Table of Contents
The later years of the 1990s saw a period of deteriorating governance, economic decline, and rising tensions in relations between the Papua New Guinea government and the World Bank and other donors. This culminated in a vote of no confidence against the prime minister, Bill Skate, and in 1999 Sir Mekere Morauta replaced Skate as prime minister. As documented in Chapter 2, Morauta promptly moved to initiate policies designed to achieve reconstruction and development.
The Morauta government set itself six objectives: to stabilize the economy; to stabilize the budget; to rebuild the institutions of state; to remove impediments to investment and growth; to reach a peaceful political settlement on Bougainville; and to create political stability and integrity. A number of fiscal and broader economic measures were introduced with respect to the first two objectives and a Medium Term Plan of Action for Public Sector Reform was drawn up for the period 2000–2003; steps were taken to safeguard the independence of, and to strengthen, the Bank of Papua New Guinea (see Kamit 2000), the Ombudsman Commission, the auditor general, and the public service; an Organic Law on the Integrity of Political Parties and Candidates was passed and changes made to the electoral system, and a long-running peace process culminated in the Bougainville Peace Agreement of 2003. Notwithstanding these reforms, economic and political stability proved hard to achieve.
Following the national elections of 2002 (which were generally conceded to have been marked by greater irregularities and violence than any previous national election), a new coalition government, headed by Sir Michael Somare, came into office. The Somare government quickly made clear its intention to maintain the previous government’s commitment to policies of recovery and public sector reform. With respect to the former, and in the context of a substantial deterioration in the fiscal situation, in August 2002 the government announced a Program for Recovery and Development, which identified as its three main objectives, ‘good governance; export-driven economic growth; and rural development, poverty reduction and empowerment through human resource development’. [2]
As a framework within which to pursue these objectives, the government presented, after a lengthy process of consultation, a revised Medium Term Development Strategy (MTDS) for 2003–2007, which replaced the previous MTDS for 1997–2002.[3] The MTDS 2003–2007 has subsequently been replaced by the MTDS 2005–2010. With regard to its public sector reform agenda, the Somare government also presented, in November 2003, a Strategic Plan for Supporting Public Sector Reform in Papua New Guinea 2003–2007, which superseded the Morauta government’s Medium Term Plan of Action for Public Sector Reform.
These documents define the broad framework for government policies. Within this framework, however, there has been a proliferation of new systems, programs and initiatives addressing particular aspects of the reform process. For example, in presenting the 2004 budget, the then Minister for Finance and Treasury, Bart Philemon, announced that the government’s reform agenda would be supplemented…by a new focus on improving the management of public sector employment and the control of personnel expenditures; restoring the integrity of budget institutions and systems to improve budgetary discipline; and to review the role, functions, and outputs of each spending agency in order to identify ways of improving the allocative and technical efficiencies of public expenditure (Papua New Guinea 2003, 23).
Several new measures were described by the minister, including a Performance Management System for Department Heads, a Medium-term Budget Framework, an Integrated Financial Management System (IFMS), and the creation of a Budget Screening Committee (BSC). (Also see Kua 2006).
The following overview provides a rough guide to recent public sector reforms.
In a foreword to the MTDS, the acting minister for National Planning and Monitoring, Sir Moi Avei, noted that, ‘Since independence, successive governments have prepared many worthy development plans and strategies that have promised to realize our national vision’, but that, while such plans and strategies ‘were often soundly based, they have not been translated into results on the ground’ (MTDS, iv). The MTDS 2005–2010, prepared by the Department of National Planning and Rural Development (DNPRD), seeks to reverse this trend.
The role of the MTDS is defined:
First, to articulate an overarching development strategy that will provide the guiding framework for prioritizing the Government’s expenditure program.
Second, to identify in broad terms, the wider policy framework that will help strengthen the enabling environment for the Program for Recovery and Development.
Third, to improve fiscal governance by strengthening PNG’s Public Expenditure Management (PEM) system (MTDS iii, chapter 1).
