FOR OFFICIAL USE Report No - World Bank · Report No: PAD3245 ... BLST Basic Life Skills and Job...

FOR OFFICIAL USE ONLY Report No: PAD3245

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 25.5 MILLION

(US$35 MILLION EQUIVALENT)

TO THE

INDEPENDENT STATE OF PAPUA NEW GUINEA

FOR AN

URBAN YOUTH EMPLOYMENT PROJECT II

March 28, 2020 Social, Urban, Rural And Resilience Global Practice East Asia And Pacific Region

This document has a restricted distribution and may be used by recipients only in the performance of

their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective {January 31, 2020})

Currency Unit = PGK

PGK3.41 = US$1

US$1.37695 = SDR 1

FISCAL YEAR

January 1 ‐ December 31

Regional Vice President: Victoria Kwakwa

Country Director: Michel Kerf

Regional Director: Benoit Bosquet

Practice Manager: Susan S. Shen

Task Team Leader: Sonya Woo

ABBREVIATIONS AND ACRONYMS

AGO Auditor General’s Office

ALMP Active Labor Market Program

BLST Basic Life Skills and Job Readiness Training

BoQ Bill of Quantities

BSP Bank South Pacific

CCP Community Consultation Plan

CFP Country Financing Parameters

CPF Country Partnership Framework

CPS Country Partnership Strategy

CV Curriculum Vitae

DA Designated Account

DFAT Department of Foreign Affairs and Trade, Australia

DFCDR Department for Community Development and Religion

DLIR Department of Labor and Industrial Relations

DNPM Department of National Planning and Monitoring

DOT Department of Treasury

DPLGA Department of Provincial and Local Level Government Affairs

DSP Development Strategic Plan

ESMF Environmental and Social Management Framework

ESMP Environmental and Social Management Plan

ESW Extended Skills Work

FM Financial Management

FMM GoPNG’s Financial Management Manual

FSV (NCDC) Family and Sexual Violence Secretariat

FUS Follow‐Up Survey

GBV Gender Based Violence

GDP Gross Domestic Product

GoPNG Government of Papua New Guinea

IA Implementing Agency

IDA International Development Association

IFMIS Integrated Financial Management Information System

IRI Intermediate Results Indicator

IPP Indigenous Peoples Plan

JICA Japan International Cooperation Agency

LCA Lae City Authority

M&E Monitoring and Evaluation

MIS Management Information System

MOU Memorandum of Understanding

MTDP III Medium Term Development Plan III 2018‐2022

MTR Mid‐Term Review

NATTB National Trade and Testing Board

NCD National Capital District

NCDC National Capital District Commission

NEET Not in Education, Employment or Training

NTC National Training Council

NYDA National Youth Development Authority

OJT On‐the‐Job Training

PAD Project Appraisal Document

PCO Program Coordination Office

PDO Project Development Objective

PGK Papua New Guinea Kina

PMU Project Management Unit

PNG Papua New Guinea

POM Project Operations Manual

PPSD Project Procurement Strategy for Development

PSC Project Steering Committee

RFP Request for Proposal

RPF Resettlement Policy Framework

SDR Special Drawing Rights

SPD Standard Procurement Documents

STEP Systematic Tracking of Exchanges in Procurement

TOC Theory of Change

ToT Training of Trainers

TVET Technical and Vocational Education and Training

UNICEF United Nations International Children's Emergency Fund

US$ United States Dollars

UW&S Urban Works and Services

UYEP I Urban Youth Development Project I

UYEP II Urban Youth Development Project II

WB World Bank

YJC Youth Job Corps

The World Bank Urban Youth Employment Project II (P166420)

TABLE OF CONTENTS

DATASHEET ............................................................................................................................. 1

I. STRATEGIC CONTEXT ........................................................................................................ 8

A. Country Context ................................................................................................................................ 8

B. Sectoral and Institutional Context .................................................................................................... 9

C. Relevance to Higher Level Objectives ............................................................................................. 14

II. PROJECT DESCRIPTION ................................................................................................... 15

A. Project Development Objective ..................................................................................................... 15

B. Project Components ....................................................................................................................... 15

C. Project Beneficiaries ....................................................................................................................... 23

D. Results Chain .................................................................................................................................. 24

E. Rationale for Bank Involvement and Role of Partners ................................................................... 25

F. Lessons Learned and Reflected in the Project Design .................................................................... 26

III. IMPLEMENTATION ARRANGEMENTS .............................................................................. 27

A. Institutional and Implementation Arrangements .......................................................................... 27

B. Results Monitoring and Evaluation Arrangements ......................................................................... 29

C. Sustainability ................................................................................................................................... 29

IV. PROJECT APPRAISAL SUMMARY ..................................................................................... 30

A. Technical, Economic and Financial Analysis ................................................................................... 30

B. Fiduciary .......................................................................................................................................... 31

C. Safeguards ...................................................................................................................................... 32

V. KEY RISKS ....................................................................................................................... 33

VI. RESULTS FRAMEWORK AND MONITORING ..................................................................... 38

ANNEX 1: Implementation Arrangements and Support Plan ........................................... 50

ANNEX 2: Economic Analysis .......................................................................................... 65

ANNEX 3: UYEP I Impact Evaluation and Results Working Paper Executive Summary ..... 69


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DATASHEET

BASIC INFORMATION BASIC INFO TABLE

Country(ies) Project Name

Papua New Guinea Urban Youth Employment Project II

Project ID Financing Instrument Environmental Assessment Category

P166420 Investment Project Financing

B‐Partial Assessment

Financing & Implementation Modalities

[ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC)

[ ] Series of Projects (SOP) [✓] Fragile State(s) [ ] Disbursement‐linked Indicators (DLIs) [ ] Small State(s)

[ ] Financial Intermediaries (FI) [ ] Fragile within a non‐fragile Country

[ ] Project‐Based Guarantee [ ] Conflict

[ ] Deferred Drawdown [ ] Responding to Natural or Man‐made Disaster

[ ] Alternate Procurement Arrangements (APA)

Expected Approval Date Expected Closing Date

22‐Apr‐2020 30‐Sep‐2025

Bank/IFC Collaboration

No

Proposed Development Objective(s) The development objective is to improve the capacity of participating young men and women in project areas to engage in productive income generating activities. Components Component Name Cost (US$, millions)


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Youth Job Corps 18.30

Skills Training 8.90

Referral Services and Monitoring and Evaluation 3.20

Project Management 4.60

Organizations Borrower: Independent State of Papua New Guinea

Implementing Agency: National Capital District Commission Lae City Authority

PROJECT FINANCING DATA (US$, Millions)

SUMMARY‐NewFin1

Total Project Cost 35.00

Total Financing 35.00

of which IBRD/IDA 35.00

Financing Gap 0.00

DETAILS‐NewFinEnh1

World Bank Group Financing

International Development Association (IDA) 35.00

IDA Credit 35.00

IDA Resources (in US$, Millions)

Credit Amount Grant Amount Guarantee Amount Total Amount

Papua New Guinea 35.00 0.00 0.00 35.00

National PBA 35.00 0.00 0.00 35.00

Total 35.00 0.00 0.00 35.00

Expected Disbursements (in US$, Millions)


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WB Fiscal Year 2020 2021 2022 2023 2024 2025 2026

Annual 0.00 4.87 4.94 6.82 8.87 8.24 1.27

Cumulative 0.00 4.87 9.81 16.62 25.49 33.73 35.00

INSTITUTIONAL DATA

Practice Area (Lead) Contributing Practice Areas

Social Education, Fragile, Conflict & Violence, Gender, Social Protection & Jobs

Climate Change and Disaster Screening

This operation has been screened for short and long‐term climate change and disaster risks

SYSTEMATIC OPERATIONS RISK‐RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance Substantial

2. Macroeconomic Substantial

3. Sector Strategies and Policies Moderate

4. Technical Design of Project or Program Moderate

5. Institutional Capacity for Implementation and Sustainability Substantial

6. Fiduciary High

7. Environment and Social Moderate

8. Stakeholders Substantial

9. Other

10. Overall Substantial


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COMPLIANCE

Policy Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✓] No Does the project require any waivers of Bank policies?

[ ] Yes [✓] No Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔ Performance Standards for Private Sector Activities OP/BP 4.03 ✔

Natural Habitats OP/BP 4.04 ✔

Forests OP/BP 4.36 ✔

Pest Management OP 4.09 ✔

Physical Cultural Resources OP/BP 4.11 ✔

Indigenous Peoples OP/BP 4.10 ✔ Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔

Projects on International Waterways OP/BP 7.50 ✔

Projects in Disputed Areas OP/BP 7.60 ✔

Legal Covenants

Sections and Description The Recipient shall maintain, or caused to be maintained, throughout the Project implementation period, a Project Steering Committee, with terms of reference, composition and resources satisfactory to the Association, which shall be co‐chaired by DPLGA and NYDA, and comprised of representatives from the Project Implementing Entities and other representatives set forth in the Project Operations Manual. (Section I.A.1 of Schedule 2 to the Financing Agreement). Sections and Description NCDC shall maintain, throughout the Project implementation period, a Project Coordination Office within NCDC, with terms of reference, composition and resources satisfactory to the Association, which shall be co‐located with the NCDC Project Management Unit, led by a Project coordination manager and supported by adequate staff and


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personnel shared with the NCDC Project Management Unit, each with terms of reference, qualifications and experience satisfactory to the Association. (Sections I.A.1 and 2 of the Schedule to the NCDC Project Agreement). Sections and Description NCDC shall maintain, throughout the Project implementation period, a NCDC Project Management Unit within NCDC, with terms of reference, composition and resources satisfactory to the Association, which shall be led by a Project manager and supported by a senior Project accountant and a procurement officer, each with terms of reference, qualifications and experience satisfactory to the Association. (Sections I.A.3 and 4 of the Schedule to the NCDC Project Agreement), Sections and Description LCA shall maintain, throughout the Project implementation period, an LCA Project Management Unit within LCA, with terms of reference, composition and resources satisfactory to the Association, which shall be led by a Project manager, with terms of reference, qualifications and experience satisfactory to the Association. (Sections I.A.1 and 2 of the Schedule to LCA Project Agreement). Sections and Description By not later than thirty days from the Effective Date, the Recipient shall cause the Project Implementing Entities, DPLGA and NYDA to, and the Project Implementing Entities shall, enter into a memorandum of understanding, in form and substance satisfactory to theAssociation, setting forth the understanding on the cooperation, implementation arrangements and roles and responsibilities of each party with respect to the implementation of the Project. (Section I.A.2 of Schedule 2 to the Financing Agreement; Section I.A.5 of the Schedule to the NCDC Project Agreement; and Section I.A.3 of the Schedule to the LCA Project Agreement). Sections and Description To facilitate the carrying out of LCA’s Respective Part of the Project, the Recipient and/or LCA, as applicable, shall, by not later than six months after the Effective Date, take the following actions: (a) the Recipient shall furnish to the Association the document(s), in form and substance satisfactory to the Association, demonstrating that LCA is authorized to undertake its roles and responsibilities under its Respective Part of the Project pursuant to the LCA Act and/or other relevant legislation; (b) the Recipient shall cause LCA to enter into a Project Agreement, in form and substance satisfactory to the Association; (c) the Recipient and LCA shall enter into a Subsidiary Agreement, under terms and conditions approved by the Association; and (d) the Recipient shall take all measures required on its part to cause LCA to, and LCA shall: (i) take the following actions to become operational: (A) appoint an accountant or accounting firm to perform its financial and accounting functions, and ensure that such accountant or accounting firm has commenced the work; (B) establish a bank account for its operations; (C) implement a functional accounting system; and (D) secure adequate funding to support its operations; and (ii) thereafter maintain such measures throughout the Project implementation period, all in a manner satisfactory to the Association. (Section I.C of Schedule 2 to the Financing Agreement and Section I.B of the Schedule to the LCA Project Agreement). Sections and Description The Project Implementing Entity (NCDC) shall, by not later than one month after the Effective Date, update its financial management and information system for managing Project accounting and reporting, in a manner satisfactory to the Association. (Section I.B.2 of the Schedule to NCDC Project Agreement).


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Sections and Description The Recipient shall cause the Project Implementing Entities to, and the Project Implementing Entities shall, by not later than three months after the Effective Date, prepare and adopt the Project Operations Manual accepted by the Association. The Recipient and the Project Implementing Entities shall ensure that the Project, or its Respective Part of the Project, as applicable, is carried out in accordance with the Project Operations Manual. (Section I.D of Schedule 2 to the Financing Agreement; and Section I.C of the Schedule to the Project Agreements). Sections and Description The Recipient shall cause the Project Implementing Entities to, and LCA shall, by not later than November 1 of each year, prepare and furnish to NCDC for consolidation, information on the Annual Work Plan and Budget with respect to its Respective Part of the Project, and NCDC shall, by not later than December 1 of each year, prepare and furnish to the Association for its review and no‐objection, an Annual Work Plan and Budget for the Project. The Recipient and the Project Implementing Entities shall ensure that the Project or its Respective Part of the Project, as applicable, is implemented in accordance with the Annual Work Plan and Budget accepted by the Association for the respective fiscal year (Section I.E of Schedule 2 to the Financing Agreement; and Section I.D of the Schedule to the Project Agreements). Sections and Description The Recipient shall carry out jointly with the Association and the Project Implementing Entities, not later than three years after the Effective Date, or such other period as may be agreed with the Association, a Mid‐Term Review of the Project. (Section II.2 of Schedule 2 to the Financing Agreement; and Section II.B of the Schedule to the Project Agreements). Conditions Type Description

Disbursement No withdrawal shall be made under Category (1) unless and until the Association is satisfied

that the Project Implementing Entities have adopted the Project Operations Manual, in form

and substance satisfactory to the Association. (Section III.B.1(b) of Schedule 2 to the

Financing Agreement). Type Description


that: (i) the Project Implementing Entities have adopted the Project Operations Manual, in

form and substance satisfactory to the Association; (ii) the Recipient has furnished to the

Association the document(s), in form and substance satisfactory to the Association,

demonstrating that LCA is authorized to undertake its roles and responsibilities under its

Respective Part of the Project pursuant to the LCA Act and/or other relevant legislation; (iii)

the LCA Project Agreement and the LCA Subsidiary Agreement have been entered into, and

the Association has received legal opinion(s) with respect to these agreements; and (iv) LCA

has furnished to the Association the evidence to demonstrate that all measures set forth in

Section I.C.1(d)(i)(A) to (D) of Schedule 2 to the Financing Agreement for LCA to become

operational have been completed, all in a manner satisfactory to the Association. (Section


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III.B.1(c) of Schedule 2 to the Financing Agreement). Type Description


that: (i) the Recipient has furnished to the Association the document(s), in form and

substance satisfactory to the Association, demonstrating that LCA is authorized to undertake

its roles and responsibilities under its Respective Part of the Project pursuant to the LCA Act

and/or other relevant legislation; (ii) the LCA Project Agreement and the LCA Subsidiary

Agreement have been entered into, and the Association has received legal opinion(s) with

respect to these agreements; and (iii) LCA has furnished to the Association the evidence to

demonstrate that all measures set forth in Section I.C.1(d)(i)(A) to (D) of Schedule 2 to the

Financing Agreement for LCA to become operational have been completed, all in a manner

satisfactory to the Association. (Section III.B.1(d) of Schedule 2 to the Financing Agreement).


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I. STRATEGIC CONTEXT

A. Country Context 1. Papua New Guinea (PNG) is the largest country in the Pacific sub‐region with a population of just under nine million. While the country has made some progress, economic growth and productivity is partly constrained by a low skilled workforce. PNG’s economy is dominated by the agricultural, forestry, and fishing sector, where most of the labor force is engaged, and mining sector, which has provided significant growth over the past decade. Despite reasonable Gross Domestic Product (GDP) growth rates1, and the accumulation of natural resource wealth, which has allowed PNG to obtain Middle Income Country status, private investment is low. Since Independence, real GDP per capita has increased by only 0.8 percent per year, which is low in comparison to other Middle Income Country resource exporters. Employment in the mining sector only accounts for about 1 percent of total employment; and employment in the private sector accounts for less than 20 percent.2 Across the country, the number of jobs in the formal sector has fallen by 10 percent over the last four years.3 Two‐thirds of the formal sector jobs are in the private sector (heavily concentrated in the wholesale and retail trade sector and construction), with the remaining in the public sector.4 There are also large skill shortages in a variety of trades, such as carpentry, hospitality, retail and office administration.5 Most people rely on the informal economy and non‐resource (agricultural) sector for their livelihoods. 2. The relatively low growth performance of the non‐resource sector has limited inclusivity in PNG’s growth performance. While recognizing significant data gaps, PNG has considerable levels of poverty and suffers from poor development outcomes. The 2010 Household Income and Expenditure Survey reveals that 38 percent of the population lived below the internationally recognized extreme poverty line of US$1.90 per day.6 PNG’s Human Development Index (HDI) rank, was 154 in 2015, the second lowest in the Pacific region. The country is also vulnerable to natural hazards.7 These include floods, droughts, landslides and sea‐level rise, which have affected the agriculture and fisheries sectors, leading to lower economic growth and negatively impacting the most vulnerable populations. 3. In PNG, poverty is overwhelmingly a rural phenomenon, but urban poverty is rising faster.8 Almost 90 percent of the poor in PNG live in rural areas and Papua New Guineans engaged in agricultural activities are much more likely to be poorer than the rest. However, in urban areas, poverty tends to be concentrated in and around urban settlements, which are those areas with particularly limited access to public services and facilities. The increase in poverty among urban households reflects the rising urbanization rate coupled with limited gainful employment opportunities.

