Papua New Guinea - Development policies and prospects for the 1980's

 PAPUA NEW GUINEA Selected Development Issues The economic mission responsible fol this report visited Papua New Guinea in February/hlarch 1981. Its members were: Abee Galemon. chief of mission Friedrich Kahnert Glenn Lehmann. consultant Linda Likar Mudiayi Ngandu Kenneth Woodward, consoltant Edward Hawkins joined the m k k m for discussions in the field. The report takes account of discussions with Governmsnt offirials on an earlier draft in October 1981. This report constitutes part of a continuing dialogue between the World Fia~~kand the Govern- ment of Papua New Guinea on a aide range of economic and sector issues. Its coverage \vas determir .Iin consultation with the Government and focuses on a few specific areas that were agreed to be among the most impPrtant for Papua New Guinea's development during the 1980s. It is not intended to be exhaustive in its scope and excludes important topics in the social and economic field which both the Covemment and the Bank considered to be dea:+with adequately in other documents. Earlier World Bank reports covered additional topics and can be referred to for a fuller description of the mumtryand its economy. The report of the fin. post-independence World Bank economic mission was the basis of a published report on the country, i:s major problems and its prospects.(See Gorge B. Baldw:~.,et. al. Papua New Guinea: Its Economic Situation and Prospects for LieoPloyment. Washilagton. D.C.: World Bank, 1978.) Zast Asia and PaciFic Regional Office T h e World Bank M'ashington, D.C., U.S.A.  The Wbrld Bank issues coudry -mic skdies in twoseries This report is a working document and is, as such. part of an i n f o n d series based wholly on materials originally prepared for restricted use within the BvltThe text is not meant to be definitive, but isoffered soas to make some results of internal r e d widely available to scholars and practitioners throughout the world. A m n d , more f d series entitled World Bank Country Economic Reports is pub- lished for the Bank by The Johns Hopkins University Press. Baltimore and London. Titles of these and all other bank +tiom may be found in the Catalog of PuMicath, which is available free of charge from World Bank. Publications Unil 1818 H Street. N.W., Washington, D.C. 20433, U.S.A. The views and interpretatims in this report are the authors' and should not be athibuted to the World Bank, to its affiliated mganktions, or to any individual acting in their behalf. Copyright 0 1982 The International Bank for Reconstruction and Ikvebpmzntflhe World Bank The World Bank enjoys cop)right under Protocol 2 of tbe Universal Copyright Convention. Nevertheless. permission fmr reproduction of any part of this report is hereby granttd provided that full citation is made  PAPUA NE!J G U I E A SELECTED DEVELOPMENT ISSUES Table of Contents . . . . . . . . . . . . . . . . . . . . . AND CONCLUSIONS . I- xi . . . . . . . . . . . . . . . . . ......... D BACKGROUND 1 . . . . . . . . . . . . . . . . . < . . . . . . . . . . .................................... A The Setting 1 B Development Objecti7es 3 C.... Progress Toward National Goals 6 D Maior Issues i n Economic Development 10 A .. Population and Labor Force . . .......................... 15 B Employment Trends and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . 16 C .. Wages . . . . . . . . . . . . . . . . . . . 19 D S k i l l s and Traininn 23 . . . . . . . . . . . . . 1 FISHERIES 27 A . . Projections of Output 27 B P o t e n t i a l f o r Development . . ... ....................... . . 