PAPUA NEW GUINEA MEDIUM TERM DEVELOPMENT PLAN 2011-2015

Part 1The MTDP appro ach1.1The objectives of the GovernmentThe Medium Term Development Plan 2011-2015 (MTDP) is a 5-year rolling development plan providing aclear, accountable plan for investment. It sets the sector strategies, targets, deliverables and their projectedestimated cost of implementation. The MTDP is aimed at translating the Papua New Guinea DevelopmentStrategic Plan 2010-2030 (PNGDSP) into tangible results. It also takes into account the lessons learnt andexperience from the previous Medium Term Development Strategy 2005-2010 (MTDS). The MTDP outlines thespecific players who will be responsible for achieving key deliverables. It strengthens the NationalGovernment’s ability to monitor and evaluate investments over the coming years during the life of thePNGDSP 2010-2030.Therefore, the MTDP implements the PNGDSP and the Vision 2050 and will be a sequenced mid-term plan.The MTDP 2011-2015 will concentrate on the enabling activities under each sector which will be funded andimplemented by the sector agencies, provincial governments, community service organisations (CSOs) anddevelopment partners1. The progress of this plan will guide the following 3 mid-term plans, thus high prioritywill be given to the enabling activities such as road infrastructure, education, health and economic sectors,among others.The desired deliverables under the MTDP 2011-2015 will be supported by:····targets for this MTDP and the remaining 3 MTDPs to ensure we ‘stay on track’;the identification of risks and assumptions to ensure sectors coordinate and link with each other;demarcation of the respective agency’s responsibilities; andthe specification of resource requirements from various financing sources.The linkages between the MTDP and both the PNGDSP and the Vision 2050 may be summarised by thefollowing four points.1. The Vision 2050 maps out PNG’s development initiatives for the next 40 years and identifies sevenstrategic pillars underpinning economic growth and development. The PNGDSP translates the sevenstrategic focus areas of Vision 2050 into directions for economic policies, public policies and sectorinterventions with clear objectives, targets and indicators.2. The MTDP is guided by the PNGDSP on how best development in PNG will be undertaken under thePublic Investment Program (PIP), outlining resource utilisation by focusing development efforts on keypolicy areas.3. The MTDP guides the development of sector policies, plans and strategies. Vision 2050 and PNGDSPboth provide economic development frameworks and performance indicators that enable policyproposals to be prioritised and closely monitored through implementation of the MTDP. Budgetsubmissions by sectors, provinces, CSOs and other development partners will be aligned with theexpenditure and development priorities outlined in Vision 2050, translated in the PNGDSP andarticulated in the MTDP.4. Importantly, the allocation of scarce resources will be prioritised across sequenced targets anddeliverables over the 5 year period of the MTDP. Sectors, provinces, CSOs and development partners’Public Investment programs and budget appropriations will be aligned to priorities of Vision 2050,PNGDSP and the first MTDP.The alignment of the development partners under the Accra Declaration and other partner agreements willbe adjusted and reviewed straight after the adoption and endorsement of the MTDP 2011-2015 by NEC.11