1 The economy has more than tripled in size and real GDP growth has averaged 3.4 percent per year since independence in 1975. 2 World Bank, 2017, Systematic Country Diagnostic – PNG. 3 BPNG 2018, UNFPA 2014. 4 NSO 2013, Jones and McGavin 2015. 5 Imbun, Ben (2015), Supporting Demand Led Vocational Skills Development in Papua New Guinea: A Labour Market Approach, Study prepared for Human Resources Development Programme Phase 2 (HRDP2), December 2015. 6 NSO 2012, PNG Household Income and Expenditure Survey, 2009‐2010. 7 The University of Notre Dame’s Global Adaptation Initiative ranks PNG 173 out of 181 countries for its vulnerability and readiness to the challenges of climate change. 8 World Bank, 2017, Systematic Country Diagnostic – PNG. Urban poverty has experienced a larger increase (5 percentage points) than rural poverty (3 percentage points) since 1996.


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B. Sectoral and Institutional Context 4. Related to the recent lackluster performance of the economy and non‐resource sector, limited economic opportunities for youth, gender inequity, and gender based violence (GBV) are key impediments to reducing poverty and boosting shared prosperity.9 Youth are the dominant demographic group in PNG, and a growing proportion of the total population are urban youth.10 It is estimated that 67 percent of the country’s population is below 35 years of age.11 Available evidence suggests youth move to urban locations to pursue livelihood opportunities, although schooling and other social factors serve as important “pull” factors.12 They are disproportionately disadvantaged by poverty, limited economic opportunities, poor human capital development, increasing social pathologies, and risky behaviors. 5. Certain characteristics set urban youth apart from other groups. Urban youth are more likely to be: poor, living in settlements, migrants from other areas, living on the streets, in‐conflict with the law, living with disability,13 HIV14 or tuberculosis, serving as sex workers, and experiencing high levels of GBV.15 These groups are among the most stigmatized, facing difficulties in accessing state services and entering the labor market. Crime and victimization rates in PNG are among the highest in the world with Lae and the National Capital District (NCD) at the top end with 66 and 33 homicides per 100,000 population, respectively, reported in 2010.16 The Development Strategic Plan (DSP) 2010‐2030 states that within PNG, “80 percent of crimes are committed by young people and 71 percent of prisoners are below the age of 25 years.” High crime rates have affected the business and investment climate in PNG and the economic costs and longer‐term social impacts of crime and violence are substantial as business owners and employees have stressed that this continues to effectively limit them from operating to their full potential.17 High levels of crime and violence create fear that constrains the mobility of staff and clients, erodes trust, and reinforces stigma toward certain groups perceived to be dangerous, especially youth. 6. About one in four urban residents are estimated to be not in Education, Employment or Training (NEET) but urban youth are more likely to be unemployed and lacking basic education, which are key determinants for transitioning out of poverty.18 Youth are first and foremost preoccupied with getting a job, whatever their status. However, they do not meet the prequalification requirements for vocational or other training; and do not have access to the basic services and economic opportunities that should be available to them in a lower‐middle income country such as PNG. Currently, there are only limited places available at technical colleges and universities (just over 5,000 across the country19). It is estimated that about 80,000 school leavers enter the labor force each year, but only 10,000 jobs are created.20 The

9 World Bank, 2017, Systematic Country Diagnostic – PNG. 10 Jones, P. and Kep, M. 2012. Understanding Urbanization in the PNG Context. 11 Ivaschenko et al., 2017, Can public works programs reduce youth crime? Evidence from PNG’s UYEP. 12 Kanaparo, P., J. Ryel, B. Imbun, and J. Jacka, 2014. Urban Youth Employment Study in Selected Urban Centres in PNG. 13 WHO 2011, World Report on Disability. While there is no available data, the WHO estimates about 15 percent of the population in PNG has some form of disability and these groups tend to find themselves even more isolated in urban areas without family support. 14 UNAIDS, 2016. HIV prevalence data suggests that amongst the population, 0.9 percent are HIV positive, and rates are higher for women at 1.1 percent. Another group particularly at risk are sex workers with an estimated prevalence rate of 17.8 percent. 15 Evans, D. 2018. Draft Youth Scoping Study. 16 Law and Justice Sector Secretariat Monitoring and Evaluation Unit (2010). 17 Lakhan, S and Willman, A (2014), The Socio‐economic Costs of Crime and Violence in Papua New Guinea, Recommendations for Policy and Programs. Private security represents a significant and growing expense: more than two‐thirds of businesses employ private security staff and spend an average of 5 percent of their annual costs on this, compared to an average of 3.2 percent for firms in East Asia overall. 18 Evans, D. 2018. Draft Youth Scoping Study. 19 Australian Council for Educational Research, 2014, Research into the Financing of Technical and Vocational Education and Training in the Pacific, PNG Country Report. 20 National Strategic Plan Taskforce, Government of Papua New Guinea (2011).


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situation is particularly acute in cities, as youth migrate to urban centers in search of better job opportunities. Among young people aged 15 to 24 years in Port Moresby, 29 percent were estimated to live on less than US$3.10 per day in 2009/2010, and 31 percent were unemployed.21 This number is set to increase by more than 50 percent over the next 25 years.22 Youth are generally at a disadvantage when competing for jobs, compared to older and more experienced workers. Due to shortcomings of the school system, many young people leave school without basic cognitive and social skills. Since they also lack work experience, their employability is low. Those that are employed, and in the informal sector, are usually in low paying jobs and lack productivity. A 2014 survey of youth reported 58 percent have dropped out of school or tertiary education, with graduation rates for young men almost doubling that of young women at the secondary level.23 In 2012, 82 percent of students assessed were not attaining expected levels of literacy, while 64 percent were not attaining expected levels of numeracy.24 Particularly in technical and vocational areas, the quality of training is below what the PNG economy requires, due to numerous factors including poor training facilities and teacher quality. Various studies have drawn attention to the mismatch between training provided by Technical and Vocational Education And Training (TVET) institutions and employers’ needs in PNG.25 It is likely that the formal economy would be able to absorb a larger number of graduates if they had the “right skills.”26 Therefore, despite limitations in the job market, reports by employers suggest there is opportunity for filling and creating more jobs, and, consistent with global evidence,27 incorporating a combination of soft and practical skills training in all stages of the work cycle is at least as important as building technical skills.28 7. There are also gender disparities across all sectors, including a gender gap in access to paid work. UNDP’s Gender Inequality Index (GII) placed PNG at 141st place out of 156 countries in 2015.29 Women in PNG suffer from gender inequity in terms of their: (i) access to endowments such as education and health, (ii) access to economic opportunities, and (iii) voice and agency. According to the most recent data available, only 27 percent of the labor force were women in 2011. The formal economy workforce comprised 261,682 men and 99,050 women but women are three times more likely than men to work in the informal sector.30 More men were employed in construction, while the education industry employed the largest number of women (22 percent of women).31 There are very few females in jobs and training for the construction, vehicle, electrical and metal‐working trades. Two colleges which specialize mainly in these trades: Port Moresby Technical College, which reported that females comprised 11 percent of its students; and Mt Hagen Tech, which reported that the proportion was even lower at six percent.32 In 2016, women in the formal sector reported their average

21 Ivaschenko et al., 2017, Can public works programs reduce youth crime? Evidence from PNG’s UYEP. 22 United Nations Population Fund (UNFPA) (2018), Data, available at: https://www.unfpa.org/data 23 Kanaparo, P., J. Ryel, B. Imbun, and J. Jacka, 2014. Urban Youth Employment Study in Selected Urban Centres in PNG. 24 SPC 2012, Pacific Islands Literacy and Numeracy Assessment. http://www.forumsec.org/resources/uploads/attachments/documents/2014FEdMM.03_Attachment_PILNA_Rpt.pdf 25 Parker, J., J. Arrowsmith, D. Tippin, M. Nemani, with L. Marai (2012), Situational Analysis of Employment Policies in Papua New Guinea. A Report Commissioned by the International Labour Office (ILO). 26 Department of Higher Education, Research, Science and Technology (DHERST) (2015), National Higher and Technical Education Plan, 2015 ‐ 2024, Port Moresby: DHERST. 27 Fox, L and Kaul, U, 2017, The evidence is in: How should youth employment programs in low income countries be designed? 28 Deloitte Touche Tomatsu and UNDP 2017, Fulfilling the Land of Opportunity: How to Grow Employment in PNG. 29 At the core of violence dynamics is gender inequality. Dominant gender identities (in particular, dominant models of masculinity) that link together being a man with taking risks, using violence, and dominating women are risk factors for violence. In addition, children both girls and boys experiencing or witnessing violence during their childhood, often at home, have a higher probability to become perpetrators or victims of violence when adults, suggesting that the patriarchal system that supports gender inequality and violence against women also leads to the inter‐generational transmission of violence. 30 NSO 2010. 2009‐2010 Papua New Guinea HIES: Summary Tables. International Labour Organisation (ILO) (2016), Women at Work – Trends, Geneva: ILO. 31 NSO 2013, Jones and McGavin 2015. 32 https://dfat.gov.au/about‐us/publications/Documents/financing‐of‐tvet‐in‐png.pdf


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monthly pay was less than half that of men’s income.33 Women also face both structural and circumstantial barriers in accessing and controlling finances, which limits their ability to grow businesses and make financial decisions that affect them and their families.34 This is reflected in the fact that women have significantly lower levels of financial inclusion than men (holding just over one‐third of bank accounts).35 Gender inequities remain pervasive, partly because of widespread violence against women. Women in PNG are also victims of some of the highest levels of GBV in the world. Médecins Sans Frontières suggests that 70 percent of women in PNG experience some degree of physical or sexual assault in their lifetime.36 In the same way that crime has affected the business climate, GBV is intruding into the workplace and exacting a heavy toll on the economy as economic productivity and accumulation of human capital is directly impacted due to related absenteeism and time taken to provide support for coworkers affected by GBV.37 8. There are policies and programs that provide a range of “just‐in‐time” support for young people but no impact evaluations have been carried out to date, making it difficult to assess their efficacy, value for money and scalability. PNG’s National Youth Policy (NYP) reaffirms the importance of youth in national development planning; and the Vision 2050, launched in 2009, aspires to improve PNG’s human development outcomes and prosperity by improving human capital development, gender, youth and people empowerment as one of seven pillars. The DSP 2010‐2030 provides the Government of Papua New Guinea (GoPNG)’s blueprint for achieving this, with a strong focus on employment, secondary education for all, and halving the rate of youth crime. Complementing these priorities, GoPNG’s focus continues to be on promoting nutrition through its 2016‐26 National Nutrition Policy due to concerns regarding the cognitive impact of stunting as well as job creation and economic growth. The Medium Term Development Plan III 2018‐202238 focuses on Youth and Employment under Priority Development Agenda 3 where it seeks to develop “a vibrant and productive youth that has career opportunities, skills, good education, moral values and respect.” GoPNG seeks to stimulate economic growth through the development of small to medium enterprises (SMEs) as well as investments in the agriculture, tourism, and livestock industries. There are also a range of youth and community programs currently in operation that range in size and scale. A National Youth Employment Framework, prepared by the National Youth Development Authority (NYDA), was approved by GoPNG in March 2018. The Department for Community Development and Religion (DFCDR), is supporting various initiatives to strengthen the family unit and enhance access to training opportunities through non‐formal education and the informal sector. Municipal authorities are coordinating and financing a range of training programs (e.g., TVET scholarships) safety campaigns (e.g., National Capital District Commission [NCDC]’s Seife Meri), GBV referral services (NCDC’s Gender and Family and Sexual Violence Action Committee [FSVAC] Desks) and youth networks. United Nations International Children's Emergency Fund (UNICEF) and UN Women are involved in youth policy development and supporting programs focused on HIV/AIDS prevention, GBV, promoting child protection as well as education and livelihood opportunities for women. Australia’s Department of Foreign Affairs and Trade (DFAT) is financing GBV and youth programs focused on marginalized youth, including the Ginigoada Binis Development Foundation and City Mission. 9. Despite the number of sectoral interventions, there were other issues that also pointed to the need for a new

33 ADB 2017. Pacific Economic Monitor. 34 Structural barriers are those that arise from traditional and contemporary cultural and other socio‐economic characteristics, such as the culture of male entitlement or weak law enforcement. Circumstantial barriers are the factors arising from each woman’s personal circumstances, including household dynamics, level of education, economic activities, and access to opportunities (Women’s World Banking, 2013). 35 This is true even where financial services are available in urban communities (38 percent of urban women have some form of savings account, versus 68 percent of urban men), and where women hold jobs in the formal sector (where women’s access to financial products still lags that of men). 36 Médecins Sans Frontières (2016). 37 Darko, E., W. Smith and D. Walker. 2015. 38 Securing Our Future through Inclusive Sustainable Economic Growth,” focuses on building PNG’s economic foundations through inclusive growth.


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and comprehensive approach due to the high numbers of youth finding the transition from school to work difficult with little or no support, and not obtaining the necessary basic skills and work experience required in the work place and integrate into society. First, a growing segment of youth at‐risk were engaging in crime and in civil unrest; but public programs were not addressing their specific needs. Second, TVET organizations confirmed that most youth engaged by the World Bank’s Urban Youth Employment Project I (UYEP I, P114042) would not prequalify for their courses as a high school certificate was required. In addition, they did not have the capacity to absorb large numbers and did not routinely offer industry placement opportunities for students.39 Employers also suggested that some TVET programs were outdated and were not aligned with industry needs. The main job‐relevant skills lacking in youth identified by employer surveys include: (i) low numeracy and literacy levels, with PNG behind global benchmarks; (ii) poor cognitive, character, and behavioral skills that are desired in the workplace and society; and (iii) a shortage of a range of trade and job‐specific skills. Eighty percent of businesses surveyed consider skill shortages a barrier to expanding headcount with one in three jobs filled by unqualified persons.40 Third, given the complex nature of youth unemployment, solutions were either too short or too fragmented to make a difference. 10. In 2010, GoPNG asked IDA to prepare the UYEP I, a national workforce development and job readiness scheme designed to provide urban youth with practical training and work experience to increase their employability.41 UYEP I contained three key components of a comprehensive Active Labor Market Program (ALMP): (i) soft skills and vocational training; (ii) job matching assistance and placement; and (iii) wage subsidies. The project played a critical role in three areas: (i) the provision of training, job creation and employment opportunities for out‐of‐school and out‐of‐work youth between the ages of 16 and 29 years; (ii) the provision of an income transfer to youth; and (iii) the provision of secondary benefits, including small‐scale infrastructure aligned with the local development priorities of cities. The injection of cash into the economy and operation of a social safety net is significant in an environment where there is low economic growth and where the cost of living is significantly higher than in rural areas.42 11. Demand for the project was strong with the project over‐subscribed even after eight years of implementation. The project screened over 24,000 applicants; engaged about 18,500 youth (compared with the 15,500 target); and was successful at promoting social inclusion and gender. Forty‐one percent of youth participants were women (exceeding the target of 40 percent); and 12 percent are indigenous to NCD (Motu Koitabuan youth exceeding the target of 10 percent). Of the other major ethnic groups, 30 percent of participants report their region of origin as Highlands, 25 percent as Southern; 9 percent as Momase; and 3 percent from the Islands.43 12. A Gender and Labor Study for the UYEP I44 confirmed that in most aspects of training, women showed a higher

39 Practical training was carried out through workshops. 40 Deloitte Touche Tomatsu and UNDP 2017, Fulfilling the Land of Opportunity: How to Grow Employment in PNG. 71 percent of employers identified poor staff attitudes, productivity, and attendance as factors affecting their willingness to hire more staff. 41 World Bank 2010. Urban Youth Employment Project, Project Appraisal Document. UYEP I has three components: (i) Youth Job Corps (YJC) inclusive of Eligibility Screening, Basic Life‐Skills Training (BLST) and public works; (ii) Skills Development and Employment Scheme (SDES) inclusive of two Pre‐Employment Training (PET) schemes (Office, Customer Service and Hospitality; and Industrial Technical), On‐the‐Job (OJT) and Adult Literacy and Livelihoods Training; and (iii) Project Management. 42 UYEP I surveys indicate that in addition to meeting immediate expenses, e.g., food and clothes, youth contribute to other family expenses. 43 UYEP I Quarterly Progress Report end September 2018. Some respondents did not report their origin. 44 Voight‐Graf, C. 2018. Gender and Labor Market Study, Port Moresby, Papua New Guinea. Other key challenges faced by females related to household and family obligations, not finding a babysitter and pregnancy. Most women were expected to tidy their houses before leaving in the morning and therefore often arrived late. For others, unsupportive husbands were a major obstacle. Previous studies reported that some female participants had to deal with aggressive resistance from husbands towards their participation in UYEP I. Focus group participants also talked about incidents of jealous husbands turning up at worksites and forcing women to withdraw. Interviews for this study suggest that there are considerable costs for providing childcare for mothers in terms of energy, financial expenses, and missing


