have significant implications. Uncoordinated development is also a key issue. For instance construction of dams and mining development effects will have direct negative impacts on land area and water systems. A consultative approach with other sectors is thus necessary in the implementation of the PNGDSP so that all sectors, including agriculture, benefit from integrated development. Further, global commodity price fluctuations will remain a major influence on growth of the sector. 68 DSP sector goal Indicator Source Baseline 2015 2020 2025 2030 DSP target A world class agricultural Meat production, LDC, DAL 407,000 tonnes in 2007 4 million tonnes. sector that is responsive to including organic international and domestic markets for a diverse range Coffee production CIC, CRI, DAL 63,000 tonnes in 2008 500,000 tonnes. of products and provides the Oil Palm production OPIC, OPRA, 556,000 tonnes in 2007 1.6 million tonnes. best available income and DAL job opportunities Cocoa production PNGCB, 56,000 tonnes in 2008 310,000 tonnes (minimum of 100,000 tonnes PNGCCI, DAL required for a local processing industry. Copra production KIK, PNGCCI, 110,000 tonnes in 2007 440,000 tonnes. DAL Horticulture production, DAL, NARI 10,000 farmers Increased by 5 times. including organic Rice production NARI, DAL Domestic market dominated Strengthen the bargaining power of local growers by foreign products and encourage local processing. Sago production DAL Nil Establish 2 large sago plantations by 2030 and venture into full commercialisation. Staples (potato, cassava, DAL, NARI Nil Increase production to levels sufficient to feed the taro, banana) production population and supply downstream industries Subsistence agriculture DAL, NARI 80% of population in 70% of subsistence farmers will expand into small subsistence agriculture and medium primary agricultural enterprises Land use for agriculture DAL, DLPP Less than 4% currently used Over 50% of available potential land for for agriculture agriculture utilised. Organic certification NARI Nil 1 globally accredited institution that can facilitate organic certification Codex standards NAQIA, NISIT Nil All processing facilities adhering to Codex standards Lead government department DAL, PNGCCI, KIK, Cocoa Board, NARI, NAQIA, OPIC, OPRA, CIC, CRA, Rubber Board, LDC, Spice Board No Sector strategy

1 Achieve efficient institutional structure in industry

2 Efficient land administration – enabling environment for people to engage in agriculture – allowing land owners to profit from their land

3 Develop roads and key agricultural infrastructure (mills, factories, downstream processing plants) – supply chains to generally link producers to markets.

4 Adequate extension services (including control and eradication of pests and diseases, research and development)

5 Enforcing CODEX marketing standards to facilitate processed food exports

6 Utilisation of Economic Corridors for agricultural development

7 Ensure interventions are transparent, cost effective and non-discriminatory 69 DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Efficient institutional structure 1 Review roles of agricultural agencies serving the agricultural industry and restructure, ensuring all agencies fulfill their roles effectively. Access to land for agriculture 2 Provide input and assistance to implement the NLDP Adequate transport services 3 Provide input and assistance to the national transport strategy Smallholder livestock industry 4.1 Rehabilitation of breeding centres and Land issues - introduction of improved breeds. Smallholder coffee industry 4.2 Efficient regulations and effective World commodity prices information dissemination. fluctuations and lack of government support Pest and disease free oil palm 4.3 Capacity for regulation and control. 50% of pests under 100% pest Focus on upgrading Pest mutations and industry control. management. pest control facilities. resistance Eradication of cocoa pod borer 4.4 Containment strategies to be CPB eradication 100% CPB Focus on upgrading CPB resistance and concentrated in affected provinces. strategy commences. eradication. quarantine facilities. adaptation Eradication of the coconut beetle 4.5 Containment strategies to be 100% eradication of 100% Coconut Beetle Focus on Pest mutations and concentrated in affected provinces. coconut beetle and Eradication and other strengthening resistance other pests potential pests. quarantine facilities. Other commodities (rubber, sago, 4.6 Capacity building and regulation of the Land access and spices, apiculture, etc) industry. commodity prices Vibrant rice farming industry with 4.7 Capacity in research for adopting rice Schools, prisons, etc. Economic Corridors rice becoming a dominant farming in rural PNG. grow own rice for introduced to rice alternative crop consumption. farming. Downstream processing and 4.8 Research into improving quality and Continuous government export of staples such as potato yields of local staples and to enhance - support and capacity and banana capacity of downstream processing issues. Agriculture survey with NSO 4.9 Undertake agriculture survey in 2012 Establishment of Codex 5 –Improve capacity to undertake the Establish global links Establish institutions Codex standards a Appropriate policy to certification process of facilitating Codex standards. for Codex standards in PNG controlling norm in agriculture avoid duplication of –Establish a National Food Authority. Codex and processing functions Global standard quarantine 7.1 Capacity upgrading of current One major global Regional/provincial Quarantine facilities Funding support facility quarantine facilities. standard facility to be quarantine facilities to established and built in Port Moresby be built. strengthened. Regional organic certification 7.2 Facilitate process in which an One internationally establishments institution in PNG can be accredited recognised organic with organic certification certification institution in PNG Responsibility DAL, PNGCCI, KIK, Cocoa Board, NARI, NAQIA, OPIC, OPRA, CIC, CRA, Rubber Board, LDC, Spice Board Estimated Inputs (Kmillion) No 2011 2012 2013 2014 2015 2011-2015 Funding Option(s) 4.9 50.0 50 100 GoPNG/Donors 7 44.5 44.5 89 GoPNG/Donors Others 14.8 14.8 14.8 14.8 14.8 74 GoPNG/Donors Total: 109.3 109.3 14.8 14.8 14.8 263 70 4.2 Fisheries Goal: Develop fishery sector that is both sustainable and highly profitable for P NG, with PNG becoming a world leader in the supply of tuna Introduction PNG has abundant marine resources with the largest fisheries zone in the Pacific, covering an area of 2.4 million square kilometres. The fisheries sector is extensive and includes inland river fisheries, aquaculture, coastal beche-der-mer, reef fisheries, prawn trawl and large scale deepwater tuna fisheries. The sector ranges from artisanal communities to medium sized domestic prawn and tuna long line operators to large international purse seine fleets. The key strategy in this sector is to promote downstream processing, especially in the tuna industry for both domestic and export markets. MTDP 2011-2015 Developing PNG’s fishing industry will be a high priority for the Government. But this will be done in a manner that ensures that the sector’s potential is realised and the resource is managed in a sustainable way. The first MTDP will look at reviewing existing legislative framework and policies of the sector to strengthen and enhance the capacity of the National Fisheries Authority (NFA) to promote development of the sector. The capacity of the NFA to do stock assessment on commercial species and conduct policy enforcement will be strengthened and enhanced. Research, extension services and marketing capacities will be further developed to support the industry in managing risks and in providing direction to the industry. To meet the skills requirement of the industry, the existing Fisheries College needs to be rehabilitated and the curriculum upgraded. A degree course in fisheries management will be established at the Maritime College and coordinated with NFA to boost experts in the whole fisheries sector.In addition, the current lack of maritime surveillance capacity is resulting in the loss of millions of Kina in illegal or under-reported fishing activities. Development of the maritime surveillance capacity of appropriate agencies is critical. It is essential that the responsible agencies be adequately resourced to effectively undertake surveillance activities. In the period 2011-2015, a number of marine industrial parks will be established in the maritime provinces of PNG. These will provide an outlet for local fishers which will support fishing incomes. The marine industrial parks will also support the development of onshore processing; adding to PNG's manufacturing capacity. The first development of the maritime park is the Pacific Marine Industrial Zone (PMIZ) in Madang. The Coastal Fisheries Development Authority (CFDA) through the concept of fish port development will help mobilise and enable local fishermen to improve traditional fishing methods and increase their catch. CFDA will also facilitate downstream processing of the catch supplied by rural fishing communities, including inland aquaculture. Licenses will be reviewed in terms of property rights to bring greater certainty to the holders. License fees, excise and other revenue raising arrangements will be revised to ensure that PNG is raising revenue efficiently yet without discouraging domestic production. It is estimated that to implement these strategies in the first MTDP and to achieve the sector targets, it will cost approximately K165 million in the period 2011-2015. Building on MTDP 2011-2015 Most of the projected revenues are derived from the license fees that will be received from foreign boats based domestically and license fees from tuna fisheries. A typical processing/fishing company in PNG offloads about 60 per cent of its catch as exports to overseas markets. The balance is utilised by the onshore processing facilities. Increasing and upgrading onshore processing facilities provides the opportunity to value add the product in PNG and create large numbers of additional local jobs. As well as optimising returns from wild catch fisheries, the sector will investigate and seek to establish large and small aquaculture enterprises which can be built on PNG’s unique marine life. There is, for example, a significant global market for tropical aquarium fish, the propagation of which may well suit small scale local producers. Challenges in implementation A potential challenge will be the establishment of a well coordinated baseline database by 2010-2011. It will be important for stakeholders in the sector, such as the Ministry of Fisheries, NFA and PNGDF, to liaise and coordinate efforts and resources to undertake this task. The PNGDF navy will provide support through updating monitoring and controlling surveillance equipments and technology. There is a possibility that sections of the industry may initially resist the increased monitoring and surveillance of their industry. As their rights increase and additional investment capital is attracted a secure and mature industry will develop. 71 DSP sector goal Indicator Source Baseline 2015 2020 2025 2030 DSP target Develop a fisheries sector License/access fees NFA K60 million in 2008 K100 K100 K100 K100 million in 2008 prices. that is both sustainable and generated from tuna million million million highly profitable for PNG, fisheries including the establishment of PNG as a world leader in Stock assessment of the NFA Stock assessment is currently “under Revive the Increase catch by 25% and raise the supply of tuna. Gulf prawn fisheries. exploited” GOPPF stock assessment to “fully exploited” PNG processed fisheries NFA K189 million (21,940 tonnes in 2007, K450 K1 billion K2 billion Triple volume and real value of exports and 34% of total fisheries exports). million processed fisheries exports Quantity share of catch NFA Less than 1% in 2007 5% 10% 15% Increase to at least 20% by 2030. caught by PNG vessels Lead government department National Fisheries Authority No. Sector strategy

1 Stock assessments for all commercial, artisanal and recreational fisheries to calculate Maximum Sustainable Yield (MSY)

2 Revamp fisheries licenses providing greater property rights but with additional development conditions

3 Establish a system of monitoring and enforcement to reduce illegal, unreported and unregulated (IUU) fishing and to assist with research

4 Pursue fisheries development for aquaculture and other small wild capture fisheries such as trepang or aquarium

5 Fully rehabilitate fisheries colleges and upgrade the curriculum. DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Stock assessments for all fisheries 1 Assessments for all Annual assessment Annual assessments All fisheries graded –Lack of quality data fisheries reports sustainable –Illegal fishing New licensing system delivering greater property 2 Revamped licenses in Revamped licenses in Revamped licenses Fisheries Act amended Existing license holders rights to holders but greater returns to GoPNG place for tuna industry place for Gulf prawn in place for all to license for artisanal may resist change and via increased fees and license conditions (e.g. fishery commercial fisheries and recreational new conditions local processing of catch) fisheries Effective monitoring and enforcement unit 3 Data for monitoring and IUU fishing reduced Industry efficiency Fisheries profitable Lack of capacity to established with the support of the PNG Navy. fee calculation and deterred improved and sustainable monitor all PNG’s waters Smaller fisheries developed i.e. aquaculture, 4 Development Pilot projects New ventures Aquaculture Lack of capital aquarium, pearls, live fish export opportunities identified completed established production tripled; 3 new fisheries Fully rehabilitated fisheries colleges and 5 Existing colleges Cooperation Highly skilled PNG Highly skilled regional Funding available curriculum upgraded rehabilitated agreements with other industry sector industry sector regional institutions Responsibility National Fisheries Authority, Department of Trade and Industry, Investment Promotion Authority, Department of Environment and Conservation, Boarder Development Authority, Internal Revenue Commission, PNG Defence Force, Customs Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding options Total 76 I 76 I 5 I 5 I 5 I 167 I GoPNG 72 4.3 Forestry Goal: - -- Build a forestry sector th at is sustainable and highly profitable. Introduction The forestry sector continues to contribute immensely to the national economy, as well as improving the livelihoods of the rural people. The sector operates in the most remote areas of the country, thus creating opportunities for rural communities to engage in formal employment to improve their living standards. Companies involved in the sector have provided the basic social and economic infrastructure services like roads, bridges, schools and health centres. In the absence of government services and support, the presence of the forest industry in rural communities is vital since they provide some of the basic services which the Government should typically provide. MTDP 2011-2015 The first MTDP will mainly focus on improving the forest policy and regulation as it will lay a strong foundation for other strategies in subsequent MTDPs. The PNG forestry sector will move forward to build constructive and progressive aspects of forest policy and regulation in order to wisely use and develop its forest resource. A strong regulatory and policy framework is vital since it will give full effect to government policy in the forestry sector so as to achieve the overall goal of building a forestry sector that is sustainable and highly profitable. A review of all existing policy documents within the framework of objectives and practices of the PNG Forest Authority (PNGFA) is required. This includes: · an overview of the National Forest Policy to better address operating challenges of new initiatives related to international environmental issues; · the progressive evolution of PNGFA activities in areas such as the phasing out of log exports, research, carbon trading, operation of the State Marketing Agency, revenue arrangements under financial autonomy, etc; · continuous review of the PNGFA’s corporate plan to ensure it is in line with government policy and the needs of PNG; · the development of national enterprises within the forestry sector; and · preparation of all subordinate policy documents including for reforestation and processing and phasing out of log exporting. The PNGFA will continue to improve field manuals to assist field officers in their duties. Operational reviews of field practices should be of a procedural and structural nature to improve management of the nation’s strategic forest resources. The establishment of financial autonomy will significantly assist capacity development of the PNGFA’s role under the objectives of the Forestry Act. It is anticipated that financial autonomy will assist greatly in reversing the current negative trends in PNGFA capacity and enable much needed sustainable reform to proceed with significant dividends directed to the National Government. Building on MTDP 2011-2015 The application of the National Forest Policy and Forestry Act has resulted in the development of existing systems and practices. This transition phase is now over and it is time to move forward to provide better services and to prepare for the challenges of the future. The forestry sector is tasked to: increase processed timber exports to 80 per cent of all forestry exports by 2030 from the current rate of 20 per cent; have plantations produce all logs and manage forests by 2030; and increase plantation forests from 62,000 hectares to well over 150,000 hectares by 2030. The policy and regulatory framework will form the basis for other strategies to be implemented in subsequent MTDPs. Challenges in implementation There are certain challenges that need to be addressed in order to implement strategies in the forestry sector. These include: land, finance, manpower, equipment, infrastructure and technology. However, some of these issues will be addressed when the LNG project and the Economic Corridor system is in operation. The availability of secure land tenure is one of the important challenges in the forestry sector and remains a continuing obstacle which must be addressed. 73 DSP sector goal Indicator Source Baseline 2015 2020 2025 2030 DSP target Build a forestry sector Share of processed PNGFA 20% of log harvest in 30% of total harvest 40% of total harvest 50% of total harvest 60% of total harvest to that is sustainable and timber increased from 2007 processed for to be processed for to be processed for to be processed for be processed for highly profitable. 2007 base year export and domestic export and domestic export and domestic export and domestic export and domestic markets markets markets markets markets Decrease share of log PNGFA 8% from plantations Logs will be provided harvest coming from by plantations and natural forest managed forests Increase area of PNGFA 62,000 hectares 80,000 hectares 100,000 hectares 150,000 hectares Substantial increase plantation forests in plantation forest Lead department PNG Forest Authority No. Sector strategy

1 National forest inventories shall be undertaken every ten years to ensure policy decisions are well informed

2 Promote sustainable forest management through the establishment of permanent forest estates

3 Prevent felling of natural forests unless the land is developed to provide sustainable jobs and income, whether through agriculture, plantation or other profitable land use

4 Pursue downstream processing of forest products such that 60% of PNG timbers are processed in-country by 2030

5 Strengthen the regulatory and policy framework, including ensuring compliance in order to give full effect to government policy

6 Enhance the research and extension services of the forest industry so that the industry is profitable and sustainable to benefit current and future generations

7 Develop forest plantations to meet the impact of climate change and to meet future timber demand for both domestic and international markets

8 Promote community forestry activities with the view of empowering rural communities and alleviating poverty

9 Promote the international initiative Reducing Emissions from Deforestation and Forest Degradation (REDD+) to assist with mitigation adaptation measures in climate change DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions 80% of processed timber to be exported 1 All strategies are achieved Logs to be provided by plantations and 2 All strategies are achieved managed forests Substantial increase in plantation forests 3 Insecure land tenure Responsibility PNG Forest Authority Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding option(s)

1 I 1 I 1 I 1 I 1 I 5 I GoPNG 74 4.4 Petroleum Goal: ---- Build a world leading petroleum industry that maximises benefits to PNG and landowners, minimises impacts on the environment and social welfare, and provides PNG with energy security Introduction Petroleum sector development started in 1991 with crude oil production at the Kutubu fields. After reaching peak levels in 1993, oil production has been declining due to natural depletion. In 2005, PNG’s first oil refinery commenced production, sourcing crude oil from both local oil fields and from abroad. The Kutubu fields are rich in gas resources but the focus so far has been on the extraction of crude oil. This will change as they become predominantly gas fields, exporting condensate and wet gas and processed petroleum. MTDP 2011-2015 Achieving the goal for petroleum requires a strengthening of the state institutions responsible for policy making, administration and enforcement of regulations within the first MTDP. An important strategy is to have an efficient and effective delivery mechanism established to achieve the targets. A deliverable identified to contribute to the sector goal is to raise the capacity of the agency responsible for developing global industry standards. This will involve training staff and purchasing and installing state of the art equipment so that all regulatory and administrative processes can be followed with efficiency. Gas production has a huge potential for contributing to the economy in terms of tax and export revenues. However the Government cannot develop this resource on its own as it will involve specialised expertise and substantial resources. The private sector will be needed to combine their expertise and resources with that of Government and to take the lead in exploration and investments in the petroleum industry. There are currently two commercial gas projects — the Liquefied Natural Gas (LNG) project headed by Exxon Mobil, which is at construction phase, and the LNGL project headed by Interoil which is at the planning stage. The LNG project is expected to bring considerable revenues annually to PNG from 2014 onwards. A clear challenge for the Government is to invest these revenues through the respective MTDPs and the PNGDSP to address the development needs of the current and future generations. Investment in the PNGDSP priorities such as schools, hospitals, roads and ports is an investment in PNG’s prosperity from which future generations will benefit. Such investments will convert non-renewable revenues into sustainable and renewable development. Building on MTDP 2011-2015 Development of the petroleum sector also depends on other crucial sectors like law and order, land, and transport infrastructure. It is important for the Government to ensure key infrastructure is provided so that developers can progress the project and benefits to both landowners and the country are fully realised. Further delays in the construction phase of the project as a result of landowner issues will be detrimental to the entire project. It is also critical for the Government to meet its obligations to the project landowners under the Umbrella Benefit Sharing Agreement (UBSA) and the License Based Benefit Sharing Agreement (LBBSA). Failing to meet landowner commitments will threaten the project from progressing in the construction phase and reaching production. Between 2016 and 2020, the LNG project is expected to be fully operational and contributing significant tax and dividend revenue to the Government. These revenues will support the Government’s nation building investment through the second MTDP and subsequent MTDPs. The Economic Corridor concept will be set up and used to develop and link provinces where poverty is common and convert them into areas of opportunity. The Petroleum Resource Area Economic Corridor (PRAEC) will be the first Economic Corridor to be implemented and covers the resource rich provinces of Central, Gulf, Western, SHP and Enga. Much of the resources from the LNG project will be used to develop this corridor. Challenges in implementation Potential challenges to this sector are governance and landowner issues. Without good governance, revenues and other benefits from the petroleum sector may not be converted to investments in development through the PNGDSP. There is also a possibility in future years of political manipulation for their own gain of the project benefits. Another major risk relates to the global market price of gas and oil which can be volatile in nature. Other potential risks include supply disruptions through landowner disputes, employee strikes and weather related problems. 75 DSP sector goal Indicator Sou Baseline 2015 target 2020 target 2025 target 2030 DSP target rce Build a world leading Total number of DPE 75 licenses in 2009 Issue at least 5 or Issue at least 5 or Issue at least 5 or 120 petroleum licenses petroleum industry that petroleum licenses more new exploration more new exploration more new exploration and expanded exploratory maximises benefits to PNG licenses and maintain licenses and maintain licenses and maintain work in the remaining 4 and landowners, minimises work program for work program for work program for basins (North New Guinea, impacts on the environment existing licenses existing licenses existing licenses Cape Vogel, Bougainville and social welfare, and and New Ireland) provides PNG with energy security. Petroleum license DPE K720.5 million in Acquire at least 5 new Acquire at least 5 new Acquire at least 5 new 33% increase in expenditure 2009 licenses, maintain licenses, maintain licenses, maintain exploration expenditures existing exploration existing exploration existing exploration from 2009 expenditure incentives and incentives and incentives and level to K960 million increase 2009 increase 2015 increase 2020 expenditures by 10% expenditures by 10% expenditures by 10% Volume of crude oil 13.7 million barrels Produce more than Produce more than Produce more than Sustain crude oil production DPE produced in 2009 13.7 million barrels 13.7 million barrels 13.7 million barrels production 2009 levels Remaining oil DPE 575.5 million Increase proven Increase proven Increase proven Increase proven reserves reserves barrels in 2009 reserves by 20% reserves by 20% reserves by 20% by 70% compared to 2009 Refinery production DPE 5.8 million barrels Increase 2009 Increase 2015 Increase 2020 9 million barrels processed of oil processed in feedstock level by 1 feedstock level by 1 feedstock level by 1 2009 million barrels million barrels million barrels Refinery sales DPE 6.3 million barrels Increase 2009 Increase 2015 Increase 2020 9 million barrels of volume of refined products dispensed products by dispensed products by dispensed products finished products sold sold in 2009 1 million barrels 1 million barrels by 1 million barrels Number of LNG DPE 3.6 MTA LNG plant 6.3 million tonnes of 6.3 million tonnes of More than 6.3 million At least 3 LNG projects projects under construction LNG produced and LNG produced and tonnes of LNG and more than 6.3 million for commission in exported exported produced and tonnes of LNG produced 2014 exported and exported No. of petrochemical DPE Nil Petrochemical plant Petrochemical plant Petrochemical plant 1 Petrochemical plant plants proposals Proposals Proposals Number of gas-to - DPE 2 Medium Scale 1 new gas to 1 new gas to 1 new gas to 5 gas to electricity plants electricity plants (Stanley and Hides) electricity plant electricity plant electricity plant Revenue from DPE K2.6 billion in 2009 K0.4 billion increase K2 billion increase in At least K5 billion a year petroleum projects in revenues revenues Lead government department Department of Petroleum and Energy No. Sector strategy

1 Strengthen state institutions responsible for policy, administration, regulation, and enforcement of the gas industry.

2 Promote investment in petroleum/oil/gas exploration.

3 Ensure the fair and equitable distribution of benefits from the petroleum industry

4 Ensure that revenue from the petroleum industry is sustainably invested for maximum benefit for current and future generations through the PNGDSP and MTDPs 76 DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions DPE capacity improved 1.1 –5 officers to be on –5 officers to be on –5 officers to be on –5 officers to be on –Skilled government officers are easily lured by private petroleum to world standards technical training technical training technical training technical training firms offering attractive salary packages –Job twinning –Job twinning –Job twinning –Job twinning –Most gas-based technical training programs and institutions are programs of programs of programs of programs of overseas-based and expensive personnel personnel personnel personnel Increase investments in 2.1 Provide new –Incentives may not achieve the target envisaged the industry incentives for –Incentives often favour foreign firms, costing PNG revenue exploration –Incentives can be misplaced resulting in unsustainable resource extraction, and environmental and social degradation. –Most of PNG’s prospective hydrocarbon basins may be explored by 2030 and it is possible that these basins are not commercial –Weak investment environment due to law and order, land tenure political dynamics, etc 2.2 Market PNG as a –PNG needs to expand its understanding of its sedimentary highly prospective basins to properly market its prospects to the outside world country for the –Marketing efforts will depend on a positive overall investment petroleum industry climate for PNG Equitable distribution of 3.1 2 Economic 2 new Economic 2 new Economic 3 Economic –Landowner issues benefits to landowners Corridors (PRAEC Corridors (South Corridors (Central Corridor (Momase –Legal or confrontational opposition as well as to the broader & Border Corridor) Coast Corridor & Corridor and and Solomons and –Greed, corruption and misrepresentation amongst landowners, economy Enga Sepik Madang-Baiyer- Free Zone may prevent equitable distribution of project development benefits Corridor) Karamui-Gulf Corridors) amongst landowners and nationally. Corridor) 3.2 Fund district development plans Sustainable investment 4.1 A Future A Future A Future –Funds are susceptible to misuse by politicians and bureaucrats, of revenues to benefit Generations Fund Generations Fund Generation Fund if not protected by appropriate laws or policies current and future –Investment risks of funds such as world economic crises generations –Funds can be vague and unclear on who the beneficiaries are and when and how these funds will be used –Political manipulation of fund can be possible if PNG politics becomes volatile and unstable 4.2 Establish a As above Sovereign Wealth Fund 4.3 Funds for the MTDPs Government obligations 5 Pay MOAs, LNG well managed allocations & SSG Responsibility Department of Petroleum and Energy Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding options 220.1 I 223.1 I 188.1 I 375.1 I 425.1 I 1431.5 I GoPNG 77 4.5 Minerals Goal: ---- Double mineral exports, while minimising the adverse impact s on the environment Introduction The minerals sector has been the key source of exports and revenue to the Government over the years. There remains considerable mining potential so the sector will continue to play a critical role in PNG’s development. MTDP 2011-2015 The first MTDP will be about setting the right foundation for subsequent MTDPs to successfully build on. In the minerals sector a number of strategies will be implemented. Capacity building of key stakeholder agencies in the sector will be critical. This will involve recruitment and training of staff and purchasing and installing technical equipment so as to effectively administer and enforce government policies and regulations in the industry. Reviews of the mineral policies will also be necessary to better address landowner participation in the industry. In addition, the Government’s environment policies and regulations will be reviewed to capture relocation, sea-bed mining and downstream processing matters. Moreover Economic Corridors will be located in the poorest regions of PNG with the aim of extending the benefits of development to the most disadvantaged regions. They will be located where the gains are likely to be greatest, particularly where land is fertile or where the three modes of transport – air, sea and land – are able to come together to provide efficient trade hubs. There are currently nine mines in operation: Tolukuma, Ok Tedi, Porgera, Kainantu, Simberi, Ramu Nickel, Lihir, Mt. Sinivit and Hidden Valley. Those that will commence production and contribute resources within this MTDP period are Ramu Nickel and Hidden Valley. However, efficient development of the minerals industry hinges largely on the provision of key infrastructure such as roads. Building on MTDP 2011-2015 Subsequent MTDPs will build from sectoral strategies implemented in the first MTDP. These include capacity strengthening of key state institutions that administer and enforce regulations in the industry. It will also be necessary to ensure compliance with national environmental and other relevant policies to develop an industry that is sustainable. In order to encourage further exploration, regulatory procedures will be simplified to reduce costs. The degree of exploration activities will determine future production. Proper stakeholder consultation will be critical to review existing environmental policies. This is to ensure all parties take ownership of proposed changes that capture current development issues. However, the underlying objective is to protect the environment from damages caused by the industry, for example from tailings disposal. Challenges in implementation Some major challenges to implementing mineral sector strategies are poor governance and volatile global mineral prices. Resources coming from the mineral sector will need to be used better by making productive nation building investments through the PNGDSP to realise broad-based growth. The possibility of lower prices of minerals in the future would possibly discourage further exploration and also reduce the profitability and viability of existing and planned mines. 78 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Double mineral exports, Mineral exports K9.2 billion in 2007 Unable to predict Unable to predict Unable to predict At least K18 billion while minimising the Exploration K213 million in 2008 K218 million K200 million K180 million Sufficient exploration to adverse impact on the expenditure reach production target. environment Exploration licenses 241 exploration 250 exploration 370 exploration 400 exploration Ongoing high level of licenses in 2009 licenses licenses licenses exploration activity Number of mine sites 9 in operation, 4 12 in operation, 4 15 in operation, 5 18 in operation, 2 Around 20 in operation under development, under development under development under development 11 at advanced stage and 10 at advanced and 8 at advanced and 5 at advanced of exploration stage of exploration stage of exploration stage of exploration Government revenues K2.2 billion in 2007 Unable to predict Unable to predict Unable to predict At least K3 billion a year from minerals projects Sustainable deep sea nil 1 project in 2 projects in 3 projects in A number of projects to mining in PNG waters operation operation operation have commenced Lead government agency Mineral Resource Authority and Department of Mineral Policy and Geo-hazards Management No. Sector strategy