The key objectives of the government’s development policies, its expenditure priorities, and the principal elements of a ‘supporting policy environment’ are spelled out in the MTDS (chapters 2, 3), which also lists ten broad ‘guiding principles’ (i–ii). Also noted are some of the constraints upon, and threats to, development; among these, along with poor infrastructure, HIV/AIDS, high population growth, unplanned urbanization and impediments to land utilization, is listed ‘dysfunctional service delivery systems’ (see MTDS, 9–10).[4]
The ability of the government to give effect to the MTDS will depend in part upon whether the programs identified are affordable and sustainable. To this end the MTDS is complemented by a Medium Term Resource Framework (MTRF), designed ‘to integrate the “top-down” resource envelope with the “bottom-up” sector programs’ (MTDS, 52). The ‘“top-down” resource envelope’ is defined by a Medium Term Fiscal Strategy (MTFS) formulated by Treasury for the period 2003–2007.
The implementation of the MTDS also depends on having an effective administrative structure, and the MTDS explicitly recognizes the importance of good governance and credible and stable policies. It devotes some attention to the government’s Public Sector Reform (PSR) program, which, in broad terms, seeks to ‘reduce the cost of government, abolish waste and non-priority activities, improve service delivery and strengthen accountability and other systems of good governance’ (MTDS 2005–2010, v, chapter 5). The PSR program is spelled out in fairly general terms in the Strategic Plan for Supporting Public Sector Reform in Papua New Guinea 2003–2007, and addressed in more detail in the Public Expenditure Review and Rationalisation (PERR) program (both of which are discussed below).
In his foreword to the MTDS, Sir Moi Avei commented: ‘…we can no longer ignore the dysfunctional system of service delivery that has arisen following the 1995 reforms to our system of decentralised government’. Since a large part of governance, including delivery of basic services, is carried out at sub-national level, the performance of government at provincial, district and local level is critical for any program of recovery and development — though it must be observed that problems of service delivery were well in evidence before 1995. With regard to decentralization, the MTDS states: ‘Improving the relationship between the three levels of government will be crucial for the effective implementation of the new MTDS’, and it notes that a number of activities are in place ‘that are designed to identify practical solutions to the functioning of the decentralized system of government’ (MTDS 2005–2010, IV, chapter 4). These are discussed below.
A final chapter of the MTDS discusses the issues of monitoring and evaluation. The MTRF, quarterly budget reviews, and the annual budget documents will form part of the financial monitoring process, but in addition, national departments and agencies, provincial and local-level governments, NGOs and community-based organizations, and other stakeholders ‘will be required to participate’ in monitoring and evaluation. Specific performance indicators (for both the MTDS and the Millennium Development Goals [MDGs] (to which Papua New Guinea is committed as a signatory to the UN Millenium Declaration)[5] were to be prepared by the end of 2005. In a few key sectors (including health and education) performance indicators have already been prepared and incorporated into sectoral plans. Overall responsibility for monitoring and evaluation rests with the DNPRD, which will report through the Central Agencies Coordinating Committee (see below) to the National Executive Council (NEC).
[1] This paper draws on material in May (2006). I am grateful to Kathy Whimp for her comments on a draft of that paper.
[2] In the 2004 Budget Speech, these are restated as ‘(a) promotion of good governance; (b) improving economic management; (c) improving public sector performance; and (d) removing barriers to investment and economic growth’ (Papua New Guinea 2003, 23).
[3] Referring back to the MTDS 1997-2002, the MTDS 2005-2010 (pp.5-6) says, ‘Although the policies and priorities contained in the MTDS 1997-2002 were soundly based, they were not rigorously applied or followed in practice’, partly because there was ‘very little ownership of the MTDS, across all levels of government’. Specifically, the earlier MTDS ‘was poorly integrated with the policies and programs of the provincial and local level governments’.
[4] For a review of the MTDS 2005-2010, and a summary of its predecessors, see Mawuli et al. (2005).
[5] The eight MDGs, to be achieved by 2015, broadly, are: eradicate extreme poverty and hunger; achieve universal primary education for all children ; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, TB and other diseases; ensure environmental sustainability; and develop a global partnership for development. Papua New Guinea is currently behind schedule in achieving the targets (see Millenium Development Goals: Progress Report for Papua New Guinea 2004, and The National 26 September 2005).