US$100mil approved for response

THE World Bank has approved a US$100 million (K352 million) operation to support PNG’s response to the Covid-19 pandemic and to lay important foundations for a sustainable recovery.
“With PNG’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,” World Bank said.
The PNG 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 is no denying that the Covid-19 pandemic has had a severe impact on our country,” Treasurer Ian Ling-Stuckey said.
“However, we have been proactive in taking steps to lay out a clear recovery plan to help stabilise the economy, maintain frontline health services and provide support to the business sector, especially those in the micro, small to medium enterprise (SME) sector.”
“Beyond the Covid-19 crisis, the 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.”
World Bank country manager for PNG Stefano Mocci said globally, the Covid-19 crisis had tested the resilience of many economies.
“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 finance, and to address the impacts of climate change,” he said.
World Bank said the financing would help safeguard routine health services while delivering the rollout of Covid-19 vaccinations, help provide financial assistance to 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 Government’s national plans and will support the 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 PNG 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 said it was 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 PNG’s resilient recovery.