1 Strengthen institutional capacity to administer and enforce regulations

2 Provide regulatory and policy framework that is simple, effective, has low industry compliance costs, protects the environment and ensures landowners and all stakeholders benefit

3 Facilitate further exploration by simplifying and speeding up regulatory procedures

4 Promote an integrated approach to mine development, rather than an enclave approach, with the use of Economic Corridor zones to direct revenues

5 Develop and review appropriate mechanisms to address landowners’ participation and industry issues

6 Pursue strategies for manufacturing and SMEs that encourage downstream processing of minerals to add value to PNG’s mineral as well as supplying the gold bullion needs of PNG DSP 2030 deliverables No. 2011-15 2016-2020 2021-2025 2026-2030 Risks and assumptions DMPGH and MRA capacity 1.1 More staff recruited and Continuous training of staff Up-to-date training including Continuous and up-to-date Poor governance. to be improved. trained. to meet high class standards. overseas training. training. 1.2 Technical equipment State of the art equipment Up-to-date equipment Up-to-date equipment purchased and installed purchased and installed purchased and installed purchased and installed. Regulatory and policy 2.1 All regulatory and policy Frameworks in place and Review of frameworks. Review of frameworks. Poor governance. frameworks provided frameworks reviewed. used by all stakeholders High level of exploration 3.1 Regulations simplified. Increase in exploration. Ongoing exploration Ongoing exploration Poor governance Landowners’ participation 4.1 Acts and frameworks for Continuous involvement of Continuous involvement of Continuous involvement of Poor governance addressed landowner issues. landowner participation. landowner participation. landowner participation. Use of Economic Corridors 5.1 Economic Corridors set up Mineral revenues used in Increased and sustained Increased and sustained Poor governance to direct mining revenues and working closely with Economic Corridors to bring development development the mining industry. development. Downstream processing 6.1 Policy developed. Processing starts Policy reviewed. Policy reviewed. Poor governance Government obligations 1.3 MOAs & SSG obligations well managed met effectively Responsibility Department of Mineral Policy and Geo-Hazards Management Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding option(s) 1.3 33 37 62 70 70 272 GoPNG Total 43.6 47.5 72.5 80.5 80.5 324.5 79 4.6 Non-Agricultural i nformal sector Goal: ---- To promote th e non-agricultural informal sector (urban informal sector) to secure a livelihood for indigen ous entrepreneurs and to encourage progression into the formal sector, thus alleviating illicit activities th at demean moral values and create dish armony in the major cities an d townships Introduction PNG’s economy is predominantly agricultural with this sector contributing immensely through export revenue, generating income and employment opportunities, and sustaining rural livelihoods through subsistence farming. However, a rapidly increasing population has led to a growing number of Papua New Guineans who are becoming landless and are faced with fewer income earning opportunities in this sector. The non-agricultural informal sector (NAIS) provides the opportunity for people to venture into other informal ways of earning income and thus promote development of informal micro-enterprises. The informal micro- enterprise business concept is a step towards progression from an informal business activity to a commercially viable formal business. MTDP 2011-2015 The first MTDP introduces the strategies for development of the non-agricultural informal sector as a measure against the rise in social ills such as crime and prostitution. Lack of accessibility to agricultural land has resulted in limited opportunities for employment and wealth creation and for overall improvement in the quality of life for Papua New Guineans. The key strategy of the Government in facilitating entrepreneurial micro-enterprise activities is to ensure that the informal sector is an effective livelihood security for the landless while at the same time providing the basis for the development of a vibrant private sector. Hence, within the period 2011-2015, the first MTDP directs responsible agencies to set the legislative and policy framework for the industry to flourish and to enhance the capacity of the indigenous population engaged in this industry. Specifically, appropriate training programs will be set up for facilitating development of the informal sector and cottage industries. In addition existing policies will be improved and developed, including the Informal Sector Policy administered by the Department for Community Development (DfCD), and the Small and Medium Enterprises Policy implemented by the Small Business Development Corporation (SBDC). To facilitate and foster growth of the sector, specific targets and measurable indicators will be identified to monitor implementation progress of the informal industry. Building on MTDP 2011-2015 Through the strategies identified by the Government for the non-agricultural informal sector, subsequent MTDPs will build on improving capacity and developing a specific credit line with agencies such as the National Development Bank (NDB) to promote growth of micro-enterprises and establish information and public assistance programs in the various locations across PNG. The subsequent MTDPs will ensure these programs and other incentives are further rolled out, paving ways for progression from an informal business to a commercially viable formal SME. Challenges in implementation Funding inconsistency and ineffective implementation will be important challenges in progressing informal business activity into commercially viable formal businesses. Lack of awareness and marketing will also play a major role in the underdevelopment of this sector. Government regulations can also play a role in inhibiting this sector. 80 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Promotion of the non-agricultural Number of urban/rural informal sector to secure a people engaged in informal livelihood for indigenous sector entrepreneurs and to encourage progression into the formal sector. Number of people with access to financial credit Number of graduates from Informal Sector training programs Number of market facilities Lead government department Department for Community Development No. Sector strategy

1 Develop credit line with the National Development Bank /SBDC

2 Develop appropriate training programs for facilitating development of the informal sector and cottage industries

3 Establishment of information and public assistance programs across PNG

4 Development of policy to facilitate and foster growth of the sector

5 Establish at least one well resourced market for informal sector in every district. DSP 2030 deliverables No. 2011 2012 2013 2014 2015 2011-2015 Risks and assumptions Number of credit facilities established 1.1 across the 23 provinces Number of training programs held in 23 2.1 provinces District markets 5.1 20 20 40 Responsibility Department for Community Development Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding Option(s) 1 22 22 2 2 2 50 GoPNG 81 4.7 Small and medium enterprises Goal: - -- Develop and promote small an d medium enterprises Introduction Economic growth based on extracting natural resources is unsustainable in the longer term. Therefore there needs to be a strong focus on developing other sectors of the economy through the private sector and small and medium enterprises (SME) in particular. SMEs are vital if PNG is to realise development that is broad- based and sustainable. SMEs generate enormous benefits at many levels, such as jobs and wealth creation. They also help to promote self-reliance and reduce poverty by supporting sustainable livelihoods. The development of SMEs in PNG has not been robust due to policy, institutional, environmental and structural impediments. In promoting SMEs, the Government has to create an enabling environment and improve support services. Currently, the number of SMEs in PNG, which mostly comprises of tucker shops (48%), is 16,500. None of these SMEs unfortunately are involved in overseas operations. MTDP 2011-2015 The first MTDP 2011-2015 will set the policy and legislative framework to establish an enabling environment for SMEs to prosper. It will focus on reviewing and improving the existing SBDC Act 1990, SME Policy 1998 and trade policies with a view to facilitate an export driven focus and SME promotion. In addition to developing robust SME policies and establishing the legislative framework to guide the growth of SMEs, the MTDP 2011-2015 also aims to build capacity through existing training programs such as “Know About Business” (KAB), “Start, Improve your Business” (SIYB), SIC and “Women in Textile Training.” Compared to baseline data of 16,500 SMEs employing 82,500 people, the first MTDP has a set target of achieving 21,000 SMEs employing 105,000 people by 2015, with 3 SMEs operating overseas by 2015. The SBDC is the Government’s support agency under the coordination of the Department of Commerce and Industry (DCI) in promoting SME development. Building on MTDP 2011-2015 Subsequent MTDPs will focus on achieving the targets set for 2015 and onwards with the sector strategies identified in the PNGDSP 2010-2030 to promote SME development. They will play a vital role in improving support services for SMEs, drawing from the deliverables outlined in the first MTDP 2011-2015. Under the existing business development programs of SBDC, successive MTDPs will continue to improve SMEs access to credit finance, with the expansion of microfinance facilities across the provinces. There will also be increased marketing and promotion of SMEs towards a competitive industry that is able to participate in a globally challenging environment. Subsequent MTDPs will enable creation of jobs, wealth and sustainable livelihoods in reducing poverty and promoting self-reliance, thus ultimately achieving the overarching goal of the PNGDSP 2010-2030 which is “a quality of life for all Papua New Guineans”. Challenges in implementation There are several constraints that will impinge on development and growth of SMEs. These are identified as: · lack of human resource capacity and development; · lack of information dissemination and knowledge of business opportunities; · lack of access to markets and financial credit; · lack of financial and appropriate technological resources; · lack of adequate infrastructure; · policy incoherence; and · complexity of administrative procedures. 82 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Develop and promote small and Number of SMEs WB Messer Hamid Alive and Max 16,500 21,000 30,000 45,000 Four fold increase at medium enterprises (SMEs) Aitker presentation on SME risk least share facilitator project Employment in As above 82,500 105,000 150,000 225,000 Four fold increase at SMEs least PNG SMEs with Nil 3 5 10 A significant number overseas operations Lead government department Department of Commerce and Industry (DCI), Small Business Development Corporation (SBDC) No. Sector Strategy

1 Expand microfinance banking services

2 Reduce bureaucratic red tape to simplify processes in establishing and maintaining a business

3 Establish SME training institute that modernises businesses and develops skills for a successful SME

4 Facilitate transfer, adaptation, and development of relevant technologies through research and promote partnerships with foreign businesses

5 Encourage the development of designated facilities for SMEs to sell and market their products to the public and to tourists

6 Develop plans and policies to encourage SMEs to focus on export markets DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Microfinance banks established in 23 1.1 –4 banks established –10 banks established –20 banks established –23 banks established –Government/political support provinces –Facilitate and assist –Facilitate and assist –Facilitate and assist Facilitate and assist –Sufficient funding available indigenous SME to indigenous SME to indigenous SME to indigenous SME to –Land and resources available establish micro bank establish micro bank establish micro bank establish micro bank Number of skilled personnel employed in 1.2 48 60 80 96 –Government/political support Microfinance Bank –Sufficient funding available –Skilled labour and resources available Low cost user-friendly mechanism policy 2.1 Partner with IPA, Partner with IPA, Partner with IPA, Partner with IPA, –Government/political support developed to assist in establishing and Labour Industrial and Labour Industrial and Labour Industrial and Labour Industrial and –Sufficient funding available maintaining a business, including Immigration and Immigration and Immigration and Immigration and –Skilled labour and resources foreign direct investment (FDI) customers to reduce customers to reduce customers to reduce customers to reduce available time involved to time involved to promote time involved to time involved to promote both domestic both domestic SME & promote both domestic promote both domestic SME & FDI FDI SME & FDI SME & FDI Number of SME training centres 3.1 2 5 7 10 –Government/political support established –Sufficient funding available Number of SME specialised trainers 3.2 5 10 15 20 –Government/political support engaged in training –Sufficient funding available Number of graduates from SME training 3.3 500 1500 3000 5000 –Government/political support –Sufficient funding available Number of certified trainers in 23 3.4 180 200 300 –Government/political support provinces –Sufficient funding available 83 Master trainers per region 3.5 6 certified international 8 certified 10 certified –Government/political support master trainers international master international master –Sufficient funding available trainers trainers Coordinating body developed to 4.1 4 4 4 4 –Government/political support coordinate research centres in the field –Sufficient funding available of SME Number of international expositions or 4.2 1 – Co-host with IPA 2 Co-host with IPA 2 – Co-host with IPA 3 Co-host with IPA –Government/political support trade fairs conducted to promote foreign –Sufficient funding available investment Number of SME market/trade centres 5.1 1 3 4 4 –Government/political support established to facilitate production and –Sufficient funding available marketing and encourage local participation Number of advertisements through local 5.2 10 20 20 10 –Government/political support media and internet on SMEs –Sufficient funding available Review existing SME policy and improve 6.1 Amendment of SBDC Improve existing trade Review other related 2 –Government/political support on existing policy to facilitate export Act 1990 and policy and other related policy on SME sub –Sufficient funding available driven focus simultaneously review policy to facilitate sector and develop SME Policy of 1998 exports conducive policies for SME promotions Responsibility Department of Commerce and Industry, and Small Business Development Corporation Estimated inputs (K million) No. I 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding option(s) I 1 I 1 I 1 I 1 I 1 I 5 I GoPNG/Donors 84 4.8 Manufacturing sector Goal: ---- To achieve a competitive man ufacturing sector through the developmen t of higher value chains and appropriate tech nologies to manu facturing that will lead to the generation of higher income and employment Introduction Manufacturing will be a key sector in transforming the economy from primary industry into higher value- added downstream production. The dominant manufactured export commodities are palm oil, copra oil, processed timber and refined petroleum products, while processed tuna continues to emerge as another growing export industry. A key focus in the manufacturing sector will be to convert large primary agricultural and resource based exports into processed products. This will, in turn, generate higher incomes and employment opportunities for the bulk of Papua New Guineans. MTDP 2011-2015 The key strategy is to encourage and increase exports in the manufacturing sector to facilitate growth and diversification. An export focus is vital because the global economy offers an incomparably larger market than the domestic economy, allowing local producers to specialise in those industries where they are most adept. Central to achieving increased exports will be addressing the supply-side constraints such as transport and energy infrastructure. Transforming the sector from current light manufacturing industries into higher value production can be achieved by articulating proper backward and forward linkages and adapting appropriate technologies. Also in the first MTDP, land and law and order issues will be addressed as these will lower the cost of business in PNG. It will otherwise be necessary to remove regulatory constraints, particularly for export-oriented businesses. Building on MTDP 2011-2015 The Government will ensure that a conducive business and investment environment is created and sustained to enable and encourage more growth of manufacturing and other industries. Joint ventures between local and foreign investors will also be promoted as a means of combining local knowledge with foreign technology, capacity, and market linkages so that business partnerships will be more successful and local capacity will be improved. Challenges in implementation Lack of funding is a serious concern as this may cause delays in implementing the strategies to achieve the key deliverables for this sector. Apart from funding, shortage of necessary entrepreneur skills will limit the ability of many people to participate in the industry. It is thus necessary for the Government to provide more opportunities for people to acquire these skills. Climate change could become a major challenge. The El Nino climate pattern predicted for 2012 would alter the breeding cycle of tuna which would impact upon production of processed tuna. Exported manufactured goods are subject to fluctuations in global prices posing a challenge and at times an impediment for expansion of the manufacturing sector. 85 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target A competitive manufacturing Value of manufacturing production DCI K4 billion (2009) 25% K12billion in 2009 prices sector through the development Value of manufacturing exports DCI K1.4 billion (2009) K5 billion of higher value chains and appropriate technologies that Manufacturing – foreign equity DCI K382 million (2007) Triple the current investment will lead to the generation of Employment in manufacturing DCI 38,000 (2009) Triple employment to 114,000 higher income and employment. Lead government department Department of Commerce and Industry (DCI), Industrial Centre Development Corporation (ICDC) No. DCI strategy

1 Promote export orientation in manufacturing industries

2 PNG to be a world tuna capital and leader in related marine based products (see part 4.2)

3 Attract foreign investment in PNG manufacturing, particularly through joint ventures

4 Remove inefficiencies in regulation and otherwise ensure low business costs in PNG

5 Facilitate the expansion of a strong industrial base through an integrated manufacturing industry DSP deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Treble the real value of 1 –Initiate PNG export incentive award for PNG owned –Trade missions to key - - manufacturing exports manufacturers that exports over 50% of output. destinations for PNG –Implement CODEX food safety and fair trade standards for exports processed foods. –Commission research –Facilitate organic certification in processed food into marketing of manufacturing to increase export demand products PNG to be a leader in marine 2 –Construction and installation of physical infrastructure PMIZ in full operation - - –Social problems products with the Pacific (phase 1) attracting investment (HIV/AIDS, etc), Marine Industrial Zone (PMIZ) –Phase two of the project to be completed, ready for operation –High red tape restrictions Encourage joint ventures 3 Provide incentives for new foreign manufacturing businesses - - - – impediments in access to form joint venture with PNG businesses to land Provide a low cost 4 –Coordinate government actions to improve enforcement of - - - environment for business to contracts, improve land administration, and reduce red tape operate –Survey manufacturers to identify regulatory impediments or costs and use results to prioritise further Government action. Facilitate an industrial base 5 Road and other transport networks, particularly in Economic - - - through integrated Corridors will connect primary inputs to factories and will link manufacturing networks industry to export markets Responsibility Department of Commerce and Industry (DCI), Industrial Centre Development Corporation (ICDC) Estimated inputs No. 2011 I 2012 2013 2014 2015 2011-2015 Funding options (K million) 1 1.1 I 1.1 1.0 1.0 1.0 5.2 GoPNG

2 Costed under fisheries sector GoPNG/Donor 3 0.1 I 0.1 0.2 0.2 0.2 0.8 GoPNG 4 0.8 I 0.8 0.8 0.8 0.8 4.0 GoPNG

5 Costed under transport sector GoPNG Total 2.0 I 2.0 2.0 2.0 2.0 10 86 4.9 Tourism sector Goal: ---- Build a strong, vibrant, world class tourism sector Introduction Tourism is one of the fastest growing industries globally as it plays a major role in increasing the wealth of nations. It is an important broad-based sector for developing countries like PNG since it can provide more income and employment opportunities which, in turn, can improve the living standards for many people. This broad-based sector can contribute valuable foreign exchange earnings to the direct benefit of a broad spectrum of people in the community. MTDP 2011-2015 PNG has enormous unexplored tourism potential compared to many countries, including our South Pacific neighbours. Despite this, the number of tourists visiting the country has always been much lower than what would be expected. PNG’s share of the regional tourist market is very small at only 5 per cent of total arrivals, and less than 2 per cent of the holiday market compared to neighbouring island nations. Given this scenario, the MTDP 2011–2015 will initiate a process of transforming PNG tourism into a growing and sustainable industry by 2030. This will involve creating an enabling environment through the formulation of key strategies like developing human resources, promoting institutions and industry partnership, building economic and social infrastructure and importantly, marketing PNG as a tourist destination. Expansion of the opportunities within these market segments will be a critical component of the development of the sector. The tourism sector will need to be developed cost effectively and within a safe and secure environment as it is a highly competitive international industry. Development of the tourism sector in PNG will generate many benefits to both the rural and urban areas of the country. Some of these benefits include: · higher employment opportunities; · income generation activities which will lead to a reduction in poverty levels and in law and order problems; · a decline in rural-urban migration as rural economies become developed through tourism and become part of the mainstream economy; · a sustainable alternative which contributes to the management and preservation of PNG’s natural resources; · contributing to growth of sectors like agriculture and fishing that provide inputs to tourism; and · direct and indirect tax revenue to government. Building on MTDP 2011-2015 Addressing the supply side constraints in this MTDP’s key enablers will pave the way for a dynamic tourism industry in PNG. Before any major marketing and road-show initiatives in the international arena for selling PNG as a tourist destination, key investment in transport infrastructure, law and order, utilities, skilled manpower, and other complementing services are to be addressed. This is to ensure the tourism sector in PNG has the capacity and a competitive advantage. Cost effective tour packages with upgraded maintenance of infrastructure and transport will help to increase market demand and improve visitor satisfaction levels. Importantly, the MTDP will strengthen the capacity of human integral development through facilitating training and quality education programs which will meet industry needs, improve skill levels and create greater awareness of the benefits of tourism. Subsequent MTDPs will focus on the transformation of the trend set by the first MTDP for a more developed and sustainable tourism industry over the next 20 years. Challenges in implementation First and foremost is the challenge of how to deal with law and order problems, energy and land issues, and to improve the image of PNG internationally. Transport and accommodation are core infrastructure needs of tourists. Some of the key infrastructures and facilities such as airports, roads, wharves and water are in need of significant upgrading to match international standards. Without addressing these constraints tourist numbers coming into PNG will continue to be low. 87 DSP sector goal Indicator Source Baseline (2009) 2015 target 2020 target 2025 target 2030 DSP target Increase the overall economic Number of foreign visitors Arrival cards 125,000 240,000 450,000 850,000 1,500,000 value of tourism to the nation (Immigration) by nearly doubling the number of tourists on holiday in PNG Total tourism receipts Visitor K1.7 billion K3 billion K5 billion K9 billion K13 billion every five years and Survey maximising the sustainable (sampling tourism growth for the social method) and environmental benefit of Employment TPA Research 13,500 jobs 25,000 45,000 70,000 120,000 Papua New Guineans. & Survey (skilled, semi-skilled) Lead government department PNG Tourism Promotion Authority No. Sector strategy

1 MARKETING: Increase tourism demand by raising market awareness of PNG as a destination and increasing product information and distribution.

2 PRODUCT DEVELOPMENT & INVESTMENT: Encourage investment in new and existing tourism products, that meet market needs, by increasing sector competitiveness and industry standards and profitability

3 TRANSPORT and INFRASTRUCTURE: Improve competitiveness and standards of transport and infrastructure, to increase market demand and improve visitor satisfaction levels.

4 HUMAN RESOURCE DEVELOPMENT: Facilitate training and quality education programs to meet industry needs, improve skill levels and create awareness of the benefits of tourism.

5 INSTITUTIONS & INDUSTRY PARTNERSHIP: Develop institutional structures and capacity within the public and private sector to facilitate tourism development at a national and provincial level. DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions MARKETING THE 1 –Expanded annual market research program –Conduct external audit to –Prepare and sign –Establish a special DESTINATION: –Review/amend arrivals/departure card data review effectiveness of PNGTPA MOUs with regional and sporting events Increase tourism demand –Review PNGTPA website and develop and marketing activities and international unit by raising market implement internet marketing strategy –Review PNGTPA Act to reflect partners and –Establish a special awareness of PNG as a –Bbuild internet marketing capacity in the new functionality and structure undertake joint events working group destination and increasing provinces –Review and revise legislation for promotions. and prepare product information and functions of PNGTPA –Leverage global & marketing strategy distribution. –Restructure PNGTPA: establish regional memberships and incorporate into new separate marketing and with South Pacific annual marketing policy & planning bodies Travel, PATA and program WTO. PRODUCT DEVELOPMENT 2 –Revise existing regulations in relation to Develop Provincial Tourism Plans –Develop criteria for –Identify key sites for & INVESTMENT: tourism investment incentives funding tourism tourism projects Encourage investment in –Review and revise legislation and projects –Develop processes new and existing tourism regulations in relation to cruise ships –Establish tourism for securing land for products, which meet –Review and revise legislation and conservation tourism development market needs, by regulations for pre-approved visa exemptions committee and hold increasing sector –Design community project components annual forum competitiveness and –Design standards system, pilot test and industry standards and develop legislation & regulations for profitability accommodation sector –Undertake provincial training and awareness program 88 TRANSPORT & 3 –Develop new market opportunities created Provincial Authorities to develop Enforce roadworthy INFRASTRUCTURE: by new air services maintenance program based on regulations for tour Improve competitiveness –Implement Cruise Ship Strategy targeting Provincial Tourism Plans operator vehicles and and standards of transport potential new operators and introduce taxis and infrastructure, to regulations to remove charges increase market demand –Coordinate annual infrastructure and improve visitor maintenance plans with priorities identified satisfaction levels. in Provincial Tourism Plans –Review existing infrastructure and develop and implement upgrading program HUMAN RESOURCE 4 –Implement Tourism Training Needs Analysis –Produce development program Incorporate DEVELOPMENT: Facilitate & HRD Plan for existing technical institutions competency based training and quality –Establish Industry Advisory Committee (see for facility upgrade and capacity training principles education programs, which below) building into all technical meet industry needs, –Review existing TVET course content –Review outcomes of TNA and training improve skill levels and –Review existing material and conduct train existing course content create awareness of the the trainer program for Provincial tourism –Develop short technical courses benefits of tourism. officers INSTITUTIONS & 5 –Revise the functions of the PNGTPA –Design and implement a Establish a national Establish a Tourism INDUSTRY PARTNERSHIP: –Review PNGTPA Act and draft new capacity building program in Hotels Association Police Concept Develop institutional legislation tourism development and structures and capacity –Establish a Tourism Policy Secretariat. marketing at a central and within the public and –Develop business plans for all registered provincial agency level private sector to facilitate tourism industry associations and fund key –Liaise with operators and create tourism development at a initiatives networks national and provincial –Develop standard constitutions level. for Provincial Associations Responsibility Tourism Promotion Authority Estimated inputs (K million) No. I 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding option(s) I 2 I 2 I 2 I 2 I 20 I 28 I GoPNG 89 Part 5 Cross cutting sectors 5.1 Population Goal: Achieve a population growth rate that is sustainable for society, the economy and the environment Introduction In the last three decades, PNG’s population growth rate was higher than the economic growth rate, resulting in serious resource implications for demographic investment (in health, education and employment creation etc). Although declining, fertility rates remain high by international standards resulting in a very broad-based age and sex structure with 40 per cent of the population under the age of 15. This means that there is a very young population that clearly has the potential to further grow. This young population is characterised by a median age of 19 years and a mean age at marriage of 23 years for males and 20 years for females. The median age is expected to increase over time as a result of increased life expectancy and a gradually decreasing fertility rate — resulting in a higher aged population and fewer births. Mortality is decreasing but it remains at a high level. This has had a significant contribution to PNG’s low life expectancy estimated to be 57 years. The maternal mortality ratio is very high at 733 per 100,000 live births, however, this is based on 1994 data. Most of these deaths are pregnancy-related, caused by unsupervised births and lack of access to reproductive services, high rates of illiteracy particularly in the remote areas of PNG, and lack of knowledge about contraceptives. The increasing population also places increased pressure on PNG’s environment with its rich natural resources including forestry and fisheries. In other parts of the country, particularly smaller islands, population growth is placing increasing pressure on the environment, calling for better environmental management. Education for youths, as well as adults, will provide economic opportunities. Agriculture has the potential to grow in rural areas, while employment generation for the informal sector and small and medium enterprises is important for the urban sector. The increased labour force participation will play an important role in reducing fertility rates. MTDP 2011-2015 The sector will depend entirely on the achievements of other key sectors that are implementing initiatives and programs over the next five years. The lead agencies in the sectors of health, education and community development, in collaboration with other agencies and partners, will implement programs that address fertility and mortality issues, whilst initiatives or programs in urban development and the Economic Corridors will attempt to address rural-urban migration and labour force participation. Addressing issues that affect population growth and the quality of all citizens’ lives is a reflection of PNG’s commitment to achieve MDGs 4, 5 and 6. The broad sector strategies are related to the respective sector strategies of health, education and community development, which guide implementation of this sectors initiatives that aim to attain the following deliverables. · Health: 100% health facilities with adequate medical supplies and equipment, upgrading of training institutions, increased family planning coverage – with outcomes of reduced mortality from preventable diseases and containment of the HIV/AIDS epidemic. · Education: quality, primary and secondary curriculum, implemented and monitored and quality teacher education and training. · Community development: adult literacy and entrepreneur skills development training and capacity enhancement program. · Economic development: skills training for economic opportunities and investment in rural development and opportunities within the Economic Corridors to deliver increased labour force participation. Moreover, given the focus of implementation over the next five years on capacity building, the respective sectors will depend entirely on the key enablers, in particular infrastructure, transport, land and education to 90 support interventions. The promotion of partnerships with the private sector, churches and non-governmental organisations in this case is fundamental. Building on MTDP 2011-2015 Future plans will continue to build and enhance skills and capacity, rehabilitate and maintain old infrastructure, while at the same time construct new infrastructure and build capacity. Interventions by the key enablers over the next five years will pave the way to successful implementation to achieve the desired deliverables that will contribute to the achievement of the ultimate goal. Outcomes in 2030 will include reduced infant, child and maternal mortality, lower fertility for women and teenage girls resulting in smaller family size, and limited movement of people from the rural to urban centres. Reductions in fertility are expected to outweigh reductions in mortality resulting in a reduced rate of population growth. These outcomes would be the result of improved road networks and connectivity, established and well equipped health and education facilities at all levels of government and communities, and a healthy and educated population able to make wise and responsible decisions to self-sustain and participate in economic activities. Challenges in implementation Investing in the key enablers over the next five years is crucial as this will accelerate progress across all other sectors in future plans. However, to further support effective implementation, sectoral liaison, coordination and collaboration must continue. Furthermore, issues on data limitations must also be addressed to ensure effective implementation and monitoring of the plans. 91 DSP sector goal Indicator Source Baseline 2015 target 2030 DSP target Achieve a population Population size Census/DHS 5.2 million (2000) 7.3 million 9.8 million growth rate that is sustainable for Population growth rate Census/DHS 2.3% (2000) 2.2% 2.0% society, the economy Total fertility rate Census/DHS 4.4 children per woman (2006) 4.0 children per woman 3.4 children per woman and the environment. Infant mortality rate Census/DHS 57 deaths per 1000 live births 43 deaths per 1000 live births 17 deaths per 1000 live births (2006) Median age Census 19 years (2000) 21 years 25 years Mean age at marriage Census Male: 23 years Male: 23 years Male: 27 years Female: 20 years Female: 20 years Female: 25 years Urban population Census 13% (2000) 16% Contained at 20% Dependency ratio Census 0.73 0.69 0.61 Lead government Department of National Planning & Monitoring/Department of Health/Department of Education/Department for Community Development department No. Sector strategy

