Highlights

A complex set of interrelated fragility, violence, and disaster-related drivers and risks undermines inclusive and sustainable development in Papua New Guinea.

Country strategies, buoyed by a 2018 Risk and Resilience Assessment, have increasingly recognized the need to address the drivers of fragility, conflict, and violence (FCV) and to mitigate compound risks wrought by climate change, disasters caused by natural hazards, and FCV drivers. However, despite strategy commitments, FCV issues remain ill-monitored, relevant staff lack access to credible conflict analyses, and disaster and climate risks have not been elevated at the policy level, although they have been recognized.

The World Bank sought to address drivers of urban crime and violence through youth employment programs, which have achieved some employment benefits. However, causal links among skills development, job placement, and crime reduction in targeted neighborhoods are not evident. The intractable and rising challenge of urban violence will require redress through multiple security, justice, and social reforms that exceed the World Bank’s youth employment programs’ labor market incentives.

The Bougainville situation is testing the World Bank’s ability to balance client relations with the need to sustain development gains, including in contested spaces. Contrary to its past efforts, the World Bank Group has distanced itself from the autonomous region in ways that are unaligned with FCV strategy aims.

A complex set of fragility, violence, and disaster drivers and risks undermines inclusive and sustainable development in Papua New Guinea. As identified by the SCD (World Bank 2018a) and featured in the Country Program Evaluation’s framework, compounding and interrelated risks involving the interplay between violence, conflict, disasters, institutional fragility, and governance limit human capital development and constrain investment and growth severely. The country’s ethnic and cultural diversity and the remoteness of many communities have so far stopped any single issue from fostering nationwide conflict, but local ethnic and gender relations and rising numbers of underemployed youth all fuel the endemic daily violence. In Papua New Guinea’s urban settings, underlying ethnic identities also emerge as fault lines for new kinds of violence. Modern politics brings together neotraditional patronage and wider, modern political boundaries that still set clan against clan and village against village, undermining cooperation and sustained service delivery. Papua New Guinea also faces very high natural disaster risks that it is ill-equipped to mitigate. Exposed to earthquakes, tsunamis, volcanoes, cyclones, drought, and flooding, the country is expected to incur (on a long-term average) $85 million per year in losses. This exacerbates preexisting vulnerabilities and can multiply risks, as became apparent in 2018, when slow disaster relief after an earthquake prompted violence. Along with all this, the diverse social traditions of the hundreds of distinct tribal groups create a deeply complex web of conflict, crime, and violence drivers and disaster risks. Although intertribal conflict has decreased overall, interpersonal violence remains high and by some metrics higher than at the start of the evaluation period (IHME 2019).1

World Bank strategies have increasingly recognized the effects of compound or compounding and interrelated fragility, conflict, and disaster risks. Reflecting the poignancy of the Bougainville conflict (1988–98) triggered by grievances over extractive governance issues, the 2007 CAS prioritized support for sound natural resource management and equitable service delivery, including through mining technical assistance and CDD in postconflict areas. It also supported analyses of youth unemployment and urban violence. The 2012 CPS linked FCV drivers to development effectiveness more explicitly. The strategy thus expanded the World Bank’s physical presence in Bougainville and supported a project on youth unemployment to address urban violence. However, FCV analyses were not integrated into engagement or portfolio decision-making. Disaster risks were recognized but not elevated, and climate risks were not analyzed. The period of the 2018 SCD and the 2019 CPF represents an inflection point for FCV analyses. A well-written RRA emphasized the need to address economic volatility, extractive sector governance, limited youth opportunities, weak subnational governance, and multidimensional risks. It recommended support to Bougainville, monitoring emerging conflict risks and applying a peace and inclusion lens to the portfolio. With the aid of the RRA and governance-focused advisory services and analytics, the SCD presented a holistic analysis of the multiple and interrelated FCV and disaster risks that needed to be addressed to support development effectiveness (box 6.1). Accordingly, the 2019 CPF committed to using a “risk-informed approach” by applying an FCV selectivity filter to portfolio decisions and maintaining a watching brief on Bougainville and the resource-rich Southern Highlands. The 2019 CPF also indicated that the World Bank would work closely with the Autonomous Bougainville government and local communities to ensure ownership of development activities and with the UN, other development partners, and nongovernmental organizations to maintain vigilance on the referendum.

Source: World Bank 2019b.

