Looking to make the most of the country’s resource revenues, Papua New Guinea (PNG) is planning to dip into the sovereign wealth fund to generate progress in the health and education sectors. However, current indicators suggest the administration faces an uphill battle.
On October 8, the minister of health, Michael Malabag, pledged to initiate important administrative and legislative reforms to improve the health care system, which has come under criticism in recent months from non-governmental organisations and observers.
After a meeting with Prime Minister Peter O'Neill, Malabag told media that his ministry plans to introduce free health care, set aside a PGK20m ($9.7m) allocation in the 2013 budget to combat tuberculosis, and step up a recruitment drive for professionals such as doctors, nurses and technical personnel. He also promised measures to combat the sale of fake pharmaceutical drugs and to improve the salaries of church health workers.
The reforms are part of Medium Term Development Plan and Strategic Implementation Plan. Eight "key result areas" have been identified as part of the PGK14.1bn ($6.8bn) reform initiative, which is linked to the National Health Plan. These include improving services delivery, strengthening partnerships with stakeholders, tightening health systems and governance, advancing child survival and maternal health, and reducing communicable diseases.
The ministry will likely turn to the sovereign wealth fund (SWF), established in February to manage revenue from an expected resources boom, to fund the reforms. Rimbink Pato, the minister of foreign affairs and immigration, told the UN General Assembly in September that the boost the economy expects, particularly from the $19bn Exxon-led liquefied natural gas plant, would enable the country to improve social indicators such as literacy levels, maternal and infant mortality rates, as well as law enforcement.
The government is already studying the effect its spending so far has had on health and education. In October, Port Moresby launched a major education and health facility survey that will revisit schools and health centres surveyed 10 years ago in a joint PNG-based National Research Institute/World Bank effort. The aim is to see what effect the massive increase in government spending on health and education – from one-third of all spending 10 years ago to one-half today – has had over the past decade.
An early target for the SWF funds may be improving health provision outside towns. According to a recent report by Global Integrity, a non-profit organisation that tracks governance and corruption around the globe, “[Health care] problems in PNG are compounded by a decentralised and fragmented health care system, which has led to a lack of coordination and oversight of responsibilities between national and provincial/district government agencies, hospitals, health clinics and civil society organisations.”
Likely in an attempt to ease such fragmentation, in late October Malabag told parliament that a new Provincial Health Authorities Act of 2007 will allow for a "single and streamlined" health system to be established in the provinces, local media reported.
"This law will see public hospitals and provincial health services come under a single authority,” he said. “This reform will improve planning and coordination of health service delivery by having a single authority managing the human resources and finances in the provinces.”
In September, however, Australia-based AusAID noted the scale of the challenge, revealing in an annual report that PNG was off track on its Millennium Development Goals, and that its health and education indicators were the lowest in the Asia-Pacific region.
The country’s Human Development Index has fallen to 153 out of 187 countries in 2012 from 132 in 2003, with life expectancy just 62.8 years and adults attending an average of 4.3 years of school. As of 2011, infant mortality rates also averaged a record high 42.05 deaths per 1000.
However, the government is confident the SWF can make a difference, estimating that some PGK100bn ($48.5bn) will be initially deposited. Malabag's reform plan will account for 27% of the government's overall recurrent budget to be allocated to the Health Department.
Education will also need much attention from the SWF funds. According to data from the PNG National Statistical Office, over one-third of school-aged youths have not received any form of formal education.
The treasury and finance departments have been told to release PGK500m ($242.5m) for a free education programme announced in 2011, with tuition fees paid by the government for children up to year 10. However, some critics say there were too many delays in ensuring subsidies reach the schools in time to make a difference for the 2013 school year, while others say that to be implemented correctly the government must provide more scholarships for student teachers.
Proper management of the SWF can indeed prove crucial in turning around PNG’s health and education sectors. As the government works out the specifics of where funding will be directed, the private sector’s assistance and expertise could also prove beneficial.