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Rural Development & Agriculture in Papua New Guinea



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 Quick Facts
 Figures show the most recent available data and the year.

Source: World Development Indicators 2006  

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PNG BoatStrategies for Agriculture and Rural Development
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Vol 2


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The World Bank has been working with Papua New Guinea (PNG) since its independence 1975 to help the country manage its natural resources and reduce poverty.

painted kidsCurrently, the World Bank is supporting the country through analytical and advisory activities and capacity building to help stabilize the economy and promote growth, in line with PNG’s Medium Term Development Strategy 2005-2010.

The Interim Strategy Note of March 2005 provides the framework for the Bank’s current engagement in PNG. It has two objectives: (i) to promote development dialogue and mitigate the decline in social indicators; and (ii) to build the foundations for improved governance and sustained recovery. The focus is on communication and outreach, building constituencies for change, knowledge dissemination and innovative approaches to improving governance and service delivery.

Relevant activities for rural development and natural resource management under the Interim Strategy Note include:

  • facilitating dialogue and debate on development themes and disseminating recent analytical work to inform that dialogue;
  • analysis of alternative modes of assistance, including through non governmental stakeholders;
  • capacity building for community-led development and local governance; and
  • selected priority investments that: generate high social and economic returns; contribute to community-level engagement; strengthen donor coordination; improve income-generating opportunities and service delivery; and enhance sustainability.

Rural Farming A new Country Assistance Strategy (CAS) is currently under preparation and, following an initial discussion between the Government of Papua New Guinea and the World Bank held in June 2006, it was proposed that the CAS could focus on the following main objectives: (a) Increased economic growth and opportunities for the poor; (b) improved governance; (c) enhanced development and service delivery; and (d) sustainable natural resource management.

With regard to rural development, priorities as expressed by participants included: (a) roads and other rural infrastructure; (b) additional assistance for smallholder agriculture; (c) possible support for future reforms of land administration; (d) Community Driven Development (CDD) approaches for the delivery of social services; and (e) strategic and selective assistance on natural resources management (to be defined). These should be considered as initial indications of interest by the Government and would be confirmed during subsequent stages of the Bank’s dialogue on the CAS preparation.

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Man with paint on faceThe Bank’s approach to rural development in PNG has focused on approaches that have proven successful in the past (e.g., the smallholder oil palm sector), while continuing to develop a broad based dialogue on issues of relevance to rural development, including natural resource management issues.

 In the future, the Bank aims to assess opportunities for making further progress on governance issues in the sector – both at the national level (e.g., responding to Government initiatives to improve the management, organization and governance of agricultural institutions) and at the local level (e.g., working with communities and local governments to improve rural service delivery and expand support for rural livelihoods).

These are areas in which the Bank can add value to the work of other donors and in which we are providing similar assistance in other countries in the region (e.g., Solomon Islands). In natural resource management, options include working at the sector level (possibly with other donors) or through broader regional or cross-sector initiatives, or a combination of both.

Rural HouseThe current project portfolio supported by the World Bank in PNG has a strong focus on urban and infrastructure development (Gazelle Restoration II Project; Mining Sector Institutional Strengthening Technical Assistance; Gas Development Technical Assistance; Road Maintenance and Rehabilitation, and GEF Teachers’ Solar Lighting). The Smallholder Agriculture Rehabilitation Project is currently the only project under preparation in the rural development sector. 

Analytical and advisory activities have focused on human development (Human Development Strategy, HIV/AIDS strategy); economic management (Public Expenditure Review and Rationalization; and local governance (CDD stocktaking).

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Key Issues

Agriculture and Rural Development.   To move forward on the rural development agenda, there is a need to (a) revive the strategic dialogue with the Government and other development partners (interest already expressed by the EC, AusAID and IFAD); and (b) during the preparation of the CAS, review opportunities for the rural sector to contribute to the broader objectives of the CAS.

Palm TreeOn the former point (a) the final product/deliverable would depend on the interest of the government and different partners (e.g., focused analytical work on topics of interest to Government and other partners might be a better form of engagement than a comprehensive rural development strategy).  This work would be used to prepare for longer-term engagement in rural development including a possible second operation/project after the  Smallholder Agriculture Rehabilitation Project in FY08 or more likely FY09. As a next step, the World Bank is planning to engage with the Government (including sector agencies) and other partners to develop this approach in greater detail.

Natural Resource Management.   The Government has stated that the dialogue and future re-engagement of the World Bank in natural resource management should be based on shared understanding of the priority issues. Options discussed include supporting in-country dialogue led by local institutions and supported by development partners on natural resource management, preferably with other donors. 

An additional option would be to possibly work with the PNG Millenium Development Goal 7 Initiative on Environmentally Sustainable Economic Growth which works in partnership with the Center for Environmental Research at Columbia University. The main aim of the initiative is to operationalize the Government’s commitment to achieve this goal on environmental sustainability. The initiative is currently working on operational strategies for engaging environmentally sustainable economic activities for several economic sectors.

Addressing governance issues in the natural resource management sector could also be done with other sectors (i.e., Treasury, Finance, etc.): (a) work on the revenue management side with other sector units of the World Bank; (b) dissemination in-country of the findings of the regional work on governance and forestry (FY08/09); and (c) include substantive chapters on natural resource management/forestry in country analytical work (e.g., Poverty Assessment, Country Economic Memorandum, Public Expenditure Review) to allow discussion of the issues beyond the Forestry Authority (i.e., Treasury, Finance, etc.).  These options would be further discussed with the Government in in 2007.

Community Driven Development (CDD). Regional experience suggests that CDD approaches would help build  more empowered rural communities capable of playing a stronger role in the direct provision of basic services and in holding government more accountable for its performance in assisting communities to address their priority needs.

Local Rural Farming Governance-related issues that affect the overall enabling environment for agricultural investment and market development at the local level could be addressed through support for CDD approaches, including: (a) promoting the development of effective community-based systems for addressing developmental issues at the local level; (b) ensuring some resources are made available at the community level to support community participation and local accountability in the delivery of local services; and (c) providing opportunities for improving the well-being and involvement of women, youth and other disadvantaged groups in agricultural and rural development activities.

To be successful CDD approaches would need to strengthening the foundation for community driven development through (a) building the basic systems of local governance at the community and local government levels; (b) providing intergovernmental fiscal transfers to local governments and community participation backed by central government oversight; and, (c) supporting the capacity development of local level institutions.

Local Governance and Service Delivery. There is a growing interest in the contribution that activities designed to stimulate the “demand-side” of governance can play in strengthening the participation of communities and local governments in taking a more active role in driving local development processes, at the same time taking on greater responsibility for finding local solutions to local challenges. It is envisaged that, on the basis of the dialogue conducted as part of the CAS preparation process, the World Bank could explore the Government’s interest in Bank assistance to improve rural livelihoods through a CDD/local governance program.

More Information:
blue arrow Papua New Guinea Rural Development Strategy (41kb pdf)

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