Use of Analyses of Fragility, Conflict, and Violence Issues

FCV issues remain poorly monitored, however, and staff lacked access to credible conflict analyses. The SCD identified violence and conflict as major barriers to development, and the RRA recommended that the World Bank use a fragility lens to ensure that the portfolio is developed (and projects are designed) in line with fragility-reducing aims, including with political economy or conflict analyses or both. As the RRA recommended, applying a fragility lens would include a robust conflict-sensitive results framework with data collection and monitoring systems, and key disaggregated beneficiary indicators and a robust communications strategy, with ongoing stakeholder engagement. However, since its finalization in 2019, the analyses underpinning the RRA have not been made available to many staff engaged in Papua New Guinea, and the promised watching brief on developments in Bougainville and the Central Highlands has never materialized. A 2019 intersectional risk analysis consisting of a national-level analysis and four subregional intersectional risk profiles was also not shared with development partners that expressed interest, even in an abridged format. Interviews with staff showed a high level of interest in integrating FCV considerations into operations better (for example, by applying a project-level peace and conflict lens), but a lack of access to relevant analyses has hindered this. As of May 2023, an RRA update was underway, but to be effective, it will need to develop a clear engagement strategy for the Country Management Unit and operational staff.

Urban Crime and Violence

The World Bank sought to address the complex drivers of urban crime and violence through youth employment programs. The drivers of urban crime and violence are politically and socially complex (box 6.2). Young people are gravitating toward urban centers to pursue better jobs and standards of living, but without the language and practical skills necessary for scarce formal sector jobs, they settle into the fiercely competitive informal sector or turn to crime (World Bank 2019b). The cost of urban crime is estimated at 10 percent of average business profits (Lakhani and Willman 2014). The government’s development strategic plan for 2010–30 states that “80 percent of crimes are committed by young people, and 71 percent of prisoners are below the age of 25 years” (DNPM 2010, 111). The World Bank, through UYEP I (2011; plus additional financing) and UYEP II (2020), posited that a combination of productive activities through temporary employment, increased employability, and attitudinal change through training would lead to “a reduction of [antisocial behavior] (violence and crime)” among youth and thus reduce the impact of crime (World Bank 2020a, 8). The project would measure this outcome through perception surveys capturing both participants and other community members.

Source: World Bank 2019b.

Although UYEP delivered employment benefits, targeting and scale have been challenging, and evidentiary links to reduced crime and violence are weak. The World Bank helped provide job training and work placement for 1,184 youth through UYEP, but implementation was challenging because the program struggled to include and retain entrants from the poorest households. The choice to bypass existing civil society institutions working in this space aligned with World Bank goals to build public institutional capacity, but that choice opened the program up to potentially more forms of political interference in entrant, ward, and company selection. Of the 11,506 entrants, 4,548 were selected for on-the-job training based on their (financial) literacy, 2,890 youth completed this training, 1,184 graduates accessed a paid job, and 1,222 sustained their employment for at least six months after project close. Regarding targeting, the program theory was geared toward prevention, but there is no evidence that the program was designed to effectively recruit and retain youth most likely to engage in criminal activities. In fact, the program broadened the age range because of the recruitment challenges (beyond the average criminal age demographics) and loosened poverty targets. The program did not collect crime data for the neighborhoods, and even though surveys indicated that participants and nonparticipants perceived a reduction in crime, the self-evaluation did not demonstrate causal links.

Supporting the reduction of urban crime and violence requires going beyond providing labor market incentives. Emerging research from West Africa suggests that a combination of financial support (which could include employment) and (behavioral) therapy, among other contextually relevant incentives, has worked to reduce crime and violence among vulnerable youth (Blattman, Jamison, and Sheridan 2017). In its urban resilience evaluation, IEG recommended and management agreed to undertake relevant analytical work to address localized typologies of crime and violence and to assess the mechanisms most effective at reducing crime and violence within specific operations and varying contexts (World Bank 2019a). As UYEP moves into a second phase and expands from Port Moresby to Lae (a city with reportedly twice the murder rate and higher intercommunal tensions; World Bank 2020b), it should strengthen data collection, analysis, monitoring, and evaluation to understand and adapt its approaches related to crime and violence reduction that in similar programs often depend on the viability of civil society organizations and other institutions, including the police.