1 Enhancement of skills and capacity to equip the labour force

2 Strengthen and expand family planning and reproductive health services

3 Increase awareness to specific target populations at all levels on population issues, family planning and reproductive health

4 Improve and increase economic opportunities and conditions in the rural and the Economic Corridor areas to increase labour force participation

5 Integrate population issues and personal development into formal and informal education curriculum DSP 2030 deliverable No. 2011-15 2016-2020 2021-2025 2026-2030 Risks and assumptions Institutionalise and build 1.1 2 national counterpart officers recruited Limited spaces and administrative capacity on population bottlenecks Integration of population 2.1 23 provincial planners and 89 district administrators Lack of government support and issues into sectoral, provincial trained on integrating population issues into plans ownership and district plans Responsibility Department of National Planning & Monitoring/ Department of Health/Department of Education/Department for Community Development Estimated inputs (K million) 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding options 1.509 I 1.509 I 1.700 I 1.750 I 1.850 I 8.318 I UNFPA/GoPNG 92 5.2 Youth Goal: ---- A vibrant and productive youth population that has career opportu nities, skills, good education, moral values and respect Introduction The PNG population has a youthful structure with 40 per cent aged 0-14, 20 per cent aged 15-24, and 16 per cent aged 25-34. In total, 76 per cent of the population is 34 years or younger. The recently revised National Youth Policy recognises that there are young people who are over 25 but still identified as “young people” and they maintain an active involvement in community youth activities. It must be recognised that the needs and issues of youth can vary considerably between the ages of 12 and 25 and between different life circumstances and locality. Young people are mobile; hence there is a trend of rural to urban migration of youths for reasons including: education and employment opportunities; an attraction to a different way of life; to remove themselves from the restrictions of their villages and from family obligations; abuse and violence; to access services; sports and recreation; and for pleasure. There are also young people who have been born in urban areas and raised in the city. They do not necessarily go to their family’s home villages or speak their parent’s native languages but speak PNG Tok Pisin and English. Youths also migrate from urban and rural areas to places where economic development is occurring, for example, around logging camps, mines, oil fields, and plantations. Urban settlements have increased in size, and overcrowding and lack of services create vulnerability to communicable diseases. In settlement areas, large numbers of unemployed youths, without land or jobs, become gang members that engage in unlawful activities to earn a living, such as breaking and entering, hold ups, and shop lifting. There is a lack of educational and employment opportunities to meet the needs of young people and, as a result, poverty and unemployment are critical issues for the youth population in PNG. Moreover, young people find it difficult to access micro-finance schemes or small grants to assist them to get involved in sustainable income generation activities. Youth issues are a real threat and a challenge for the government vision of a happy, fair, wealthy and smart country by 2050. The youth are the future of PNG and the PNGDSP 2010-2030 focuses on nurturing young people so that they become agents of change in the society. The nurturing will start with families where parents take a serious role in caring for and responsibly bringing up their own offspring. Strategies for education, employment generation, crime control, and HIV/AIDS are all critical for improving the lives of young people today and in the future. In addition, sport and recreation activities need to be developed as discussed in section 5.15. Counselling programs through partnership with churches and NGOs are the way forward in creating social and spiritual opportunities for young people to identify their potential and their usefulness for positive living and advancement in life. MTDP 2011-2015 To improve outcomes for youth, investment in education, particularly in the promotion of polytechnic programs, is paramount. Polytechnic programs will equip young people with the technical and entrepreneurial skills they require to effectively participate in the developing and vibrant PNG economy. The Government will also focus on recapitalising youth centres to provide an avenue for youth activities to be coordinated. Investment in sports and recreation, employment generation, culture and community programs through strong partnership with churches, NGOs and community based organisations are crucial mechanisms to transform the mindset of our youth population and to develop them to become vibrant and productive participants of society. Building on MTDP 2011-2015 Future MTDPs will build upon progress in MTDP 2011-2015 and continue to invest in youth initiatives, including polytechnic training. Work will continue on development of youth skills training and personal development programs. Capacity building through the creation of training centres and facilities will act as a launch pad for increased youth participation in the future, contributing to the 2030 target. Effective investment in youths will bring about changes in their behaviour and attitudes whilst also contributing to significant economic gains in the form of employment, increased entrepreneurship, law and order, productivity and reliability of an educated healthy population. Challenges in implementation In order to realise positive change in youth development, effective prioritisation and sequencing of expenditure must take place. Setting the right foundation in MTDP 2011-2015 through sound investment in the key enablers is one way in which this can be done. Moreover, only by enhancing employment opportunities will our youth be able to be a truly productive and vibrant part of society. 93 DSP sector goal Indicator Source Baseline 2015 target 2020 2025 2030 DSP target target target To have a vibrant and productive youth Education for 500,000 youths in rural 200,000 youths have Secondary education for all youths population that has career opportunities, youths areas have never attended never attended formal including education through skills, good education, moral values and formal education education polytechnic courses respect. Career for 80,000 youths leave school 40% are employed All youths leaving formal education youths annually. are able to find work. Morals, crime 80% of crime is committed 15% reduction in the Youths committing crime falls by and drugs by youths. number of youths in 55% and drugs and alcohol will be crime controlled Teenage 13% of teenage girls have 8% 7% 6% Less than 5% pregnancies unwanted pregnancies. Lead government department Department of Community Development / Department of Education / Law and Justice Sector No. Sector strategy

1 Increase programs to nurture and develop youths to become effective and become agents of change.

2 Increase youth enrolment in formal education and polytechnic trainings.

3 Increase opportunities for youth engagement in formal employment.

4 Enhance social and spiritual opportunities of youths. DSP 2030 Deliverable No. 2011-15 2016-2020 2021-2025 2026-2030 Risks and assumptions Nurturing and personal development 1.1 Negative peer and social influences. Formal education & polytechnic training 2.1 Limited spaces and administrative bottlenecks. Youth employment 3.1 Limited job opportunities. Social, sports and spiritual developments 4.1 Lack of government support Responsibility Department of Education / Department of Community Development/Law & Justice Sector Estimated inputs (K million) No. I 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding options I 2 I 2 I 2 I 2 I 2 I 10 I Churches, GoPNG 94 5.3 Gender Goal: ---- All citizens irrespective of gen der will have equal opportunity to participate in and benefit from developme nt of the country Introduction Gender refers to the socially determined roles and socially learned behaviour of both men and women in any given society. It refers to scripts people are socialised into and reflects the dimensions of power relations and status, roles and positions, access to and control over resources, and divisions of labour. Gender relations are undergoing considerable transformation with the advent of formal education, employment and the monetary economy. Women are assuming greater economic responsibility, as a matter of necessity in most cases, to supplement household incomes. Tension and conflict seem to pervade gender relations and are often manifested in physical violence, most significantly between spouses. The high incidence of rape and other forms of sexual violence also stems from gender relations and how women are valued in society. Sexual suspicion and jealousies cloud gender relations and significantly impede women’s ability to participate fully in economic development. Professional associations are constrained and women’s advancement in the formal sector of employment and politics is restricted by sexual antagonism. Gender disparities are also manifested in the poor health of mothers and the high rate of maternal mortality, often due to preventable causes, as well as the high incidence of sexual and domestic violence directed at women. Efforts to achieve gender equity require a better understanding of the role of men as husbands and fathers. Young boys and men need positive role models to provide guidance and direction to meet the challenges of a society in transition. Gender mainstreaming and gender responding planning and budgeting are critical to support many of the initiatives undertaken by the sector agencies, as well as those specific agencies and community based organisations directly dealing with women and the communities. MTDP 2011-2015 Gender differentials in education, labour force participation, health morbidity and mortality still exist in PNG. The Government acknowledges that gender based violence is widespread and it is an impediment to effective progression towards achievement of the PNGDSP and Vision 2050. Gender based violence has clear links with other factors such as poverty, HIV/AIDS, land and property rights, race/ethnicity, age and sexual orientation. As such, initiatives over the next five years will continue to acknowledge and support protective shelters for women and children — shelters established and managed by churches and CSOs as implementing partners of the Government. Moreover, to deal with victims of gender based violence, specialised training is essential for police, welfare officers, courts and health officials. Building on MTDP 2011-2015 To fully realise the PNGDSP 2010-2030 goal, gender mainstreaming and specific programs for women in urban and rural areas will continue to be a focus of the Government across all MTDPs. Moreover, once the enabling environment has been set and resources are more readily available, new and innovative programs that raise awareness of the roles of women and men in developing and promoting equal access to resources, information, opportunities and other services that support gender equality will receive increased attention. Challenges in implementation Gender inequality is a severe threat to future development in PNG, and PNG’s gender culture in particular, places women in a disadvantaged position. This applies in particular to gender based violence (rape and spousal abuse) which is common in PNG. As such, for effective implementation of gender-based interventions under MTDP 2011-2015, PNG’s gender culture must continue to be unpacked and interventions must be sensitive to PNG ways. 95 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target All citizens irrespective of Gender Development Index UNDP 0.54 By 2015, the GDI will By 2020, the GDI will By 2025, the GDI will By 2030, the GDI will gender will have equal (GDI) increase to 0.60 increase to 0.65 increase to 0.70 increase to 0.75 opportunity to participate Gender Empowerment DPM 0.15 By 2015, the GEI will By 2020, the GEI will By 2025, GEI will By 2030, GEI will increase in and benefit from Index (GEI) /Labour increase to 0.25 increase to 0.35 increase to 0.45 to 0.60 development of the Gender parity ratio of NDOE Schools Reduce gender Reduce gender Reduce gender Eliminate gender disparity country students in primary, OHE = 0.9; disparity at schools to disparity at schools to disparity at schools to at schools and in tertiary secondary and tertiary Tertiary 0.93, and in tertiary 0.95, and in tertiary 0.98, and in tertiary education so that the education = 0.6 education to 0.7 education to 0.8 education to 0.9 gender parity ratio is 1.0 in both. Gender parity ratio of Census, 0.91 Reduce gender parity Reduce gender parity Reduce gender parity Reduce gender parity ratio literate 15-24 year old NDOE ratio of literate 15-24 ratio of literate 15-24 ratio of literate 15-24 of literate 15-24 year olds persons year olds to 0.80 year olds to 0.70 year olds to 0.60 to 0.50 Gender parity ratio of Census, 0.80 Reduce gender parity Reduce gender parity Reduce gender parity Reduce gender parity ratio literate adults (aged 15 and NDOE ratio of literate adults ratio of literate adults ratio of literate adults of literate adults to 0.40 over) to 0.70 to 0.60 to 0.50 Women as a proportion (%) Census, 29% 30% 34% 37% 45% of persons aged 10 and DL&IR over in wage employment Women as a proportion (%) Census 12% 20% 25% 30% 40% of persons aged 10 and over with cash income from any source Proportion (%) of seats held 0.9% 15% 20% 25% 33% by women in national parliament Number of reported cases Crime forthcom Zero tolerance for violence of domestic violence per statistics, ing against women 100,000 population in a Police or given year HIES Lead government Department of Family and Community Development and Department of National Planning & Monitoring department No. Sector strategy

1 Achieve equal access to education for all males and females

2 Increase the rate of functional literacy among girls and women

3 Increase women’s access to economic opportunities and awareness of their economic rights

4 Enhancement of sustainable access of women to capital, market, information, technology and technical assistance

5 Gender mainstreaming in the bureaucracy, legislation and judicial system

6 Ensure equal access to and full participation in power structure and decision-making

7 Prevent and eliminate violence against women and children by strengthening legislation on family welfare, child and women protection 96 DSP 2030 deliverables/ interventions No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Implement the entrepreneur skills development 3.1 50-100 entrepreneur 150-200 entrepreneur 250-300 entrepreneur 350-400 entrepreneur skills Implement training and capacity enhancement programs for 3.2 skills development skills development skills development development training programs women in all districts training courses training courses training courses courses conducted in 40 conducted in 10 conducted in 20 conducted in 30 districts. 700-1000 women districts. 100-300 districts. 300-500 districts.500-700 entrepreneurs are identified women entrepreneurs women entrepreneurs women entrepreneurs and supported. are identified and are identified and are identified and supported. supported. supported. Develop women’s political awareness programs 4.1 10,000-15,000 IEC 8,000-10,000 IEC 5,000-7,000 IEC 2,000-5,000 IEC materials Secure funds before election materials on women’s materials on women’s materials on women’s on women’s political political participation political participation political participation participation are printed are printed and are printed and are printed and and disseminated disseminated disseminated disseminated Conduct several gender sensitivity programs in the 4.1 20-30% of public 30-40% of public 40-50% of public 50-70% of public servants Implement bureaucracy, legislation and judicial systems servants are gender servants are gender servants are gender are gender sensitised. programs and sensitised. sensitised. sensitised. secure funds Produce and disseminate a number of gender 4.1 10,000-15,000 IEC 8,000- 10,000 IEC 5,000- 7,000 IEC 2,000- 5,000 IEC materials Secure funds sensitivity communication awareness materials materials on gender materials on gender materials on gender on gender produced and produced and produced and produced and disseminated. disseminated. disseminated. disseminated. Protective shelters established for women and 5.1 2-4 safe houses 4-6 safe houses 6-8 safe houses 8-10 safe houses Secure funds children survivors of abuse established established established established Police, welfare/CD officers and health officials 5.1 200-300 concerned 300-500 concerned 500-700 concerned 700-1000 concerned Secure funds trained to respond to gender based violence (GBV) officers trained to officers trained to officers trained to officers trained to respond respond to GBV respond to GBV respond to GBV to GBV Responsibility Department for Community Development, Office for Development of Women, Department of Education, Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding options 3.1/3.2 2 2 2 2 2 10 GoPNG/Donors 4.1 2 2 2 3 2 11 GoPNG/Donors 5.1 2 3 3 3 3 14 GoPNG/Donors Total: 6 7 7 8 7 35 97 5.4 HIV/AIDS Goal: ---- A healthy population free from sexually transmissible infections and HIV/AIDS threats Introduction By the end of 2007, an estimated 5,995 people had died of AIDS related illnesses and 3,730 children had been orphaned. Based on the 2007 estimation report on the HIV epidemic in PNG, the national HIV prevalence among adults was estimated to be 1.61 per cent. At the end of 2008 there were an estimated 76,665 people living with HIV in PNG. Forty per cent of all reported cases of HIV infections are accounted for by males and 60 per cent for females. The median age for those diagnosed with HIV was 27 years for females and 33 for males. Seven provinces connected by the highlands highway accounted for approximately 94 per cent of all new cases confirmed in 2008. Currently there is no biological surveillance in place for monitoring the epidemic among sex workers, homosexual men and higher risk groups like workers in economic enclaves. Furthermore, there is still a lack of quality epidemiological data to guide the planning of the national response. HIV transmission in PNG is heightened by early sexual activity often in situations of coercion and abuse; multiple and concurrent sexual partnerships including polygamy, extramarital sexual partnerships and inter- generational sex, the exchange of sex for cash, goods and services; low and inconsistent condom use, high levels of sexual violence and rape, mobility, and the use of penile inserts and modifications. The total number of sexually transmitted infection (STI) cases reported, which are known cofactors in HIV transmission, increased from 21,213 in 2000 to 30,535 in 2008, representing a growth of 44 per cent. MTDP 2011-2015 Under MTDP 2011-2015, interventions will focus on strengthening systems, in particular the establishment of a well functioning monitoring, surveillance and evaluation system, effective coordination of all stakeholders, prevention, counselling, testing, treatment, care and support. Effective coordination of efforts to fight HIV/AIDS under MTDP 2011-2015 will take place under the leadership of the National AIDS Council Secretariat (NACS). In particular, NACS will work towards strengthening collaboration and coordination within and across government, NGOs, CBOs, and donors in both the delivery of services and in the development and use of the monitoring, surveillance and evaluation system. Alongside effective coordination, equipping HIV/AIDS and health centres with sufficient supplies for the treatment, care and support of those infected with HIV/AIDS will be a focus for the coming years, with efforts increasing subject to financing. Prevention efforts under MTDP 2011-2015 will include the provision of information and education in high schools, youth programs, national events and government departments and agencies. Building on MTDP 2011-2015 Beyond 2015, MTDPs will upscale services, awareness, education and training activities. In particular in the later MTDPs the monitoring, surveillance and evaluation system will be rolled out to an expanding number of provinces, strengthening the knowledge on the HIV/AIDS situation across PNG. System strengthening will be ongoing to ensure new challenges are dealt with adequately. Interventions in the HIV/AIDS sector will be more effectively upscaled in the later MTDPs through prior investment in MTDP 2011-2015 in the enabling environment, in particular, infrastructure, transport and utilities. Challenges in implementation The key challenges in effective implementation are a paucity of good monitoring data, cultural and traditional barriers and institutional and organisational capacity of implementing agencies. Moreover, access to health centres and poor existing infrastructure in the rural areas remain key issues to overcome in the coming years. 98 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Healthy population Prevalence rate (%) of HIV/AIDS by sex NHIS 0.96% in Below 0.9% 0.5% 0.3% Below 0.1% free from sexually 2008 transmissible infections and Orphan children due to AIDS NHIS 5995 in 2008 4000 3000 2000 Reverse the rise in orphans HIV/AIDS threats. % of HIV positive pregnant women on ART UNGASS 3.48% in 20% coverage 50% coverage 80% coverage 100% coverage (PPTCT) 2008 Degree of stigma and discrimination as No baseline 20% stigma 30% reduction 50% reduction 80% reduction identified by PHA’s stigma index info reduction Proportion (%) of condom use by sex at last DHS 30% 50% 60% 70% high risk sex Proportion (%) of persons by sex who know DHS 87.2% in 90% 95% 98% 100% about HIV/AIDS 2006 Prevalence rate (%) of HIV/AIDS among NHIS No distinct people aged 15-49 by sex baseline Prevalence rate (%) of HIV/AIDS among NHIS No baseline pregnant women aged 15-24 Proportion of population (%) by sex in need NHIS 17% in 2006 34% 68% 75% 98% of ARV drugs who receive those drugs Lead Agency National AIDS Council Secretariat, Department of Health, Education Department, Community Development No. Sector strategy I 1 2 3 I A policy framework taking into account PNG ways: prevent and reduce the transmission of HIV and STIs in PNG A policy framework taking into account PNG ways: counseling, testing, treatment, care and support Systems strengthening: coordination, data collection and analysis DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions I Implement education and awareness programs 1.1 30% of high schools 60% of high schools 80% of high schools 100% of high schools –Cultural & traditional barriers covered covered covered covered –Funding allocation Increase access to quality STI/HIV PEP services 1.2 30% access through 60% access through 80% access through 100% access through –Cultural & traditional barriers all health facilities all health facilities all health facilities all health facilities –Funding allocation Adequate supply of HIV related commodities to 1.3 30% of coverage to 60% of coverage to 70% of coverage to 100% of coverage to –Access to ANC. ANC all ANCs all ANCs all ANCs all ANCs –Cultural & traditional barriers Implement national guidelines for standard 1.4 30% coverage in all 60% coverage in all 80% coverage in all 100% coverage in all –Cultural & traditional barriers precautions in health care settings. health care settings health care settings health care settings health care settings –Funding allocation Support centres to assist PHAs 1.5 30% coverage to all 60% coverage to all 80% coverage to all 100% coverage to all –Access centres with PHAs centres with PHAs centres with PHAs centres with PHAs –Cultural & traditional barriers Establish youth programs to raise greater 1.6 30% coverage 60% coverage 80% coverage 100% coverage –Cultural & traditional barriers awareness –Funding allocation All government agencies have in place workplace 1.7 30% coverage of 60% coverage of 80% coverage of 100% coverage of –Cultural & traditional barriers policies. workplace policies workplace policies workplace policies workplace policies in –Funding allocation in the public sector in the public sector in the public sector the public sector Implement awareness of HIV/AIDS activities 1.8 30% coverage in all 60% coverage in all 80% coverage in all 100% coverage in all –Cultural & traditional barriers during national and local social, cultural, local & national local & national local & national local & national –Funding allocation sporting, and professional events events events events events 99 Increase access to quality HCT 2.1 30% access to HCT 60% access to HCT 80% access to HCT 100% access to HCT –Cultural & traditional barriers –Funding allocation Develop an effective quality assurance system for 2.2 30% coverage 60% coverage 80% coverage 100% coverage –Cultural & traditional barriers HCT/ART program –Funding allocation Expand ART and STI treatment services to all 2.3 30% service 60% service 80% service 100% service –Cultural & traditional barriers districts. coverage coverage coverage coverage throughout –Funding allocation throughout 89 throughout 89 throughout 89 89 districts districts districts districts Establish district HBC support mechanism to 2.4 30% coverage of 60% coverage of 80% coverage of 100% coverage of –Cultural & traditional barriers facilitate and support HBC units. support services in support services in support services in support services in –Funding allocation 89 districts 89 districts 89 districts 89 districts Establish a national standard and guideline to 2.5 National standard National standard National standard National standard –Cultural & traditional barriers govern HBC guideline for HBC guideline for HBC guideline for HBC guideline for HBC –Funding allocation completed & coverage in 7 coverage in 14 coverage in 22 operating Provinces Provinces provinces Establish National HIV/AIDS monitoring and 3.1 National M&E National M&E National M&E National M&E –Cultural & traditional barriers evaluation (M&E) system and database. System in full System operational System operational System operational –Funding allocation operation in 7 provinces in 14 provinces in 22 provinces Establish a HIV/AIDS research, information and 3.2 National HIV/AIDS National HIV/AIDS National HIV/AIDS National HIV/AIDS –Cultural & traditional barriers statistics centre. Research, Research, Research, Research, –Funding allocation Information and Information and Information and Information and Statistics Centre Statistic Centre Statistic Centre Statistic Centre established established in 7 established in 14 established in 22 Provinces Provinces Provinces Strengthen organisational and human capacities 3.3 30% coverage on 60% coverage on 80% coverage on 100% coverage on –Cultural & traditional barriers of NACS, DACS, PACS organisation and organisation and organisation and organisation and –Funding allocation institutional institutional institutional institutional strengthening for strengthening for strengthening for strengthening for NACS, PACS, DACS NACS, PACS, DACS NACS, PACS, DACS NACS, PACS, DACS Responsibility NACS Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding options 1 17 20 15 15 10 77 GoPNG/Donor 2 30 30 20 20 25 125 GoPNG/Donor 3 20 20 30 25 25 120 GoPNG/Donor Total: 67 70 65 60 60 322 100 5.5 Vulnerability and disadvantaged groups GOAL: Vulnerable and disadvantaged people w ill have the support that they require from the Government, service providers an d the general public for meetin g their right to a minimum standard of living Introduction The vulnerable and disadvantaged group of any population is a group of society that needs special attention as they belong to the communities and have rights that allow them to fully participate in society without discrimination. Members of this group unfortunately may have become disabled and disadvantaged due to unforeseen circumstances and incidences like accidents or health-related abnormalities at birth. They may have become victims due to outcomes of socio-economic hardships and challenges including violence, abuse, exploitation and neglect brought upon them by families and other selfish and disrespectful members of society. The latter may have been due to a changing society as a result of development in the country. People who generally face such hardship include people with disability, widows, children (orphaned, adopted and fostered children), settlers, refugees, landless and homeless people, and the elderly, including those suffering from acute poverty. In the last three decades, this particular group of the population did not stand out and as such they were given little attention. This was because of the strong traditional support systems and a small population. However, the vulnerable and disadvantaged group is likely to continue to increase in size. This is due to factors such as: a population growing at the rate of around 2.7 per cent; the ever increasing HIV/AIDS epidemic; “poverty opportunity” due to isolation and lack of access to markets, health and education; lack of employment opportunities especially for the youth; marginalisation of women; and poor housing. MTDP 2011-2015 Supporting the vulnerable groups of society is ethical and, as such, efforts over the next five years will be focused on developing a sustainable social care and protection system which draws upon collaborative efforts — within communities, with donors and across government — and one which builds upon cultural norms and social safety nets, such as the ‘wantok system’. A collaborative approach is important and will be strengthened right down to the community level. Moreover, during the same period, empowerment of vulnerable groups will be enhanced through proactive education and awareness programs. This will be further supported through associated legislation and the provision of rehabilitation, assistive devices and self-help mechanisms. The key enablers over the next five years will also provide the appropriate environment for much of the support programs, initiatives and mechanisms for the group. Building on MTDP 2011-2015 Future plans will build on the enabling environment created in the first five years of implementation and will expand services provided to vulnerable and disadvantaged groups. The kind of services provided will differ according to the type of disability and the type of vulnerable group. Through a range of interventions, vulnerable and disadvantaged people will have the support they require to meet their rights to a minimum standard of living. Challenges in implementation Implementation of effective and appropriate interventions to support the vulnerable and disadvantaged sections of society is difficult without accurate and appropriate data. Moreover for effective implementation the strengthening and building of alliance between the government and the non government sector — often the service providers to the vulnerable — is extremely important. 101 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Vulnerable and Recorded disabled Census, 0.9% of Integrated into the disadvantaged people will persons DHS population community with better have the support that they access to services require from the Number of legislations Legislation 1 national 1 legislation for 3 legislations for 3 legislations for 3 legislations developed Government, service and policies protecting council disability disability disability and disability, elderly and implemented providers and the general the vulnerable and registry policy elderly persons persons, children public for meeting their right disadvantaged to a minimum standard of living % of the population Census, No data 20% of the population 40% of the population 60% of the population 100% of the population aware of people with DHS made aware of the made aware of the made aware of the aware of the needs of disabilities and their needs of disabled needs of disabled needs of disabled disabled people and needs people and their people and their people and their their existence existence existence existence % increase in service No data 10% increase 15% increase 20% increase 30 % increase providers for the vulnerable Lead government department Department of Community Development, Provincial Divisions for Community Development, Department of Health, Department of Education, Service Collaborating agencies organisations No. Sector strategy

