Countries and Regions

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p. 5 of 21 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Poverty Assessment C. Assessment of Socio-Environmental Performance D. Governance: Sound Development Management E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Papua New Guinea : I. Country Performance Assessment

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D. Governance: Sound Development Management

17. Governance shortcomings exacerbate PNG's development problems. Development management is a major problem, exacerbated by political instability. PNG witnesses frequent changes in policies and inconsistent implementation of programs. It has an expensive and inefficient public service, whose performance is further hampered by frequent changes in senior civil servants and ministers; politicization of the civil service is acknowledged as a growing problem. Public sector reform has been attempted sporadically since 1990, bursts of significant progress alternating with periods of inaction. The new Government is strongly committed to public sector reforms, and is taking reasoned steps to beginning implementation. The Government also is actively pursuing corporatization and privatization of Government agencies.

18. Constitutional changes in 1995 decentralized responsibility for many government services, including basic health and education, to the provinces. Implementation has been problematic, not least because of capacity constraints at provincial and local level government level, and it is now widely acknowledged that some of the changes will need to be revisited, likely with some reassertion of central controls and responsibilities.

19. The rule of law and the enforcement of well-defined rights are essential for economic activity to flourish. Poorly defined rights or inadequately enforced laws, discourage risk-taking, growth, and development. Most land is under customary ownership. Individuals' rights to land are not well defined and disputes are common. The difficulty of acquiring (and retaining) title is a significant constraint to economic development in PNG. Likewise, the pervasive personal security and crime problem is a serious concern; the incidence and direct costs of crime are growing rapidly, and, perhaps even more serious, the perceived risks of crime greatly hamper investments and economic activity. With the agreement and assistance of external financiers, the Government is taking steps to improve the situation by increasing law enforcement-related budget appropriations and strengthening legal institutions.

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