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propensity to complete the training offered, which suggests that the project was successful at engaging young women and addressing a gender gap in access to and paid employment. Apart from skills development and work experience, receiving a certificate and reference from UYEP I were major factors facilitating the search for employment. However, the study also revealed that women encountered several challenges with respect to completing the training, which resulted in them dropping out of the project. Factors disadvantaging women in the labor market include their vulnerability to becoming victims of crime, gender‐based violence, difficulty accessing safe transport, discrimination in workplaces, cultural expectations, difficulties accessing market opportunities, financial exclusion, legal factors (such as inheritance and ownership laws), and others. To mitigate this, UYEP I ramped up its communications to reassure families about the training and work women were being offered, it sensitized trainees, contractors and project personnel through gender training, and in areas where the subprojects were not located in proximity to communities, it arranged for contractors to provide transport to ensure safe passage. UYEP I also provided all participants with child and family care responsibilities additional days to complete the training; and incorporated an electronic banking component to help promote their financial inclusion and protect their income and savings.45 Through its Gender Committee, the project developed a Sexual Harassment and GBV Policy and Maternity Leave Statement in 2016,46 which defined the project’s related response and reporting protocols in accordance with the NCDC’s Family and Sexual Violence Action Committee (FSVAC) Strategy 2016–2018, and the PNG National Strategy to Prevent and Respond to Gender‐Based Violence 2016‐2025. 13. Evidence showed strong employment and social impacts for UYEP I participants. A 2017 Impact Evaluation on the project examined the effect of participation on anti‐social behavior compared to youth in parts of Port Moresby where the program had not been offered.47 This evaluation showed that UYEP I participants were up to 65 percent less likely to engage in aggressive behavior, gratuitous property damage, and be out late at night compared to the ‘control’ group. This suggested that there were large public benefits from the UYEP I as these positive externalities benefited society, not just the participants themselves. In a 2017 Follow‐Up Survey (FUS) conducted on a sample of youth between six months and two years after their participation in UYEP I , 41.2 percent of the On‐the‐Job Training (OJT)48 trainees in this group reported that they had been employed, full‐time or part‐time, in the six months prior to the survey compared to 13.6 percent in the control group. The placements can be directly attributed to the project, as two‐thirds were offered jobs, by their OJT employers. Of the youth who had been through the Youth Job Corps (YJC)49, 21 percent reported being employed, full or part time, in the previous six months. The top employing occupation was for clerical and administrative workers. The second largest employment sector was for works, general labor and maintenance followed by hospitality, catering and retail/customer services. The results suggested that the project played an important role in facilitating entry into the labor market for youth—against a backdrop of persistent bias from employers against engaging youth with limited education, experience and skills. The results were also corroborated by a 2017 Employers’ Survey of OJT employers. Employers reported that 97 percent of UYEP I youth were perceived as being qualified for a full‐time job. Seventy eight percent of employers confirmed that youth had acquired technical skills during their OJT. In terms of support for OJT from the Project

training and work experience days. 45 According to the end March 2018 Quarterly Progress report, 41 percent of women had never had a bank account prior to the UYEP I. 46 The Policy establishes a comprehensive set of workplace strategies to address the impact of GBV in the workplace and guide UYEP I responses to employees and trainees whose work life is affected by GBV. The Gender Committee is responsible for implementing and monitoring the GBV Policy and UYEP I’s response protocol. It also has responsibility for GBV focal points which provide support and referral. According to UYEP I’s Maternity Leave Statement for Youth Trainees of April 2016, women trainees will be entitled to unpaid maternity leave in line with the Public Services General Order. Women will not lose their place in the YJC, PET and OJT when they withdraw due to pregnancy. While the Statement is not yet being implemented, UYEP I currently deals with the issue of pregnant women by advising them to start UYEP I later while their places are guaranteed. 47 Ivaschenko, Oleksiy, et al (2017) “Can public works programs reduce youth crime? Evidence from Papua New Guinea’s Urban Youth Employment Project”, IZA Journal of Development and Migration (2017) 7:9. 48 OJT was provided to approximately 3,000 participants with a range of employers in NCD over a period of approximately three months. 49 This involved 30 days of public works placements for approximately 8,500 youth who completed the program.


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Management Unit (PMU), 89 percent of employers found that the support services provided by the PMU were helpful. Their main reason for participating in UYEP I was to “contribute to the community” (with 62 percent of employers reporting this). Of those not working after UYEP I, there was still evidence of increased job search (from 14 percent before the UYEP I to 18 percent post‐UYEP I) and greater optimism about future employment prospects, than before their involvement in UYEP I. The proportion of youth in informal work was also higher after their participation in YJC (from 30 percent to 49 percent) and OJT (from 39 percent to 44 percent). At the time of the 2017 FUS, 5 percent of YJC youth and 8 percent of OJT youth were in education, and 46 percent of YJC youth and 50 percent of OJT youth expressed an interest in pursuing education or training opportunities in the next six months.50 14. Based on the success of UYEP I, IDA received official requests from GoPNG in August 2017 and May 2018 to deliver a follow‐on project, Urban Youth Employment Project II (UYEP II), and consolidate and expand the workforce development scheme delivered under UYEP I. In a context of high youth unemployment and slowing economic growth,51 risks associated with youth poverty and marginalization was perceived to have the potential to hamper the future growth and development of the country. Underscoring demand from the city authorities were growing concerns regarding both poverty and associated social risks, which had the potential to fuel civil unrest and become a major source of risk and fragility for the Government and for society. This had been evident with periodic and highly destabilizing street rioting having taken place in Lae, Port Moresby and Mt Hagen over the last decade. Robbery and assault were the most commonly reported crimes with youth being the most active in crime. Supporting the safety, functioning and connectivity of key cities was therefore perceived to be vital for the economy and wellbeing and livelihoods of urban residents as well as rural regions and communities connected to them by land or sea.52 It was agreed that the follow‐on operation would address the following key priorities:53

a. Strengthen GoPNG’s medium‐term public‐sector response to addressing the more immediate challenges and risk factors related to youth poverty, marginalization, and unemployment (and GBV) until longer‐term investments and growth begin to generate more visible impacts;

b. Contribute to job creation by providing resourcing for the engagement of youth in a range of social and economic development priorities;

c. Serve as a model for other cities and rural areas to potentially replicate and customize their own models; and d. Facilitate critical research and development on youth to inform policy development.

C. Relevance to Higher Level Objectives 15. The operation will contribute to the World Bank Group’s Country Partnership Framework (CPF) for PNG for FY19‐23,54 focusing on ensuring more effective and inclusive service delivery, particularly in underserved areas; and enabling private sector development and inclusive growth in the non‐resource sector. By assisting unemployed and out‐of‐school youth to access improved training and job opportunities, with targeted monitoring of and support for female participation, the project is expected to help achieve these objectives.

50 More details can be found in Annex 3. 51 The November 2019 budget for 2020 cut capital expenditure by defunding provincial and district services improvement programs. 52 World Bank, 2017, Systematic Country Diagnostic – PNG. 53 The PDO responds directly to GoPNG’s MTDP III 2018‐2022. Specifically, Key Result Area (KRA 3), Goal 3.3 which for GoPNG to develop “Resourceful and Productive Youth.” It also responds to Goal 3.5, which is for GoPNG to provide “Equal Opportunities for all Citizens to Benefit from Development.” Both goals are captured in the project’s indicators measuring direct employment outcomes and citizen engagement. 54 CPS FY 2019–2023. Report 128471‐PG.


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II. PROJECT DESCRIPTION

A. Project Development Objective

PDO Statement

The project development objective is to improve the capacity of participating young men and women in project areas to engage in productive income generating activities.

PDO Level Indicators 16. The performance of the project will be measured by a set of indicators contained in the Results Framework. Key Project Development Objective (PDO) and Intermediate Results indicators (IRI)s will be disaggregated by gender by the Project Implementing Entities.55 Indicators tracking achievement of the PDO are:

a. Number of direct project beneficiaries (i.e. project participants—numbers of youth engaged in training and work experience opportunities, including the percentage of beneficiaries who are women, Motu‐Koitabu and Ahi); 56

b. Percentage of graduates who report being employed 12 months after they complete their internships;57 c. Percentage of youth who are assessed to have achieved satisfactory performance in the Urban Works and Services

component58; and d. Percentage of participants achieving minimum standards in vocation training assessments59.

B. Project Components 17. The project (UYEP II) is designed as an Investment Project Financing (IPF) operation and is financed by an IDA credit of SDR25.5 million (inclusive of taxes or US$35 million equivalent). It is planned to be implemented over five years from 2020 to 2025 in NCD and Lae.60 The project will help NEET youth:

Develop practical skills to get a job,

Connect with certified training organizations and microenterprise providers (for those interested in self‐employment),

Find and complete internships, and

Connect with relevant specialized community services, including counseling for GBV survivors through a referral system connected to local service providers.

55 The gender disaggregated IRIs will be captured in the Quarterly Progress Reports to be submitted to GoPNG and IDA. 56 This core indicator is required for all IDA financed investment projects. A beneficiary is defined as people or groups who directly derive benefits from an intervention. 57 Defined as either self‐employment or employment in the informal or formal sectors. Formal employment, part or full time, regular ongoing employment (not temporary) during the past 6 months; and/or Self‐employment as part of an ongoing activity (i.e. not "one‐off" assignment) over the past six months, for at least four weeks in total. 58 See Results Framework for definition of “satisfactory” performance. 59 Based on assessment tests administered at entry and during/end of vocational training. 60 “Lae Area” means the area defined under the Recipient’s Lae City Authority Act 2015, No. 11 of 2015, as the boundaries and jurisdiction of LCA, unless otherwise specified in the Project Operations Manual. “Greater Lae” typically includes the six Wards of Lae Urban and 17 Wards of the Lae Ahi.


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18. GoPNG’s Department of Treasury (DOT) would be the Executing Agency for the project and Subsidiary Financing (as a grant) would be provided to the City Authorities, namely, the National Capital District Commission (NCDC) and Lae City Authority (LCA) as the implementing entities for NCD and Lae, respectively. The project locations were selected due to their population size and the strategic potential they offer, linking job placements to the local economy.61 During the first year of project implementation, a study to consider the applicability of a simplified UYEP model to other project locations will be carried out. Locations to be included in the study will be determined by the Project Steering Committee (PSC). Subject to the findings of the study as well as project performance and additional financing, to be reviewed during the Mid‐Term Review (MTR),62 additional locations may be added to the project scope. The project will include four components: (1) Youth Job Corps; (2) Skills Training; (3) Referral Services and M&E; and (4) Project Management. The youth development process is shown schematically in Annex 1 (Diagram 4).

19. COMPONENT 1: YOUTH JOB CORPS (US$18.3 million) will raise the awareness of the project in targeted urban areas among youth in their communities, mobilize eligible youth, provide them with Basic Life Skills and Job Readiness Training (BLST) and place them in public works schemes. The overall design includes key changes based on lessons from the original UYEP I, including: (i) reinforcing the importance of soft skills by integrating the soft skills learned into public work placements; (ii) allowing for more capital and skills‐based intensive works, the development of hard/technical skills and the inclusion of young women and youth with disabilities; and (iii) adopting a merit‐based approach to training, whereby all selected participants are required to complete classroom‐based and practical training in public works as a prerequisite for further skills training. As with UYEP I, the works and services will consist of waste management services, maintenance activities and public infrastructure repair and improvement works, which are closely aligned with the urban development planning priorities of the city authorities and their communities. Completion of both the ten‐day BLST and 30‐day public works activities will be a pre‐condition for further training. There will be four subcomponents: 20. Subcomponent 1a: Communications and Mobilization (US$0.9 million) will support community awareness and mobilization campaigns, communications and related activities to identify eligible youth and inform them on the procedures and requirements for participation under the project. As for UYEP I, the campaign will inform youth of the project and selection criteria to mitigate risks of complaints from youth about perceived biases in the application and screening process. The community mobilization process and Grievance Redress Mechanism (GRM) have been continually reviewed and adjusted throughout UYEP I. Activities for the communications and media program will be set out in a Community Consultation Plan (CCP) developed by the project, which will include a nuanced engaged strategy targeted to different groups who meet the selection criteria, such as young women, indigenous youth and disabled youth. The project will finance the development and dissemination of communication materials, consultations with local stakeholders in each city to plan for the screening and recruitment of youth and implementation of the GRM. The CCP and GRM will be the main instruments for the project’s community outreach and citizen engagement.

61 Business Advantage PNG, 2013. The nomination of these cities followed an announcement by the Prime Minister in 2013 that identified four locations for development as “special zones,” representing each of PNG’s four geographic regions: NCD as the commercial and administrative center; Lae for manufacturing and industry; Mt Hagen for agricultural development and Kokopo as the tourism center. Reliable data is problematic in PNG. However, dated Diagrams for Port Moresby indicate youth between the ages of 15 and 29 years accounted for 35.1 percent in 2000 as compared to 28.5 percent nationally. Although the official population was reported in 2011 by the NSO (NSO, 2014) as 364,125, this figure is felt to be grossly underestimated. By some accounts the figure is 750,000 (Jones and Kep, 2012) or even higher, at 900,000. Lae is the second largest city in PNG and comprises around 22 percent (approximately 150,000, comprising the districts of Ahi and Lae) of the total population of the province (NSO, 2014). Like NCD, Lae is ringed by settlements (over 50 percent of the city’s population lives in settlements (Jones and Kep, 2012). At the 2011 Census, Mt Hagen was home to some 30,000 residents (NSO, 2014c:26) but more recent estimates suggest that the figure is somewhere between 40,000 and 70,000 depending on the boundaries included, which would make it the third most populous city in PNG. 62 The MTR will be completed between two‐and‐a‐half to three years after project effectiveness.


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21. Subcomponent 1b: Basic Life‐Skills and Job Readiness Training (US$4.3 million) will provide Basic Life Skills and Job Readiness Training (BLST) to approximately 6,700 youth (5,360 in NCD and 1,340 in Lae) to increase their knowledge and preparedness for transitioning into the work place both in the formal and informal economy. Drawing on UYEP I, which highlighted the importance of the soft skills training, the BLST will be modified and extended from five to ten days, which is expected to allow young women and men with low literacy more time to absorb the training topics.63 The curriculum will cover: (i) basic literacy and numeracy, (ii) social diversity, gender equity, GBV awareness and prevention,64 (iii) personal health, hygiene, and nutrition (especially related to environmental sanitation and maternal‐child health), (iv) work place health and safety, (v) basic finance and budgeting‐business skills, (vi) banking and savings,65 (vii) work place behavior, communication and relationships with co‐workers and supervisors and problem solving, and (viii) preparing basic work‐related documents, e.g., job applications, CVs, etc. In addition, the BLST will collect socio‐economic data as part of its registration process; setup bank accounts for beneficiaries; and orient youth to a set of referral services provided by the project. The BLST involves classroom‐based training using adult learning methods delivered in the communities where youth reside. Based on lessons acquired under UYEP I, the training’s instructional design will focus on special learning needs of female and male trainees with low literacy, disability and be delivered by National Training Council (NTC) certified facilitators. Learning achievements will be measured through a baseline pre‐training test, in‐classroom assessment by the trainers, and a post‐training test. Trainers will receive prior training on the curriculum and on the delivery of coaching and support services. Course accreditation, which was recognized by UYEP I participants as being important for future training and employment, will be provided by the NTC. Participants will be provided with lunch during training. If feasible, the training will be delivered in the Ward or settlement where youth reside and/or in a facility within safe walking distance. 22. Subcomponent 1c: Urban Works and Services (UW&S) (US$13.0 million) will generate approximately 183,000 labor days for 6,100 participants,66 enabling youth to develop technical skills and apply the soft skills learned through public works for 30 paid days after they complete the BLST.67 Through the Urban Works and Services scheme, youth will be engaged in short‐term public works and acquire work place, and marketable skills in one or more of the following: basic road maintenance, the construction of pedestrian pathways and landscaping (including tree planting, both of which will improve the project’s climate change mitigation benefits), drainage cleaning and clearing, mixing and laying concrete, concrete block making, laying of bricks and pavers, painting, fencing and other practical skills as well as health and safety in construction. It is expected that the road and drainage maintenance activities will contribute to the infrastructure’s climate resilience due to an anticipated reduction in flooding, and climate resilient construction practices. In addition, based on consultations during preparation, the menu of works and services will be expanded to improve inclusion of young women and youth with disabilities. Tasks such as painting, clearing of debris, weeding, planting and paving will be identified and can be performed by young women and youth68 with disabilities. Examples of infrastructure and services to

63 Using the lessons from UYEP I one and feedback from employers, the training will allow for more skills practice sessions to develop communication skills and help participants to identify learning and employment pathways. 64 In terms of GBV awareness and prevention, the BLST will rely on specialized service providers who would oversee developing the content for these modules. 65 The BLST curriculum will align with the financial education modules established by Centre for Excellence in Financial Inclusion (CEFI) and promoted by all micro‐banks and institutions for inclusive finance and include it in the scope for training of trainers for BLST. 66 This assumes some attrition. 67 Under UYEP I, youth were engaged in 35 days of road and public works maintenance. Capable, good performing trainees were provided an extra 10 days of Extended Skilled Works (ESW). The ESW involved semi‐skilled works such as constructing concrete footpaths, block pavements, and stone wall masonry. The ESW helped transfer trade skills through guidance and learning by doing. Under UYEP I, ESW was popular with trainees, and desirable because of the increased skills gained and social desirability of the work. Under UYEP II, all trainees will have an opportunity to do ESW as part of the mix of public works undertaken. 68 Under UYEP I, there was no significant difference in public works completion (48 percent females) and attrition rates between men and women at two and four percent, respectively.


