Countries and Regions

	Table of Contents
p. 10 of 21 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Agriculture B. Infrastructure C. Social Infrastructure and Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Development G. Private Sector Operations 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 : III. Sector Strategies

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B. Infrastructure

1. Transport

36. Given its critical importance to economic growth and to poverty alleviation, the transport sector will remain a leading priority for the ADB. For roads, the highest priority is to redress the deterioration of the current road network, which has greatly reduced rural incomes (e.g., in the Highlands where coffee sales have plummeted; an on-going ADB study is helping to quantify the linkages between road transport and rural incomes). The ADB has helped establish a Road Asset Management system, as a key management tool. This is guiding ADB assistance for rehabilitating and maintaining roads, both in the recently approved project for the Highlands Region and a similar effort envisaged for the Southern Region. The ADB is endeavoring to catalyze private sector participation in infrastructure financing and in sector management. To complement the physical infrastructure investment, the ADB will assist in restructuring and strengthening institutional structures, based on studies of road cost recovery options and road maintenance management systems.

37. Given the importance of sea and inland waterways transport for the PNG economy and social services, especially for the poor, infrastructure and institutional investments yield suitable economic returns. The ADB is helping to restore the system of maritime navigation aids, including developing a sustainable maintenance system, with suitable long-term financing mechanisms. This will help satisfy PNG's obligations under extant maritime shipping treaties and provide invaluable assistance to local shipping and other maritime activities. In addition, deficient maritime (and inland waterways) infrastructure systems (provincial ports, wharves/jetties/landing facilities, route markings) will be established or upgraded, based on careful evaluation of economic and social criteria, together with the development of appropriate policy and management environment. To complement these investments, the ADB will provide assistance in developing the options for management of the broad maritime sector, possibly through the establishment of a consolidated maritime authority.

2. Finance

38. The financial system in PNG is relatively sophisticated, but it is focused entirely on the larger formal sector. Small enterprises, semi-subsistence farmers and the poor have virtually no access to financial services. The inadequacy of microfinance services clearly hampers development of small enterprises and semi-subsistence activities, while the dearth of savings services is an obstacle to personal wealth accumulation, particularly given personal security and crime problems. The ADB has been assisting to study the sector and, through a loan programmed for 2000 approval, will be assisting to provide sustainable microfinance services to viable enterprises and savings services to the population at large, providing institutional strengthening and a revolving refinance facility. The Government is reforming the structure of the traditional financial system, with World Bank and IMF assistance; no direct ADB involvement is envisaged.

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