The World Bank Board of Executive Directors today approved a US$100 million (PGK 352 million equivalent) operation to support Papua New Guinea in its response to COVID-19, and to lay important foundations for a sustainable recovery.
With Papua New Guinea’s economy entering the COVID-19 crisis with limited resilience to external shocks, the pandemic has led to a sharp economic contraction, higher unemployment and considerably more Papua New Guineans falling into poverty, particularly women and young people.
The Papua New Guinea Crisis Response and Sustainable Recovery Development Policy Operation aims to strengthen PNG’s health system, support livelihoods of vulnerable households and small businesses; and lay vital foundations for a more sustainable economic recovery.
“There’s no denying that the COVID-19 pandemic has had a severe impact on our country,” said Papua New Guinea Minister for Treasury, Hon. Ian Ling-Stuckey. “However, we have been proactive in taking steps to lay out a clear recovery plan to help stabilize the economy, maintain frontline health services and provide support to the business sector especially those in the MSME space among others.
“Beyond the COVID crisis, the Marape Government has made a firm commitment to resume fiscal consolidation to ensure fiscal and debt sustainability and this operation is a strategic partnership with the World Bank to achieve this.”
Stefano Mocci, World Bank Country Manager for Papua New Guinea said “Globally, the COVID-19 crisis has tested the resilience of many economies; and PNG is no exception.
“To prepare PNG’s economy for a sustainable recovery, this operation supports the PNG Government’s efforts to strengthen the country’s medium-term fiscal and debt sustainability, improve the efficiency of the financial sector, ensure more people – particularly PNG’s most vulnerable families and communities – have better access to the finance, and to address the impacts of climate change.”
This financing will help safeguard routine health services while delivering the rollout of COVID-19 vaccinations, help provide financial assistance to micro, small, and medium-sized enterprises (MSMEs) for job protection and ease the tax administration burden on small businesses.
It will also support the government’s commitment to ensure fiscal and debt sustainability, enhance women’s voice and opportunities in decision making, improve financial sector efficiency and financial inclusion, and prepare PNG for the impending impacts of climate change.
Beyond the current crisis, the World Bank operation is closely aligned to the PNG Government’s National Plans and will support the PNG Government’s commitment to resume much-needed fiscal consolidation in the post-crisis period, to address key structural challenges of fiscal and debt sustainability.
The operation is in line with the World Bank Group’s Country Partnership Framework for Papua New Guinea 2019-2023 and will be delivered through a highly concessional credit through the International Development Association (IDA), the World Bank Group’s fund for the world’s most in-need countries.
The World Bank is working in close coordination with key development partners, including the International Monetary Fund, the Asian Development Bank, the Australian Government, the Japan International Cooperation Agency, and the United Nations to boost support for Papua New Guinea’s resilient recovery.
The World Bank works in partnership with 12 countries across the Pacific, supporting 85 projects totalling US$2 billion in commitments in sectors including agriculture, aviation and transport, climate resilience and adaptation, economic policy, education and employment, energy, fisheries, health, macroeconomic management, rural development, telecommunications and tourism.