1 Development of a social care and protection system

2 Education and awareness

3 Policy and legislation formulation

4 Improvement in infrastructure

5 Strengthened partnerships with community based organisations and donors DSP 2030 deliverables No. 2011-2015 2016- 2021- 2026- Risks and 2020 2025 2030 assumptions Increase awareness programs and materials on all vulnerable groups including 2.1 Integrate into education curriculum children and disabled people at all levels of the service systems and society. Strengthen legal instruments for the disabled and vulnerable 3.1 Enact and review legislation to protect rights of the vulnerable Develop and maintain appropriate rehabilitation, care and protection programs 4.1 Rehabilitation, care and protection services for all sectors of the vulnerable population. for vulnerable people Strengthen support for self help organisations (SHOs) for vulnerable groups and 4.2 Workplace safety policies and guidelines improved and maintained workplace safety policies and guidelines developed. Improve infrastructure and utilities to cater for the vulnerable 4.3 Develop vulnerable and disable friendly infrastructure in public places Partnerships strengthened with donors and CBOs that specialise in catering for 5 Established legal partnership between vulnerable and disadvantaged groups government and private organisations Develop and maintain updated records of vulnerable groups 6 Develop needs analysis for vulnerable groups. Responsibility Department of Family and Community Development Estimated inputs (K million) No. I 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding Options I 3.5 I 3.5 I 3.5 I 3.5 I 3.5 I 17.5 I GoPNG/Donors 102 5.6 Environment Goal: ---- Promote a su stainable environment Introduction Conservation of the environment is a fundamental pillar of the constitution and is captured under the fifth pillar of the Vision 2050 in Environment Sustainability and Climate Change. In addition, the PNGDSP 2010- 2030 gives emphasis on environmental sustainability and further articulates the Nation’s 20 year plan to reach the Millennium Development Goals and targets for the environment. The environment is enshrined in the constitution and there are over 45 various regulations, acts and policies guiding environment issues, yet compliance, enforcement and adherence to standards remain a key challenge. Unsustainable logging operations, direct disposal of tailings, mangrove depletion and unsustainable fishing practices continue to be pressing environmental concerns. Recently, economic development initiatives, in particular the Economic Corridors to address poverty, have posed new challenges on environmental sustainability. The formulation of an environmentally sustainable economic growth policy is thus essential to ensure appropriate levels of impact assessment are conducted. MTDP 2011-2015 In order to promote a sustainable environment, MTDP 2011-2015 will focus on interventions to minimise pollution, reduce deforestation and improve waste management, thereby resulting in a cleaner, more inhabitable environment for all. This will be done by firstly monitoring and minimising runoffs from all industrial processors and improving waste disposal methods. Emphasis will also be placed on the strengthening and utilisation of customary practices in preserving the natural environment, encouraging its conservation through sustainable development in ensuring the benefits for present and future generations. Furthermore, with the challenge of limited and outdated environmental data, a national database for environmental accounting will be established to strengthen environment protection activities. This will ensure that progress is made towards improving all indicators of MDG 7, which serves as a way of measuring progress and achievements in the environment sector. Addressing environmental issues and achieving the goal of promoting a sustainable environment will need the support and stability of key enablers within society and the country as a whole. Building and rehabilitating infrastructure, for instance sewerage systems and hydrological stations will be achieved if land is secured and law and order issues that impede development processes are reduced. In addition, education at all levels is needed to create awareness on environmental issues and to build capacity in areas that will contribute to achieving environmental sustainability. Building on MTDP 2011-2015 The first MTDP 2011-2015 will focus on capacity building and improving legislative frameworks for the environment. Achieving this through the first 5 year implementation of the PNGDSP will build a strong foundation on which the other three MTDPs can build. Establishing the capacity and legislative framework within the environment sector will ensure that deliverables are appropriately administered and implemented. Furthermore, priority activities such as the expansion of water and sanitation programs to rural areas will take place under the last three MTDPs due to greater direct government expenditure and improved capacity and legislative frameworks. With good establishments in human and administrative capacity, such as for environment protection, and improved legislative framework within the environment sector by 2015, the 2030 PNGDSP targets for the environment can be achieved. Challenges in implementation The main challenge faced in this sector is the unavailability of data in some areas and the available but outdated data in other areas. A decision by NEC on the Environment Protection Authority is still pending and remains a challenge to execute to ensure a strong environment protection regime. 103 DSP sector Indicator Source 2010 2015 2020 2025 2030 DSP target goal: Baseline Target Target Target Promote a Percentage of land area covered by primary DEC 59% 59% Effective systems in place for monitoring the sustainable forests PNGFA changes in primary forest cover environment Primary forest depletion rate per year due to; DEC 2.6% 2.4% –Prevention in the felling of virgin forests. –– commercial agriculture, logging, mining, & PNGFA Logs to be provided by plantations and urban town planning. managed forests. Percentage of land area protected to maintain DEC 3.83% 4% Improve conservation of terrestrial & improve biological diversity biodiversity for future generation Percentage of marine area protected to DEC 0.00047% 0.047% Improve conservation of marine protected maintain & improve biological diversity areas for future generation Land area rehabilitated to ensure biodiversity DEC 6550ha No change Improve conservation of biodiversity for (mines). Number of Mine Closure and expected future generation Rehabilitation Plans implemented Proportion of licensed permitted water usage DEC 37.5% 38% Improved catchment based water use permit as a proportion of total water resources used operating efficiently Proportion of pollution complaints investigated DEC 10% 50% Improved management of investigated waste discharge and pollution complaints Proportion of tuna stocks within safe biological National Fisheries Sustain tuna stock by increasing license fees limits Authority (NFA) to reduce incentive to overfish No Sector strategy

1 Institutional capacity strengthening for environmental sustainability management

2 Environmental protection and standards

3 Institutionalise implementation and management of the Global Environment Conventions to meet PNG’s commitments

4 Creation of systems of protected areas management at all levels and forest and biodiversity conservation

5 Land and water resource management

6 Environmental data and information management for planning and dissemination DSP 2030 deliverables No 2011-2015 2016-2020 2021-2025 2026- Risks and assumptions 2030 Develop and implement the 1.1 Implement and build capacity to DEC is able to implement the ESEG ESEG policy implement the ESEG policy in Policy with CSOs, CBOs, NGOs and partnership with all stakeholders. the Private partnership Develop environment and 1.2 Impact assessment conducted & –Environmental damages are natural resource development sustainable development approach minimised plan for Economic Corridors taken to minimise long term –Economic development impeded environmental damages Comprehensive range of natural 1.3 Provide training, develop and –Adequate funding available resource management guidelines implement code of conduct for oil –Trained officers retained that addresses drivers of palm. Establish baseline data and –Guidelines and baseline database deforestation pilot projects for other drivers of for natural resource management deforestation including mining, established infrastructure 104 Waste management policies and 1.4 Review mining policy (oil and gas) –Adequate funding available guidelines for mining and on the guidelines for operations and –Waste management policies and petroleum projects operations closure guidelines reviewed and closure Enhance management of land 1.5 Develop, manage and screen for land Reduction in the rate of land degraded by commercial degradation and rehabilitation degradation by commercial activities extraction guidelines Enhance the coastal zone 1.6 Manage the coastal zone Adequate funding available conservation management plan conservation management plan Review of the Environmental Act 1.7 Ensure compliance and protection of –Endorsement from DJAG and other 2000 and new legislation to the environment relevant authorities. create EPA –Parliament pass the new legislation –Adequate funds available Ensure more comprehensive 2.1 –Improve registry of pollution Reduction in the number of pollution waste management practices are complaints in legal and regulatory related complaints employed branches of DEC and EPA –Increase attempts to address or investigate all pollution complaints –Establish pollution taxes and transferable pollution permits Streamline EPA monitoring and 2.2 –Provide training on monitoring and –Trained and experienced officers are compliance and build capacity compliance procedures of the retained development projects –Monitoring and compliance –Resource the EPA to effectively mechanism improved carry out monitoring and compliance of development projects Standards and code of practices 2.3 Review and implement the code of –Adequate funding available for projects category 1 and 2 practices for commercial activities –Code of practice for commercial in all sectors activities are not adhered to Streamline permit procedures 2.4 –Review the current permit Might take a long time for the review and processes procedures and processes Adequate funding available –Implement review findings Trained officers are adequately –Provide training on procedures and resourced processes Implement Multilateral 3.1 –Coordinate the implementation of the –NEC approves MEAs to be ratified Environmental Agreements MEAs’ obligations –DEC effectively coordinates the (MEAs) like the UNCCD, UNCBD –Establish monitoring systems to keep implementation and monitoring of and UNFCCC track of implementation progress the ratified MEAs National Capacity Self 3.2 –Launch the NCSA report NCSA recommendations addressing Assessment (NCSA) of the global –Implement the recommendations to the capacity issues in implementing environmental conventions build capacities for effective the Rio conventions implementation of the MEAs 105 Endangered species and 4.1 –Develop and implement the national criteria for protected area system (for Availability of adequately trained habitats conservation and both marine and terrestrial) in PNG which will leads to the development of a officers and funding management plan for marine protected area policy. and terrestrial protected areas –Implement the plan and guidelines for protected areas –Undertake landscape and coastal bio-regional planning –Review protected areas legislation –Provide for new types of protected areas including REED+ forests and refuges for climate change –Develop biodiversity conservation initiatives with private sector, NGOs and customary landowners. –Establish a national endangered species inventory Develop terrestrial protected 4.2 –Implement terrestrial Adequate funding and manpower area policy protected area policy available –Work through PPPs to –Private sector aware and willing to promote conservation of engage in PPP terrestrial protected areas Develop Marine Protected Area 4.3 –Implement marine protected –Adequate funding and manpower Policy area policy available –Develop management strategies for coastal and marine resource management Strengthen customary practices 4.4 Make CSOs, private sector, NGOs and CSOs and private sector are aware of for enhancing and preserving CBOs aware of government partnership PPP opportunities the environment and educate landowners on the importance of conserving the environment REED + and payment for 4.5 Make landowners aware of the essence of Landowners’ support obtained ecosystems services (PES) conservation and sustainable development Increase water catchment and 5.1 –Rehabilitate water and Adequate funding is available water and sanitation programs sanitation/sewerage systems. –Provide tanks and back-up water supply for vital government services Maintained inventory of all 5.2 –Improve and maintain –Adequate funding available licensed national water usage effective registration of water –Improved and effective water related environmental permits permitting system in place –Improve catchment based water permit system Develop sustainable land 5.3 Implement sustainable land management Adequate funding and manpower management policy policy available Develop water resource 5.6 Implement water resource management Adequate funding and manpower management policy policy available Introduce land zoning systems 5.7 –Allocate adequate land for agricultural –Agricultural production increased to increase agricultural purposes –Adequate funding available production –Environment and natural resource development plan for Economic Corridors Minimise land degraded by 5.8 –Develop land degradation and –Land degradation and rehabilitation commercial extractive purposes rehabilitation guidelines guidelines developed and effectively –Screen and manage developments in implemented environmentally sensitive areas –Landowner support 106 Build information database for 6.1 –Establish environmental database and –Adequate funds available natural resources and information system –Internal officers are adequately environment management –Engage external GIS expert to complete trained and retained systems set up and data upgrading –Provide training for internal staff on environmental database and information management Establish a database for 6.2 Build capacity Adequate funding is available environmental risk and hazard in hazard accounting analysis and do national stock-take of hazards Responsibility Department of Environment and Conservation and other key implementing agencies responsible for environmental issues Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding options 13 17 17 17 17 81 GoPNG/Donor 107 5.7 Climate change Goal: ---- Adapt to the domestic impacts of climate ch ange and contribute to global efforts to abate greenhouse gas emission Introduction PNG has taken a global lead in seeking to combat climate change, particularly by proposing measures to activate the carbon abatement opportunity by preserving tropical forests. Deforestation and forest degradation are major contributors to greenhouse gas emissions, through large scale logging and the conversion of forests into agricultural use. These activities continue because the value of forests as carbon sinks and a source of livelihood have not been fully recognised by market mechanisms. PNG, together with other rainforest nations, is currently working to create a mechanism for Reducing Emissions from Deforestation and Forest Degradation (REDD+), to enhance carbon stocks and manage forests sustainably in developing countries. The Copenhagen Accord of December 2009 recognised the fundamental role of REDD+ in climate change mitigation and made substantial funding available for the first time, starting with a commitment of US$3.5 billion globally for the period 2010 to 2012. In total, funding of US$30 billion was committed for the 3 year period to support the implementation of mitigation and adaptation actions in developing countries in line with their national development strategies. Even with global action on mitigation, climate change has already begun and has exacerbated some hazards locally, such as coastal and inland flooding. There are now gradual shifts in the prevalence of malaria and in agricultural yields. The office of climate change and development is tasked to investigate ways to protect PNG’s people and economy from these risks. The national Climate-Compatible Development Strategy prioritises actions related to climate change mitigation, adaptation, low-carbon growth and REDD+. The Copenhagen Accord recognises that both mitigation and adaptation to climate change are inseparable from economic development. PNG supports the Accord and is now taking steps to ensure climate-compatible development for its entire people. MTDP 2011-2015 Climate change is a complex frontier issue and PNG’s response must be grounded by strong research and clear empowering legislative and regulative instruments to guide all stakeholders in a coordinated, holistic and integrated manner. During the first MTDP, PNG will continue to engage effectively in global climate change negotiations and will ensure synergy in the climate change response amongst all stakeholders, including government agencies, private organisations, churches and local communities. Moreover, during the first MTDP, interventions will be focused on enforcing minimum technology and maintenance standards, particularly within the economic and infrastructure sectors such as forestry, agriculture and energy. The first MTDP will, at the same time, address the adverse impacts on our local communities through community based adaptation programs subject to available financial resources. Building on MTDP 2011-2015 Subsequent MTDPs will leverage the coordination mechanism and synergies established during MTDP 2011- 2015, ensuring that all stakeholders respond to climate change in an appropriate and measured fashion. REDD+ and a willingness to adapt to climate change will continue with assistance from the climate change fund. PNG will be ready to support and implement international initiatives and agreements that are forged in future years. Challenges in implementation Effective coordination is needed to ensure the desired results are met with regards to climate change. Coordination is not only required across sectors but amongst stakeholders. An ongoing risk is the potential for a breakdown in international negotiations for reaching agreement on tackling climate change. 108 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Adapt to the domestic Number of meteorological stations NWS 14 20 45 70 89+ impacts of climate Tide Monitoring Stations NWS 2 5 12 18 20 change and contribute to global efforts to abate Emissions intensity of electricity generation OCCD Reduce by Reduce by Reduce by Reduce by 65% greenhouse gas 25% 40% 50% emissions Multi-temporal remote sense satellite coverage OCCD/DEC 1 database system 20 database systems Lead government agency Office of Climate Change and Development No. Sector strategy

1 REDD+

2 Mitigation

3 Adaptation

4 Climate resilience DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks, assumptions Engage in global climate change 1.1 –REDD+ mechanism established negotiations –Adaptation funds accessed. Develop REDD+ projects 1.2 7 REDD+ pilot projects 12 REDD+ project 12 REDD+ project 12 REDD+ projects Develop CDM projects 1.3 2 CDM pilot projects 5 CDM projects 5 CDM projects 5 CDM projects Develop renewable energy policy 1.4 Renewable energy policy and 5 EF projects Enforce minimum technology and 2.1 Enforce current motor vehicle check Equip facilities for maintenance for vehicles and other standards. Raise standards where compliance and greenhouse gas emissions. necessary to reduce emissions. monitoring Develop an innovative emissions reduction 2.2 Establish policies and tax incentive and permit system legislations; and international carbon market exchange Establish community-based mangrove 3.1 10,000 seedlings/yr 25,000 seedlings/yr 40,000 50,000 planting to prevent coastal flooding/erosion seedlings/yr seedlings/yr Set up a landslides hazards mapping 3.2 1 stand alone database Integrated into core system system planning systems Establish a coastal and flood warning 3.3 2 tide centres, 20 met 20 tide centres, system stations 89+ met stations Ensure reallocation and resettlement of 3.4 Identify resettlement areas affected communities. National climate change research including 4.1 1 climate change research centre in climate resilient agriculture Climate proofing of key infrastructure 4.2 Climate proofing Establish climate micro-financing schemes 4.3 Access for 20% of rural population Access for 60% of rural Access for 90% of population rural population Ensure public-private, church-state, CSO 4.4 partnership on climate change 109 Responsibility Office of Climate Change and Development Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding option 1.1 1 3 5 2 2 13 GoPNG/Donor 1.2 3 2 2 1 1 9 GoPNG/Donor 3.1 1 2 1 1 1 6 GoPNG/Donor 3.2 0 0 0 0 0 0 GoPNG/Donor 3.4 2 2 1 1 1 6 GoPNG/Donor 4.1 2 1 1 1 1 7 GoPNG/Donor 4.3 1 2 2 2 2 9 GoPNG/Donor 10 12 12 8 8 50 110 5.8 Natural disaster management Goal: ---- Manage the risk of natural disasters Introduction Tropical cyclones, inland and coastal flooding, landslides and mudslides, volcanoes, earthquakes, tsunamis and El Nino have impacted PNG on numerous occasions. Malaria remains a major health problem in PNG, with 700 deaths and about one million infected cases recorded in 2007. With the change in climate patterns and increase in temperatures, the number of cases, particularly in the highlands, could increase. Volcanic and seismic activity may occur at any time. Sea-level rise is now occurring coupled, with frequent sea surges affecting numerous island communities. The risk of tsunamis related to earthquakes also remains current. El Nino drought preparedness is a major program to improve food security and ensure that the 64 drought vulnerable districts develop drought coping strategies. MTDP 2011–2015 The first MTDP will focus on improving existing early warning systems and enhancing community preparedness through public awareness and education programs. A policy and legal framework for the rapid deployment of defence forces will be developed and the capacity of the defence forces to assist in natural disasters will be increased. The role of the defence forces is elaborated upon further in section 5.14. Moreover, efforts by implementing agencies will be focused on ensuring increased cooperation and coordination between disaster management and response units, in particular civil-military cooperation. Proper coordination of foreign donors in disaster relief will also be essential. Efforts will extend across all forms of hazards so as to minimise the overall social and economic impacts of natural disasters. Training in disaster management agencies will help strengthen PNG’s response to natural disasters. Building on MTDP 2011-2015 Subsequent MTDPs will build on the first MTDP, taking advantage of investment during MTDP 2011-2015 in the key enablers, in particular utilities, education, transport and infrastructure, and in the capacity of the defence forces. Challenges in implementation A coordinated approach to natural disaster management is vital. Without effective collaboration and dialogue between relevant agencies, including foreign donors, the ability to reduce the risk of disaster will be compromised. 111 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Manage the risk of PNG lacks appropriate National Disaster Disaster Appropriate Better prepared Effective and DRM mainstreamed across natural disasters DRM policies, legislation Centre and related legislation and communities resulting efficient disaster different sectors and and response capacities studies by losses are policies for DRM from awareness and response system development planning takes stakeholders on the rise are established education programs established DRM issues into consideration Lead government National Disaster Centre, Department of Provincial and Local Level Government department No. Sector strategy I 1 2 3 Develop and disseminate appropriate DRM policies and legislations Enhance early warning systems and disaster response capacities at all levels Enhance disaster preparedness at all levels through DRM education, awareness and training DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions I Promulgation and 1 –Appropriate DRM legislation Assist provinces to develop their Effective DRM systems and Continue capacity Appropriate policies and dissemination of new and policies put in place own legislation and apply DRM procedures established at building of the provinces legislation must be in DRM legislation and DRM –Partnership developed with protocols all level on DRM policy and place protocols all stakeholders legislation issues. Early warning 2 –Strengthen early warning Establish rapid response force Continue strengthening Strengthening of Timely budget allocation strengthened and disaster system and response and and regional stock piling communication network provincial DRM offices and partnership response capacity preparedness capacities system, enhance the and early warning systems completed. Establish established with key optimised –Assist provinces in disaster communication network, and capacity building of emergency operation sectors management planning continue assisting provinces to the provincial DM offices centres, procedures and enhance their preparedness and and capacities systems in high risk response planning provinces Informed and prepared 3.1 –Community based DRM Disaster awareness programs in Various training modules Key officials at Appropriate monitoring communities through programs high risk provinces and capacity pertaining to DRM provincial level trained measure in place to gauge awareness and education –Production of awareness building of provincial authorities developed and provincial in key aspects of DRM the effectiveness of the programs materials through trainings. authorities trained in those to effectively manage awareness and education –Trainings and workshops modules disaster risks. campaign Establish and rehabilitate 3.2 –14 stations rehabilitated Gerehu Fire Station, Madang Alotau Fire Station, Wewak Popondetta Fire Station, fire stations at key –Computer aided dispatch Fire Station, Kokopo Fire Fire Station, Goroka Fire Kavieng Fire Station and locations system installed Station. Station, Kimbe Fire Station Responsibility National Disaster Centre, DPLGA Estimated inputs (K million) No. I 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding options I 35 I 17 I 13 I 13 I 14 I 92 I GoPNG/Donors 112 5.9 Governance and p ublic sector management Goal: ---- Attain high standards of public sector man agement in all levels and institutions of government Introduction Governance is a broad theme, covering all facets of government systems and processes. Codes of ethics and work place conduct is no exception. The Government encourages good governance through Public Sector Reforms, Financial Management Reforms, Public Private Partnership (PPP) and electoral processes and systems. One aspect of good governance in the public machinery is to improve and strengthen public sector management. In order to achieve the goals set by the PNGDSP, the highest standards of public sector performance and management at all levels of government must be demonstrated. The current status of PNG’s position in the World Governance Indicators (WGI) compiled by the World Bank needs to be improved where practical. Collectively, all departments and agencies who execute government policies, plans and legislations must work together for improvement so that PNG can be a prosperous nation by 2030. MTDP 2011–2015 From the PNGDSP, the MTDP provides us with workable, practical and feasible plans to address the issue of poor governance, and achieve better governance in institutions, departments and agencies through which the Government conducts its business. Reform within the public sector has to be adequately backed by the political and bureaucratic arms of the Government. Thus by 2030, the public sector must attain high standards of public sector performance and management in all tiers and institutions of government. Under the MTDP 2011-2015, the Government will focus on public sector reform and increasing human resource capacity. Moreover, interventions will take place to improve budgeting and financial management and monitoring and evaluation mechanisms. Public servants will be trained through a public sector competency based training package to enhance their work performance. Training on the Integrated Financial Management System (IFMS) will be provided to relevant personnel with all government sector agencies and trickle down to the provincial and district levels. This will improve public financial management and ensure proper accounting and budgeting. Audit units and committees and district treasury offices will be established in all the provinces and districts to enable effective monitoring and tracking of funds. These will be supported by regional offices of the Department of National Planning and Monitoring. Underpinning good governance and democracy is the need for free and fair elections which can be enhanced by means of strengthening the existing electoral processes and systems, as well as the delivery mechanisms. Building on MTDP 2011-2015 Building on investment in the enablers under MTDP 2011-2015, an increased numbers of monitoring bodies in the provinces and districts will be established, coupled with an increase in the number of public servants trained in IFMS. Through PSWDP, mechanisms of accountability and transparency in service delivery will be strengthened. Good governance will be demonstrated through practical monitoring and reviews of plans and legislations that abide by codes of ethics and work place conduct. Challenges in implementation In order to adequately train public servants, an appropriate number of qualified trainers and training institutions must be available. To effectively establish audit units and committees in the provinces and districts, it is important to redress the structures and systems for alignment of proper channels of reporting and communication. Law and order problems have been the major impediment to effectively implement the district treasury roll-out program to most districts. As such, investment in the enablers under MTDP 2011- 2015 is critical. 113 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Attain high standards of Rule of law WGI Bottom 21% in the world 30% 35% 40% Top 50% in the world public sector performance and management in all Regulatory quality WGI Bottom 30% in the world 35% 40% 45% Top 50% in the world levels and institutions of Public service effectiveness WGI Bottom 25% in the world 30% 35% 40% Top 50% in the world government Control of corruption WGI Bottom 9% in the world 15% 25% 35% Top 50% in the world PEFA indicators scoring A or B 34% in 2006 40% 50% 75% 100% Lead government Department of Personnel Management, Department of Finance departments No. Sector strategy