Bougainville

The Bougainville situation is testing the World Bank’s ability to balance client relations with the need to achieve and sustain development gains in politically contested spaces. The Autonomous Bougainville government has a stated goal of becoming independent by 2027, but it faces substantial challenges because at present rates, it would not be able to raise sufficient state financing. Large parts of the Bougainville population see the referendum as guaranteeing independence. However, per the peace agreement, the national parliament must ratify the outcome of the referendum. Humanitarian and peace-building actors recommend vigilance if parliament allows increased autonomy rather than full independence—one of several likely hybrid scenarios. The World Bank has a unique apolitical position as the only donor not involved in the postwar settlement supporting Bougainville’s economic development. It has historically had a strong physical presence in Bougainville, including supporting postconflict projects on extractive governance and agriculture to counteract the reliance on extractives. Yet as of September 2023, there was only one World Bank national project operating in Bougainville—the Agriculture Commercialization and Diversification Project for Papua New Guinea. Although a relevant mining technical assistance project was prepared by the World Bank, it was dropped because of the inability of the national and regional government to reach agreement on implementation and fiduciary arrangements. A watching brief recommended by the RRA and planned for the CPF has not been conducted. Since the referendum, the World Bank has also not attended Bougainville meetings organized by the UN liaison office.

The World Bank’s small footprint in Bougainville is out of step with the RRA and FCV strategy guidance. The situation in Bougainville is fragile. If Bougainville were to achieve full independence, it would be mired in economic difficulties, including the need to raise revenue; political contestation; and severe service delivery challenges. A hybrid solution would likely give rise to grievances, with latent potential for violence of uncertain extent. Nevertheless, the Bank Group’s FCV strategy recommends engagement, in line with the strategy’s aim of “pivoting to prevention,” beginning with the most basic of aims of having “eyes on the ground” (box 6.3). The World Bank’s historic engagement, focused on extractive governance, nonextractive sources of growth, and women’s empowerment, was highly relevant and of broad scope. As of FY22, only one World Bank agriculture activity is situated in Bougainville. Development gains will be eroded if violent conflict erupts, including the strengthening of social capital achieved through World Bank–supported community-led approaches. Interviews suggest that multiple financing and portfolio factors have contributed to the shift in World Bank presence and that its strategic role needs to be considered more intentionally, with a goal of contributing to its conflict prevention aims.

Source: Independent Evaluation Group.

Addressing Disaster and Climate Change Risks

Papua New Guinea has no national efforts to promote disaster risk reduction, so the World Bank relevantly directed its focus on sector operations but with modest effects. Located in the Pacific Ring of Fire, Papua New Guinea is one of the most disaster-prone countries: it has an 81 percent chance of experiencing a disaster yearly and has some of the highest levels of population exposure to volcanic and earthquake risks (GFDRR 2015). Yet the country lacks coherent national conversation about disaster risks and pays little attention to risk identification, planning, and preparedness, and underinvestment is chronic, perhaps because of the low level of built infrastructure. Institutional issues compound the challenge. The Disaster Assistance Act has not been updated since 1984, the National Disaster Center was placed into the Defense Force and has no budget authority, and the provincial disaster centers are delinked from the National Disaster Center. The World Bank with support through the Global Facility for Disaster Reduction and Recovery analyzed Papua New Guinea’s disaster risk management framework in 2019–21 and produced a diagnostic report and investment plan, but proposed investments—including a catastrophe deferred drawdown option–never materialized.2 Because of the lack of national traction, the World Bank has integrated disaster resilience into some sector operations since FY17 (agriculture, water supply, and transport). It is also increasingly using contingency emergency response components (in water, agriculture, and health operations), but if triggered, these can support disaster response, not risk mitigation.

The World Bank staff has tried to initiate a dialogue among government and UN officials about compounding and interrelated disaster, climate change, and conflict risks, but these issues have not been prioritized amid competing demands. World Bank staff with deep country knowledge conducted a relevant analysis of the links between disaster and conflict risks ahead of the 2019 CPF. The analysis, which included national and provincial risk assessments, showed how slow institutional responses and competition for aid can ignite local grievances, leading to widespread violence. It also demonstrated the inadequacy of treating disaster and climate risks as separate provincial problems. World Bank staff presented the analysis at a joint disaster risk committee of the UN and the government, but no actions have been taken based on this assessment. Moreover, the Country Management Unit’s decision to not provide the analysis even in an abridged format has limited its distribution and influence with donors. Actions to address compounding and interrelated risks would have involved, among other things, pairing provincial-level risk assessments with community activities to support enhanced resilience at the local level.