1.2Addressing supply-side constraint sThe success of the PNGDSP 2010-2030 will depend on how well strategies and expenditures are sequencedfor implementation. Although each Medium Term Development Plan (MTDP) is designed to achieve progress inevery aspect of the PNGDSP, some parts will be given higher priority in the early MTDPs. In this case, the firstMTDP 2011-2015 will concentrate on policy areas referred to as “key enablers” to lay the foundation for thesuccess of all other parts of the PNGDSP.The PNGDSP identifies the key enablers that will establish PNG on a path towards prosperity. TheGovernment will integrate its investment to lay the foundation for growth by addressing the supply-sideconstraints and expanding the productive capacity of the economy in the first MTDP 2011-2015. As part oflaying the foundation for growth the Government will ensure fiscal and monetary stability is attained, land issufficiently unlocked for development, law and order problems are normalised and quality infrastructureconnectivity is established to connect rural populations to markets and services. All of these are essential forattracting 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 thatfacilitates both economic progress and efficient delivery of services. Introducing competition into the mobilephone 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 andsecondary education will not manifest until about 10 years later, a highly productive workforce will beessential by then to ensure the success of the PNGDSP. Higher and technical education is also a key priorityto equip the workforce to implement the PNGDSP and build the nation. Moreover, substantial economic gainsfrom higher education are available by replacing expensive foreign workers.Equally, transport and the provision of key public utilities of electricity, clean water and sanitation arepriorities in the first MTDP 2011-2015 as they are required to facilitate investment across the economicsectors of PNG, from agriculture to manufacturing to tourism. However, the costs of providing thisinfrastructure are lower and the returns are higher when land is accessible, when crime is not animpediment, when funds are well managed, and when providers are competing by offering better service andlower prices. At the same time, effective infrastructure services help to reduce the cost of providing ruraleducation and law and order.Underpinning the Government’s success in implementing these priorities in the first and subsequent MTDPsis the public sector’s performance and governance issues. High standards of public sector managementinvolve high standards in the various institutions, departments and agencies through which the Governmentconducts its business. For PNG to have a prosperous future, good public sector management is crucial as it isthe 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 2011-2015as it will create a virtuous cycle of growth and development. The rationale is that these priority areas are theenablers for growth. They are the policies that will lay the foundation for PNG to progress rapidly towardsmiddle income status by 2030. If significant progress is not made in each of the enablers by 2015, PNG willnot realise the status of a middle income country by 2030. Therefore it is in these areas where developmentbudget expenditure will bring the greatest returns.As highlighted in the PNGDSP, the benefits to PNG of these investments will be substantial. For instance, over710,000 full time equivalent jobs will be created in rural PNG as a result of initiatives to promote ruraldevelopment, 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 accessto health facilities. The causes of cholera and typhoid will be removed by the provision of clean water andsanitation. PNG’s population will be equipped to participate in the nation’s prosperity through investment inquality education, including higher education.2

1.3The MTDP frameworkTo outline what will be done over the next 5 years in order to achieve the PNGDSP goals, a framework for eachof the sub-sectors has been developed for the MTDP document (figure 1.1). Each framework is accompaniedby a short discussion providing an overview of the plan for the sub-sector. The MTDP framework has beendeveloped 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 goalfor utilities is “all citizens and visitors to haveaccess to reliable and affordable public utilities byThe MTDP Framework2030”. To monitor progress toward the sub-sectorgoal, indicators and targets have been developed.These indicators are based on those outlined in thePNGDSP and take into consideration internationalobligations and local priorities. The source columndetails where the data will come from.1.1In the second box of the framework the strategiesfor the sub-sector strategy are outlined.The third box details the ‘deliverables’ of theMTDP. Subject to the availability of resources,investment will take place in support of the detaileddeliverables. The deliverables are in line with thesub-sector strategies and contribute to the subsector goal. Deliverables for the remaining MTDPsunder the PNGDSP are also discussed to ensure we‘stay on track’ towards reaching the PNGDSPhigher order objectives. Risks and assumptions aredetailed in the third box to ensure sectors linktogether and that effective sequencing andprioritisation of expenditure within and acrossMTDPs is followed. Lastly, the agency or government department responsible for ensuring the deliverables arerealised is detailed.The fourth box provides information on the estimated resources needed to attain the deliverables. Resourcesare detailed by amount and by funding option – donor, government or other.1.4The economic imp act of the MTDPImplementation of the MTDP will be the first step towards reaching the target outlined in the PNGDSP ofPapua New Guinea becoming a prosperous middle-income country by 2030. This will be underpinned by therapid economic growth driven by the MTDP policies and investments. Over the period 2011-2015, economicgrowth is expected to average 8.7 per cent a year (figure 2.1 in part 2). This will result in a healthy rise in theaverage 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 ayear. GDP per person

MEDIUM TERM DEVELOPMENT PLAN 2011-2015 Department of National Planning and Monitoring Port Moresby October 2010. For more information contact: Department of National Planning and Monitoring P O Box 631 Waigani National Capital District Papua New Guinea Telephone: (675) 3288302 /3288324 Facsimile: (675) 2388399/3288384 Published by Department of National Planning and Monitoring Port Moresby .