1 Improve and strengthen public sector reform in the institutional structures and human resource capacity

2 Improve and strengthen budgeting and financial management for effective service delivery

3 Improve and strengthen procurement and service delivery mechanism

4 Strengthen electoral processes and systems

5 Strengthen partnership with the private sector and community based stakeholders for development

6 Strengthen and enforce accountability and transparency initiatives DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks & assumptions Trained public servants through PNG public sector 1.1 20% of public 30% 50% 70% –Availability of qualified lecturers training package servants –MOU with training institutions Devolution – the percentage of public sector agencies 1.2 40% 60% 80% 100% Centralisation of powers that have exercised autonomy Institutional capacity building & training – % of public 1.3 20% 40% 80% 100% Capacity building programs given to sector effectively delivering services officers on merits Financial Management Improvement Program (FMIP) - 2.1 50% 80% 90% 95% Slow roll-out of IFMS to the provinces implementation of IFMS at all levels of government Established audit units and committees in 20 2.2 10 units in 4 regions 10 additional units 0 0 Lack of capacity and membership provinces in 4 regions Effective electoral processes and systems 3.1 Improved electoral 50% 75% 100% –Ghost names remain large in roll. processes and system –Capacity and resources Responsibility DPM, 1.2 DPM, 1.3 DPM, 1.4 DNPM, 2.1 DoF, 2.2 DoF, 3.1 Electoral Commission Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding options 1.1 8.3 5.0 6.0 6.0 6.0 31.3 GoPNG 1.2 1.0 1.0 1.0 1.0 1.0 5.0 GoPNG 1.3 20.0 10.0 15.0 12.0 12.0 69.0 GoPNG 2.1 18.4 5.0 5.0 5.0 5.0 38.4 GoPNG 2.2 1.0 1.0 1.0 1.0 1.0 5.0 GoPNG 3.1 51.3 6.0 0.0 0.0 0.0 57.3 GoPNG 100 28 28 25 25 206 114 5.10 National statistics systems Goal: ---- A high quality national statistical service for developmen t planning, policy formu lation, decision making and research through the production of accurate, compreh ensive and timely statistics of an international standard Introduction Statistics is vital for socioeconomic analysis, policy formulation and population planning. However, PNG, like many developing countries, has experienced common data problems such as out-of-date records and unavailable or poor quality data. A contributing factor to the ongoing data issues over the last two decades is the lack of bureaucratic leadership and support for up-to-date quality data. This is a reflection of the lack of financial support to the national statistical agency to build their capacity and to periodically collect data and conduct timely economic surveys. The difficult geography and weak infrastructure of the country have also been key impediments to conducting surveys cost effectively. In order to progressively monitor the progress of the PNGDSP, MTDPs and MDGs, all agencies need to take a collaborative approach to addressing the data problems and issues across all sectors. MTDP 2011-2015 Over the next five years, a number of interventions will be implemented to improve the national statistics systems. These include investment in capacity building, in particular the recruitment of specialised and technical personnel to enhance the capacity within the national statistics agency, and addressing the training needs of existing officers. With these interventions, a range of critical statistical series that are currently either non-existent or of poor quality will be re-established on an annual or quarterly basis. However, without establishing strategic partnerships, the PNGDSP goal for national statistics will not be achieved. Over the next five years the current National Statistical Services Act 1980 will be reviewed and amended to promote effective, efficient and timely performance. Decentralising statistical collections at the provincial level will be high on the agenda. This will not only improve the capacity at the sub-national level but will improve data collection and compilation in districts, local level governments and ward levels. With decentralisation, the planning and coordination of survey and census operations and the management and accountability of financial resources at the provincial level will relieve the mammoth task taken on by the national statistics agency in the last three decades. To affect this, five pilot Provincial Statistical Offices (PSO) will be established over the next five years while the rest of the PSOs will be established and fully equipped under future plans. Prominently, a National Statistical Coordinating Board will be established to have a whole of government approach to addressing data requirements and issues. The Board will be fully functional over the next five years and will be central in implementing the National Statistical Development Strategy. Building on MTDP 2011-2015 Future plans for statistical development will build on the achievements of the sector attained over the period 2011-2015 when provincial statistical collections are decentralised. Hence, by 2020, the national census as well as the Household, Income and Expenditure Survey (HIES) will be executed by the PSOs which will have total control over the coordination and collection of statistical information. The national statistical agency will provide overall guidance to ensure consistency, high standards and quality of data. By then, periodic social and economic data will be collected at all levels of government on an annual basis or as required, for monitoring, reporting as well as decision making and policy formulation. Challenges in implementation Potential challenges in implementation include the geographical conditions and infrastructure quality in PNG as well as the communication of data from the remotest parts of PNG to their provincial headquarters in terms of reporting data. Making national data available to the required population may not be possible due to this challenge or the limitations in communication technology (e.g. internet access) for public access to online data. Also, establishing fully equipped PSOs in all 23 provinces will be a huge exercise that will be a challenge in terms of funding. 115 DSP sector goal Indicator Source Baseline 2015 2020 2025 2030 DSP target target target target Provide a high quality national On-line access to NSO Public access to official statistics in PNG is poor All official statistics to be free and statistical service for official statistics with limited internet access to data on-line development planning, policy Census collections NSO The national census is conducted every 10 years, High quality census collections formulation, decision making and while data collection is reasonable, every 5 years and research through the processing and dissemination are weak production of accurate, comprehensive and timely Social indicators NSO Statistics for social indicators including health, Regular and high quality social statistics of an international education and crime are weak and irregular, yet survey collections standard crucial for understanding and monitoring social progress Labour market NSO Labour market data, including for the informal Regular collection of wage and data sector is among the most important statistics, employment data yet regular official surveying is nonexistent Economic data NSO The collection of official economic data is weak, Regular collection of all including basic data such as GDP and inflation. mainstream economic data series Rural economic data is virtually nonexistent Lead government department National Statistical Office Collaborative dept/agency Department of Information & Communication, DAL, Department of Labour & Employment, No. Sector strategy

1 Improve availability of national statistics

2 Increase capacity of official statistics agency (with competent and experienced staff)

3 Conduct relevant censuses and surveys to collect required data

4 Establish effective coordination between official statistics agency and agencies that use the statistics DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Number of partnerships with 2.1 2 Enthusiasm from official international agencies statistics agency Specialised data analysis training 2.2 10 Training in data analysis for the official statistics agency and needs to be in place PSO staff Number of statisticians per PSO 2.3 1 10 23 23 Absence of incentives National Census 3.1 Conduct Census in 2011 Produce findings of 2011 Conduct 2020 Census Produce findings of Ensure early preparation and Census in 2013 and in 2020 2020 Census in quality control prepare for 2020 Census 2023 and prepare in 2017 for 2030 Census in 2027 Demographic & Health Survey 3.2 (a) Disseminate and utilise Conduct DHS in 2016 Prepare to conduct DHS Conduct DHS in Advanced preparation (DHS) DHS 2006 findings and produce report in 2026 through all 23 2026 and produce

2017 PSOs report in 2027 3.2 (b) Prepare to conduct 2016 Disseminate and utilise Disseminate and Localise data analysis, DHS 2016 DHS findings utilise 2026 DHS dissemination and utilisation findings in official statistics agency Household Income & Expenditure 3.3 (a) Produce HIES 2010 Conduct HIES in 2015 Conduct 2020 HIES Conduct 2025 HIES Advanced preparation Survey (HIES) Report through all 23 PSOs through all 23 PSOs 116 3.3 (b) Disseminate and utilise Produce 2015 HIES Produce 2020 HIES Produce 2025 HIES Localise data analysis,

2010 HIES findings report and disseminate report and disseminate report and dissemination and utilisation and utilise findings and utilise findings disseminate and in official statistics agency utilise findings Agriculture Survey (AS) 3.4 Prepare for and conduct Prepare for and conduct Resources and collaboration the 2013 AS. Produce the AS to be an annual requirements are met.

2013 AS, report and series from 2018. Produce Localise data analysis, disseminate and utilise AS Report annually and dissemination and utilisation findings disseminate and utilise in official statistics agency findings Establishment of annual economic 3.5 New annual publications New annual publications New annual A focus on Resources surveys and publications established for labour established for publications established deepening provincial force, wages, national manufacturing, building, for, tourism, services, level data across all accounts, energy mining, transport, informal sector. series. housing Establishment of other annual 3.6 New annual publications New annual publications New annual A focus on Resources surveys and publications established for crime, established for migration, publications established deepening Provincial land registration education. for births, deaths, level data across all marriages, environment series. Review of the Statistical Services Act 4.1 Reviewed and revised Implementation of the 1980 amended Act Establishment of a National Council 4.2 Body to effect the NSDS Partnerships signed between official 4.3 statistics agency and agencies that use the statistics Responsibility NSO in collaboration with all other agencies involved in respective data collection Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding options 1.1 45.0 20.0 10.0 30.0 20.0 125.00 GoPNG/Donors 2.1 1.0 1.0 0.1 0.05 0.05 2.20 GoPNG/Donors 2.2 1.0 3.0 2.0 2.0 1.0 9.00 GoPNG/Donors 2.3 0.05 3.0 2.0 2.0 1.0 8.05 GoPNG/Donors 3.1 25.0 20.0 45.00 GoPNG/Donors 3.2 10.0 10.00 GoPNG/Donors 3.3 40.0 40.00 GoPNG/Donors 3.4 Funded under Agriculture sector 2 2.00 GoPNG/Donors 3.5 0.5 0.5 1.5 1.5 1.5 5.50 GoPNG/Donors 3.6 0.1 0.1 1.1 1.1 1.1 3.50 GoPNG/Donors 4.1 0.02 0.02 GoPNG/Donors 4.2 0.01 0.01 GoPNG/Donors 4.3 0.01 0.01 GoPNG/Donors Total: 72.69 47.60 18.70 76.70 34.70 250.29 117 5.11 Foreign policy Goal: Strong and pragmatic foreign relations that are in the interests of PNG and the region Introduction Foreign policy is deemed to be a synthetic projection of all other national policies. Thus, as PNG’s economy and productive capacities grow, the country needs to enhance its international standing in a way that furthers its national interests. MTDP 2011-2015 The first MTDP 2011-2015 will concentrate on strengthening PNG’s current relationships both on the bilateral and multilateral fronts and further set the basis for intermittent relationships with non state institutions to harness PNGs’ capability in trade and investment. Trade and investment will be the focal point of PNG’s foreign policy and thus it is the Government’s vision to establish the enabling framework in the first MTDP. This shall be achieved through expanding PNG’s diplomatic presence and trade projection, and the re- invigoration of its bilateral and multilateral diplomatic relations with countries of the Oceania region, enhancing its role as the recognised leader among the Pacific Island countries. On the bilateral front, PNG needs to establish strong diplomatic relations with countries of the Asia–Pacific region. This includes strengthening the relationship with Australia, but with greater emphasis on the high growth countries of China and neighbouring South East Asia. On the multilateral front, PNG will boldly advocate the democratisation and reform of international organisations, giving priority to consolidating its leadership within the United Nations and boldly promoting the harmonised delivery of its agencies through the One UN Process. Within the next five years, focus will be on the following objectives. Provide Strong Leadership among South Pacific Island countries Enhance its consistently strong bilateral and multilateral diplomatic relations with countries in the Oceania region, adopting initiatives that highlight its regional leadership. Deepen its projection in the Asia–Pacific region Further its relations in the Asia–Pacific by facilitating institutional frameworks for trade, investment and bilateral cooperation. Gain greater presence and visibility in the multilateral forums Through diplomatic action, PNG will assure that the interests and views of the South Pacific Island countries are properly voiced in the multilateral forums, and that adequate levels of assistance are provided to address the needs of its people. PNG will become more involved in discussion and decision-making regarding the reform of the United Nations system, and will continue to support proactively the One UN process as an international pioneer. Improve its trade negotiation capacities and enter into new BITs and FTAs The expansion of PNG’s economy and productive capacities demands a greater integration into the international economy and the global markets. Thus, the country will pursue and enhance its trade negotiation and management capacities, and will proactively seek the adoption of new BITs and FTAs with relevant countries. Building on MTDP 2011-2015 Under subsequent MTDPs, the National Government will continue to build strong and pragmatic foreign relations and expand its international presence, both bilaterally and multilaterally. 118 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target I Strong & pragmatic foreign relations that are Strong & pragmatic DFAT 7 countries/ 7 countries 10 countries 10 countries 15 countries I in the interests of PNG and the region Lead government department DSP 2030 deliverables No. relations Department of Foreign Affairs & Trade 2011-2015 2016-2020 regions 2021-2025 2026-2030 Risks and assumptions Increase flows of foreign direct 1 300% increase in FDI; 200% additional 200% additional increase 200% additional R: Political, economic or security investment (FDI) and 50% increase in increase in FDI; 50% in FDI; 50% increase in increase in FDI; 50% instability may hamper growth international trade international trade increase in international trade increase in A: Political, economic and security international trade international trade stability and improvements will take place Engage new partnership with 2 Enhanced bilateral 5 new missions in SE 5 new missions in SE 5 new missions are R: PNG’s institutional capacities to emerging economies in the Asia- relationship with the Asia and in Latin Asia and Latin America established maximise benefits of new relations Pacific and Latin America South Pacific island America are are established may be absent countries established A: PNG’s DFAT will enhance its capacity to effectively manage bigger international presence Greater multilateral presence 3 –Continue exerting Continue exerting Continue exerting global Continue exerting R: PNG’s institutional capacity to global pioneer role in global leadership in leadership in furthering global leadership in maximise benefits of greater the One UN Process, furthering the UN the UN harmonisation furthering the UN multilateral role may be absent including investments harmonisation and and reform process; PNG harmonisation and A: PNG’s DFAT will enhance within the One UN reform process; PNG will chair or be elected reform process; PNG capacity to effectively manage Fund and the building will chair or be elected for important UN bodies will chair or be elected bigger international presence of the UN House for important UN for important UN –Actively participate in bodies bodies deliberations to build better governance and reform at the UN Improve PNG’s trade negotiation 4 –20 government –20 additional –20 additional –20 additional capacities and enter into new officers become highly government officers government officers government officers BITs and FTAs skilled to lead trade become highly skilled become highly skilled to become highly skilled and investment to lead trade and lead trade and to lead trade and negotiations investment investment negotiations investment negotiations –3 BITs and FTAs with negotiations –5 additional BITs and –5 additional BITs and are adopted –5 additional BITs and FTAs with SE Asia and FTAs with SE Asia and FTAs with SE Asia and South American South American South American countries are adopted countries are adopted countries are adopted Responsibility Department of Foreign Affairs & Trade, Department of Commerce, Department of National Planning & Monitoring Estimated inputs (K million) No. I 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding option(s) I Recurrent I Recurrent I Recurrent I Recurrent I Recurrent I I GoPNG 119 5.12 Immigration Goal: - -- Effective systems th at benefit PNG in the area of skills and entrepreneurial expertise, while upholding safety measu res against illegal immigration Introduction The immigration of large numbers of people is both a significant and positive force for the economic, social and cultural development of PNG; yet it is also a cause of concern. PNG is currently experiencing increased immigration activities as a result of not only economic and employment needs within the region, but also due to the demographic situation, political instability and economic and social inequalities. Furthermore, PNGs economic prospects and demographic trends make migration a necessity and a key factor of future development. For this reason, clear and effective policies, legislation, organisational structures and funding is required for the social integration of the immigrant population, as well as for the protection of Papua New Guinean migrants overseas, in cooperation with countries of origin and destination. This framework will also provide for the protection of refugees. Immigration issues have now been given priority with the establishment of a separate office from within the Department of Foreign Affairs and Trade. Infrastructure building and capacity development at all international sea and land border posts need to be further strengthened to standardise country-wide border control measures. MTDP 2011-2015 Migration policies facilitate national development processes rather than hamper them, while ensuring adequate protection of migrants and refugees. Migratory flows, both outbound and inbound, are a reality in the global environment and can enhance PNG’s connection with the rest of the international community. If properly facilitated, they can generate diverse positive benefits, including the dissemination of knowledge and wealth within PNG. To prevent negative effects, the capacities of PNG Immigration and Citizenship Services (PNGICS) and other relevant agencies need to be enhanced. Furthermore, PNG needs to align its migratory and other relevant legislation and procedures with current international laws, standards and principles. The first MTDP will improve the recording of inbound and outbound migratory flows data. Based on the collection and analysis of data, migration policies will be strengthened to promote national security, secure investor confidence, and address human capital development in the context of labour mobility. Moreover, during MTDP 2011-2015, innovative technology, including e-passports, will be investigated and scoped in their potential to strengthen immigration services within PNG. Building on MTDP 2011-2015 Following international trends and the increase of both inbound and outbound migratory pressures — as a natural consequence of PNG’s growth and greater integration into the global arena — migratory policies will require continuous revision through a whole-of-government approach to align them to national developmental needs. Greater recognition and overseeing of the role of the Office of Immigration will be required. Reciprocal visa-exemption agreements with specific countries and for specific activities (for example, foreign aid work) will be adopted. 120 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target The best systems Congested timeframe of 4 PNGICS Existing facilities Reduction in Reduction of Reduction of Reduction of timeframe to 1 that benefit PNG in weeks for processing of and arrangements timeframe from 4 timeframe from 2 timeframe from 1 day the area of skills applications weeks to 2 weeks weeks to 1 week week to 4 days and entrepreneurial Reception and processing PNGICS Existing processing Reduced timeframe to Reduced timeframe Reduced timeframe Reduction of timeframe to expertise, while centres (RPCs) facilities less than 2 weeks to less than 1 week to less than 5 days less than 2 days upholding safety measures against Immigration services at PNGICS Existing service Reduced timeframe Reduced timeframe Reduced timeframe Reduced timeframe to same illegal immigration overseas missions, facilities in from 1 week to 4 days from 4 to 2 days from 2 days to 1 day day service consulates & trade centers overseas missions IT infrastructure to E- PNGICS Existing IT facilities Reduced timeframe Reduced timeframe Reduced timeframe Reduced timeframe for E- Passport and online in the PNGICS for E-processing from for E-processing for E-processing processing to same day applications 1 week to 4 days from 4 to 2 days from 2 days to 1 day Lead government PNG Immigration & Citizenship Services (PNGICS) department No. Sector strategy

1 Effective immigration services

2 Reduce illegal immigrants

3 Improved ports and customs services

4 Improved E-Passport and online application systems DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Accommodation and office 1 Establishment of accommodation Establish 8 provincial Established immigration An effective and efficient Acquisition of land infrastructure built in selected and office infrastructure in 4 immigration offices and services in regional & immigration system in place locations strategic locations infrastructure provincial centres Proper and fully kitted 2 Establishment of 6 reception & Establishment of border Partnership agreements Fully established and Immigrants might reception & processing centres processing centers in 6 strategic posts at most strategic with agencies such as functional reception & not cooperate with in identified locations locations locations Police, IRC, BDA, etc processing centres the authorities Immigration facilities & 3 Establishment of 4 immigration Recruitment & placement Include other locations Fully established and Distance and services at overseas missions, service facilities in 4 strategic of skilled personnel in the depending on whether functional immigration language could be consulates & trade centers locations around the world 4 locations there is demand and services in the selected challenges to economic benefit for PNG locations implementation IT infrastructures to E- 4 Establish 2 main IT facilities for Recruitment & placement Introduce services to other Fully established and Future ICT policy Passport and onine processing E-Passports and of appropriately skilled parts of PNG and abroad functional IT systems in could have applications online applications personnel place implication Responsibility Department of Immigration, Police, Defence & PNG Ports Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding options 1 7 2 2 2 2 15 GoPNG/Donors 2 2 2 2 2 8 GoPNG/Donors 3 2 2 2 2 8 GoPNG/Donors 4 5 2 2 2 2 13 GoPNG/Donors Total: 12 8 8 8 8 44 121 5.13 Foreign aid Goal: ---- Advanced stage of foreign aid management and ultimately attain independence from foreign aid Introduction PNG still depends on foreign aid in areas such as transport and energy, telecommunication, health and education, food security and good governance. As prescribed in the PNGDSP, external aid can be viewed from two specific angles: resources for development programs such as health, education and transport; and technical expertise and skills to provide advisors and training for delivering services and executing investment in development. The proportion of technical assistance to aid varies between development partners but the total percentage amongst all donors is estimated to be above 50 per cent which is considered to be too high. To reduce the dependence on foreign aid, PNG will need to drastically reduce the skills gap in the first five years, and simultaneously transfer the resources expended on technical assistance into boosting technical and higher education and training, as well as into the development of infrastructure. Over the next five years the level of technical assistance as a percentage of total foreign aid will decrease. In addition, the first MTDP intends to significantly address aid effectiveness issues. Current weaknesses in monitoring and evaluation of international aid undermine efforts to improve its effectiveness. All assistance programs of donor partners will need to be aligned to supporting the realisation of the PNGDSP in a coordinated and joint manner. In addition, an enabling environment will need to be established for PNG to graduate to a donor partner within the Pacific region. MTDP 2011-2015 As from 2011, all foreign aid will need to comply fully with the PNGDSP and MTDP 2011-2015. This will require radical change in the way donors operate in PNG, including a dramatic shift away from the focus on technical assistance for filling the skills gap. The new direction outlined in the PNGDSP, and to be implemented in the MTDP, is for all aid to be used to help fill the resources gap in the current and future MTDPs (see Part 7 for more details). This will mean technical assistance in its current form will largely be replaced by technical assistance required to implement the strategies of boosting technical and higher education within PNG, including implementing short term training programs. It will also mean a shift away from technical assistance and towards resourcing projects in building infrastructure, including infrastructure in health and education. By 2015, expected targets are: (a) less than 50 per cent of foreign aid will be for technical assistance, and most technical assistance will be in the areas of education and training; (b) the total value of technical assistance in education and training priority areas will increase, with a corresponding reduction in lower priority areas, and a greater utilisation of technical assistance from developing countries; (c) increased number of scholarships and quality graduates in professions identified in the skills gap analysis, consistent with the national human resource requirements; (d) a national and sectoral dialogue system established and operationalised for development partners; (e) central and line agencies of the PNG Government to meet the principles of the Paris Declaration, the Accra Agenda for Action, and the PNG Commitments to Aid Effectiveness; (f) as an expression of a mature level of aid alignment to national development strategies, a single Joint Assistance Strategy for PNG (JAS PNG) is adopted to complement the 2016-2020 MTDP, in place of individual country assistance strategies; (g) a significant and measurable reduction in aid fragmentation is achieved, and distribution of labour among development partners is agreed with the Government; (h) new modalities of aid and technical support are adopted, including the contracting by the Government of development partners to produce specific developmental outcomes and the adoption of co-financing schemes; (i) South-South Cooperation agreements are negotiated, subscribed, and substantially implemented, with proper monitoring and evaluation procedures to guarantee its value-for-money impact. In order to achieve these, the MTDP 2011-2015 will focus firstly on taking firm measures to: · undertake a comprehensive assessment of the skills gap and to establish — through partnership with donor partners — education, training and scholarship programs to reduce this skills gap; · simultaneously undertake a sectoral analysis of technical assistance requirements and to redirect technical assistance away from low priority areas with a low education basis, to priority areas with capacity building through education and training; · establish an advisory procurement and management system that is accountable to GoPNG systems; 122 · reform and rehabilitate tertiary and technical institutions to international standards that will produce internationally competitive graduates; · in partnership with sectoral agencies, develop and establish a delivery mechanism and process that will strengthen and use national systems; and · develop and establish a harmonisation system and process that promotes joint programs and investments that are consistent with the sequencing in the PNGDSP. As a signatory to the Millennium Development Declaration, the Paris Declaration, and the Accra Agenda for Action, the goals and targets prescribed in the PNGDSP and the five year MTDPs will guide PNG’s foreign policy towards independence from foreign aid once the country achieves the 50th position in the international Human Development Index produced by the UNDP. Challenges in implementation Developing an aid delivery process that uses PNG systems is a challenge amidst poor perceptions of accountability and transparency, good governance, security and social justice. Until the Government systems become more transparent and accountable, and are able to absorb and manage aid, development partners will prefer to continue to use their financial management, procurement and reporting systems. However, the international agreements in foreign aid should compel all donors to channel all their aid through PNG government systems before 2015. Changing the mindset of donors to comply fully with the 2050 Vision, PNGDSP and MTDP will be particularly challenging. This will require radical change in the way donors operate in PNG, including a dramatic shift away from the focus on technical assistance for filling the skills gap. To be consistent with the PNGDSP and MTDP, donor priorities will instead need to focus on educating the people and helping to build the needed infrastructure. The desire to progress from a donor recipient to a donor partner is a daunting task challenged by the political, social and economic developments and business dynamics in the Pacific and Asian regions, and by global dynamics. Of immediate challenge will be the relationship challenges with key bilateral and multilateral partners whose country assistance programs are at varying tenures and focus. To align all assistance programs to the PNGDSP and its four MTDPs over the 20 year period is in itself a challenge. Of most importance, PNG will need to meet the economic development targets set out in the PNGDSP to be in a viable position to change its status from donor recipient to donor. PNG will need to meet the challenge to ensure that all aid leading up to these outcomes are effective and that PNG will have established an environment conducive to becoming a significant player as a development partner in the Pacific, in partnership with Australia, New Zealand and other donors in the region. 123 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Advanced stage of foreign Proportion of aid that is TA DNPM More than 70% Less than 30% Less than 5% Less than 5% Less than 3% aid management and attaining independence Aid as a proportion (%) of GDP DNPM, DoT, DoF 5% 4% 3% 2% 1% from foreign aid Proportion of aid that is concessional loans DNPM, DoT, DoF Proportion of aid that is untied DNPM, DoT, DoF 100% 100% 100% 100% Proportion of aid for infrastructure DNPM, DoT, DoF Proportion of aid for social services DNPM, DoT, DoF Proportion of aid to help facilitate trade DNPM, DoT, DoF Number of short term (less than one year) DNPM scholarships for skills development Number of long term (more than one year) DNPM scholarships for professional development Lead government Department of National Planning & Monitoring department No. Sector strategy

1 Pursue diplomacies to help build trade capacity and secure untied ODA that is aligned to the PNGDSP and MTDP for infrastructure, education and basic social services

2 Develop a comprehensive system of Management for Development Results (MfDR) to assess the quality of aid, and particularly of technical assistance components to assure its quality, value-for-money, and capacity development impacts

3 Progressively eliminate all TA that bears little capacity development outcomes

4 Achieve significant levels of national ownership, leadership and alignment over aid programs

5 Enhance the national institutional framework for aid management, including staffing, legislation and policies; and maintain fully operative and updated DAD PNG, and use it to submit annual aid reports to Parliament

6 Monitor the joint implementation of the Paris Declaration, the AAA and the PNG Commitment on Aid Effectiveness

7 Enhance the dialogue and joint action with DPs, assuring the effective operation and support of the Technical Working Group on Aid Effectiveness (TWG-AE) 124 DSP 2030 No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions deliverables

1 Monitor aid performance Monitor aid performance Monitor aid performance Monitor aid performance and R: Lack of monitoring mechanism and report annually to the and report annually to the and report annually to the report annually to the National A: Sustained commitment to National Executive Council National Executive Council National Executive Council Executive Council monitoring exists

1 Negotiate and implement MfDR fully implemented MfDR fully implemented MfDR fully implemented and R: Consensus is not reached with the MfDR, and report to and regularly reported to and regularly reported to regularly reported to Parliament DPs Parliament on outputs Parliament Parliament A: Commitment for consensus

2 Elimination of TA of low Less than 30% of total aid Less than 5% of total aid Less than 5% of total aid R: Change resistance by some DPs capacity development A: Commitment for change exists impacts with new emphasis on TA for higher education

3 All aid programs are All aid programs are All aid programs are All aid programs are aligned to R: Resistance by some DPs aligned to PNGDSP and aligned to PNGDSP and aligned to PNGDSP and PNGDSP and MTDP, according A: Alignment commitment exists MTDP, according to a MTDP, according to a MTDP, according to a to a jointly agreed assessment jointly agreed assessment jointly agreed assessment jointly agreed assessment framework; Comprehensive JAS framework; national aid framework; adopt a Joint framework; mid-term JAS review policy sets parameters for Assistance Strategy (JAS) review alignment