29 1 Expansion of Production .. .. .. .. .. .. .. .. .. .. .. ;.......... 29 2.. Resources f o r Development . 34 C Government Policies .. . . . . . . . . . . . . . . . . . . 38 1. Forms of Growth . . . . . . . . . . . . . . . . . . 38 2. EnallholderGrowth . . . . . . . . . . . . . . . . . 39 I 3. Large-Scale Growth . . . . . . . . . . . . . . . . . 40 A Structure and Recent Growth 43 B.. National Goals and P o l i c i e s .............................. 43 3. Financial Assistance t o National Finns . . . . . . . 48 I 49 5. . . . . . . . . . . a . . . . . . . . . . . . . . . . . . Regulation and Related Obstacles 50 1  . P a g e No STI.TISTICAL APPENDIX . . . . . . . . . . . . . . . . . . . . . . . 5 1 ANNEX A .RECENT DEVELOPPIENTS . . . . . . . . . . . . . . . . . . 95 ANNEX B. EMPLOYMENT. WAGES AND MANPOWER . . . . . . . . . . . . . 119 ANNEX C.AGRICULTURE. FORESTRY AND FISHERIES: INDUSTRY PROFILES 190 A N N E X D - I N D U S T R Y . . . . .. . . . . . . . . . . . . . . . . . . 2 5 3 MAPS   Page 2 of 2 COUNTRY DATA - PAPUA NEW GUINEA March March MDNEY, CREDIT AND PRICES - - - - - - (Ydllion K outstanding at end of period) Money and Quasi Money 428.5 449.0 571.7 553.2 611.6 545.7 Bank Credit t o Public Sector, net Bank Credit t o Private Sector, n e t 137.7 194.5 228.9 301.9 (Percentages o r Index Numbers) Money and Quasi Money a s X of CDP Consumer Price Index (1977 = 100) 100.0 105.8 111.9 125.4 121.0 134.3 Annual P e r c e n t ~ g eChanges in: Consumer Price Index Bank Credit t o Private Sector BALANCE OF PAYMENTS EERCHANDISE EX3'SPnR.TS (AVZiGE 1978-1980) - 1978 1979 1980 / a (US$ ~ m z t n ) --- Million X nxporte of Goods, NFS 764.8 1,057.4 1,034.1 Coffee Imports of Goods, NFS -1,028.5 878.7 1,287.3 Cocoa Resource Gap (Deficit = -) -113.9 30.1 -253.2 Copra & Copra Products Timber & Timber ?roducts Factor Services (net) -64.6 -109.8 -170.6 Copper Transfers (net) 184.6 157.9 162.9 Gold 212.1 23.7 Balance on Current Account 6.1 76.8 -260.9 A l l Other Commodities Private Capital (net) -28.3 15.7 44.9 Total -- 894.2 100.0 Public KLT Loans (net) -7.8 37.5 66.3 Errors and Omissions /b Increase i n Reserves -2.5 109.4 -73.R Imports of f u e l and related P ~ b l i cDebt, incl. Guaranteed materials 72.9 107.2 189.8 Nonguaranteed Private Debt Total Outstanding & Disbursed RATE OF EXCHANGE PUBLIC DEBT SERVICE RATIO FOR 1980 / c - 1980 Public Debt, incl. Guaranteed Nonguaranteed P r i v a t e Debt US$1.00 = K 0.79 US$1.OO = K 0.67 K 1.00 = USS1.26 K 1.00 = US$1.50 Total Outstanding & Disbursed IBRD/IDA LENDING (AS OF 12/31/80) 1978-79 , 1981, Jan.-May -- US$ Million US$1.00 = K 0.71 US$l.OO = K 0.67 Outstanding & Disbursed K 1.00 = USS2.41 K 1.00 = US$1.50 Undisbursed 25.1 27.7 Outstanding incl. Undisbursed -- 79.6 82.7 .. not available November 1981 ..  CURRENCY EQUIVALENTS Currency Unit - Kina (K) ABBREVIATIONS BDO - Business Development Officer BOS - Bureau of S t a t i s t i c s (now NSO) CPI Consumer P r i c e Index DOL Department of Labor and Industry DOWS ---Department of Works and Supply . DPI Department of Primary Industry IASER I n s t i t u t e of Applied Social and Economic Research MRSF ---Mineral Resources S t a b i l i z a t i o n Fund MWB - Minimum Wage Board NIDA National Investment and Development Authority NIPS -- National Investment P r i o r i t i e s Schedule NMA - National Manpower Assessment NOTA - National Occupational and Training Authority NPEP - National Public Expenditure Plan NPO - National Planning Off i c e NSO - National S t a t i s t i c a l Of