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be delivered include: pedestrian pathways, steps, driveways and parking lots, recreational and market shelters, the beautification and landscaping of public areas, maintenance and repair of roads and drainage, schools and other public buildings, waste management and street lighting. Climate resilient design considerations (e.g., use of suitable construction materials and standards to enhance resilience) will be incorporated. Women would be encouraged to perform other infrastructure works to break gender stereotypes and give them skills not otherwise available to them. Completion of both the BLST and public works activities will be mandatory for further training. The public works scheme will be closely aligned with the local development priorities of the municipal authorities. Infrastructure improvements and maintenance needs are similar both in NCD and Lae, and joint planning will be undertaken with City Authorities in support of their urban development plans. In addition to supporting their core functions and services, the investments will enable them to achieve more than they could otherwise with limited financial means. Households in target neighborhoods and the general urban population not regularly served under the City Authorities current arrangements will benefit from the infrastructure and services provided. 23. Subcomponent 1d: Other Technical Assistance Activities (US$0.15 million). The project, through NCDC, will finance a set of technical assistance activities, such as studies and diagnostics, that will inform the design and implementation of violence prevention and/or labor mobility pilot initiatives in subsequent years, drawing on global best practices69 and available evidence.70 A concept note for the studies and diagnostic work will be developed by NCDC in collaboration with relevant stakeholders. The foundation work will subsequently inform the development of a concept note for the implementation of a multi‐year pilot that is designed to identify and test innovative approaches to youth inclusion and their development, including identifying opportunities for example, for their labor mobility. International best practices suggest that youth development strategies are most effective when they build on a strong participatory approach and combine social and situational evidence‐informed interventions. 24. COMPONENT 2: SKILLS TRAINING (US$8.9 million) will provide a range of market‐oriented training programs for approximately 5,700 youth to improve their general and technical skills needed in the work place.71 Stakeholder and youth consultations suggested that the UYEP I was successful in providing recognition to youth in society and giving them the basic skills required in the job market, but youth expressed a desire for more opportunities for skills development and qualifications to be competitive in the labor market.72 The training and skills development activities will aim to build basic

69 Chioda, L (2017), Stop the Violence. 70 See for example, Carbonari, F., A. Willman and R. Sérgio de Lima. 2017. “Learning from Latin America: Policy Trends of Crime Decline in 10 Cities Across the Region”. Background paper. Ending Violence in Childhood Global Report 2017. Know Violence in Childhood. New Delhi, India; See also: Abt, T. 2017. “Towards a Comprehensive Framework for Preventing Community Violence among Youth.” Psychology, Health and Medicine 22(S1): 266–85. The pilot could build on the works and services financed by the project whose design will follow Crime Prevention Through Environmental Design (CPTED) principles to enhance safety perception and reduce opportunity for crime in the built environment. The CPTED informed urban works (situational prevention) could be combined with additional evidence‐informed social interventions (e.g. cognitive behavioral therapy) or strengthened existing programs and services (e.g. mediation, sports, respectful relationship, and parenting programs), to increase the intensity of the support provided to the youth and ensure the approach sustainability. By so doing, the pilot could focus on mitigating most salient risk factors for violence and crime at the individual and community level, including youth idleness, conflict resolution, abuse of alcohol, dating violence, poor parental discipline, anger management and a lack of citizen engagement. It is expected that the combined interventions will have a cumulative effect geared towards strengthening youth leadership, gender equality, and the community social capital that will in turn enhance community’s resilience to violence. The approach developed in the pilot communities will be evaluated after at least 12 months of implementation and inform the pilot’s scalability and sustainability. 71 With increased coaching and counselling, regular feedback and communication with employers, affirmative action on gender issues, UYEP I was able to reduce the attrition rate in OJT from 38 percent to 18 percent. The projection for UYEP II includes an attrition rate of 20 percent. However, there is an assumption that the rates can be lowered through improved coaching, mentoring and counselling will help reducing the attrition rate in the skills development schemes. 72 There is a strong evidence of substantial employment gains due to the pre‐employment training and the work placement with a firm


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competency and provide a skill development pathway for employment in the formal and informal sectors. The training will involve creating a competency framework for each course, and, to the extent possible, putting youth on a pathway for accreditation or certification/licensing. The project will coordinate with NTC and the National Trade and Testing Board (NTTB) to develop a competency‐based certification that will be issued to participants on course completion or trade testing. While participants can self‐select into one of two training programs, criteria such as satisfactory trainee performance during BLST and Urban Works and Services and numeracy and literacy may be applied to guide the process of selection to ensure suitability and competitiveness. There will be two subcomponents: 25. Subcomponent 2a: Internships (US$6.7 million) will provide an approximately 4,600 youth the opportunity to work with employers on a three‐month internship in entry level jobs.73 Building on UYEP I, the labor‐market insertion scheme provides youth with firm training and on‐the‐job experience in areas that have shown consistent demand supported by a training stipend and facilitation services. Growing participation in UYEP I confirmed employer demand for such training and the wage subsidy, and consultations with employers revealed that the project should continue to emphasize the importance and monitoring of life and job skills progression during the internship. The project will establish a scoring system for the internship using a score card to be completed by the employer at the beginning, and end of the internship period together with regular coaching and counselling sessions to be provided by the project. The value proposition offered to employers is the three‐month wage subsidy in the form of a training stipend provided to participant youth in addition to the screening, training and job matching services provided by the project. The program offers employers a low‐risk opportunity to observe and assess trainees for potential employment, subject to vacancies. The project will aim to match youth into appropriate jobs based on expressed demand, levels of numeracy and literacy with additional provisions for mentoring and coaching. The project will maintain attendance and performance data for certification where possible.74 26. Subcomponent 2b: Vocational Training (US$2.2 million) will develop entry‐level competencies for approximately 1,100 youth75 in selected trades relevant to both the formal and informal sectors by providing existing short courses offered by accredited training providers or industry‐linked training providers for duration of three months.76 In addition to the minerals sector, GoPNG’s Medium Term Development Plan III 2018‐2022 (MTDP) identifies tourism and agriculture as key areas for economic growth. However, consultations with employers and other development partners confirm that the tourism and construction sectors provide the most immediate potential for job growth. Employer surveys,77 experience with the OJT under UYEP I and consultations with vocational training organizations suggest that relevant trades considered suitable for trainees are: (i) hospitality, (ii) kitchen operations,78 (iii) office, customer care and basic computing skills, (iv) building and construction and (v) machine and plant operators.79 Therefore, based on a

(Sonya Woo and Darian Naidoo, 2018). 73 The internship (previously call on‐the‐job training) period was five months under UYEP I; the period has been reduced so more youth can benefit from the limited number of places available. 74 UYEP I implemented a literacy and livelihoods scheme in 2018 through a training provider and terminated due lack of atonement of targeted results. Livelihoods programs with the existing providers in Lae is largely geared towards rural areas. 75 The numbers are considerably lower as this is a new intervention that is yet to be tested. The cost per beneficiary at $1,600 is also marginally higher than for the Internship scheme ($1,100 per beneficiary). 76 The assessment of vocational training providers in Lae revealed that most of them are disconnected from the industry; do not have adequate facilities with modern equipment used in industry, have stopped industry placement schemes to provide on the job training/internship, and do not have job placement mechanism for graduates. 77 Deloitte Touche Tomatsu and UNDP 2017, Fulfilling the Land of Opportunity: How to Grow Employment in PNG. 78 While UYEP I have already provided short courses on hospitality and office and business skills, the Vocational Education and labor market linkage practices adopted by providers such as IEA‐TAFE and Limana suggest that the partnership agreement between training institutions and local businesses provide a better chance for trainees to get a job compared to those joining a course without such placement linkages. 79 Consultations with local businesses, training institutions and other stakeholder suggest that the Wholesale and Retail Trade and


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labor market analysis carried out under the UYEP I,80 the project will finance existing short courses in response to expressed demand by employers in the tourism/hospitality, administration and construction sectors. Training service providers will be required to provide accredited trainers, physical facilities equipped with learning equipment matching with the industry requirements and have established linkages with the relevant industry. The building and construction related training will also include climate resilient/energy efficient building techniques. Provision for financial literacy and basic business skills during the training will be relevant for youth seeking to pursue self‐employment opportunities; and those youth will be further assisted through the referral services on training or enterprise development desks. Such courses will help youth to build basic competencies in relevant trades along with basic financial and business skills over a three‐month period. The course certification will follow the national certification system and target training or trade Certificate I and II for these purposes. The project will work closely with the training provider to quality assure their training policies and competency assessments. Participants will be provided with lunch and a transport stipend together with regular coaching and counselling sessions. The coaching and counselling support will include both career path coaching and address behavioral and personal issues. 27. COMPONENT 3: REFERRAL SERVICES AND MONITORING AND EVALUATION (US$3.2 million) will build on the systems and processes developed under UYEP I, aimed at screening and referring youth to other specialized organizations and delivering data and analysis to support project operations and inform policy development. This component will also include a set of services that respond to recommendations arising from UYEP I, that facilitate pathways to employment, engagement in micro‐enterprises and training beyond the project, and utilize more specialized counseling services, drawing upon the expertise of service providers in those fields. There will be two subcomponents:

28. Subcomponent 3a: Referral Services (US$1.8 million) will provide a set of job, training and microenterprise support services designed to screen and refer eligible youth to identify and access potential career pathways beyond the project. The subcomponent will comprise two streams: First, the provision of job search, microenterprise and training referral services beyond the project; and second, referral to specialized GBV services. Both streams will be integrated with the mentoring and coaching services to be provided through all components of the project, so that participants receive consistent guidance towards appropriate pathways. Coaching and mentoring will be strengthened by specialized training for PMU staff and the adoption of a structured approach to delivery of these services, including systematic recording of information. Participants will be offered a basic set of exit services consisting of a career advice session and CV preparation advice and facilities. There will be three types of referral services in the first stream: (i) Employment; (ii) Training; and (iii) Micro‐Enterprise services. They will be implemented in partnership with other institutions such as: Employers, Accredited Training Agencies and Financial Services (micro‐lending) Institutions. The services will aim to go beyond the provision of general information and refer youth to known opportunities identified through a network of partnerships, like the arrangements, resourcing and direct relationships pursued under the Internships (or “OJT” in UYEP I). However, services will be limited to screening and referrals.

The Employment Referral Desk will leverage relationships with Internship employers; work with the

Hospitality industries have greater chance of providing employment in NCD. However, the assessment during project preparation in Lae identified Building and Construction and machine operator as the most prospective skills to maximize the chances of getting employed. The assessment found a dis‐connect between the Vocational Training Providers and Industry that has led to Industry actors setting up certified training packages and apprenticeship scheme that best match the industry requirements. UYEP II will include such training that has got a linkage with industry with better employment prospects. The assessment of agriculture sector for Lae City area under LCA suggested that the current schemes are targeted for farmers in rural areas, e.g. the rice farming scheme promoted by Trukai Industries in partnership with NARI targeting farmers outside LCA area. Similarly, the current arrangements for Poultry farming promoted by Tablebirds under Mainland Holding targets farmer families in rural areas outside LCA, is not viable for LCA Wards due to its land requirements. 80 Voight‐Graf, C 2017, PNG Gender and Labor Market Study.


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Department of Labor and Industrial Relations (DLIR), to promote UYEP II youth for inclusion in unskilled and semi‐skilled labor components of government infrastructure projects; facilitate the exchange of information (and potentially access) to the Australian seasonal labor migration program; and work to widen the network of employers, especially in the planned growth areas of agriculture, tourism and construction. The potential for developing a labor placement desk under NCDC as a sustainable long‐term service, will be explored as it is confirmed that local recruitment agencies have no commercial interest in the type of labor that can be provided by UYEP II. The secondment of NCDC staff to one or more positions will be explored.

The Training Referral Desk will focus on opportunities for further training for those who wish to strengthen their prospects for formal employment, for example, by obtaining trade certification. There will be efforts to develop productive relationships with these institutions to ensure that the project meets specific training pre‐qualifications for certain programs. E.g., Malanghan Technical High School; St Joseph’s Technical School; Hornibrook NGI and IEA TAFE.

Micro‐Enterprise Development Referral Desk will focus on providing support for youth exploring informal employment options. This will depend on relationships with micro‐lending business services institutions such as: Pacific Financial Inclusion Program (PFIP) – UNCDF; Women’s Micro Bank; Centre for Excellence in Finance Inclusion (CEFI); and the Market Development Facility funded by DFAT. It will be necessary to expose youth to these institutions at key points during the program so that youth understand their requirements and available options. E.g., micro‐banks may require borrowers to open bank accounts with them and establish savings as prior conditions for lending, and methods of making provision for this will be explored, as well as coaching to ensure youth understand the services available, the benefits and risks and especially responsibilities of borrowers.

29. In the second stream, and in response to issues identified by women in the UYEP I regarding women’s maternal health and access to the labor market (see paragraph 12), the project will strengthen its approach to GBV, by leveraging services of specialized external entities already operating in NCD and Lae. Specific initiatives to be financed by the project include: (i) GBV awareness training for all project staff, including BLST trainers and contractors and employers participating in the Urban Works and Services and Internships schemes; and (ii) identifying and/or strengthening the project’s referral process for GBV cases. Under UYEP I, NCDC’s Gender Desk and FSV Secretariat provided support on intervention protocols, case management and referral pathways to meet the anticipated needs in the project. Under UYEP II, IDA will engage a GBV expert to undertake a qualitative assessment of the system (NCDC’s referral pathway and their partner GBV service providers) to have a better understanding of the strengths and weaknesses of the system in place. This will ensure that project staff understand the referral points, procedures and services as well as limitations in support that may require the provision of additional project resources to strengthen. Where available, the assessment should draw on existing work undertaken by other partners (e.g., IFC). Services in Lae are not as well established. There is not the equivalent of a FSV Secretariat or Gender Desk as in the case of NCDC. There are a few service providers who provide services but there is also less coordination and clarity of referral pathways than in NCD. The lack of well‐established services suggests that the PMU in Lae will need to devote more resources (including the time of the Gender and Inclusion Advisor) to advocate for a more organized government response to FSV case management and the development of LCA’s referral pathway. Given budget limitations, the scope of improvements to be financed by the project will be limited to service provision for project participants only and will not involve building case management capacity within the project itself. In addition, the project will support the monitoring of GBV cases in accordance with the Sexual Harassment and GBV Policy and Maternity Leave Statement developed under the UYEP I in 2016; and the inclusion of a Workers Codes of Conduct on sexual exploitation and abuse and other forms of GBV that all contractors will have to comply with.