4 Effective aid management Legislation and policies Legislation and policies Legislation and policies fully R: Lack of institutional capacities or legislation and policies adopted; DAD PNG fully fully implemented; DAD implemented; DAD PNG fully commitment hampers progress adopted; DAD PNG fully operational PNG fully operational operational A: Institutional capacities and operational. commitment do exist

5 Monitor the joint 100% of implementation 100% of implementation 100% of implementation R: Policy or methodological implementation of the achieved achieved achieved disagreements with DPs exist Paris Declaration, the AAA A: Policy and methodological and the PNG Commitment consensus with DPs exists on Aid Effectiveness

6 TWG-AE operates and TWG-AE meets regularly TWG-AE meets regularly TWG-AE meets regularly and R: Lack of sustained commitment delivers and provides effective and provides effective provides effective platform for to keep the TWG-AE operative platform for PD, AAA & platform for PD, AAA & PD, AAA & PNGC-AE A: Sustained commitment to keep PNGC-AE implementation PNGC-AE implementation implementation the TWG-AE operative exists Responsibility Department of National Planning & Monitoring, Treasury & Finance 125 5.14 Defence and security Goal: ---- A defence force that safeguards PNG’s sovereignty and security, including by contributing to the task of nation building and to disaster relief. Introduction The roles and functions of the PNG Defence Force (PNGDF) according to section 202 of the National Constitution are to defend PNG and its sovereignty; assist in the fulfillment of PNG’s international obligations; provide assistance in the restoration of public order and security; provide for humanitarian assistance and disaster response; and to contribute to national development tasks. The military assets and facilities are run down and barely operational. The small force of 2000 personnel is ageing and suffers from inadequate specialty training as a result of budget constraints since the 1990’s. These constraints have severely restricted the PNGDF from fully delivering on its key roles and functions. With appropriate funding for an increase in military equipment, personnel and training, the PNGDF will move towards achieving its goal in accordance with its constitutional obligations, and meet the Vision 2050 fourth pillar on security and international relations. Importantly, the activities and tasks of the PNGDF will deliver benefits to PNG’s development. As outlined earlier in section 5.8, PNG is prone to disaster. Additional military equipment and strategic platforms are necessary to enable the PNGDF to respond quickly to any disaster relief operations and provide humanitarian assistance. The PNGDF is the only government agency that has platforms and trained personnel to deploy to disaster areas. Equipment used in disaster relief operations are the air platforms and navy platforms such as the LCH patrol boats. Manpower deployment includes medics and logistics. Land transport is an important requirement during such operations, however, expensive hire vehicles are commonly used. Planes and ships are crucial for deploying to disaster areas due to poor road infrastructure across PNG’s rugged and archipelagic geography. Depending on the locality of the disaster area, planes are used to transport immediate supplies and manpower to the affected areas while ships are used to deliver the secondary supplies. Specialist training for disaster relief operations is very important as well so as to be prepared for any emergencies. During deployments, including disaster relief, it is a requirement for personnel to be in full military attire, right down to personal weapons. Hence the kitting of military personnel is a requirement and not an option. Even on routine operations — whether land, maritime or aerial border patrols — a soldier is required to be fully equipped. MTDP 2011-2015 A doubling in the regular defence force strength from 2,000 to 4,000 personnel by 2015 will provide the human resources to enable the PNGDF to effectively execute its mandated roles of border surveillance and patrols and sovereignty protection, particularly if accompanied by an increase in training. The regular force will be supported by a reserve force of 1,000 by 2015. The first five years is the transitional period for the PNGDF and so recruiting should be undertaken with a priority on the transfer of knowledge and skills as 70 per cent of the current manpower is over the average age for serving in the military. Consequently, it is critical to build the reserve force to undertake nation building and UN tasks, allowing for the time taken to build human capacity and the reserve force that predominantly comprises employed specialists. PNG has 3.1 million square kilometres of waters and seven maritime borders to monitor. A lack of surveillance capacity has contributed to an increase in illegal cross border activities such as drugs, gun smuggling, human smuggling and trafficking, money laundering, illegal fishing and poaching, and sea piracy. As a result, PNG loses millions of kina each day. For instance, in the fishing industry it is believed that fresh fish is illegally exchanged at sea. This costs PNG around K3 million a day or K1 billion a year. A proper surveillance system in place within the first five years would help protect PNG’s rich fisheries and marine resources, as well as other issues of national interest. This includes the protection of oil and LNG pipelines and seabed mining activities — all of which are critical for the PNG economy. A more effective intelligence capacity will need to be developed to cover forward operating bases so as to ensure timely reporting and a response to illegal cross-border activities and therefore sovereignty protection. To increase effective patrols of PNG’s maritime borders in the first five years, there is a need to upgrade and increase the marine capacity and to be International Maritime Organisation (IMO) compliant. The various vessel types indicated in the deliverables table below serve different purposes and are for different sea pockets. Acquisition of the inshore patrol vessel (IPV) in the first five years will boost the surveillance and 126 patrol operations from 6 to 200 nautical miles along the 7 maritime borders whilst the assault boats are for the forward operating bases (FOBs) and LCH for logistics requirements. Upgrading PNG’s strategic air capacity will complement existing maritime operations to ensure a quick response to disaster relief and to provide effective sea and land border patrols. It will also help in responses to other government call outs — in addition to routine aerial border surveillance — to meet PNG’s objectives in defence and security. Office, housing, training, health and utilities infrastructure will also require upgrading to enable the PNGDF to better perform its roles and functions in order to achieve its sector goal. Communication is an integral part of defence operations. Improving communication by 2015 will ensure the PNGDF successfully delivers on its core functions. The field equipment, kitting of a soldier, and other machinery are to equip the force so that it is in accordance with NATO & UN standards in preparation for international obligations (UN, etc). PNGDF’s participation in international obligations will put PNG on the global decision-making arena and contribute to world peace as a member of the United Nations and therefore safeguard PNG’s sovereignty and security. Increasing PNG’s land defence capacity will contribute to the effective land border patrols between PNG and Indonesia to hinder illegal cross-border activities. Greater land defence capacity will also contribute to nation building tasks and greater participation in international obligations. Building on MTDP 2011-2015 With institutional capacity building in the first five years, much of the critical defence infrastructure and strategic equipment/capability base would have been addressed through the rehabilitation program. This will take the process of rebuilding PNGDF well into the second five year MTDP where it will gain momentum as the economy also picks up, therefore enabling the construction of required infrastructure to be financed. The stronger economy will also allow an increase in manpower strength and specialist training, thereby equipping the force in the ensuing MTDPs to a level such that the defence sector’s goal will be realised. Furthermore, participation in international commitments will provide the platform for PNG to influence trade brokering/negotiations for the nation. Appropriately resourcing the PNGDF will enable it to increase its regular periodic border surveillance and patrols to ensure sovereignty protection. This will contribute to achieving the target of a 55 per cent reduction in law and order (section 3.2) because the influx in illicit cross-border activities has contributed to the law and order problem, particularly in the area of gun and drugs smuggling. Illegal migrants not only pursue business opportunities in PNG, but occupy local jobs and this contributes to PNG’s unemployment problem. It also leads to less revenue flow to the Government due to tax evasion by foreigners, which in turn results in a reduced quality of public services to the people of PNG. The PNGDF’s engagement in nation building tasks through their civic action program guarantees military presence in the rural and poverty corridor areas and in so doing contributes significantly to containing the law and order problem. Challenges in implementation The main challenge to the implementation phase of the defence sector will be adequate funding to meet all the expenditure requirements. Good management of funds will also be a major challenge for the defence sector thus calling for stringent measures to be in place to avoid future repetition of financial blunders. Another challenge will be the creation of an international relations and security sector — for better coordination of international relations and security — which will involve agencies such as Foreign Affairs and Trade, Immigration, Defence, PM and NEC Departments, Customs and NAQIA. 127 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target A defence force Ratio of PNGDF PNGDF 1:3,300 (2,000) 1:1,825 1:1,350 1:1,112 10000 manpower that safeguards personnel to PNG’s /DOD strength (1:1,000) PNG’s sovereignty population and its security, by contributing to Increase maritime PNGDF Only PNG-Aust and Quarterly surveillance and Monthly surveillance Fortnightly All 8 borders, both nation building surveillance and border /DOD PNG-RI sea and land patrols of all borders and and patrols of all surveillance and land and sea, are and disaster relief patrols borders manned (1/4 continental shelves borders and patrols of all borders effectively monitored borders manned) at continental shelves and continental on a weekly basis random shelves Number and types of air, PNGDF Current capabilities Rehabilitate and upgrade all Acquire new different Increase acquisition More effective air, land and maritime /DOD for the three elements existing air, land and types of air, land and of air, land and land and sea equipment/capabilities maritime capabilities and maritime capabilities maritime capabilities capabilities in place acquire critical capabilities and equipment as as required to respond to and equipment required government call outs Participation in PNGDF Previous & current Signing of MOU with UNPKMs, Regional, UNPKMs, Regional, Effective international obligations /DOD international UNPKM. Engagements in MSG, Bilateral, MSG Bilateral, collaboration & commitments & UNMOs & RAMSI. Requesting Requesting participation in engagements such as International obligations Organisations Organisations international Vanuatu and RAMSI committee in place obligations Increase use of PNGDF PNGDF Past and ongoing Procure and mobilise Commit PNGDF to all At least 75% of all All major civic action program for /DOD PNGDF civic action equipment to build capacity major government major construction construction national building tasks projects and engage in civic action construction projects projects are fully projects are fully programs in the country completed completed Lead government Department of Defence and PNGDF department No. Sector strategy

1 Enhance defence and security by increasing maritime surveillance capacity and activities;

2 Rehabilitate existing facilities and building infrastructure, develop human resource capacity and appropriately equip the Force;

3 Equip and use the military for international obligations (UNPKMs efforts, etc) and disaster relief operations both within PNG and abroad;

4 Increase the use of the military for nation building tasks. DSP 2030 No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions deliverables Surveillance 1.1 Surveillance capability in place Review and expand to Review and expand to Establish an effective Acquire and install capacity include coast watches include coast watches surveillance system equipment by 2012. Have arrangements in place for coast watches. Maritime capacity 1.2 Rehabilitate existing 6 maritime Increase maritime Increase maritime 1 LPA (Larger Vessel); –Funding is made (ships, capabilities and equipment as follows: capabilities and capabilities and available on an ‘at least’ equipments) 2 LCH; 4 Patrol Boats; EOD Equipment; equipment as follows: equipment as follows: basis SBT Equipment; 3 IPVs; 2 OPVs ; 1 LCH; 4 2 OPVs; 4 assault boats; New critical purchase assault boats ; 2 hover 2 work boats; 1 LSH

1 IPV; 1 LCH; 8 assault boats crafts (Larger vessel) or Multi- Purpose Vessel (MPV) 128 Air capacity 1.3 Rehabilitate & upgrade 6 existing Increase air force strategic Increase strategic air Acquisition of: –Funding is made (equipment, platforms: capabilities: capabilities: 2 Strategic Air lifts; 1 VIP available machinery) 2 CASA CN235; 2 Arava 201; 1 UH-IH 4 STOL Crafts; 2 Strategic 1 Strategic Air Lift - Jet; –Enter into procurement New critical purchase; Air Lifts; 4 Rotary Wings; Persuader; 1 Strategic arrangements to tap into 2 rotary wings; 1 STOL Craft; 4 Combat Rotary Wings Air Lift; 4 Combat discounts available. (marinised) Helicopters (marinised); 4 trainers ; 1 VIP Jet; Intelligence 1.4 -1 restricted IT network for intelligence Upgrade and acquire Upgrade and acquire Upgrade and acquire Have a compatible requirements branch where critical where critical where critical intelligence network in -1 intelligence communication system place -5 vehicles for intelligence branch & field officers -2 boats for DSLOs (Buka & Daru) Forward Operating 1.5 Upgrade existing facilities in Kiunga & Build one in Alotau , Build one in New Ireland Have at least 8 well- Bougainville peace Bases (FOBs) Vanimo and construct new ones in Daru & Torauto and Kiunga and Manus equipped FOBs agreement to be reviewed Weam Communications 1.6 Rehabilitate existing VSAT facilities: Upgrade existing Upgrade and acquire Upgrade and acquire -Have an effective infrastructure and 2 VSAT based stations; 10 unit equipment and acquire critical equipment critical equipments communication capability equipment communication centres; critical equipment in place New Purchases: -Funding is made

12 (4x4)-VSAT mobile vehicle; 40 VSAT available mobile stations; 150 long range tactical HF radio set; 150 short range tactical VHF radio set; 3 radio mounted vehicles Infrastructure 2.1 Rehabilitate and upgrade existing Expand, upgrade and Expand, upgrade and Expand, upgrade and -Funding is made requirement infrastructure (office, training, residence, build new land, air and build new land, air and build new land, air and available health, etc) including: 10 barracks roads, maritime residential, office maritime residential, maritime residential, office -Land is made available 10 sewerage and water supply systems; and training facilities to office and training and training facilities to and registered as defence relocation of 50 married quarters, 1 accommodate an extra facilities to accommodate an extra state land Comms and 1 HQ in Tarangau Naval Base; 2000 personnel. accommodate an extra 2000 personnel and build -Building plans have to be construction of a 40-men officers quarters 2000 personnel. 1 new air base. by registered reputable for air transport wing, relocation of Joint draftsman and certified Force HQ (JFHQ). Human resource 2.2 Training for: 2000 basic recruits; 175 Training for: 2000 basic Training for: 2000 basic Training for: 2000 basic –Funding is made capacity building officer cadets; 30 pilots; 30 loadmasters; 4 recruits; 175 officer recruits; 175 officer recruits; 175 officer available air traffic officers; 5 customs officers; 4 cadets; 10 pilots; 10 cadets; 10 pilots; 10 cadets; 10 pilots; 10 –Defence training facilities engineers; 4 0x Aircraft technicians; 10 loadmasters; 2 engineers; loadmasters; 2 loadmasters; 2 engineers; are in place technical trade training (NATTB); 20 4 air traffic officers; 5 engineers; 4 air traffic 4 air traffic officers; 5 –Air force pilots to be technical trade training (PNGDF TTU); 10 customs officers; 20 officers; 5 customs customs officers; 20 trained overseas in the professional management; surveillance technical trade training officers; 20 technical technical trade training first five years training; and force exercises (PNGDF TTU); 10 trade training (PNGDF (PNGDF TTU); 10 professional management; TTU); 10 professional professional management; surveillance training; and management; surveillance training; and force exercises surveillance training; force exercises and force exercises 129 Equipping of the 2.3 Acquisition of land equipment: Acquisition of land Acquisition of land Acquisition of land Force equipment, weapons Force - land 200 vehicles; 4,500 small arms; 4,500 field equipment: equipment: equipment: and machineries at element equipments; 20,000 DPU uniforms; all 200 vehicles; 6,500 small 300 vehicles; 8,500 400 vehicles; 10,500 small NATO/UN standards (equipment, weapon types; 200 tentage all sizes; arms; 6,500 field small arms; 8,500 field arms; 11,000 field weapons, 2,500,000 ammunition all types; 1 equipments; 30,000 DPU equipments; 40,000 equipments; 60,000 DPU machineries) squadron combat engineering machinery; uniforms; 100,000 CRP; DPU uniforms; 200,000 uniforms; 300,000 CRP; 1 troop armoured vehicle all weapon types; 300 CRP; all weapon types; all weapon types; 400 tentage all sizes; 300 tentage all sizes; tentage all sizes; 3,500,000 ammunition all 4,500,000 ammunition 5,000,000 ammunition all types; 1 squadron combat all types; 1 squadron types; 1 squadron combat engineering machinery; 1 combat engineering engineering machinery; 1 squadron armoured machinery; 1 squadron squadron armoured vehicle armoured vehicle vehicle Force available for 3.1 1 company 5 Companies 8 Companies 1 Battalion International Obligations call out (IO) Bill passed as an Act of Parliament in May 2010. Other legal & policy instruments enabling call outs are in place Recruiting and 3.2 Recruit and train 1,000 reservists Recruit and train 3,000 Recruit and train 3, 000 Recruit and train 3,000 Reserve Force Bill passed training of reservists reservists reservists as an Act of Parliament by reservists 2011 and recruiting begins Regional 4.1 2 fully complete and equipped (HREB & 1 fully complete and well 1 fully complete and well At least 4 fully complete Land is registered as engineering bases IREB) equipped (NREB) equipped (SREB) defence state land, and (REBs) funding is made available Responsibility DOD and PNGDF Estimated inputs (K million) No. 2011 2012 2013 2014 2015 2011-2015 Funding options 1.1 1.0 25.0 1.0 1.0 1.0 29.0 GoPNG 1.2 6.6 4.5 5.0 2.0 90.0 108.1 GoPNG 1.3 66.0 47.0 60.0 50.0 5.0 228.0 GoPNG 1.4 1.1 1.0 4.7 1. 0 0.0 6.8 GoPNG 1.5 9.2 9.2 9.2 9.2 7.2 44.0 GoPNG 1.6 5.8 4.8 4.9 5.0 0.0 20.5 GoPNG 2.1 39.0 42.1 44.9 42.2 25.2 193.4 GoPNG 2.2 5.6 6.1 6.6 6.1 6.3 30.7 GoPNG 2.3 27.6 17.6 21.1 21.1 21.1 108.5 GoPNG 3.1 5.0 5.0 5.0 5.0 5.0 25.0 GoPNG 3.2 5.6 5.3 5.3 5.3 5.3 26.8 GoPNG 4.1 4.5 4.5 5.0 17.0 14.0 45.0 GoPNG Total: 177.0 172.1 172.7 163.9 180.1 865.8 130 5.15 Sports Goal: ---- To harness the power of sport for personal developmen t, community developmen t, and national development. Introduction Sports is a conduit for advocacy in nation building, healthy living, prevention of crimes, and providing career opportunities. In PNG sports is part and parcel of the society. The annual PNG games contribute to nation building and character development. The international sporting events such as the Mini-South Pacific games, the South Pacific Games, the Olympics and the Para-Olympics, sees the nation converge in support of PNG’s athletes. Sports can also provide career opportunities such as in soccer, Australian rules, rugby league, basketball, netball, tennis, golf and cricket. The development of sport is integral to youth development outlined earlier in section 5.2. Sport-oriented development programs have been recognised by the United Nations Inter-agency Taskforce on Sport for Development and Peace as viable and practical ways to enhance an individual’s spiritual, emotional and physical health and provide an alternative to harmful behaviour, promote social inclusion and enhance conflict prevention and peace building processes. They can also contribute to economic development and employment. In that context, the Taskforce advocates that sport and physical activity be incorporated in the development policies of countries and programs of International Development Agencies, with particular emphasis on the MDGs and the needs of young people. Sport is a tool for: · Personal development: Being involved in sport promotes an individual’s development of health, fitness, discipline, respect, leadership and confidence. · Community development: Community based sporting activities help to improve the quality of community life. · National development: PNG’s participation in international and major national sporting events promotes national unity, national identity and national pride, and raises the international profile of PNG. MTDP 2011 -2015 The MTDP shall promote the development of sports at the community, amateur and elite levels. This will be achieved by supporting the development of sporting facilities for community, national and international sporting events, integrating sport in schools, and supporting the coordination and development of domestic sporting competitions from grassroots to elite levels. Within the next five years, focus will be on the following areas: · strong organisational capacity development; · private sector engagement; · grassroots participation and provincial and district engagement; · sporting excellence; · education and training; · sport for development; and · facilities. 131 DSP sector goal Indicator Source Baseline 2015 target 2020 target 2025 target 2030 DSP target Personal development, Incidence of lifestyle Keep the incidence of lifestyle illnesses community development and illnesses and coronary disease low. national development through sports. Number of PNG SF Only one One sporting Minimum two Four regional Number of internationally accepted internationally sporting stadiums regional sporting sporting facilities accepted sporting stadium in meeting stadiums stadiums facilities reasonable international meeting meeting standard standards minimum minimum international international requirements requirements Lead government department Papua New Guinea Sports Foundation No. Sector strategy

1 Support provincial authorities in promoting the PNG games, community sports, the 2015 Pacific Games and other international events

2 Support promotion and awareness through enhanced sports education and training program at schools and community levels for children, youth and adults to minimise unhealthy lifestyle diseases

