Catalog

	Table of Contents
p. 25 of 44 BACK | NEXT Country Reports East and Central Asia Mekong Pacific Cook Islands Fiji Islands Kiribati Marshall Islands Federated States of Micronesia Nauru Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu South Asia Southeast Asia

Annual Report 2002 : Pacific

---

Papua New Guinea

Economic performance

In 2002, Papua New Guinea experienced its third consecutive year of recession, with real GDP declining by an estimated 0.5%. While mining and petroleum continued to decrease, the nonmineral sector recovered to a record 2.4% growth in 2002. Because of increased expenditure in the run-up to the elections, the Government introduced a supplementary budget, which resulted in a budget deficit of 3.8% of GDP. The total debt:GDP ratio was over 70% at the end of 2002. The annual inflation rate rose to 11.8% and the kina (K) depreciated by 13.6% against the US dollar.

In the second half of 2002, the Bank of Papua New Guinea tightened its monetary policy. The overall balance of payments was in deficit by K239 million ($61.5 million), associated with a lower current account deficit and lower trade surplus. At the end of 2002, gross international reserves were sufficient to cover about 5 months of nonmining imports.

ADB operations

Operational strategy: ADB’s strategy focuses on helping restore good governance and establishing the conditions for sustainable economic and social growth, by improving public sector financial management, supporting public service reforms, and strengthening institutions. ADB assistance to reorganize and strengthen the management of road and water transport systems emphasizes maintenance and sustainability. ADB also helps strengthen the agriculture and fisheries policy and service delivery capacities, and supports the development of agro-enterprises. In the social sectors, ADB is assisting with broad policy analysis and improved services delivery.

Policy dialogue:In 2002, policy dialogue with the Government focused on improving governance and services delivery. ADB has taken a lead role in working with the Government on public service management reform. Also in 2002, ADB initiated discussions with the Government on forming a joint country assistance program for Papua New Guinea in collaboration with the World Bank and the Australian Agency for International Development (AusAID).

Loans and technical assistance: One loan of $5.7 million was approved in 2002 for coastal fisheries management and development. Four technical assistance totaling $2.5 million were approved (see tables 1, 6, 24, and 25 in the Statistical Annex).

Project implementation: Since joining ADB in 1971, Papua New Guinea has received 56 loans totaling $855 million, of which 12 were active at the end of 2002. Contract awards during the year totaled $10.9 million, bringing cumulative contract awards to $583.5 million. The contract awards ratio for 2002 was 6.8%—lower than the ADB-wide average of 22.6%. Disbursements in 2002 totaled $14.0 million, bringing cumulative disbursements to $579.5 million. The disbursement ratio was 6.9%—lower than the ADB-wide average of 22.2% (see tables 14–23 in the Statistical Annex).

Back Nauru	Next Samoa