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30. Subcomponent 3b: Surveys, Monitoring and Evaluation (US$1.4 million) will include a set of surveys designed to evaluate the achievement of project outcomes and impacts, including the value and effects of individual interventions. As with UYEP I, a Management Information System (MIS) will be used to record most of the project’s operational information, including registration, allocation of trainees to work‐sites, attendance and performance score cards, survey data, electronic stipend payments, and training certificates. Responding to lessons learned in the UYEP I, the evaluation surveys will include carefully designed procedures to maintain statistically rigorous randomized control and treatment groups, within the practical constraints of project operations. The number of surveys will also be reduced to balance data collection and analysis against practical constraints, including resources. Biometric identification based on fingerprint scanning or facial recognition will be implemented, where appropriate, to ensure that control and treatment groups remain separated for the planned periods. The set of surveys comprise a Baseline when youth enter the project, Follow‐Up Surveys (FUS) administered at the project’s mid‐line and end‐line, and a set of additional Community Perception and Employer surveys. Follow‐Up Surveys are planned to take place around 12 months and 24 months after participants are screened. Execution of the FUS will preferably be done by a professional survey firm contracted for the purpose, working closely with the PMU. A second option of working with an individual consultant to guide the PMU’s own survey team has also been identified, in case a well‐qualified firm cannot be procured within the available budget. Assessment of participants performance at key stages, such as entry and exit of BLST, exit from Urban Works and Services; exit from internships or vocational training; and assessments obtained during coaching and mentoring sessions, designed to monitor their development as they progress through the project, will be introduced. The MIS will be enhanced as needed to record and present this information and will be an increasingly important tool in the provision of targeted services to participants as they progress through the project and later, for referrals to other opportunities and services. 31. Component 4: PROJECT MANAGEMENT (US$4.6 million) will finance project management support, including safeguards oversight, communications and media, short‐term technical assistance, training, grievance management, financial management, procurement, project management and support staff, goods, and incremental operating costs. The key elements consist of two Project Management Units (PMU)s attached to NCDC and LCA, respectively, as the Implementing Entities, coordinated by a Project Coordination Office (PCO) co‐located with the NCDC PMU. Each implementing agency will host a PMU led by a Project Manager. The staffing structures and contracting within the two PMUs will essentially be a mirror of each other, although the size of the LCA PMU will be smaller because of the smaller number of throughput beneficiaries. Some joint activities will also be undertaken but led by the NCDC PMU on behalf of both entities, such as the impact evaluation and specialist surveys although both teams need to be involved at some level. The PMUs will house the back‐office functions such as accounting, procurement, and administration essential to operate the project. The major activities under the project will be led by Team Leaders, each with supporting technical and operational staff. There will be two subcomponents: 32. Subcomponent 4a: Program Coordination Office (PCO) and PMU in NCD (US$2.6 million) implemented by NCDC. Technical and operational assistance, capacity building activities and training will be provided to support NCDC on project management, implementation, coordination, communications and media. A PCO will manage inter‐agency coordination and carry out certain overarching activities including national communications, coordinating with NYDA on project implementation, partnerships, joint PMU training, and consolidated accounting and reporting to the Association, DOT, DNPM and PSC (where appropriate). For efficiency and operational reasons, the PCO will be co‐located with the NCDC PMU in office space provided by NCDC. The NCDC Project Manager and PCO Manager will formally report to the NCDC City Manager but will also be functionally accountable to the PSC Co‐Chairs (Department of Provincial and Local Government Affairs [DPLGA], the parent ministry for NCDC and LCA, and National Youth Development Authority [NYDA]) in terms of governance and reporting.


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33. Subcomponent 4b: PMU in Lae City (US$2.0 million) implemented by LCA. Technical and operational assistance, capacity building activities and training will be provided to support LCA on project management, implementation, coordination, communications and media. The LCA Project Manager will report to the LCA Chief Executive Officer but also be functionally accountable to the PSC Co‐Chairs.

C. Project Beneficiaries 34. UYEP II will cover NCD in Port Moresby and Lae in Morobe Province. Additional locations may be considered for inclusion in a second phase following the completion of the project’s scoping/feasibility study to be carried out in the first year of implementation under the auspices of the NYDA, and subject to financing and performance. With the experienced gained in setting up what is now a well‐tested ALMP in NCDC, the expansion to Lae would provide a critical step in scaling up the program nationally; and lay the foundation for similar programs to be implemented in Mt Hagen, Kokopo and elsewhere. However, the scale up will be targeted and managed with the support from local level implementing partners to ensure the sustainability of the program. It was agreed that only two locations would be included in the first phase of the scale up. Both NCD and Lae were selected after an extensive consultation process with key national, provincial, city and local level government authorities carried out between 2014‐2018.81 NCD and Lae met the project’s criteria of: (i) being the largest and second largest cities in PNG (in terms of its population and youth size); (ii) having local economies and service providers that would ensure the project’s sustainability; (iii) having city authorities in place which would provide local level oversight for project implementation; and (iv) providing suitable office space for the project to operate out of. 35. The continuation of the program through a dedicated and highly experienced project coordination team in NCDC will provide the necessary experience and hands‐on support required for the roll‐out of the project to Lae, and potentially other urban and rural areas, where institutional and implementation capacity is considerably weaker. Both NCD and Lae include extensive peri‐urban areas outside the city center, characterized by larger lot sizes and lower density development.82 The rationale for providing a slightly higher proportion of funding for NCD (60 percent) compared with Lae (40 percent) in the current context is because NCD has a considerably larger youth population than Lae, and the budget allocation for NCD also includes the PCO and other shared resources, which will benefit and provide support to LCA (and NYDA), including the secondment of staff as well as the implementation of the MIS (Management Information System) and impact evaluation. LCA is still in the very early stages of setting up its operations, including its accounting system and staff to perform the financial and accounting and procurement functions of the LCA. For these reasons, it is anticipated that will not be able to disburse the same level of funding as NCD. However, a further re‐balancing of project funding can be made during implementation, subject to performance capacity. 36. The project will focus on training and employment opportunities for about 6,700 youth that have been out‐of‐school and out‐of‐work (“unattached youth”) for at least six months; have resided in the project areas for at least 24 months; and fall between the ages of 16 and 29 years.83 UYEP I (total of $26 million) engaged 18,500 youth in the BLST and generated 815,000 labor days. However, UYEP II ($35 million) is only targeting 6,700 youth for the BLST; ~183,000

81 Stakeholders as reported above. In addition, additional workshops and consultations were carried out with the following government departments: DOT, DNPM, DLIR, DPLGA and DFCDR from 2018‐2019. 82 Due to the ad hoc nature of development, and steep topographic features in the area, NCD and Lae include large areas of undeveloped land, most of which are cleared of vegetation. 83 The National Employment Act (1994) stipulates that the minimum working age is 16 years. PNG’s National Youth Policy 2007‐17 defines youth between the ages of 12 and 25 years of age. However, during implementation of UYEP I, the age limit was increased to 35 years based on demand, although that is now felt to be too old to be classified as youth.


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labor days under the Urban Works and Services; and ~300,000 labor days through Internships. The change in target group size is due to a shift in focus from providing temporary income and employment for large numbers of youth, to ensuring improved socio‐economic opportunities and employment outcomes for youth. Under UYEP I, only 25 percent of participants were placed in On‐the‐Job Training. In UYEP II, all participants will be given a longer duration of training, quality of training will be improved as participants are provided with the opportunity for formal NTC or NATTB certification, and the actual through‐put numbers at the end of the Internships is higher (4,600 compared to ~3,000 under UYEP I with a further 1,100 to complete short‐TVET courses). 37. The project will aim for gender parity (at least 50 percent young women) and the social inclusion of indigenous Moitu‐Koitabu and Ahi youth with targets set at a minimum of 10 percent for NCD and 15 percent for Lae. Additional provisions for the engagement of young women and disabled youth, including a nuanced communications strategy, expanded menu of public work activities, increased stipend rate to partly compensate for child care and referrals on GBV, jobs, training and microenterprise services, will be incorporated in the project design. The project will monitor in the Results Framework and help to close gender gaps by: (i) increasing the capacity and access for female participants to training and paid work opportunities; (ii) affecting changes in attitudes/perceptions of women and gender equality in the work place; and (iii) promoting improved employment outcomes for young women, particularly in areas such as civil works and key trades that have traditionally not been filled by women.84 In addition to cash benefits, youth participants will gain value from the training received and learning experiences under the project. Many will achieve direct, long‐term employment because of their involvement in the project. The BLST and coaching will also contribute to strengthening human and social capital, including an expected reduction in anti‐social and/or crime‐related behavior.

38. Secondary benefits will accrue to communities and households in the project areas, contractors, and employers who take on urban youth through the project as well as key government institutions. The project will also create jobs through the engagement of small contractors and national service providers; increase the level of cash flow in the local economy through the stipend (wage) transfer; and provide basic infrastructure and services, that would not be delivered otherwise to under‐served communities and settlement areas, if left to the City Authorities alone. Benefits will accrue to communities residing in both cities, who are expected to benefit from improved infrastructure and services, and increased perceptions of safety. The project will enable the City Authorities to deliver part of their backlog of minor works and services at no or minimal cost. To ensure national oversight, the Ministry for Inter‐Governmental Relations and National Youth Development Authority (NYDA) will Co‐Chair the PSC. Project funding will be allocated to support NYDA activities on an annual basis through the project’s annual work planning process and the Program Coordination Office will provide support to the NYDA to meet its coordination commitments. NYDA will also benefit through the PCO being established under the project with functional accountability to NYDA’s Director General. Although primarily to coordinate between Implementing Entities, and lead some activities, this arrangement will help NYDA realize some of its broader strategic objectives and ensure alignment with the NYDA’s with national priorities. How this will be achieved will be investigated through the proposed feasibility/scoping study (see paragraph 18).

D. Results Chain 39. The project’s Theory of Change (TOC) responds to the following problem statement: “Disadvantaged youth have limited skills, education and/or employment experience, limited sources of income and are perceived to have behavioral issues. They therefore face economic and social exclusion. Young women particularly encounter gender bias in the workplace.” The expected outcomes reflect a shift in focus from providing income and temporary employment, to

84 See paragraph 12.


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improved socio‐economic opportunities for vulnerable youth. The design pursues four main areas of change: (a) positively affecting the capabilities, attitudes and experience of participating youth; (b) dispelling existing biases and any negative perceptions of these youth and their attributes by potential employers; (c) establishing linkages between institutions that support youth as they progress towards formal or informal employment, including vocational training, microfinance institutions and employers; and (d) achieving gender equity in both the training and works placements. The project inputs address the desired areas of change: the BLST and UW&S prepare participants for employment and provide them an opportunity to develop basic work place and life skills; Vocational Training provides the opportunity for certified training; and Internships provide work placement opportunities for youth; and Referral Services link youth to institutions that assist them in pursuing informal employment as well as youth who may pursue further training or formal employment. The change achieved by these inputs are reflected in the gender targets which are set across the project, intermediate outcomes, and the results framework aims to measure these, with indicators that include assessment of participant performance within the various components. 40. Critical assumptions made in the TOC are: A1—enhanced coaching and mentoring results improved completion rates and absorption of training; A2—external entities, such as vocational training institutes and micro‐finance institutions, can deliver the levels of service anticipated, especially in respect of informal sector employment; and A3—overall economic conditions remain stable or improve and generate suitable employment opportunities.

Diagram 1. Theory of Change (circled references are assumptions described in paragraph 40)

E. Rationale for Bank Involvement and Role of Partners 41. Building on the experiences of UYEP I, IDA has the resources and relationships to carry out a project of the scale proposed under UYEP II with its country and global experience in ALMPs, Gender and Labor Market Study and experience in conducting evaluations to provide rigorous evidence about the employment impacts and effects of


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different interventions. IDA’s fiduciary oversight provides a high degree of confidence that funds will be used effectively, and for their intended purposes. IDA also acts as a draw card for other donors, such as Australia, Korea and private sector partners to invest in the project. To date, UYEP I has more than doubled the Government’s original investment of US$15.8 million, leveraging US$12 million in donor funding85 with additional in‐kind support from partners in the private sector, such as BSP Ltd, estimated at over US$4 million over the past eight years.

F. Lessons Learned and Reflected in the Project Design 42. While maintaining the successful design elements of the UYEP I model,86 UYEP II includes changes in the project’s technical design based on the experience of UYEP and citizen‐oriented consultations carried out in UYEP I and during the preparation of UYEP II. They include: (i) more attention to soft skills and behavioral support. Combining soft and practical skills training in all stages of the work cycle is seen to make a difference in increasing employment and social outcomes for poor uneducated youth looking for work, and employment outcomes increase with duration; (ii) more regular assessment of the training quality and accreditation through the NTC and working with TVET organizations, provision of a competency‐based skills development pathway, and setting trainees on a path to obtain Certificate I and II entry‐level qualifications. (In UYEP I, youth reported that receiving a certificate and reference were major in factors facilitating the search for employment); (iii) a preference expressed by employers for practical training;87 (iv) a stronger focus on gender equality and disability, and relatedly the provision of GBV prevention training; and (v) the introduction of graduation pathways for youth through the referral services, including for self‐employment in the informal economy. 43. The project will aim to achieve gender equity and monitor the inclusion of indigenous youth, who are assessed to be among the most vulnerable. There is evidence that in the UYEP I, through the inclusion of women in a range of work, and through the inclusion of gender‐equality training in the BLST, has helped to improve the status and economic opportunities of women participants.88 The project design will build on existing interventions that have proven to be effective.89 To motivate participants to complete the learning pathways, facilitation services and gender targeting will be provided across all training elements. In addition, UYEP II will increase the stipend amount to cover childcare costs for both males and females and provide a wider menu of labor‐based civil works activities (e.g., paving, landscaping, etc.,) to allow for improved social inclusion for young women and youth with disabilities. 44. To address risk‐factors associated with GBV, the project will build on existing GBV referral services. The project design recognizes GBV as a significant barrier to achieving gender equality in the workplace and seeks to: (i) utilize specialized response efforts by linking to, and strengthening where needed, existing referral pathways and coordination mechanisms adopted under UYEP I (primarily through NCDC’s Gender and FSV Secretariat); (ii) support prevention efforts through the engagement of a specialist organization to deliver specific training to contractors, BLST trainers and project

85 US$10.8 million from the Government of Australia; US$1 million from Exxon Mobil and US$0.6 million from the Republic of Korea. 86 This includes UYEP I’s targeting of unattached youth, citizen engagement mechanisms (e.g., the GRM, CCP as well as the On‐the‐Job Training, delivery of small‐scale infrastructure and public services, gender focus and fiduciary arrangements). 87 The project’s consultations with employers and TVET providers revealed that the disconnect between industry and TVET institutions are largely due to (i) a mismatch between industry requirements and TVET provided competencies; (ii) the limited capacity of TVET to provide adequate learning facilities with up‐to‐date industry‐standard equipment; and (iii) a lack of capacity to insert trainees into work placement opportunities as part of the course. In response to training needs, certain industries have set up their own in‐house training and apprenticeship services which can also be trade certified. UYEP II will focus on such market oriented vocational skills with provision for certification up to National Certification I and II or trade license where possible. This will be done in coordination with NTC and NATTB. 88 Based on the 2017 FUS, the percentage of participants who believed that women should be at home and not in waged work, fell from 13 percent before the program to 2 percent after the program (and fell from 16 to 9 percent for men). 89 Described under Introduction and Context.


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staff to raise GBV awareness; and (iii) address underlying constraints that could help to stem GBV rates, including women’s lack of economic independence being a barrier to safety and justice; promoting respectful relationships, positive communications, problem solving and conflict resolution skills and challenging cultural / gender norms. 45. Key operational and fiduciary lessons include:

a. Building local ownership and optimizing the delivery and sustainability of institutional outcomes through

partnerships with municipal authorities. A timely start‐up requires working with key staff and locally embedded institutions to implement the project;

b. Due to capacity constraints in the implementing entities, managing financial management implementation through a dedicated PMU allows for efficient disbursement and payments to beneficiaries and contractors;

c. Partnering with a commercial bank to facilitate the opening of bank accounts enables access to banking services for youth who otherwise may not have such access and decreases cash handling risks;

d. Simplifying work and training flow arrangements to avoid bottlenecks and implementation delays; e. Supporting a participatory approach and ensuring that the training is merit‐based to incentivize performance but

also aligned with youth interests through the provision of a wider set training options, including improved preparedness to enter the informal economy; and

f. Supporting data collection and evaluation efforts to move towards evidence‐based policy making. 46. A more detailed summary of experiences and lessons learned from UYEP is given in Annex 3.