3 Support and promote disabled sports and disabled athletes. DSP 2030 deliverables No. 2011-2015 2016-2020 2021-2025 2026-2030 Risks and assumptions Sporting facilities that meet minimum international 1.1 –Construction of 2015 Pacific standards for all sporting codes for the PNG games, and in Games facilities preparation for the Pacific Games and all international events –3 main stadium complexes hosted in PNG refurbished Enhanced sports education and training programs for adults, 2.1 Sports for development program to youth and children promote the value of regular exercise and a healthy lifestyle A fully established national pikinini, community and disabled 3.1 Sports capacity development sports development program program Responsibility PNG Sports Foundations Estimated inputs (K million) No. I 2011 I 2012 I 2013 I 2014 I 2015 I 2011-2015 I Funding Option(s) I 4 I 12 I 66 I 6 I 6 I 94 I GoPNG 132 Part 6 Modes of implementation, collaboration and logical flow of sectoral plans 6.1 Economic Corridors Economic Corridors are proposed to alleviate poverty. Corridors of poverty will be transformed into Economic corridors. Without the corridor system people in poverty will not be integrated into the mainstream economy. An Economic Corridor is a region in which the Government provides a well planned zoning system, a comprehensive and effective network of transport and utilities, quality education, and health services. Within this region, businesses are able to operate at low cost and under well designed incentives, thereby encouraging foreign and domestic private sector investment. By concentrating the construction of essential infrastructure within certain regions, the Economic Corridor approach takes advantage of the substantial economies of scale and scope associated with large service sector infrastructure. This reduces the cost to state owned enterprises and other providers of essential infrastructure, while raising their returns. Building on this infrastructure, effective sequential and spatial planning will help to expand economic activities like agriculture, tourism and manufacturing. MTDP 2011-2015 The Government has identified ten regions of PNG to be categorised as Economic Corridors. Within the next five years, efforts will be focused on developing four economic corridors. These are as follows. · Petroleum Resource Area Economic Corridor (PRAEC) (Southern Highlands, parts of Enga, Gulf and Central Provinces). The PRAEC was approved by Cabinet in May 2009. · Central Corridor (Central, Milne Bay, Oro and Morobe). · South Coast Corridor (East New Britain and West New Britain). · Momase Corridor (Madang, East Sepik, and West Sepik). Development of these corridors will be coordinated by Economic Corridor Implementation Authorities (ECIAs). Legislation will set out the powers, functions and responsibilities of an ECIA in mobilising, planning and managing development in the Economic Corridor. Until the ECIAs are well established as a separate entity, they will operate under the Department of National Planning and Monitoring. Over the next five years, implementation of the Economic Corridors and establishment of the ECIAs will be sequenced through a number of phases. During the first phase, policy, legislation, ECIA governance and reporting mechanisms will be in place to support a fully functional ECIA. The first ECIA will be the PRAEC ECIA. The second phase will produce targeted sectoral studies with geographical overlay. An integrated development strategy and plan will be developed during phase three, alongside a proposal of specific projects and programs to be implemented within each corridor, in line with government priorities identified in MTDP 2011-2015 and PNGDSP. Phase four will focus on the implementation and monitoring of selected projects and programs. ECIAs will work closely with provincial, district and town authorities to harmonise development initiatives, coordinating efforts in order to bring about greater results in the corridors. ECIAs will only initiate flagship projects of national interest in their various corridors, specifically in economic infrastructure (transportation, energy and telecommunication), social infrastructure (health, education, and research and development), and projects for economic pursuit (agriculture, fisheries, forestry, downstream processing, and small-medium enterprise development). ECIAs will not implement development initiatives at provincial and local levels, rather this will be the responsibility of provincial and lower level authorities. 133 6.2 Partnership and collaboration Implementation of the sector strategies over the next five years requires a collaborative effort among all major stakeholders. This includes the whole of government, the private sector, development partners, churches, civil society and community based organisations. Over the next five years, development efforts of donor agencies, churches, civil society and community based organisations should be aligned with the Government in order to achieve tangible results. 6.2.1 Whole of Government collaboration Goal: A unified and dynamic public sector that effectively delivers on government goals with all central government agencies working in collaboration It is the aspiration of the Government for a “whole of Government” approach to improve the efficiency and effectiveness of the public sector to deliver the desired goals and targets of the MTDP 2011-2015. Strengthening and enhancing the capacity of the central agencies to effectively coordinate the line agencies and the provincial administrations to implement the Governments development policies and plans is the key strategy to realising this goal. Within the next five years, a “whole of Government” approach will be fostered through a review of key legislations, such as the 1995 Organic Law on Provincial and Local Level Governments, and relevant regulations that guide agencies to ensure there is a clear demarcation of responsibilities between all government agencies and provincial administrations. In addition, resourcing and enforcing the coordination functions of central agencies to ensure that public institutions comply with directives and work towards achieving the development agenda of the Government will be critical over the coming years. Other strategies for achieving whole of Government collaboration include: public servant networking and cooperation; imparting knowledge and information through reliable communication mechanisms such as the internet and e-government resources; through better communication, to learn from best practices within other agencies; and to encourage a global search for ideas and expertise to solve local problems. 6.2.2 The private sector Goal: Partnership between the Government and the private sector to provide serv ices and public infrastructure Within the next five years great strides will be taken to cement and enhance the relationship between the Government and the private sector to provide services and public infrastructure. This includes implementation of the private sector growth strategy and the Public Private Partnership (PPP) policy. PPPs are a method to procure and deliver infrastructure and services through cooperation between a public institution and one or more private enterprises. PPPs are most frequently used for major infrastructure projects and as such will form a cornerstone of investment in effective service delivery. Over the next five years the Government will establish the PPP centre, an entity which will have the capacity to support line agencies and state owned enterprises in developing robust and credible PPP proposals. Moreover, the procurement and development of select infrastructure and services will take place under PPP arrangements. Many private sector entities engage voluntarily in development activities. Telecommunications companies, for example, donate substantial resources towards education. As another key example, PNG Sustainable Development Ltd exists to enhance development in Western Province and throughout PNG. The pro- development activities of private entities are commendable, but they would be more effective if well coordinated, including with government activities. A high degree of coordination through the MTDP will greatly enhance PNG’s development outcomes during the MTDP period. 134 6.2.3 Development partners Goal: Strong and decisive leadersh ip in driving the aid program forw ard to achieve sustainable economic growth Currently, PNG receives overseas development assistance from five bilateral donors — Australia (AusAID), Japan (JICA/JBIC), New Zealand (NZAID), People’s Republic of China, and People’s Republic of Korea — a number of multilateral donors, including the European Union, World Bank and Asian Development Bank, and a number of agencies of the United Nations (UNDP, UNICEF, UNFPA, UNHCR, FAO, WHO, GEF, UNIFEM and UNHABITAT). Funding and technical support is also channelled through both international and local NGOs, private foundations and sector specific vertical programs. In an effort to make aid more effective and to move towards a more sustainable broad-based economy with improved service delivery, the Government and all development partners signed the PNG Commitment on Aid Effectiveness in 2008. This commits PNG to the implementation of the international principles of ownership, alignment, harmonisation, managing for results, and mutual accountability, as set out in the Paris Declaration on aid effectiveness. It is through this agreement that PNG and the development partners have committed to work in the spirit of partnership and mutual accountability to build on the ongoing efforts and experiences of PNG. As outlined in Part 5.13, over the next five years the Government will improve monitoring and reporting on the PNG commitment on Aid Effectiveness. Moreover, the Government will continue to focus on reducing technical assistance as a proportion of foreign aid, whilst continuing to welcome initiatives of development partners to fund investments and essential services. Crucially, the Government will direct development partners to support government priorities, as set out in the MTDP and PNGDSP. Additionally, over the next five years, support from development partners will be documented in the Development Assistance Database (DAD PNG), strengthening PNG’s commitment to the aid effectiveness agenda. 6.2.4 Churches Goal: Effective health, education and community service delivery th rough a close and sustainable partnership with PNG’s churches Churches have contributed to the development of PNG for over 100 years and continue to play an important role in nation building by fostering spiritual, social and economic growth. The Government has recognised the efforts of churches in partnering with the Government to provide basic social services such as health and education under difficult circumstances in many parts of the country, especially in the rural areas where the majority of the population lives, but where government services are either inadequate or lacking. Over the next five years the Government will continue to support PNG’s churches through the Church-State Partnership. At least K60 million will be directed by the Government through PNG’s churches to help deliver health and education services. Within the period 2011-2015, it is the Government’s commitment to ensure that a close working relationship is maintained with PNG’s churches through establishing joint coordination meetings, establishing independent monitoring mechanisms to assess performances, and continuing to maintain and strengthen development partnerships. 6.2.5 Civil societies and community based organisations Goal: Civil societies an d community based organisations will complemen t the Government in service delivery. Civil society organisations (CSOs) and community based organisations (CBOs) provide basic services to communities, addressing a host of development issues. The Government recognises the work that these organisations do to support the citizens of PNG, and has therefore developed a partnership framework. Over the next five years this partnership framework will be implemented, strengthening the relationship between the Government and CSOs to effectively implement development plans and policies of the Government. In particular, the Government will direct around K60 million through the CSO-State Partnership to help deliver basic health and education services to improve the lives of the people of PNG. Over the coming years greater monitoring by the agency responsible for planning and development will take place, to ensure effectiveness. Furthermore, the effectiveness of the CSOs will be enhanced by improving the 135 coordinated flow of information among CSOs and stakeholders including the Government and development partners and through the promotion of public forums. 6.3 Alignment of sector al, provincial and district p lans to MTDP The National Executive Council (NEC) endorsed the PNGDSP in 2010 and directed DNPM to coordinate all sectoral and provincial plans in line with the PNGDSP through the four five year MTDPs. As stipulated under the Organic Law on Provincial and Local Level Government, (Section 33A) all provinces and districts are to have five year development plans aligned to national policy. As stated in the preceding chapters, the MTDP 2011-2015 is an action plan detailing what agencies are to implement in line with the policy direction and enabling programs stated in the PNGDSP. Therefore, it will be the responsibilities of the implementing agencies and provincial governments to clearly articulate their strategies, policies and plans in line with the priorities set out in the MTDP and PNGDSP. The Department (DNPM), through its regional offices, will provide leadership in coordinating and guiding the identification of development priorities, formulation of sector, provincial and district plans, administration of budget appropriations under the Public Investment Program, and the overall supervision of monitoring and assessment of development programs and projects. Alignment strategies by sector IAs, provincial governments and local level governments At the National Government level, the PNGDSP is translated through the MTDP — a five year action plan. This plan will guide all sector agencies in their respective sector plans and strategies to achieve the desired goals and deliverables of each sector within the first five year period. Development partners are expected to align their country development programs and strategies with the National Government’s endorsed strategy — the PNGDSP. DPs are urged to support development programs and projects in line with the priorities and goals set out in the MTDP. Programs and submissions of CSOs and other non-state organisations will be supported through the Development Budget by the National Government, provincial governments (PGs), local level governments (LLGs) and donors according to the MTDP. The provincial and local level governments will also implement the MTDP through programs and projects which will be prioritised according to their local environment and their order of priorities. Support through the Development Budget will be sequenced to maximise output for core and key enabling outputs. The MTDP also calls for all IAs, PGs, LLGs and DPs, as core players, to effectively coordinate the translation, understanding and implementation of relevant prioritised programs and strategies. This means that the achievement of sector goals, provincial visions and districts’ aspirations will only come about when resources from both the recurrent and development budgets are properly managed. The alignment of various plans to the MTDP and PNGDSP requires the mobilisation of resources and appropriation to each sector and province and the coordinated implementation by all players. MTDP (PNGDSP) Sector Plans/Prov. Plans/Dist. Plans/ DPs DNPM/Treasury Country Strategies Development Programs/Projects Vetted and Consolidated for PIP Programs/Activities (IAs, PGs, LLGs, CSOs) Vetted and Consolidated for Recurrent DSP/MTDP Targets and deliverables 136 Part 7 Resourcing t he MTDP 2011-2015 7.1 Policy settings The medium term resource framework is the resource envelope of the Medium Term Development Plan (MTDP). It is determined by the Medium Term Fiscal Strategy (MTFS) and the related Medium Term Debt Strategy (MTDS) which were revised to ensure they are consistent with economic realities and to accommodate development investment decisions by the Government. This framework provides for medium term debt financing during the initial PNGDSP period, while ensuring the Government Budget is balanced over the long term. In this regard, a key factor is that Government revenues from the LNG project will commence around the beginning of the second MTDP. The focus of the medium term fiscal policy framework is to maintain fiscal discipline, maintain low levels of debt and reduce high risk foreign debt. This focus remains a sound fiscal strategy. However the way in which this is pursued needs to account for changing financial and economic conditions. As discussed in Part 2, the 2006 policy of using 30 per cent of windfall revenues to reduce debt is no longer appropriate now that PNG debt levels are sustainable. Such a narrow policy is only appropriate when debt levels are high. The public finance and investment strategy outlined in the PNGDSP is a more prudent approach to managing windfall revenues, encompassing the need to maintain low debt levels while also ensuring revenues contribute to development when debt levels are low. The Government will continue to support fiscal discipline, but through the public finance and investment strategy. The Medium Term Debt Strategy has also been revised to ensure it is consistent with economic realities and to accommodate development investment decisions by the Government. For instance, the sequencing principles in the PNGDSP entail undertaking huge investments in the ‘enablers’, such as in the transport network and in law and justice, which can be financed through State borrowing by leveraging future revenues from the minerals sector. The PNGDSP also emphasises policy measures that will generate large net revenue gains, for example the introduction of competition in ICT, freeing up private and foreign investment in critical infrastructure, and ensuring that land administration is functioning. These measures will generate economic activity and tax revenues that will support a greater capacity to borrow. Therefore, rather than waiting for the second MTDP to invest in key infrastructure, the medium term resource framework allows for borrowing during the first MTDP against the income expected in later years, and thereby investing now in critical infrastructure to develop PNG’s economic potential. Infrastructure investment will in turn lead to faster growth in government revenues, financing the repayment of debt and ongoing high levels of infrastructure investment in future MTDPs. 7.2 Financing MTDP 2011 -2015 The National Government’s resource envelope over the period of the first MTDP will approximate K68 billion (table 7.1). This constitutes funds from National Government tax revenues, support from donors, debt financing and off-budget support from other development stakeholders in PNG including for example, the private sector who may contribute through the tax credit scheme. The National Government’s financial resources will be allocated between the Development Budget and the Recurrent Budget. Preliminary estimates indicate that National Government development expenditure over the first MTDP period will approximate K32 billion. Recurrent expenditure will approach K31 billion over this same period. However recurrent expenditure may need to account for a higher share of the resource envelope than estimated here. Importantly, recurrent expenditure will grow over time as the extent of Government services expands under the Development Budget. For example, the construction and rehabilitation of community health posts will result in additional recurrent expenditure on routine maintenance and operating costs. Hence there is a need for close coordination between the development and recurrent Budgets. 137 In this context, it is noted that there are outstanding issues that need to be accounted for in order to finalise the allocation between the Recurrent Budget and the Development Budget. For example, DSG grants are funded through the Development Budget even though they are recurrent by nature. Furthermore, to the extent the Recurrent Budget adequately funds routine maintenance of infrastructure, the burden on the Development Budget of rehabilitating national infrastructure will decline over time. Accounting for these and other issues would increase the share of funds allocated to the Recurrent Budget. Table 7.1 – Resourcing the first MTDP 2011 2012 2013 2014 2015 2011-2015 K million K million K million K million K million K million MTDP Resource Envelope 9,543 12,314 13,877 15,151 17,163 68,048 Total Development Expenditure 4,500 6,899 7,650 8,434 9,783 37,267 Development Budget 4,500 6,099 6,450 7,034 8,383 32,467 GoPNG (direct finance & tax credit) 2,815 3,486 3,716 4,701 6,361 21,080 Grants 1,526 1,453 1,403 1,387 1,387 7,156 GoPNG financing requirement 159 1,160 1,331 946 635 4,231 Other stakeholders (off-budget) 0 800 1,200 1,400 1,400 4,800 Recurrent Budget (GoPNG) 5,043 5,415 6,227 6,717 7,380 30,781 Note: other stakeholders in the development of PNG include provincial and local level governments, churches, NGOs, CBOs, the private sector and PNG Sustainable Development. Government revenue is forecast to be almost K52 billion in the first MTDP period of 2011-2015 (figure 7.2 and figure 2.2 in Part 2). However, this is a shortfall against MTDP expenditure requirements which means that other sources will be required to fully finance the first MTDP. It is anticipated that donor grants directed through the national budget will exceed K7 billion over the five year period from 2011 to 2015. To the extent that these funds are coordinated with the MTDP and focused on the key enablers of higher education, primary and secondary education, law and order, land administration, transport infrastructure and other critical infrastructure such as power, water and sanitation, the returns to aid assistance will be substantial. The Government will also look to other stakeholders in PNG’s development to work towards the vision of a prosperous, united nation. Such stakeholders include provincial and local level governments, churches, civil societies and community based organisations. They all have a pivotal role in the development of PNG. Likewise, private sector contributions through the public private partnership framework and through such enterprises as PNG Sustainable Development will be necessary. It is anticipated that such stakeholders could contribute up to K5 billion over the MTDP period. To the extent that there remains a finance shortfall, it will be necessary to rely on debt to fund the MTDP. For the first MTDP, it is anticipated that around K4.2 billion will be borrowed. This does not require any new loan agreements. At the very least, it will involve the drawing down of concessional loan facilities that have already been agreed upon in the infrastructure sector. This level of borrowing will ensure that the PNG Government will remain in low debt. Figure 7.1 shows that despite the additional borrowing, public debt as a share of GDP will fall to below 25 per cent of GDP by 2015. This is because growth in GDP is forecast to outpace growth in public debt. 138 7.1 Forecast public debt, 2010-2015 Public debt as a share of GDP 35 30 25 20 Share of GDP (%) Budget 2010 forecasts 15 10 ■ MTDP forecasts 5 0 2010 2011 2012 2013 2014 2015 Source: MTDP forecasts are based on PNGGEM modelling forecasts for GDP and the criteria that an additional K4.2 billion will be borrowed compared with the level in the 2010 Budget. Budget 2010 forecasts are for 2010-2014. In the context of considering financing options, it is important to look at the longer term projections in tax revenues. In particular, because of the focus of the first MTDP on developing the nation’s productive capacity, the growth in tax revenues will continue to accelerate under subsequent MTDPs. In addition, revenues from the PNG LNG project will increase substantially during the second MTDP period. For these reasons, it is expected that tax revenues will increase substantially from K52 billion in the first MTDP to around K84 billion in the second MTDP. With the successful implementation of the PNGDSP, tax revenues will continue to expand to 2030, supporting a rapidly expanding medium term resource envelope. For this reason PNG is able to borrow now, invest wisely and repay the loans under subsequent MTDPs. Table 7.2 details the sectoral allocation of Development Budget expenditure under the first MTDP. The strong emphasis on infrastructure is necessary to achieve the ultimate aim of the MTDP of providing jobs, income and a higher standard of living for all Papua New Guineans. Access to markets and essential services will be provided through investment in infrastructure. Training of Papua New Guineans with the skills they need to prosper is an investment in the social sector. Providing a safe and secure society to live and do business in is an investment in law and justice. Private expenditure in the economic sector will then grow rapidly as a result of Papua New Guineans being provided with training, services and access to key markets. This in turn will generate the tax revenues to support ongoing expansion in the nation’s productive capacity. Not all government commitments can be allocated according to sector. DSG funds, for example, are paid directly to district level governments to be spent according to their priorities. These types of commitments are represented in table 7.2 under “other government commitments”. Under the MTDP, donor support will be directed towards programs that will generate high returns in terms of development. In particular, donor funding on technical assistance in bureaucratic positions will be redirected towards the provision of expert training assistance in PNG’s universities and technical institutes. The MTDP will also reorient debt funding towards transport infrastructure that is critical for attracting investment and supporting businesses. Furthermore, the investment of loan funds will be focused in the Economic Corridors and in the cities of PNG to ensure they realise the benefits of economies of scale and scope. 139 Table 7.2 – Expenditure by sector under the Developmen t Budget 2011 2012 2013 2014 2015 2011-2015 K million K million K million K million K million K million Economic sector 532 521 316 503 570 2,441 GoPNG (direct financing & tax credit) 334 329 202 390 457 1,712 Grants 124 118 114 113 113 582 GoPNG Financing requirement 74 74 0 0 0 148 Other stakeholders (off-budget) 0 0 0 0 0 0 Social sector 726 972 1,001 1,207 1,432 5,337 GoPNG (direct financing & tax credit) 169 343 351 447 662 1,971 Grants 518 540 550 560 570 2,738 GoPNG Financing requirement 39 39 0 0 0 79 Other stakeholders (off-budget) 0 50 100 200 200 550 Infrastructure sector 2,253 4,519 5,637 5,952 6,984 25,345 GoPNG (direct financing & tax credit) 2,013 2,323 2,796 3,386 4,729 15,246 Grants 240 400 410 420 420 1,890 GoPNG Financing requirement 0 1,047 1,331 946 635 3,959 Other stakeholders (off-budget) 0 750 1,100 1,200 1,200 4,250 Law & justice sector 170 175 175 270 320 1,112 GoPNG (direct financing & tax credit) 87 90 90 160 200 629 Grants 83 85 85 110 120 483 GoPNG Financing requirement 0 0 0 0 0 0 Other stakeholders (off-budget) 0 0 0 0 0 0 Cross cutting sector 504 398 410 392 367 2,070 GoPNG (direct financing & tax credit) 4 147 223 263 259 895 Grants 500 251 187 128 108 1,175 GoPNG Financing requirement 0 0 0 0 0 0 Other stakeholders (off-budget) 0 0 0 0 0 0 Administration 62 59 57 56 56 289 GoPNG (direct financing & tax credit) 0 0 0 0 0 0 Grants 62 59 57 56 56 289 GoPNG Financing requirement 0 0 0 0 0 0 Other stakeholders (off-budget) 0 0 0 0 0 0 Other government commitments 255 255 55 55 55 673 140 7.3 Legislative reform for resourcing the MTDP 2011-2015 Legislative reform will be required to facilitate the medium term resource envelope of the MTDP, 2011-2015. In particular, the medium term debt strategy must take into account the prudence of borrowing to invest now in lieu of future income streams from the PNG LNG project. Further, the medium term fiscal strategy must put emphasis on expenditure on the key enablers, at least during the first MTDP. This will require legislation that ensures the budget is compiled and expended according to the MTDP, subject to any changes in the policy priorities of the Government. Legislation is also required to define the role of the Department of National Planning in coordinating planning efforts. 7.4 The range of the resource env elope Volatile and unpredictable revenues are an unavoidable reality for PNG, as discussed in Part 2. The government revenue forecasts outlined in figure 2.2 of Part 2 represent the best estimates for the MTDP period. They incorporate a range of assumptions including official Australian Government commodity price forecasts, expected production profiles in mining and petroleum based on existing operations and new operations anticipated to commence production during the period, and a range of assumptions relating to implementing the MTDP. However, there are significant risks for these revenue forecasts. As outlined in Part 2, forecasting government revenue is very difficult, primarily due to the unpredictability of world prices for the key export commodities of copper, gold and oil. This is because profits, and hence tax payments, for the mining and petroleum industries are highly sensitive to prices. In view of this, two additional scenarios are modelled using PNGGEM: (1) an optimistic scenario; and (2) a pessimistic scenario. These scenarios make respectively optimistic and pessimistic assumptions with regards to commodity prices, mining and petroleum production, and MTDP implementation. Table 7.3 summarises the main assumptions that differentiate the scenarios. For the key commodity price assumptions, the optimistic scenario assumes gold and copper prices are 25 per cent above best estimates and oil prices are in line with the optimistic price scenario projected by the US Government. Conversely, the pessimistic scenario assumes gold and copper prices are 25 per cent below best estimates and oil prices are in accordance with the US Government’s pessimistic price projections. 7.2 The range for the forecast resource envelope, 2011-2015 Government revenue forecasts under 3 scenarios 16,000 14,000 12,000 Best estimate Million Kina 10,000 Optimistic scenario 8,000 Pessimistic scenario 6,000 4,000 2010 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011-2015 Best estimate 7,858 8,901 9,943 11,418 13,741 51,861 Optimistic scenario 8,197 9,490 10,558 12,176 15,052 55,474 Pessimistic scenario I 7,359 I 7,924 8,795 9,891 10,967 I 44,935 I Source: PNGGEM modelling forecasts 141 Government revenue forecasts for the optimistic and pessimistic scenarios are provided in figure 7.2 and are compared with the best estimate scenario. These scenarios reveal that over the MTDP period of 2011-2015, government revenue is expected to be between K44.9 billion and K55.5 billion with K51.9 billion representing the best estimate (figure 7.2). The range for forecast growth in GDP is outlined in figure 7.3. Table 7.2 – Main assumptions under the “best estimate”, “optimistic”, and “pessimistic” scenarios 2011 2012 2013 2014 2015 Best estimate scenario Oil US$ a barrel $76 $84 $92 $100 $105 Gold US$ an ounce $1010 $873 $885 $933 $975 Copper US$ a tonne $7025 $7779 $7434 $7021 $6588 Mining production In accordance with best estimates calculated by the Department of Mining LNG production Assumed to begin in 2015 Borrowing K4.2 billion between 2011-2015 Optimistic scenario Oil US$ a barrel $88 $106 $124 $146 $162 Gold US$ an ounce $1162 $1091 $1106 $1166 $1219 Copper US$ a tonne $8079 $9724 $9293 $8776 $8235 Mining production Same as best estimate scenario LNG production Same as best estimate scenario Infrastructure Public funded MTDP infrastructure and infrastructure maintenance increased by 25 per cent Borrowing K2 billion between 2011-2015 Pessimistic scenario Oil US$ a barrel $60 $58 $58 $58 $57 Gold US$ an ounce $859 $655 $664 $700 $731 Copper US$ a tonne $5971 $5834 $5576 $5266 $4941 Mining production Assumed that Bougainville does not reopen and Frieda does not commence LNG production Assumed to begin in 2016 – after the MTDP Infrastructure Only half the public funded MTDP infrastructure and infrastructure maintenance is completed Borrowing K6 billion between 2011-2015 7.3 GDP growth forecast under 3 scenarios, 2011-2015 per cent growth 18 16 14 12 ■ Best estimate 10 Growth (per cent) Optimistic scenario 8 6 ■ Pessimistic scenario 4 2 0 Source: PNGGEM modelling forecasts 142 7.5 Strategies for dealing with uncertainty in government revenues As outlined in the public finance and investment strategy in the PNGDSP, a stabilisation fund is needed to smooth the fiscal and macroeconomic implications of volatile and unpredictable revenues. This will be achieved by converting volatile revenues into a stable stream of finance for expenditure. The public finance and investment strategy will be developed during the MTDP period with implementation targeted for the commencement of the LNG Project. During the MTDP period there will therefore be no mechanisms in place for coping with volatile revenue streams. As outlined in the previous section and in figure 7.2, Government revenue over the years 2011-2015 could fall anywhere between K44.9 billion and K55.5 billion. Compared with the best estimate of K51.9 billion, revenue could therefore fall short by K7.0 billion or there could be an unexpected windfall of up to K3.6 billion. As explained in Part 2, this uncertainty in revenues will be dealt with by combining two strategies: (1) expenditure adjustment through front loading or back loading; and (2) debt adjustment. Within the Development Budget there will be a number of projects identified for providing a buffer in expenditure. In the event that revenues fall below best estimate forecasts, expenditure on these ‘buffer’ projects will be back loaded in the sense that funding will be reduced and implementation of the projects will be slowed down. Conversely, if revenues exceed best estimates, then the ‘buffer’ projects may be front loaded to accelerate their implementation. Major new construction projects will be the most significant items identified for this purpose. A crucial benefit of this approach is that the core services provided by Government will remain stable with predictable funding, regardless of revenue outcomes. It is important for macroeconomic stability that expenditure adjustment should not be the only mechanism for dealing with revenue volatility. Hence, there will also be an allowance for debt adjustment. The MTDP allows for borrowing of K4.2 billion as outlined in section 7.2. However, if revenues fall to the level of the pessimistic scenario, then the shortfall will be partially absorbed by increasing borrowing to K6 billion. If revenues are at the high end, then borrowing levels can be reduced to just K2 billion. The key benefits of this dual strategy approach compared with the alternative of allowing expenditure to fully adjust in line with revenue changes are: · increased stability in government expenditure; · increased stability in the balance of payments and the foreign exchange market; · eliminates the need to rush through supplementary budgets to deal with revenue windfalls; · eliminates the need for appropriations through trust accounts; and · greater certainty in the medium term expenditure envelope, thus allowing expenditure planning to shift to a more reliable medium term focus. There are numerous lessons around the globe of the critical importance of taking a conservative approach to public debt and ensuring public debt levels remain low. Even advanced nations of Europe have experienced the economic trauma and loss of sovereignty associated with building up excessive public debt. Although concessional loans represent a cheap source of finance, it is important to keep them contained at a relatively low level to ensure prudence and the maintenance of sovereignty. PNG has learnt from the past and has learnt from international experiences that over-reliance on concessional loans can lead to policy being driven from abroad. With these considerations in mind, the increased borrowing planned under the pessimistic scenario will see public debt contained at just 33 per cent of GDP (figure 7.4). This is marginally above current levels and is low by international standards and sustainable. In the event that the optimistic scenario eventuates, public debt will fall to just 19 per cent of GDP. 143 7.4 Public debt under 3 scenarios, 2011-2015 per cent of GDP 35 30 25 20 ■ MTDP best estimate Share of GDP (%) 15 ■ Optimistic scenario 10 Pessimistic scenario 5 0 2010 2011 2012 2013 2014 2015 Source: PNGGEM modelling forecasts 144 Part 8 Monitoring and evaluation of MTDP 8.1 Parameters of monitoring and evaluation Monitoring is the regular collection of information to assess progress in the implementation of workplans, projects or programs implemented over the next five years. Evaluation is defined as the periodic analysis of information to assess progress in changing the practices and the well being of target populations. 201S target 2020 t.irget 2025 urg~ 2030 OSP taa,,t 45oer1000 30per.lOOO 25per1000 Bebwl7perlOOOIM:!blrths Over the next five years these two functions will lilliebrtt.i IM:!births ive birt~ 50 per 1000 40 per li,,,e 30 per 1000 Bebw20per-10001M:!b~ births livebrtt.i per 400 capture the various stages in the life of the project or per ivebirtl$ 300per BebwlOOperlOO,OOOive program as resources get transformed into outputs, 10(\000 100,000 65~ 68 ~ outcomes and impacts. Monitoring and evaluation will primarily take place at the following levels: From inputs to outputs — have funds been spent on the desired deliverables? (box 4 to box 3) 2021·2025 2026·2030 tar get OsPt.Jrg~ ' 0 From outputs to outcomes — are we achieving our desired developmental results? (box 3 to box 1) ""' 95' 75' '"" The framework developed for each sector will be used as a reference for monitoring and evaluation ""' """ activities, detailing clear targets, indicators and 20 so 30 deliverables that are specific, measurable and time- . ,oo bound. 8.2 The Dep artment of National Planning and Monitoring ’s responsibility The overall responsibility for monitoring and evaluation rests with the Department of National Planning and Monitoring (DNPM) which reports directly to CACC and the NEC. All departments, agencies, provincial and local level governments, NGOs, CBOs and other stakeholders will work within this current framework. Within the department, monitoring and evaluation (M&E) is a collaborative activity amongst its functional branches. Each of DNPM’s divisions will be responsible for different aspects of M&E that fall within the ambit of their core responsibility. In fulfilling the department’s role and responsibilities towards the MTDP, DNPM through various technical divisions will be responsible for the following. · Ensuring that all funding submissions are in the established format and contain all the necessary information to enable judgement as to the feasibility of funding proposals submitted to the Government’s Public Investment Program in line with the MTDP. · Physical and financial monitoring of MTDP 2011-2015 implementation. · Collecting and collating quarterly reports from implementing agencies. · Physically monitoring and verifying national projects and programs implemented on sites/location in PNG. · Disseminating lessons learnt from its monitoring function on completed programs and projects to guide further improvements in future project designs and implementation. 145 Figure 8.1 Proposed M&E implementation strategy. 1. Sector Monitoring Teams DSP Performance 2. Mid Term Reviews Reports 3. PIP Performance Review PNGDSP - Program/Policy Based Sector Teams/Secretariats Monitoring and Evaluation MTDP Performance Reports (MRMF) Sector Quarterly Performance and 1. Project Specific Monitoring Budget Reviews and Evaluation Teams (PLMD) Project Based Monitoring and Continuous update 2. Site/Field Visits Evaluation of project based reports 3. Quarterly Budget Reviews 4. Budget Administration Unit 5. Special Intervention Prog. Effective Budget Administration I I Monitoring of sub-national programs and projects conducted by PLMD/PLLSMA in close liaison with DNPM and reports submitted to DNPM 8.3 Monitoring and evaluation within DNPM As part of implementing the PNGDSP 2010-2030 through MTDPs, DNPM will develop and institutionalise an elaborate Monitoring and Evaluation (M&E) system that utilises best practice information and communication technology to monitor performance. To start this process, the Department has already established regional offices in Kokopo for the New Guinea Islands Region, Kundiawa for the Highlands Region, Madang for the Momase Region and Port Moresby for the Southern Region, with the view to effectively monitor project inputs and outputs. The Provincial Liaison and Monitoring Division (PLMD) will be the ‘eyes and ears on the ground’ to ensure that monies for sectoral programs and projects under the Public Investment Program, including grants and loan funded programs, are used for their intended purpose. Officers from the PLMD will carry out regular monitoring visits and will solicit support from other line agencies and provincial and district administration planning offices to augment monitoring efforts. Monitoring visits will range from 7 to 10 days per month. Officers will not only focus on the quantity of project deliverables, but the quality as well, ensuring that interventions are meeting targeted standards. Through such processes timely information will flow back to the central database for processing. Monitoring of the relationship between outputs and outcomes will be a collaborative approach across the department involving sectoral teams and officers from, PLMD and Policy wing. Inputs from the sectoral agencies, key stakeholders and local level government will constitute an integral part of this activity. Evaluation of expenditure will be a joint exercise between PLMD, sectoral teams and the policy wing, as a sequential chain of expected impacts, outcomes and outputs is required to develop an evaluation report. Periodic impact assessments, with various stakeholders, and post completion reviews of specific projects and programs will be carried out to identify a traceable “result chain” from inputs through to impacts of each project and program. The table below gives the focus areas of M&E during and after implementation of MTDP 2011-2015. The results of the monitoring and evaluation activities will be published annually, over the next five years, in the form of a MTDP Results Monitoring Framework (MRMF). This publication will report on the trends resulting from the Government’s annual development budget expenditure and will plot the progress towards reaching the higher order PNGDSP objectives. 146 Table 1: Areas for monitoring and evaluation Financial monitoring Physical monitoring Annual cash flow Annual work plans Warrants management Site visits and inspections Expenditure reports Project/program steering committees Ad hoc reports from IAs Quarterly reports from IAs Financial monitoring Physical evaluation PBS/TMS expenditure reports Project/program mid-term reviews and evaluation missions and visits Donors’ historical financing and expenditure reports Historical performance reports, impact assessments and Ex Post evaluations Results-Based M&E MTDP PMF Sector investment plans and sector annual reports PIP performance reports 147

