[{"bbox": [96, 152, 1138, 287], "category": "Text", "text": "contributes to the EU Gender Action Plan III (GAPIII) and particularly to the thematic area of engagement \"Promoting equal participation and leadership\". It supports Papua New Guinea's gender equality policy and its National Strategic Plan \"Vision 2050\" which aims to increase equality between people, more equal distribution of resources and opportunities, particularly emphasizing women and youth roles and enhanced participation in the society."}, {"bbox": [85, 319, 304, 352], "category": "Section-header", "text": "# 2 RATIONALE"}, {"bbox": [85, 386, 216, 414], "category": "Section-header", "text": "## 2.1 Context"}, {"bbox": [96, 432, 412, 457], "category": "Section-header", "text": "### 1. Political and Financial Outlook"}, {"bbox": [96, 469, 1136, 814], "category": "Text", "text": "With 80% of the Pacific countries' landmass, population and economy, large reserves in critical mineral resources, and as a focus of intensifying competing geo-political interests, the importance of PNG for the EU is growing. Though affected by various layers of fragility, PNG adheres to EU fundamental values, human rights, democracy and the rule of law, and has recently (January 2022) abolished the death penalty. The most recent Parliamentary elections took place in mid-2022, without addressing the severe gender inequality in the legislative branch. Despite some shortcomings, the overall democratic and civilian-led political process is considered not to be under threat. Covid-19 hit PNG as the government started implementing wide-ranging macroeconomic reforms under an IMF Staff Monitored Programme. To mitigate the impact of Covid-19 on the economy, PNG opted for expansionary macroeconomic policies, mainly through an ambitious fiscal stimulus package and an increase of capital expenditure. Despite the crisis, the overall financial situation remains under control. According to the IMF, public debt is sustainable, conditional on implementing prudent fiscal policies. PNG's Medium Term Fiscal Strategy 2020-2024 aims at accelerated fiscal consolidation. The EU disbursed the first ever budget support tranche to PNG in December 2021."}, {"bbox": [96, 841, 339, 869], "category": "Section-header", "text": "### 2. Specific/ sector context"}, {"bbox": [96, 879, 1136, 1223], "category": "Text", "text": "PNG is among the countries with the largest gap worldwide between its ranking in income per capita (129th) and in human development (155th), indicating a poor state of governance. The insufficient public spending to realise people's basic rights affects more heavily groups in more vulnerable situations, in particular children, youth and women. PNG ranks 135 out of 156 countries in the World Economic Forum Global Gender Gap Report 2021. Strengthening good governance, gender equality and human rights is therefore indispensable to transform PNG's immense development potential into more inclusive service delivery and progress towards the sustainable development goals, ensuring that no one is left behind. PNG's national development plans, such as the Medium Term Development Plan (MDTP) III, include ambitious strategies to make substantial improvements in governance and addressing corruption. However, public financial management and integrity/accountability in the public sector remain very weak at national and subnational levels, due to lack of capacities, institutional dysfunctionalities and vested interests. Nevertheless, in both areas progress has been made, not least evidenced by the improvement of PNG's Transparency International Corruption Perception Index ranking from 142nd in 2020 to 124th in 2021."}, {"bbox": [96, 1250, 1136, 1624], "category": "Text", "text": "**Pillar 1: Public financial management (PFM):** GoPNG recognises that sound public financial management is critical to achieve SDGs and its national development goals. Following the 2015 Public Expenditure and Financial Assessment (PEFA) and the adoption of the PFM Reform Road Map (2015-2018), the EU provided significant support to the achievement of key milestones of the PFM reform roadmap. PEFA II was carried out in 2019/2020 and a subsequent reform roadmap was adopted in June 2020. With some improvement in eleven and deterioration in four indicators (using comparable performance indicators and previous methodology 2011), PEFA 2019 highlights important shortcomings in all PFM dimensions, including the audit function and legislative scrutiny of public expenditure, which need to be addressed in order to improve the transparency, integrity and effectiveness of Government spending. The weaknesses identified by the PEFA will be addressed through support to the implementation of the PFM Improvement roadmap (2020-2024) approved in 2021 supported by the EU and other donors. Development partners coordinate with the Department of Finance (DoF) in their respective areas of support. Several important pieces of legislation have been adopted, including with the support of the EU, for instance the Public Finance Management Act (PFMA) and its manual, the improvement of IFMS Chart of Accounts, the preparation of the Non Tax Revenue Bill (NTRB), the review of Statutory Bodies, the roll out of the"}, {"bbox": [1037, 1681, 1144, 1707], "category": "Page-footer", "text": "Page 4 of 22"}]