III. IMPLEMENTATION ARRANGEMENTS

A. Institutional and Implementation Arrangements 47. The two Implementing Entities for the project will be NCDC and LCA. Each will contain a PMU. NCDC will be responsible for the implementation of: (i) Components 1 (including 1(d) Other Technical Assistance Activities), 2 and 3 of the project as they each relate to the carrying of activities in NCD; and (ii) Component 4(a). LCA will be responsible for the implementation of: (i) Components 1(a), 1(b), 1(c), 2 and 3 of the project as they each relate to the carrying of activities in the Lae area; and (ii) Component 4(b). Each Implementing Entity will enter into a Project Agreement with IDA, and a Subsidiary Agreement with DOT. Portions of the Credit proceeds, as indicated in the table in paragraph 110, will be made available by DOT to the respective Implementing Entities on a grant basis pursuant to the Subsidiary Agreements. 48. The execution of a project agreement by NCDC and a Subsidiary Agreement between the PNG and NCDC would be, among others, conditions that need to be fulfilled to declare the Financing Agreement effective. LCA is a relatively new entity established pursuant to the Lae City Authority Act 2015, No. 11 of 2015 (LCA Act), with its Board being inaugurated in 2018 and is yet to become fully operational. The functions and responsibilities of LCA under the LCA Act are narrowly described and limited compared to LCA’s roles and responsibilities under the project. To demonstrate that LCA is authorized to carry out its designated roles and responsibilities under the project, GoPNG will provide further clarification, either through the issuance of a ministerial determination published in the national gazette or otherwise. The submission of such clarification documents by GoPNG as well as the execution of a project agreement by LCA and a Subsidiary Agreement between PNG and LCA would form part of the conditions of disbursement of funds to LCA, and they would need to be completed within six months after project effectiveness. 49. A PCO will manage inter‐agency coordination and support NYDA, one of two PSC co‐chairs and the lead


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government agency responsible for youth development. The PMU attached to NCDC under the UYEP I, operating for the past eight years, is managed by an experienced Project Manager supported by experienced administration and operational team members, most of whom will transition into UYEP II. Under UYEP II, the PMU in NCDC will be comprised of at least a Project Manager, a Senior Project Accountant and a Procurement Officer, and supported by other adequate staff and personnel. A second PMU, with its own Project Manager and support team, will be established in Lae under LCA. The PCO, led by a PCO Manager, will manage inter‐agency coordination, and carry out certain overarching activities including national communications, partnerships, joint PMU training, coordination with NYDA on project implementation, and consolidated reporting to IDA, PSC (where appropriate), DOT and DNPM. The PCO will be attached to the NCDC PMU for efficiency reasons, sharing some staff and resources, but also be functionally accountable to NYDA. The PCO will: (i) give UYEP II greater national prominence through NYDA; (ii) harmonize systems and processes across the Implementing Entities; and (iii) support DPLGA (as the parent ministry for the City Authorities) and NYDA (as the authority mandated to oversee youth development) to report and coordinate with partners on the project, nationally. 50. A Project Steering Committee (PSC) will provide strategic and governance oversight of the project, oversee performance of the project, facilitate policy discussions and coordination between agencies, and provide advice and guidance on annual work plans and budgets submitted by the PMUs. The PSC will also set the project’s policies and directions in accordance with the project’s development objectives. The PSC, co‐chaired by DPLGA and NYDA, will include the Secretaries (or equivalent) of NCDC and LCA, Director level representatives or higher of DOT, DNPM, and DLIR, and one representative from each of Private Sector, Gender and Civil Society umbrella organizations. Details of the PSC composition will be set out in the POM. The PCO will be the Secretariat to the PSC. A Memorandum of Understanding (MOU) will be executed jointly between NCDC and LCA, and DPLGA and NYDA as co‐chairs of the PSC, defining the agreed obligations of the parties and clarifying their respective roles and responsibilities in the project. The MOU will be executed no later than 30 days after the effective date of the Financing Agreement. Application of the MOU will ensure cooperative working relationships between the parties leading to effective project implementation. Key operational representatives from the PCO, PMUs, and Implementing Entities, will meet regularly to coordinate planning, resources, works and services, community engagement, safeguards compliance, budgeting, surveys, and monitoring activities.

Diagram 2. Proposed institutional arrangements showing the Implementing Entities, PMUs, PCO, and PSC.


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B. Results Monitoring and Evaluation Arrangements 51. The Monitoring and Evaluation (M&E) plan is based a set of outcome and intermediate outcome indicators and targets defined for each component in the Results Framework. Data on trainees will first be collected on all applicants using a condensed Eligibility Screening Survey (Component 1a). All selected participants will need to complete a longer registration form during the BLST (Component 1b). Progress and implementation performance data will be updated as trainees progress through different stages of the project. The data will be entered and maintained in the project MIS (see further details under Section II B [Sub‐component 3a); technical details on the MIS system are given in paragraph. 99 of Annex 1). 52. The set of surveys comprise a baseline when youth enter the project, two FUS administered at the project’s mid‐line and end‐line, and a set of additional community perception and employer surveys. The two Follow up surveys are planned to take place around 18 months after participants are screened. The use of tablet devices for data collection, combined with purpose designed software such as Survey Solutions is planned. Execution of the FUS will preferably be done by a professional survey firm contracted for the purpose, working closely with the PMU. The impact evaluation will take the form of a staggered rollout randomized control trial to be conducted in six wards in NCD. A transparent lottery system will be used to determine the random allocation of the timing of project participation opportunities for eligible youth in these wards. The main outcome of interest is the project's impact on participants’ formal or informal sector employment opportunities after the project. Further detailed analysis in the context of planned UW&S activities will be required to ensure that the ideal total sample and control group sizes can be realized. 53. Because the project covers NCD and Lae, requiring a consistent approach, the surveys will be managed under the auspices of the PCO with specialized support from IDA. The PCO will also commission specialist analysis of the data. Results from analysis of data collected in the MIS, and the formal surveys, will be used to test assumption and adjust the project over time as well as fulfill the need to monitor project results. For example, the assumption that all trainees undertaking UW&S before being offered skills development training under Component 2 makes for more employable trainees can be assessed. Similarly, the relative proportion of trainees offered internships versus livelihood or vocational training can be adjusted depending on the downstream outcomes.

C. Sustainability

54. The main sustainability risks are: (i) the project offers only short‐term training and employment for large numbers of youth; and (ii) economic uncertainty is outside of the project’s control and that GoPNG will find it difficult to sustain project activities after closing. The direct employment benefits from the UYEP’s training, job matching, and subsidized job placements confirm the positive impact the project is having on wage employment and employment prospects. Results from UYEP show the project played an important role in facilitating trainee’s entry into, and engagement with, the labor market. Even for those trainees not working after UYEP, there was “…increased job search […] and greater optimism about future employment prospects, than before their involvement in UYEP.”90 Evidence from UYEP I suggests that the project also played an important role in developing other important social skills, including citizen engagement, improved attitudes to gender equality among other areas. Under Component 1c, the urban works and services will construct or improve small‐scale public infrastructure in NCD and Lae. These will improve the living environment for local communities and will have an operating life well beyond the duration of the project. The City Authorities (NCDC and LCA) will own the assets and be responsible for their future maintenance. With the additional

90 FUS 2017.


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changes in the UYEP II’s design focused on: (i) embedding project activities where appropriate into relevant departments of the City Authorities; and (ii) the provision of a wider menu, longer duration and certified approach to training and work placements, the identified risks are further decreased.

IV. PROJECT APPRAISAL SUMMARY

A. Technical, Economic and Financial Analysis 55. The original UYEP has demonstrated that public works activities and internship placements, supported by basic life skills and job readiness training, and coaching, and counseling services, can serve as an effective safety‐net for poor and vulnerable segments of society. The same approach is appropriate and relevant for UYEP II. The main technical features of the project are: (i) communication and awareness campaigns, followed by application and screening processes, to ensure all potential beneficiaries have an opportunity to join the project; (ii) ten days of prerequisite BLST for all trainee beneficiaries; (iii) applying appropriate labor‐based technology for public urban works and services according to NCD and LCA priorities covering all Wards in the target locations; (iv) offering beneficiaries either a three‐month internship with a local employer or vocational training with established industry‐based or accredited training providers; (v) operating referral services desks as part of the graduation pathway after internships or formal training; (vi) providing counselling and GBV referral services throughout all stages of the project cycle; and (vii) undertaking detailed surveys and analysis of data collected from beneficiaries to assess the performance of, and tune, the project and its elements. 56. The approach to communications and awareness campaigns, BLST, urban works and services, and internships has been well established and proven under the UYEP I. Some improvements to the BLST program will be introduced based on lessons, including a curriculum review, and completion in the urban works and services activities will be a prerequisite for entry into the skills development training.91 As an improvement, the BLST will be formally assessed by the NTC so a competency‐based certificate can be issued to trainees on completion of the training, a desirable feature for trainees when searching for employment. Standard designs, specifications, drawings, Bill of Quantities, and construction or implementation methods will be used for the urban works and services. The works and services contract will be managed and overseen by qualified engineers and works supervisors. The vocational training is a new subcomponent to UYEP II. However, these services will be contracted through established providers and curriculum programs, rather than creating something new. 57. The various surveys to be carried out at various stages of the project will be conducted formally, following robust, internationally accepted survey and analysis methods. A technical audit may be included in the Mid‐Term Review (MTR) to assess the quality of community investments. An MTR will be conducted by no later than three years after the effective date of the Financing Agreement. In the MTR process, the PMUs will be required to provide by no later than 45 days prior to the MTR, a report on the parts of the project under its responsibility. Such reports will be consolidated by NCDC into the overall MTR report, and forwarded by the Recipient to the Association by no later than one month prior to the MTR. 58. The project will provide economic benefits from: (i) BLST training in which participants receive a daily stipend for transport, lunches and increased education; (ii) urban works and services in which participants receive a stipend for wages and lunches, health and safety equipment, and gain employment readiness experience; (iii) Urban Works and Services

91 Under UYEP I, some beneficiaries went straight into internships after BLST, while the remainder were offered only participation in urban works and services.


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capital value; (iv) internships in which participants receive a training stipend, lunches, learning experiences, and increased exposure to potential employment opportunities; (v) vocational training in which participants receive a training stipend, lunches and increased education; (vi) employment post internships and vocational training; and (vii) crime and violence prevention outcomes in specific communities benefiting from the pilot. For every US$1.00 spent on the project, around US$1.15 is expected to be generated in benefits. The project is expected to engage 6,700 unattached youth involving 446,000 training days in various forms, and 486,000 paid labor‐days. Further details on the economic benefits can be found in Annex 2.

B. Fiduciary

(i) Financial Management

59. A financial management assessment was carried out in accordance with the “Principles Based Financial Management Practice Manual” (February 04, 2015) and as further elaborated in the Bank Guidance “Financial Management in World Bank Investment Project Financing Operations” (February 24, 2015). Under the Bank’s Policy: Investment Project Financing, with respect to projects financed by the Bank, the borrower and the project Implementing Entities are required to maintain financial management arrangements—including planning and budgeting, accounting, internal controls, funds flow, financial reporting, and auditing arrangements—acceptable to the Bank to provide reasonable assurance that the proceeds are used for the purposes for which they were granted. These arrangements are deemed acceptable if they are capable of correctly and completely recording all transactions and balances relating to the project. In addition, such arrangements are acceptable if they can facilitate the preparation of regular, timely and reliable information regarding project resources and expenditures and safeguard the projects assets; and are subject to auditing arrangements acceptable to the World Bank. There are two Implementing Entities for the Project, National Capital District Commission (NCDC) and Lae City Authority (LCA). The project’s overall financial management risk is rated as “High.” 60. The existing financial management systems for the NCDC are assessed as adequate to meet the financial management requirements as stipulated in the Bank Policy: Investment Project Financing. The project's financial management risk for NCDC is rated as "Substantial". 61. The existing financial management systems for the LCA are assessed as not adequate to the meet the financial management requirements as stipulated in the Bank’s Policy Investment Project Financing. While LCA was established by the Lae City Authority Act 2015, it is still not operational. In late 2018, a board and acting CEO has been appointed, PGK5m was appropriated to it in the 2019 National Budget and it is in the process of developing an accounting system to account for the transactions of the entity or to produce financial reports and statements. However, it is yet to receive any funds, has no bank account, has no accounting system to account for the transactions of the entity or to produce financial reports and statements, and has no other staff or consultants engaged to perform its functions. The project’s financial management risk for LCA is therefore rated as “High.”

(ii) Procurement 62. Procurement for the Project will be carried out in accordance with the World Bank Procurement Regulations for Investment Project Financing (IPF) Borrowers (Procurement Regulations), July 2016 revised November 2017 and August 2018, as well as the provisions stipulated in the Financing Agreement. The project will finance small works contracts, goods, services and consultant assignments (firms and individuals) for NCDC and LCA. To avoid duplication of some procurement of some goods and services in both locations (e.g. upgrade of the MIS system, baseline and impact evaluation


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surveys, curriculum reviews and update of learning materials), the NCDC PMU will lead the procurement process in view of its demonstrated track record. LCA will be involved in these procurement processes and related decision making. Additional procurement support will be provided by a Procurement Specialist hired to support implementation of key procurement activities, development of systems and capacity building. 63. Procurement Risk Assessment. A procurement assessment of the Implementing Entities’ existing capacity, experience, and practices for managing procurement was carried out and informed the Procurement Risk Assessment of the Implementing Entities. One of the project counterparts, NCDC, through its respective PMU, have eight years of experience implementing UYEP I. Procurement under UYEP I has been Satisfactory. LCA as a new implementing agency under UYEP II, will have its own, dedicated PMU, replicating arrangements for NCDC. The LCA PMU, will have a designated Procurement Officer. However, as LCA has no previous experience with World Bank projects, support and coaching will be provided by the NCDC PMU to harmonize systems and approaches. 64. Procurement Plan. A detailed procurement plan for the first 18 months of the project was prepared based on the information detailed in the Project Procurement Strategy for Development (PPSD). 65. Systematic Tracking of Exchanges in Procurement. The use of the World Bank’s Systematic Tracking of Exchanges in Procurement (STEP) system will be mandatory for use under the UYEP II.

C. Safeguards

(i) Environmental 66. The project is categorized as Category B and will trigger OP4.01 Environmental Assessment. An Environmental and Social Management Framework (ESMF) has been prepared that represents the Environmental Assessment required for Category B projects. The project will have low to moderate environmental risks, with the project’s physical investments consisting of small‐scale infrastructure in urban areas. These include construction of, and improvements to, pedestrian pathways and steps, driveways and parking lots, recreational and market shelters, as well as beautification of public areas, repair and maintenance of roads and public buildings, and waste management. All civil works will take place within the urban areas of Lae and Port Moresby, which have been extensively developed and do not contain critical natural habitats. Potential impacts are related to the construction process and include increased dust and noise, improper waste generation, and safety risks to workers and pedestrians. These risks will be managed through processes developed on UYEP I and adapted to UYEP II, as detailed in the ESMF. 67. Risks relating to climate change and geophysical hazards are assessed as Moderate. IDA’s Climate and Disaster Risks Screening Tool has been used to determine the exposure of the project’s physical works, and where non‐physical components can modulate the climate change and geophysical‐related risks. The project has moderate overall exposure, largely due to the prevalence of various natural disaster risk in the country (flooding, drought, landslide, earthquake, and tsunami) and exposure to climate change risks (sea level rise, increased flooding, and storm surge). The location of Papua New Guinea on the Ring of Fire, as well its tropical climate, exposure to monsoon flooding, and collection of urban areas in coastal areas, results in generally high exposure across the archipelago. The project design includes several measures to plan for and mitigate the climate change and geophysical risks. Road and drainage maintenance under Component 1 will contribute to the infrastructure’s climate resilience due to an anticipated reduction in flooding, and climate resilient construction practices, where appropriate, will be incorporated into training for those activities. With regards to climate change mitigation, project activities will produce benefits and reduce potential greenhouse gas emissions by using LED


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bulbs in street lighting and tree planting in urban areas as part of landscaping and beautification works to be undertaken in Component 1.

(ii) Social

68. Most people living in cities targeted by the project are Indigenous, with the highest proportion being Moitu‐Koitabu and Ahi ethnicity. Building on the approach taken in UYEP I, the project will not prepare a separate Indigenous Peoples Plan (IPP)/Indigenous Peoples Policy Framework but will instead ensure that elements of an IPP, such as informed consultations and stakeholder participation, will be incorporated into project design. IP issues will be specifically addressed through a community engagement and communication plan, and the Project will also set minimum targets for participation of indigenous groups. Involuntary land acquisition is not anticipated as project works are small scale and are likely to be confined to Government owned or controlled land. However, as the location of works is not known at this stage, OP4.12 is triggered as a precautionary measure if the scope of works widens, or suitable land is not available. A Resettlement Policy Framework (RPF) has been prepared to ensure that the Bank’s policy requirements are met if access to land is required. The Project is expected to result in social benefits through skill development and improved access to employment opportunities in Lae and Port Moresby. It is unlikely to cause any significant social risks. Measures to ensure

that the project is implemented in line with World Bank Policy are included in the ESMF. As with UYEP I, the CCP and GRM will be the main instruments for the project’s community outreach and citizen engagement

(iii) Other Safeguards

69. No other safeguard policies are triggered for this project.

(iv) Grievance Redress Mechanisms

Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project‐level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project‐related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non‐compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects‐operations/products‐and‐services/grievance‐redress‐service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

V. KEY RISKS

70. The overall Risk Rating is Substantial. The main concern pertains to high fiduciary risks. Risks associated with political and governance, macroeconomic, institutional capacity for implementation and sustainability, and stakeholders are assessed as Substantial. Despite low institutional capacity, UYEP I, through the NCDC’s PMU has delivered excellent results, with increasing effectiveness, since its start in 2011. The project has expanded with a significant Additional Financing operation in 2016, funding from GoPNG, and in‐kind support from NCDC. Throughout the original and expanded scope, the project has adapted to risks, and risk mitigation measures have been successfully tested. Keeping central


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control of all elements of delivery under the PMU, especially procurement and finances, is critical to ensuring good implementation progress. Additional complexity will be introduced under UYEP II by operating in two locations, NCD and Lae, and potentially a third location, after the MTR. The key risks and risk management measures incorporated in the project design or implementation methodology, are described in Table 1 below.