Annex 1 - Regional and provincial targets Regional and provincial targets for health National targets in the provision of aid posts, physicians and nurses are carefully distributed across regions of PNG and across provinces within regions using a mathematical approach. This method targets equalisation in service provision across regions and provinces using formulas that take account of population and land area. For example, the 2030 target for the Southern region is for 57 aid posts per 100,000 people which is more than the national target of 76 and more than the target of 47 for the Highlands region. But the posts are distributed more sparsely in the Southern region with 1156 posts per 100,000 km2 compared with 1623 for PNG and 2745 for the densely populated Highlands region. The high targets with respect to population and low targets with respect to land area reflect the low density of population in the Southern region. Table A1 - Aid post targets Posts per Posts per Estimate MTDP targets 100,000 100,000 km2 2010 2015 2020 2025 2030 2030 2030 Central 71 94 182 335 475 136 1585 Gulf 57 75 146 270 383 188 1110 Milne Bay 115 127 174 255 330 82 2297 NCD 54 54 54 53 52 11 21863 Oro 58 75 139 250 352 139 1549 Western 105 140 274 506 719 247 732 Southern 460 565 968 1668 2311 117 1156 Eastern Highlands 138 150 196 275 349 42 3125 Enga 72 85 133 217 295 53 2520 Simbu 51 59 92 148 199 40 3260 Southern Highlands 173 197 287 445 590 57 2305 Western Highlands 90 103 152 237 314 38 3457 Highlands 524 593 860 1322 1747 47 2745 East Sepik 97 129 251 464 660 101 1519 Madang 180 201 283 425 555 80 1922 Morobe 165 197 318 528 722 70 2141 Sandaun 113 131 200 320 430 122 1201 Momase 555 658 1052 1738 2367 87 1669 Bougainville 122 127 147 182 214 64 2283 East New Britain 82 95 144 230 309 74 2021 Manus 57 57 55 52 49 59 2441 New Ireland 39 47 77 130 179 80 1874 West New Britain 95 108 158 244 324 92 1589 Islands 395 434 582 839 1075 76 1899 PNG 1934 2249 3462 5567 7500 76 1623 148 The MTDP targets of 2015, 2020 and 2025 for health services are calculated in a way to ensure that progress towards the 2030 targets is equal across regions and provinces. Under this approach, provinces that are under-represented in health service provision in 2010 will have a greater increase in resources made available to reach the equalisation targets of 2030 compared with the well represented provinces. For example, the 176 nurses in East Sepik Province is an under-representation and by 2030 this will rise to 1715 (table A3). Milne Bay Province has a much lower 2030 target of 857 nurses, but is currently better represented with 181 nurses (table A3). As a result, by 2015, East Sepik will receive 73 additional nurses compared with 32 additional nurses for Milne Bay (table A3). Table A2 – Physicians Per 100,000 Per 100,000 Estimate MTDP targets people km2 2010 2015 2020 2025 2030 2030 2030 Central 0 3 36 114 311 89 1035 Gulf 4 7 33 94 250 123 725 Milne Bay 13 15 37 87 215 54 1501 NCD 5 5 8 16 34 7 14284 Oro 6 8 32 88 230 91 1012 Western 7 12 61 177 470 161 478 Southern 35 51 208 577 1510 76 755 Eastern Highlands 16 18 41 94 228 28 2042 Enga 10 12 31 77 193 34 1646 Simbu 7 8 21 52 130 26 2130 Southern Highlands 12 16 56 149 385 37 1506 Western Highlands 35 37 55 98 205 25 2259 Highlands 80 92 204 470 1141 30 1793 East Sepik 17 21 66 169 431 66 992 Madang 23 27 63 148 363 52 1256 Morobe 56 61 105 209 472 46 1399 Sandaun 4 7 37 106 281 80 785 Momase 100 116 270 632 1546 57 1090 Bougainville 8 9 23 57 140 42 1492 East New Britain 31 33 51 94 202 48 1320 Manus 2 2 6 13 32 39 1595 New Ireland 7 8 20 47 117 52 1224 West New Britain 12 14 35 85 212 60 1038 Islands 60 67 135 296 702 50 1240 PNG 275 325 817 1975 4900 50 1060 149 Table A3 – Nurses Per 100,000 Per 100,000 2 Estimate MTDP targets people km 2010 2015 2020 2025 2030 2030 2030 Central 48 104 320 694 1236 354 4120 Gulf 87 130 295 581 995 490 2886 Milne Bay 181 213 336 549 857 214 5973 NCD 54 58 73 99 136 28 56844 Oro 83 122 274 536 916 362 4028 Western 157 238 549 1088 1870 642 1904 Southern 610 865 1845 3547 6010 304 3005 Eastern Highlands 70 110 261 525 907 110 8125 Enga 104 135 256 464 767 137 6551 Simbu 111 130 204 332 518 105 8476 Southern Highlands 259 319 551 952 1533 148 5993 Western Highlands 233 261 367 551 818 98 8988 Highlands 777 955 1638 2825 4542 121 7136 East Sepik 176 249 528 1013 1715 263 3949 Madang 196 255 481 875 1444 208 4998 Morobe 310 384 668 1162 1877 183 5568 Sandaun 83 132 320 646 1119 317 3123 Momase 765 1019 1998 3696 6154 226 4339 Bougainville 130 150 228 362 557 167 5936 East New Britain 244 270 372 548 802 192 5254 Manus 53 56 70 93 127 154 6348 New Ireland 109 126 191 303 466 207 4872 West New Britain 153 186 311 528 842 240 4130 Islands 689 788 1171 1834 2794 198 4936 PNG 2841 3628 6652 11901 19500 198 4220 Equalisation in health services across provinces and regions should provide equalisation in the standard of health as measured by health indicators. However, given the current degree of disparity it is realistic to expect that health indicators might head towards parity, but not quite reach parity by 2030. With this principle in mind, targets for progress in the under 5 mortality rate are calculated where the disparity for each region is reduced by 50 per cent, and similarly the disparity for each province is reduced by 50 per cent. For example, the Gulf province had an under-5 mortality rate of 133 in 2006 which is approximately 100 per cent above the rate of 67 for the Southern region (table A4). This disparity is reduced to 50 per cent in 2030 where the target of 28 is 25 per cent higher than the target of 19 for the Southern region. The under-5 mortality rate is chosen as the key indicator because: · it focuses on the most valuable yet vulnerable of the PNG population; · it is a commonly referred to indicator; and · it is a sufficiently broad indicator to be a proxy for the general state of health of the population. 150 Table A4 – Under 5 mortality rate MTDP targets 2006 2015 2020 2025 2030 Central 52 39 32 24 17 Gulf 133 97 74 51 28 Milne Bay 81 60 47 34 21 NCD 22 18 16 14 13 Oro 67 50 40 29 19 Western 77 57 44 32 20 Southern 67 50 40 29 19 Eastern Highlands 61 45 36 27 18 Enga 81 60 47 34 21 Simbu 61 45 36 27 18 Southern Highlands 70 52 41 30 19 Western Highlands 52 40 32 24 17 Highlands 64 47 38 28 18 East Sepik 96 70 54 39 23 Madang 94 69 54 38 23 Morobe 98 72 56 39 23 Sandaun 136 98 75 51 27 Momase 101 74 57 40 23 Bougainville 62 46 37 27 18 East New Britain 61 46 36 27 18 Manus 49 37 30 23 16 New Ireland 57 43 35 26 18 West New Britain 62 46 37 27 18 Islands 60 45 36 27 18 PNG 75 56 44 32 20 Regional and provincial targets for education By 2030, parity in education across regions and provinces will be ensured since the national target of 100 per cent net enrolment rate implies a 100 per cent net enrolment rate in each of the regions and provinces. However, there is currently disparity across regions and across provinces. Therefore more rapid progress will be required in those places where the current net enrolment rates are lowest. The mathematical method adopted is to adjust upwards or downwards the rate of progress so that all provinces and regions achieve a 100 per cent net enrolment at about the same time. For example, the net enrolment rate for PNG is expected to increase from the current level of 58 per cent to 75 per cent in 2015 – a rise of 17 percentage points (table A5). But for Oro province, a bigger 25 percentage point rise in the net enrolment rate will be required in recognition of the much lower starting point of Oro Province with a net enrolment rate of just 38 per cent. 151 Table A5 – Net enrolment rate Estimate MTDP targets 2010 2015 2020 2025 2030 Central 58% 75% 91% 96% 100% Gulf 42% 65% 88% 94% 100% Milne Bay 69% 81% 93% 98% 100% NCD 66% 80% 93% 96% 100% Oro 38% 63% 87% 93% 100% Western 61% 76% 92% 96% 100% Southern 58% 75% 91% 96% 100% Eastern Highlands 50% 70% 89% 95% 100% Enga 51% 70% 89% 95% 100% Simbu 60% 76% 91% 96% 100% Southern Highlands 39% 63% 87% 94% 100% Western Highlands 55% 73% 90% 95% 100% Highlands 50% 69% 89% 95% 100% East Sepik 51% 70% 89% 95% 100% Madang 45% 67% 88% 94% 100% Morobe 50% 70% 89% 95% 100% Sandaun 40% 63% 87% 94% 100% Momase 47% 68% 89% 94% 100% Bougainville 68% 81% 93% 97% 100% East New Britain 67% 80% 93% 96% 100% Manus 66% 79% 93% 96% 100% New Ireland 62% 77% 92% 96% 100% West New Britain 67% 80% 93% 96% 100% Islands 66% 80% 93% 96% 100% PNG 53% 72% 90% 95% 100% Teacher numbers for each province and region are calculated by applying the enrolment rate targets of table A5 to projections for the school age population. An assumption is applied that average teacher-student ratios will be the same across regions and provinces – consistent with the goal of equality in the provision of education services across regions and provinces. As a result provinces with the lowest education outcomes receive a more rapid increase in teachers (table A6). 152 Table A6 – Teachers Estimate MTDP targets 2010 2015 2020 2025 2030 Central 695 1014 1346 1538 1803 Gulf 299 527 776 906 1081 Milne Bay 897 1199 1500 1692 1959 NCD 900 1228 1558 1764 2048 Oro 327 607 916 1074 1287 Western 605 864 1133 1291 1509 Southern 3722 5439 7230 8266 9688 Eastern Highlands 1302 2062 2876 3321 3928 Enga 920 1439 1992 2297 2712 Simbu 852 1224 1609 1835 2147 Southern Highlands 1384 2508 3746 4383 5243 Western Highlands 1352 2030 2744 3149 3702 Highlands 5810 9262 12968 14985 17732 East Sepik 1111 1751 2437 2813 3325 Madang 1064 1793 2586 3005 3575 Morobe 1621 2570 3588 4143 4900 Sandaun 480 872 1303 1524 1824 Momase 4276 6986 9913 11486 13624 Bougainville 800 1076 1352 1526 1769 East New Britain 925 1260 1598 1808 2099 Manus 184 251 320 362 420 New Ireland 465 655 849 966 1127 West New Britain 763 1040 1318 1492 1732 Islands 3137 4283 5437 6154 7147 PNG 16945 25970 35548 40890 48191 The target number of schools in each region and province is calculated using a mathematical approach for equity that takes account of land area as well as student numbers. A greater weighting is given to student numbers, but this approach allows for an upward adjustment of school numbers in less densely populated areas. By adopting this approach, children in less densely populated areas will be closer to their school, and schools will tend to be smaller. For example, in Western Province the target for 2030 is for small average school sizes of 144 compared with 495 for NCD and an average for Southern Region of 187 (table A7). By taking account of land area and reducing average school sizes, there will be 4.3 schools per 1000 km2 for Western Province instead of 3.4 if land area were not taken account of. The MTDP target number of schools for 2015, 2020 and 2025 are calculated so that the rate of progress towards the 2030 targets is equal across regions and provinces. This approach means that provinces that are currently under-represented will have a greater increase in school numbers compared with provinces that are already adequately represented. Enga Province, for example, is under-represented with just 60 schools, but this will increase by 115 to reach 175 schools by 2015 (table A7). New Ireland Province enters the MTDP period with healthier school numbers, so a much smaller rise of 24 will be targeted to reach 153 schools in 2015 (table A7). 153 Table A7 – Schools Average school Schools per Estimate MTDP targets size 1000 km2 2010 2015 2020 2025 2030 2030 2030 Central 150 246 343 391 444 162 14.8 Gulf 110 167 224 252 284 152 8.2 Milne Bay 186 268 351 392 437 179 30.5 NCD 54 90 127 145 166 495 690 Oro 114 181 249 282 319 161 14.0 Western 202 273 345 380 419 144 4.3 Southern 816 1225 1640 1843 2069 187 10.3 Eastern Highlands 246 353 461 514 573 274 51.3 Enga 60 175 292 349 412 263 35.2 Simbu 146 200 256 283 313 274 51.2 Southern Highlands 230 418 609 702 806 260 31.5 Western Highlands 191 302 415 470 531 279 58.4 Highlands 873 1448 2032 2318 2636 269 41.4 East Sepik 230 366 505 573 648 205 14.9 Madang 180 338 498 577 664 215 22.9 Morobe 311 501 694 789 894 219 26.5 Sandaun 202 256 311 338 368 198 10.3 Momase 923 1462 2009 2277 2575 212 18.2 Bougainville 216 245 274 289 305 232 32.5 East New Britain 161 231 301 336 374 224 24.5 Manus 85 81 76 74 72 235 35.8 New Ireland 129 153 178 190 204 221 21.3 West New Britain 182 228 275 298 323 214 15.9 Islands 773 938 1105 1187 1278 224 22.6 PNG 3385 5073 6786 7624 8557 225 18.5 Regional and provincial targets for law and order The key regional and provincial targets in the MTDP for government services to provide law and order include police, police stations and village courts. The target for each of these is determined using a mathematical approach to equalise service delivery across regions and provinces by 2030. The main factor in determining the targets is population but land area also has some influence. This ensures a balanced approach which allows people in sparsely populated areas to access law and order services. The greater emphasis on population explains why there is much greater variation in the 2030 target for police per 100,000 km2 than in police per 100,000 people (table A8). 154 Table A8 – Police Per 1000 Estimate MTDP targets people Per 1000 km2 2010 2015 2020 2025 2030 2030 2030 Central 308 445 645 803 1094 3.1 36.5 Gulf 140 234 371 479 678 3.3 19.7 Milne Bay 224 382 613 796 1132 2.8 78.9 NCD 280 332 407 467 577 1.2 2402.3 Oro 224 324 469 583 795 3.1 35.0 Western 252 388 585 742 1030 3.5 10.5 Southern 1430 2105 3091 3869 5305 2.7 26.5 Eastern Highlands 252 522 917 1228 1803 2.2 161.6 Enga 280 455 710 911 1283 2.3 109.6 Simbu 224 372 587 757 1071 2.2 175.2 Southern Highlands 308 675 1210 1633 2412 2.3 94.3 Western Highlands 365 613 975 1261 1789 2.1 196.7 Highlands 1430 2636 4400 5791 8358 2.2 131.3 East Sepik 280 528 890 1175 1702 2.6 39.2 Madang 308 556 917 1202 1727 2.5 59.8 Morobe 701 1012 1467 1826 2488 2.4 73.8 Sandaun 252 375 554 696 957 2.7 26.7 Momase 1542 2471 3827 4898 6873 2.5 48.5 Bougainville 28 161 356 509 792 2.4 84.4 East New Britain 224 363 567 727 1023 2.4 67.0 Manus 28 57 99 132 193 2.3 96.5 New Ireland 168 236 336 414 559 2.5 58.4 West New Britain 308 411 561 679 897 2.6 44.0 Islands 757 1228 1917 2461 3464 2.5 61.2 PNG 5160 8440 13235 17019 24000 2.4 51.9 The interim 2015, 2020 and 2025 MTDP targets for each of the three law and order service indicators are calculated so that progress is proportional to the national level. This means that those regions and provinces for which the greatest rate of increase in law and order services is required by 2030 will also have the greatest rate of increase in each of the four MTDP periods. The number of police stations in Madang, for example, will rise more rapidly than most other provinces from 11 in 2010 to 62 by 2030 – in recognition of the current under-representation of police resources (table A9). By 2015 there will be 9 additional stations in Madang. This compares with the better represented West New Britain which will have only 4 additional stations in 2015. 155 Table A9 – Police stations Per 100,000 2 Estimate MTDP targets Per 100,000 km 2010 2015 2020 2025 2030 2030 2030 Central 11 16 23 29 39 11.2 130.0 Gulf 5 8 13 17 24 11.9 70.2 Milne Bay 8 14 22 28 40 10.1 281.4 NCD 10 12 15 17 21 4.3 8566.3 Oro 8 12 17 21 28 11.2 124.7 Western 9 14 21 26 37 12.6 37.4 Southern 51 75 110 138 189 9.6 94.6 Eastern Highlands 9 19 33 44 64 7.8 576.2 Enga 10 16 25 32 46 8.2 390.8 Simbu 8 13 21 27 38 7.7 624.8 Southern Highlands 11 24 43 58 86 8.3 336.2 Western Highlands 13 22 35 45 64 7.6 701.3 Highlands 51 94 157 207 298 7.9 468.2 East Sepik 10 19 32 42 61 9.3 139.7 Madang 11 20 33 43 62 8.9 213.2 Morobe 25 36 52 65 89 8.7 263.2 Sandaun 9 13 20 25 34 9.7 95.2 Momase 55 88 136 175 245 9.0 172.8 Bougainville 1 6 13 18 28 8.5 301.1 East New Britain 8 13 20 26 36 8.7 238.9 Manus 1 2 4 5 7 8.4 344.1 New Ireland 6 8 12 15 20 8.9 208.4 West New Britain 11 15 20 24 32 9.1 156.9 Islands 27 44 68 88 124 8.8 218.2 PNG 184 301 472 607 856 8.7 185.2 156 The provision of village court services will rise more rapidly in provinces that are currently under-serviced by village courts. The level of service required depends both on population size and on the proximity of the population to village court services. By this measure, Manus is well served by 11 village courts compared with larger and more disparate populations such as in Western Province (table A10). In Western Province, the number of village courts will need to increase by 228 between 2010 and 2030 in order to provide a similar level of service to that currently provided in Manus. Over that same period, only one additional village court will be needed in Manus. Table A10 – Village Courts Estimate MTDP targets 2010 2015 2020 2025 2030 Central 41 78 132 174 252 Gulf 14 39 75 104 157 Milne Bay 14 57 120 170 261 NCD 18 38 67 90 133 Oro 14 43 87 121 183 Western 10 50 108 153 238 Southern 111 305 588 811 1224 Eastern Highlands 64 125 215 286 416 Enga 157 181 217 244 296 Simbu 107 131 167 195 247 Southern Highlands 180 246 341 417 557 Western Highlands 98 153 233 296 413 Highlands 606 836 1173 1438 1928 East Sepik 103 153 227 285 393 Madang 56 116 203 272 399 Morobe 39 132 268 376 574 Sandaun 41 72 118 154 221 Momase 239 473 816 1087 1586 Bougainville 116 128 145 158 183 East New Britain 41 75 125 164 236 Manus 44 44 44 44 45 New Ireland 11 31 61 85 129 West New Britain 23 55 102 139 207 Islands 235 333 477 590 799 PNG 1190 1947 3054 3927 5537 157

Annex 2 - Acronyms AAA Accra Agenda for Action ADB Asian Development Bank ADS Automatic Dependent Surveillance AMS Area Medical Stores ART antiretroviral treatment ARV antiretroviral ATM Air Transport Management AUSAID Australian Agency for International Development BDA Border Development Authority CACC Central Agency Coordinating Committee CASA Civil Aviation Safety Authority CBO Community Based Organisations CFDA Coastal Fisheries Development Authority CHP Community health post CHW Community health worker CIC Coffee Industry Corporation CIS Corrective Institutions Service CLRC Constitutional and Law Reform Commission CRI Coffee Research Institute CRP Conservation Reserve Program CSO Civil Society Organisations DACS District AIDS Committee Secretariat DAD PNG Development Assistance Database PNG DAL Department of Agriculture and Livestock DCI Department of Commerce and Industry DEC Department of Environment and Conservation DFAT Department of Foreign Affairs and Trade DFCD Department for Community Development DHS Demography and Health Survey DLPP Department of Lands and Physical Planning DMPGH Department of Mineral and Geo Hazards DNPM Department of National Planning and Monitoring DOD Department of Defence DOE Department of Education DOF Department of Finance DOH Department of Health DOT Department of Trade DPLGA Department of Provincial and Local Government Affairs DPM Department of Personnel Management DPU Distorted Pattern Uniform DRM Disaster Risk Management DSG District Support Grant 158 ECIA Economic Corridor Implementation Authority EIP Electricity Industry Policy EOD Explosive Ordnance Division ESEG Environmentally Sustainable Economic Growth FAO Food and Agriculture Organisation FDI Foreign direct investment FMIP Financial Management Improvement Program GDP Gross Domestic Product GEF Global Environment Facility GNSS Global Navigation Satellite System GoPNG Government of PNG GOPPF Gulf of Papua Prawn Fishery HCT HIV Counselling and Testing HECS Higher Education Contribution Scheme HF High frequency HIES Household Income and Expenditure Survey HRD Human resource development HREB Highlands Region Engineering Base ICAO International Civil Aviation Organisation ICCC Independent Consumer & Competition Commission ICT Information communication technology IEA International Education Agency IEC Information, Education & Communication IFMS Integrated Financial Management System ILG Incorporated Land Group IMR Infant mortality rate IPA Investment Promotion Authority IPBC Independent Public Business Corporation IPP Independent power producer IPV Inshore patrol vessel IRC Internal Revenue Commission IREB Islands Region Engineering Base IUU Illegal unreported unregulated JAS Joint Assistance Strategy JBIC Japan Bank for International Cooperation JICA Japan International Cooperation Agency KIK Kokonat Indastri Koporesen LCH Landing Craft Heavy LDC Livestock Development Corporation LLG Local Level Government LNG Liquid natural gas LPA Large Patrol Vessel LSH Landing Ship Heavy MDG Millennium Development Goals MEA Multilateral Environmental Agreement 159 MFDR Management for Development Results MOU Memorandum of Understanding MRA Mineral Resource Authority MRMF MTDP Results Monitoring Framework MSG Melanesian Spearhead Group MTA Metropolitan Transportation Authority MTDP Medium Term Development Plan MTDS Medium Term Development Strategy MTFS Medium Term Fiscal Strategy NACS National AIDS Council Secretariat NAQIA National Agricultural Quarantine Inspection Authority NARI National Agriculture Research Institute NATO North Atlantic Treaty Organisation NATTB National Apprenticeship & Trade Testing Board NCDC National Capital Development Commission NDOE National Department of Education NEC National Executive Council NFA National Fisheries Authority NGO Non-government organisation NHIS National Health Information System NICTA National Information and Communication Technology Authority NISIT National Institute of Standards and Industrial Technology NJSS National Judicial Staff Services NLDP National Land Development Program NMSA National Maritime Safety Authority NREB Northern Region Engineering Base NRI National Research Institute NSDS National Statistics Development Strategy NSO National Statistics Office NTC National Training Council NWS National Weather Services NZAID New Zealand International Aid and Development Agency OC Ombudsman Commission OCCD Office of Climate Change and Development OCR Office of Civil Registry OECD Organisation for Economic Cooperation and Development OHE Office of Higher Education OLIPPAC Organic Law on the Integrity of Political Parties and Candidates OoU Office of Urbanisation OPIC Oil Palm Industry Corporation OPRA Oil Palm Research Association OPV Offshore Patrol Vessels PACS Provincial AIDS Committee Secretariat PATA Pacific Asia Travel Association PBS Planning and Budgeting System 160 PD Paris Declaration PEP post-exposure prophylaxis PHA Provincial Health Authorities PIP Public Investment Program PIRLS Progress in International Reading Literacy Study PISA Program For International Student Assessment PLMD Provincial Liaison and Monitoring Division PMF Performance Management Framework PMGH Port Moresby General Hospital PMIZ Pacific marine industrial zone PNGCB PNG Cocoa Board PNGCCI Papua New Guinea Chamber of Commerce & Industry PNGDF PNG Defence Force PNGDF TTU PNG Defence Force Transitional Training Unit PNGDSP PNG Development Strategic Plan PNGFA PNG Forest Authority PNGICS PNG Immigration and Citizenship Services POM Port Moresby PPL PNG Power Limited PPP Public Private Partnership PRAEC Petroleum Resource Area Economic Corridor PSO Provincial Statistical Offices PSWDP Public Sector Workforce Development Program RAMSI Regional Assistance Mission to Solomon Islands REB Regional engineering base REDD+ Reducing Emissions from Deforestation and Forest Degradation RPNGC Royal PNG Constabulary SBDC Small Business Development Corporation SBT Small Boat Team SC-DOE School Census - Department of Education SIA Supplementary Immunisation Activity SIC Small Industries Center SME Small and medium enterprises SOE State Owned Enterprise SREB Southern Region Engineering Base SSG Special Support Grant STI Sexually transmitted infection STOL short take-off and landing TA Technical assistance TB Tuberculosis TIMSS Trends in International Mathematics and Science Study TMS Treasury Management System TNA Training Needs Analysis TPA Tourism Promotion Authority TVET Technical and Vocational Education 161 TWG-AE Technical Working Group on Aid Effectiveness UH-1H Utility Helicopter - First "H" Model UNCBD United Nations Convention on Biological Diversity UNCCD United Nations Convention to Combat Desertification UNDP United Nations Development Program UNFCCC United Nations Framework Convention on Climate Change UNFPA United Nations Population Fund UNHABITAT United Nations Human Settlement Program UNHCR United Nations Refugee Agency UNICEF United Nations Children Fund UNIFEM United Nations Development Fund for Women UNMO United Nations Military Observers UNPKM United Nations Peacekeeping Mission VHF Very high frequency VSAT Very Small Aperture Terminal (Satellite technology) WGI World Governance Indicators WHO World Health Organisation WRA Women of reproductive age WTO World Trade Organisation 162