Table 1: Risks and Mitigation Measures

Description of Risk and Classification Mitigation Management Measures

Political and Governance ‐ Substantial

Institutional Mandate of LCA. The functions and responsibilities of LCA under its enabling legislation are narrowly described and limited when compared to LCA’s roles and responsibilities under the project.

GoPNG will provide, within six months from effectiveness of the Financing Agreement, further clarification, either through the issuance of a ministerial determination published in the national gazette or otherwise, to demonstrate that LCA is authorized to carry out its designated roles and responsibilities under the project. No funds will be transferred to LCA until clarification is provided with respect to LCA’s mandate.

Macroeconomic ‐ Substantial

Foreign Currency Reserves Constraints Due to low foreign currency reserves in PNG, tighter foreign exchange controls are causing significant delays in foreign currency payments of consultants and suppliers.

IDA will be flexible with lowering the minimum value threshold for direct payments to facilitate foreign currency payments while foreign currency reserve constraints exist.

Sector Strategies and Policies ‐ Moderate

Job limitations in the Labor Market and Quality of Training is Low This is due to numerous factors including poor training facilities and teacher quality. Various studies have drawn attention to the mismatch between training provided by TVET institutions and employers’ needs in PNG

Based on employer surveys conducted in UYEP I, employers report it is likely that the formal economy would be able to absorb a larger number of graduates if they had the “right skills.” Therefore, despite limitations in the job market, reports by employers suggest there is opportunity for filling and creating more jobs, and, consistent with global evidence, combining soft and practical skills training in all stages of the work cycle, which UYEP II is doing, is seen to make a difference in increasing employment and social outcomes for poor uneducated youth looking for work, and employment outcomes increase with duration.

Fiduciary ‐ High

Corruption Corruption and bribery concerns relating to internal controls and external influences; PNG is ranked 145 out of 179 countries on transparency corruption perception index.

Project will be implemented using similar fiduciary control mechanisms applied in the case of NCDC for UYEP I, which has been under implementation for several years.

Similar fiduciary controls mechanisms will be set up in Lae, which will be implementing this type of Project for the first time.

The PCO will harmonize and oversee fiduciary arrangements.

Weak In‐Country Procurement Capacity Weak procurement capacity, as well as using existing Government processes affects time taken to complete tendering processes. Limited, experienced procurement personnel are available and existing staff are unfamiliar with application of the World Bank’s current Procurement Framework.

Hire a Procurement Consultant during preparation to ensure procurement activities (including contracting of relevant staff) are at an advanced stage by effectiveness;

Retain the Procurement Consultant on‐call during life of the Project.

Ensure that the client has access to the online training modules on the New Procurement Framework.

Encourage sharing experiences among World Bank financed projects’ procurement staff.


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Organize workshops by World Bank Procurement Specialists periodically when in‐country.

Handling of Cash Payments Large numbers of payments of stipends made to beneficiaries brings security risks where paid in cash.

Under a cooperation arrangement with BSP, payments will be made by direct credit into youth beneficiaries’ bank accounts using a bulk payment, semi‐automated system (KunduPei). Bank accounts will be set up for beneficiaries with BSP if they don’t already have one.

All contractors and consultants will be paid electronically.

Institutional Capacity for Implementation and Sustainability ‐ Substantial

Low Institutional Capacity NCDC has low institutional capacity and LCA has No institutional capacity.

PMUs attached to the Implementing Entities will control all elements of the project, including finances and procurement.

The existing PMU attached to NCDC will continue under UYEP II.

Wherever practical, subject to budget and performance, existing team members will be retained to provide continuity.

LCA is a relatively new entity, with its board being inaugurated in 2018, but is not yet operational, and has not implemented a World Bank or any donor funded project before.

An LCA PMU will be established and control all local aspects of the project operations, including finance and local procurement.

Procurement and financial management of some activities that span the whole project (e.g. surveys, MIS system upgrade, curriculum review, audits, and midterm reviews) will be managed by the NCDC PMU or the PMO on behalf of both PMUs.

The PSC, co‐chaired by NYDA and DPLGA, will provide strategic and governance oversight of the project.

A MOU signed by NCDC, LCA, DPLGA and NYDA, will describe the responsibilities of the various parties, and mentoring and support arrangements.

LCA becomes operational, including, inter alia, the implementation of an accounting system acceptable to the World Bank.

Poor Consolidated Reporting Data collected from trainees at different locations may be variable and difficult to combine for analysis purposes.

The PCO will ensure data collected locally by the PMUs is entered in the MIS using common approaches and standards. The PCO will be required to submit consolidated financial (IFRs) and progress reporting (QPRs) to the Association, PSC (as appropriate), DOT and DNPM.

A central MIS database will be use if practicable or, if not, data entered in local databases will be regularly merged into a combined database and checked for accuracy.

Technical Design of Project or Program ‐ Moderate

Harmonization of Systems Between NCDC and LCA Different systems and approaches could be used in NCD and Lae, and team members recruited for Lae will be new and inexperienced in a UYEP II type operation. Coordination between the PMUs may be challenging.

Some existing members of the NCDC PMU will assist the LCA PMU, and then coach and mentor PMU counterparts until fully established and comfortable with procedures.

Common operating procedures will be adopted, documented in the POM, with adaptation for specific, local requirements as necessary.

The Project Coordination Manager (PCM) will arrange joint PMU training and be responsible for inter‐agency coordination.

Coordination between the PMUs will be done through regular meetings


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convened by the PCM, and communication between PMU team leaders, to harmonize approaches and share resources as appropriate.

New and Untested Training Interventions The vocational training elements of the project are new and untested.

Training will be delivered through existing training instructions or industry providers with established curriculum programs and track records.

An extensive review of available training providers, capacity, and track record was undertaken during project preparation.

Only a few training providers will be contracted initially in each location, and evaluated for performance, before expanding the number of providers or increasing trainee throughput numbers.

Limited Supply Market Few qualified suppliers/ contractors/consultants are available in the market to fill key positions. The Project needs security of supply at a good price despite a thin market.

Advance work and communication by the Implementing Entities must be done to encourage interest.

A remuneration scale for PMU staff has been set to be competitive within the constraints of a tax‐inclusive budget envelope.

Aspects of the project design have been adapted to fit with what NGOs and Institutions can offer for GBV services and vocational training services.

Contractors in NCD are familiar with the requirements of labor‐based contracts, but additional effort will be required to encourage and support contractors in Lae.

Relevancy of BLST Training Basic life skills training does not equip trainees with the skills necessary to gain long‐term employment

The BLST component of UYEP‐II is built on the successful UYEP‐I training.

The BLST training period will be increased from five to ten days to increase the behavioral and soft‐skills elements of the program (seen as most desirable by employers), and more time for complex subjects such as financial literacy (essential for success in the informal economy).

The BLST curriculum will be formally reviewed independently and modified as appropriate early in implementation of UYEP‐II.

Performance of trainees after the BLST will be monitored and reviewed continually as part of the M&E under the project to assess effectiveness.

Delays in Training Placements Bottle necks in the project cycle, especially after BLST, causes a backlog in internships or vocational training placements.

After BLST, trainees will participate in the urban works and services program before being offered an internship or entry into one of the vocational training programs. This is a more streamlined and simplified procedure compared to UYEP I.

Intake numbers will be tuned to match the capacity and absorption rate of the various downstream activities.

Sustainability of Employment Outcomes Enough trainees may not enjoy long‐term employment after their participation with the project

Social, behavioral, and financial literacy elements of training, desirable and sought after in prospective employees by employers, or essential to self‐employment, have been increased or improved in the project.

All trainees will participate in the urban works and services before being offered internships or other training opportunities. Evidence shows trainees with urban works and services experience are better equipped, and are expected to be more successful, in the employment market.

Previous experience shows more than 40 percent of internship trainees gain employment with their internship employer. Referral services are now included in the project design (employment, small loans, and further training desks) to give beneficiaries every opportunity after their participation with the project.

The potential of operating a commercially oriented labor placement desk


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under NCDC as a sustainable long‐term service will be explored.

More specialized counseling and GBV referral services are being added in the project design to help trainees better manage events that adversely affect their employment opportunities.

Sustainability of Infrastructure Outputs Infrastructure built as part of the urban works and services activities may not be suitable or sustainable.

All design, procurement, contract management, and supervision of works and services will be managed by PMU engineers and works supervisors.

Designs will conform to common engineering standards and levels of service appropriate to the circumstances.

Climate change and disaster effects will be considered as part of the design process as necessary.

The Implementing Entities will identify infrastructure works and services and will formally take over and be responsible for maintaining completed assets.

Stakeholders ‐ Substantial

Perceived Biases in Participation Youth complain about perceived biases in the application and screening processes, or lack of opportunity to enter the project. Communities may also feel the urban works and services are not benefiting them or are not distributed equitably among Wards.

Extensive information and awareness campaigns will inform youth of the project, and eligibility and selection criteria.

The CCP and GRM, established under UYEP I, will be the main instruments for the project’s community outreach and citizen engagement and continually adjusted as needed.

Works and services will be cycled through Wards, so each receive an equitable share. Community information campaigns will outline what is coming and when. Communities will be consulted about aspects of the works activities that affect them directly (especially relating to land use), or where compensation may be due.

Grievance Redress Mechanisms Failure of LCA to effectively implement a grievance redress mechanism causes lack of confidence and support by beneficiaries and communities. There is lack of will to undertake necessary groundwork to implement effective grievance mechanisms.

Contracts will outline processes for resolving grievances and contractual disputes.

The Project Operations Manual will detail the grievance redress mechanisms which shall be acceptable to the World Bank.

WB supervision missions will monitor the operation and effectiveness of the grievance redress mechanisms.

.


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VI. RESULTS FRAMEWORK AND MONITORING

Results Framework

COUNTRY: Papua New Guinea Urban Youth Employment Project II

Project Development Objectives(s)

The development objective is to improve the capacity of participating young men and women in project areas to engage in productive income generating activities.

Project Development Objective Indicators

RESULT_FRAME_TBL_PDO

Indicator Name DLI Baseline Intermediate Targets End Target

1 2 3 4

Improve capacity of youth in project areas to engage in productive income generating activities

Total Number of direct project beneficiaries (Number)

0.00 854.00 1,891.00 3,111.00 5,185.00 6,100.00

Of which are women (Number)

0.00 427.00 946.00 1,555.00 2,593.00 3,050.00

Of which are Motu Koitabu in NCD (Number)

0.00 68.00 151.00 249.00 414.00 488.00

Of which are Ahi in Lae (Number)

0.00 26.00 57.00 93.00 156.00 183.00

Percentage of graduates who report being employed 12 months after they complete their internships (Percentage)

0.00 10.00 20.00 30.00 40.00 40.00

Of which are women 0.00 10.00 15.00 20.00 25.00 30.00


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RESULT_FRAME_TBL_PDO


1 2 3 4 (Percentage)

Percentage of youth who are assessed to have achieved satisfactory performance in the UW&S component (Percentage)

0.00 30.00 50.00 75.00 75.00 80.00

Of which are women (Percentage)

0.00 25.00 30.00 45.00 40.00 50.00

Percentage of participants achieving minimum standards in Vocational Training assessments (Percentage)

0.00 25.00 50.00 70.00 70.00 75.00

Of which are women (Percentage)

0.00 25.00 30.00 40.00 50.00 50.00

PDO Table SPACE

Intermediate Results Indicators by Components

RESULT_FRAME_TBL_IO


1 2 3 4 Youth Job Corps

Number of youth entering BLST (Number)

0.00 938.00 2,077.00 3,417.00 5,695.00 6,700.00

Of which are women (Number) 0.00 469.00 1,039.00 1,555.00 2,593.00 3,350.00

Of which are Motu Koitabu in NCD (Number)

0.00 75.00 166.00 273.00 466.00 536.00


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RESULT_FRAME_TBL_IO


1 2 3 4 Of which are Ahi in Lae (Number)

0.00 19.00 42.00 68.00 114.00 134.00

Number of youth who complete Urban Works and Services (Number)

0.00 798.00 1,767.00 2,907.00 4,845.00 5,700.00

Percentage of residents in project locations that report improved perceptions of safety (Percentage)

0.00 20.00 30.00 30.00 30.00 30.00

Skills Training

Number of youth placed in Internships (Number) 0.00 644.00 1,426.00 2,346.00 3,910.00 4,600.00

Percentage of youth graduating from Internships (Percentage)

0.00 50.00 50.00 60.00 75.00 75.00

Number of youth placed in Vocational Training (Number) 0.00 154.00 341.00 561.00 935.00 1,100.00

Percentage of Vocational Training graduates who report being employed 12 months after they complete their vocational training (Percentage)

0.00 5.00 8.00 12.00 15.00 15.00

Referral Services and M&E

Percentage of GBV cases identified and reported in accordance with GBV and Sexual harassment guidelines and referred for case management (Percentage)

0.00 50.00 60.00 80.00 90.00 100.00

Percentage of youth accessing 0.00 5.00 10.00 15.00 15.00 15.00


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RESULT_FRAME_TBL_IO


1 2 3 4 the training referral service (Percentage)

Percentage of youth accessing the employment referral service (Percentage)

0.00 10.00 15.00 20.00 25.00 25.00

Percentage of youth accessing the micro‐enterprise referral service (Percentage)

0.00 5.00 10.00 15.00 15.00 15.00

Project Management

Percentage of participant youth who believe that men and women are equally capable of participating in the workforce (Percentage)

0.00 33.00 50.00 75.00 80.00 80.00

Percentage of participant youth satisfied with the Grievance Redress Mechanism (Percentage)

0.00 30.00 40.00 50.00 60.00 75.00

IO Table SPACE

UL Table SPACE

Monitoring & Evaluation Plan: PDO Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Total Number of direct project beneficiaries

Reported as the number of youth completing Basic Life Skills and Job Readiness Training

Quarterly

MIS

BLST Registrations

PMU


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Of which are women Number of women completing BLST (50% targeted)

Quarterly

MIS

BLST Registrations

PMU

Of which are Motu Koitabu in NCD Number of Moitu‐Koita youth completing BLST (10% targeted)

Quarterly

MIS

BLST Registrations

PMU

Of which are Ahi in Lae Number of Ahi youth completing BLST (15% targeted)

Quarterly

MIS

BLST Registrations

PMU

Percentage of graduates who report being employed 12 months after they complete their internships

Target based on UYEP I (OJT) experience, which yielded an employment outcome of 41% according to the 2017 Follow Up Survey (FUS). Percentage denominator is number “graduating” (i.e. satisfactorily completing) the project; “Employed” defined as: a) Formal employment, part or full time, regular ongoing employment (not temporary) during the past 6 months; and/or b) Self‐employment as part of an ongoing activity (i.e. not "one‐off" assignment) over the past six months, for at least four weeks in total. Reports will include

Baseline, Mid‐line and End‐line

Follow‐Up Survey

Impact Evaluation using a randomized control and treatment groups

Survey Firm


Page 43 of 72

comparison with employment levels at entry, comparison with controls.

Of which are women

Percentage of women Internship graduates who report being employed 12 months after the project. The target of 30% is slightly higher against data that suggests that females only make up 27% of the labor force.


Follow‐Up Survey

Impact Evaluation using randomized control and treatment groups

Survey Firm

Percentage of youth who are assessed to have achieved satisfactory performance in the UW&S component

Percentage denominator is the number entering each component; Definition for “satisfactory” completion includes at a minimum: ‐ Attendance >= 80% ‐ Satisfactory grading at BLST assessment; and ‐ Satisfactory assessment in UW&S component by Project staff as well as Works Contractor staff.

Quarterly

MIS

Participation and exit test for BLST and participation and performance review for the UW&S

MIS

Of which are women

Percentage of women who are assessed to have achieved satisfactory performance in the UW&S

Quarterly

MIS

Participation and exit test for BLST and participation and performance reviews

PMU


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component for UW&S

Percentage of participants achieving minimum standards in Vocational Training assessments

Based on assessment tests administered at entry and during/end of vocational training. Measures absorption of training by participants

Quarterly

MIS

Supervision and graduation reports

PMU

Of which are women

Based on assessment tests administered at entry and during/end of vocational training. Measures absorption of training by female participants

Quarterly

MIS

Supervision and graduation reports

PMU

ME PDO Table SPACE

Monitoring & Evaluation Plan: Intermediate Results Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Number of youth entering BLST Number of youth entering BLST

Quarterly

MIS

BLST registrations

PMU

Of which are women Number of women entering BLST (50% targeted)

Quarterly

MIS

BLST registrations

PMU

Of which are Motu Koitabu in NCD Number of MK entering BLST (10% targeted)

Quarterly

MIS

BLST registrations

PMU

Of which are Ahi in Lae Number of Ahi entering BLST (15% targeted)

Quarterly

MIS

BLST registrations

PMU

Number of youth who complete Urban Works and Services

This is the number of youth that remain engaged in

Quarterly

MIS

Contractor attendance reports

PMU


Page 45 of 72

UW&S to completion. Assumes an attrition rate of about five percent based on experience under UYEP I and improvements made to UYEP II.

Percentage of residents in project locations that report improved perceptions of safety

The indicator represents the increase in residents reporting perceptions of safety. Measure pre and post project in the selected communities. According to the last Community Survey conducted under UYEP I, 85% of community members in project locations believed crime and violence reduced because of the project. The number of youth who reported having friends involved in violence or robbery fell by eight percent (from 24% pre‐UYEP I to 16% by the time of the 2017 Follow‐Up Survey). The results also show a significant decline in the reported incidence of “using threat or force with somebody” for participant youth (from 16% to eight percent), while this behavior

Periodic

Community Perceptions Survey

Randomized selection of residents

Survey Firm


Page 46 of 72

increased among control youth. However, the more conservative target reflects the limited number of beneficiaries (less than in UYEP I) and expectation that security perception could change from community to community.

Number of youth placed in Internships Number of youth placed in Internships

Quarterly

MIS

Supervision and registration reports

PMU

Percentage of youth graduating from Internships

Attendance >= 80% for OJT participants and with satisfactory exit rating from employer; OR Participant leaving assignment for other employment

Quarterly

MIS

Supervision and attendance reports

PMU

Number of youth placed in Vocational Training

Target derived from number graduating from UW&S. Measures project success in providing placements. Measures project success in providing placements

Quarterly

MIS

Supervision and registration reports

PMU

Percentage of Vocational Training graduates who report being employed 12 months after they complete their vocational training

Percentage of Vocational Training graduates who report being employed 12 months after the project. Target set considerably lower than Internships as this is a new intervention,


Follow‐Up Survey

Impact Evaluation using randomized control and treatment groups

Survey firm


Page 47 of 72

which is untested and based on international evidence which report generally low employment impacts. “Employed” defined as: a) Formal employment, part or full time, regular ongoing employment (not temporary) during the past 6 months; and/or b) Self‐employment as part of an ongoing activity (i.e. not "one‐off" assignment) over the past six months, for at least four weeks in total.

Percentage of GBV cases identified and reported in accordance with GBV and Sexual harassment guidelines and referred for case management

Percentage of GBV cases identified and reported in accordance with GBV and Sexual Harassment Guidelines and referred for case management

Quarterly

MIS

Case notes

PMU

Percentage of youth accessing the training referral service

This will mainly focus on helping the project assess the relevance of the new intervention and gauge demand and how it compares to the other referral services. The target is 15% of youth completing either the Internships or

Quarterly

MIS

Supervision reports

PMU


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Vocational Training.

Percentage of youth accessing the employment referral service

This will mainly focus on helping the project assess the relevance of the new intervention and gauge demand and how it compares to the other referral services. The target is 25% of youth completing either the Internships or Vocational Training.

Quarterly

MIS

Supervision reports

PMU

Percentage of youth accessing the micro‐enterprise referral service

This will mainly focus on helping the project assess the relevance of the new intervention and gauge demand and how it compares to the other referral services. The target is 15% of youth completing either the Internships or Vocational Training.

Quarterly

MIS

Supervision reports

PMU

Percentage of participant youth who believe that men and women are equally capable of participating in the workforce

Targets based on UYEP I Follow up surveys which showed that 16% of men agreed with the statement that women should stay at home rather than enter the workforce at baseline stage. This dropped to 8% in the follow up survey.


Follow‐Up Survey

Impact evaluation using randomized control and treatment groups

Survey Firm


Page 49 of 72

Percentage of participant youth satisfied with the Grievance Redress Mechanism

Citizen engagement indicator

Quarterly and bi‐annual

Based on exit interview of BLST verified by Follow‐Up Survey

Questionnaires

PMU and Survey Firm

ME IO Table SPACE


Page 50 of 72

ANNEX 1: Implementation Arrangements and Support Plan

COUNTRY: Papua New Guinea

Urban Youth Employment Project II Implementation Arrangements

71. UYEP II consists of four components: Component 1—Youth Job Corps; Component 2—Skills Training; Component

3—Referral Services and Monitoring and Evaluation; and Component 4—Project Management. Component 4: Project Management 72. The PCO in NCDC and Implementing Entities, (NCDC in Port Moresby and LCA in Lae), through their PMUs, will be

responsible for their respective parts of the project. Staff from the NCDC PCO and PMU will assist the LCA PMU get up and running through coaching and training on systems and approaches. The NCDC PMU will also manage procurement and delivery of some activities and services where it is logical to do (e.g. will involve one service provider such as for the MIS upgrade, curriculum material development, impact surveys and social/economic survey analysis, or audit services). Details of the components are given in Section II(B).

73. The project implementation arrangements are described in Section III(A). To support this, the organizational and

staffing structure in the PCO and PMUs is show in Diagram 3 below.

Diagram 3. PMU and PCO staffing and reporting arrangements


Page 51 of 72

74. PMUs will be established in NCD and Lae. A PCO, will be co‐located to the NCDC PMU and is also functionally accountable to NYDA, will manage the inter‐agency coordination, national communications, partnerships, joint PMU training, coordination with NYDA on project implementation, and consolidated reporting to the Association, PSC (as appropriate), DOT and DNPM. The NCDC PCO and PMU will share some staff and physical resources. A Memorandum of Understanding (MOU) and Project Operations Manual (POM) will describe the arrangements and define responsibilities between the PCO and PMUs, including how the functional and oversight relationships will work. The POM will be prepared and adopted within three months from project effectiveness, and the adoption of a POM is a condition of disbursement for Categories 1 and 2 in relation to expenditures for works under the project.

75. PMUs are responsible for the preparation of project reports, financial reports, POM, Annual Work Plans and

Budgets and any other reports relevant to the parts of project under its implementation responsibility. Such reports/documents will be submitted to NCDC (through PCO) and/or Recipient for consolidation and submission to the Association. For project reports, they will need to be prepared in each calendar quarter. PMUs will need to prepare them no later than 2 weeks after the end of each reporting period, for incorporation and forwarding by the Recipient to the Association of the overall Project Report with 45 days after the end of each period. Similarly, for Completion Report, PMUs will need to provide relevant information no later than 5 months for incorporation into the Completion Report. For Annual Work Plans and Budgets (AWPB), PMUs will need to prepare an AWPB for relevant its respective parts of the project by no later than November 1 of each year, for consolidation and submission to the Association of the overall AWPB by no later than December 1 of each year.

76. The youth development process is shown in Diagram 4.

Diagram 4. Youth development processes and components.


Page 52 of 72

Component 1: Youth Job Corps Communications, Awareness, Application Screening, and Basic Life Skills & Job Readiness Training 77. This component will be implemented by NCDC and LCA involving raising awareness in targeted urban areas,

mobilizing youth, providing them with basic life skills and job readiness training, and placing the youth in public works schemes. As with UYEP I, the works and services will consist of waste management, maintenance activities and public infrastructure investments. Other features are described in para. 22 et seq. The public works scheme will be closely aligned with the local development priorities of the Municipal Authorities, youth, and the Ward communities. There will be four subcomponents:

78. Communications and Mobilization will support community awareness and mobilization campaigns to identify

eligible youth. The campaigns will be managed by each PMU in cycles rotating through selected wards. Eventually, youth and communities in NDC and Lae are expected to participate in up to 3 cycles per ward. Campaigns will be managed by a Project Operations Officer supported by Youth Facilitators, Eligibility Screening, and Data Entry support people. At this stage, biometric and other data for each participating youth is entered in the MIS, through which each participant can be tracked as they progress through the program and beyond. Further details are given in para. 20.

79. Basic Life‐Skills and Job Readiness Training (BLST) will provide basic training for youth to increase their knowledge

and preparedness for transitioning into the work place both in the formal and informal economy. 80. Assessing Learning Achievements Including Numeracy and Literacy: UYEP I’s BLST administered a simple custom‐

designed literacy and numeracy test based on the Burt Read A‐loud Test. It was designed to serve as a screening (not diagnostic) tool to test for phonetic and numeric literacy. Most participants passed the test. The test was not standardized or normed to equate to school levels to scores of participations and no was it designed to diagnose specific shortcomings or propose remedial outcomes for respondents. UYEP II will need to revise and improve upon the pre‐training and post‐training assessment for BLST and the project will consider using the early grade reading assessment instrument for PNG as well as establish more systemic linkages with the Department of Education. Regular coaching and assessment sessions during the BLST and implementation of Urban Works and Services is designed in part, to assist participants with low levels of numeracy and literacy.

81. Coaching and Counselling: The coaching and counselling services during UYEP I mostly centered around providing

support to address personal and logistical issues. The UYEP II will build on the lessons on UYEP I and strengthen the coaching and counselling services aimed at developing life skills and competencies, competitiveness, and individual plans supported by personal goals. The referral desk services will support this during and after the completion of skills development activities. This will also include prevention and remedial action for gender‐based violence and referral services right from BLST training.

82. Training Management: The implementation of BLST in UYEP II will be directly managed by PMUs in Port Moresby

and Lae. The learning management during Urban Works and Services will be managed jointly by the training team and works team through supervision, coaching and learning assessment. The implementation of internship will be managed by the PMUs using the good practices and lessons from UYEP I. The delivery of Vocational Training courses and related services will be done through local service provides in Port Moresby and Lae using off‐the‐shelf courses or existing approaches used by inclusive finance and business development organizations. The aim


Page 53 of 72

of such an approach would be provide functional competencies appropriate for employment. The project will make necessary linkages for certification. The initial assessment of Lae suggests that the Vocational Education Service Providers providing industrial traders training are running at full capacity in terms of facility and trainers. Subject to further assessment, the UYEP II will include private sector providers and agri‐business training and trade organizations that have enough physical facility and staff or ability to take UYEP II trainees.

83. Competency‐Based Training: UYEP I provided training to improve life and job skills through classroom and work

experience through the public works program and on the job training. The youth gained knowledge and skills that provided them recognition in the society and job market. However, the youth and other stakeholders expressed the need for a competency‐based qualification to compete for further education and skilled employment. The UYEP II training design builds on this lesson and expands the scope of BLST to ten days as an NTC accredited course. The expanded BLST will increase emphasis on skills development for workplace communication and behavior, works safety, and prevention and remedial measures for gender‐based violence. The curriculum will cover: (i) basic literacy and numeracy, (ii) social diversity, gender equity, GBV awareness and prevention92, (iii) personal health, hygiene, and nutrition (especially related to environmental sanitation and maternal‐child health), (iv) work place health and safety, (v) basic finance and budgeting‐business skills, (vi) banking and savings93, (vii) work place behavior, communication and relationships with co‐workers and supervisors and problem solving, and (viii) preparing basic work‐related documents, e.g., job applications, CVs, etc. The youth will have an opportunity to continue to build competency during public works and skill development schemes to compete in the labor market. The certification for skills development through internship and vocational education will use the NTC and NATTB certification system. The BLST trainers will go through a training‐of‐trainers course to increase their preparedness and meet the requirements of NTC.

84. Small Learning Groups: The technical review on training in UYEP I found that larger groups of 60‐70 participants

in a YJC site restricted the scope of learning for all. The Extended Skills Work (ESW), on the other hand, which provided only ten days of employment and learning opportunities to a smaller group was effective to learn construction skills. The UYEP II will use a group size of 20–28 for all learning activities. The other variation from UYEP I would be that all the youth completing BLST will have to go through the public works component for skills development before they attain any skills training funded by the project.

85. Urban Works and Services (UW&S) will enable youth to develop and apply the soft skills learned through public

works for 30 paid days after they complete BLST. Youth will carry out simple infrastructure works and urban services through contractors engaged under the project. Civil works contracts will be issued to local private registered construction companies. The construction contractors will be invited to tender for fixed term contracts that include civil works items and management of youth groups, selected by the project. Contractors will be obliged to work with groups from the ward where the works take place. Contractors may bid for contracts that include multiple wards or groups or multiple contracts, if they can prove to have the capacity described in the conditions of contract. The contracts will be managed by Public Works Engineers at Port Moresby and Lae, each supported by Works Supervisors. Trainee beneficiaries will receive a daily stipend, and the contractors provide lunch and water. Trainees are also provided all Personal Protective Equipment (PPE) necessary to carry out the work safely. Counselors will provide counselling services for trainees on demand.

92 In terms of GBV awareness and prevention, the BLST will rely on specialized service providers who would oversee developing the content for these modules. 93 The BLST curriculum will align with the financial education modules established by Centre for Excellence in Financial Inclusion (CEFI) and promoted by all micro‐banks and institutions for inclusive finance and include it in the scope for training of trainers for BLST.


Page 54 of 72

86. Examples of infrastructure and services to be delivered include: pedestrian crossings and footpaths, steps, driveways and parking lots, transport recreational and market shelters, beautification and landscaping of recreational public areas, maintenance and repair of roads and drainage, schools and other public buildings, waste management and lighting. In addition to supporting core functions and services of the City Authorities, the investments allow the City Authorities to achieve more than they could otherwise with limited financial means. Households in target neighborhoods and the general urban population will benefit from the infrastructure and services provided. Infrastructure improvement and maintenance need in NCD and Lae are similar. However, the responsibility for the road network in Lae is with the Provincial Department of Works, under the Ministry of Work. Once the Lae City Authority (LCA) is fully operational, this responsibility may be transferred.

87. The Urban Works and Services will include a pilot in select locations to monitor the project’s impact on urban

safety by aligning the project’s investments with the local development infrastructure and service delivery priorities of the youth and their communities. The selected locations will be determined from a community‐based mapping of areas prone to high levels of crime and violence. Activities under the Urban Works and Services will be implemented by groups of youth, screened and selected through the project. As much as possible, youth will work in their own communities.

88. Works executed under the UWS will be selected from the priority listing of the city authorities and may include

priority proposals from the communities. In NCDC, the Works Department will identify critical maintenance works across the city and prioritize footpaths and other urban pedestrian infrastructure. Annual implementation plans will be compiled and scheduled for NCD, whilst trying to ensure equal opportunities for participants across the 12 wards in the city. The urban development plan for Lae covers all wards in Lae Urban (6 wards) and Lae Ahi area (23 wards). The plan shows development priorities across all public sectors, including transport, infrastructure, electrification, water, health and education. This development plan will provide the basis from which suitable works activities will be selected. Also, in Lae, the equity principle amongst the wards will be adhered to.

89. Consultations with NCDC revealed that continuation of the type of works undertaken under UYEP I are still as

relevant and needed as it was at the start of UYEP I. The need for improvement of footpaths and pavements of public places is still far greater than the project will be able to address. NCDC will increase their involvement in planning and prioritization of works that can be handled under UYEP I and align this with city development plans. Maintenance of road drainage is considered one of the highest priorities for NCDC.

90. Waste management services and improvement of dumpsites is high on the priority list in both NCD and Lae.

Consultations with Japan International Cooperation Agency (JICA) revealed that there is scope for collaboration, as JICA is entering a second phase of support to the government to assist in dumpsite improvements and waste separation and recycling. Waste management services may provide opportunities for beneficiaries to partake. The project can contribute to the improvement of collection services and possibly participate in the development and execution of waste separation and processing, where back services and institutional support may be provided by JICA.

91. In consultations with the Lae counselors and other stakeholders, the following priorities were identified across

both the Lae Urban and Lae Ahi wards: drainage system repair and maintenance; grass cutting and road edge repairs; road pavement improvements; market flooring and roofing; public shelters; recreational facilities; community hall construction; school renovations; water supply and sanitation at markets and schools; garbage collection; footpaths and steps; driveways and parking lots; beautification and landscaping of public areas; street


Page 55 of 72

lighting (solar) and lighting of public buildings. LCA has drafted a Five‐year Development Plan (2018–2022), aiming at improving the livelihood of the people of Lae District by addressing the six main key Policy Goals of Development in line with the Morobe Provincial Strategic Plan 2018–2048 (“Morebe Kunde Vision”). The plan covers six key policy goals: (i) good governance and management; (ii) sustainable and robust economic development; (iii) growth and service center for development; (iv) physical infrastructure development; (v) integral human development; and (vi) partnership, networking, and cross‐cutting issues.

92. UYEP II can contribute to several objectives under the plan, including upgrade and maintenance of physical

infrastructure services in collaboration with government agencies responsible for electrification, water supply, roads and bridges, housing, physical planning and urban and improvement of facilities for education and health services. UYEP II can also assist with access to these facilities, and, through training, assisting startup businesses startups to service such works. Preliminary estimates of quantities and costs of works have been made. The proposed works packages and costs over the first 18 months are summarized later in the Annex under the heading “Procurement”.

93. A preliminary scheduling of beneficiary groups and wards in NCD, shown in Diagram 5, allows flexibility in

contracting arrangements while keeping equal group sizes and number of participants from each ward. This may be adjusted by population size per ward or by using other criteria. A total number of 6 contractors would be engaged at the same time, while each contract would be for a duration of approximately 9 months, in which there would be 6 cycles of group engagement.

Preliminary Contracting schedule NCD1 contract covering different Wards and different groups

20 = 20 trainees in 6 weeks UWS

20 = 20 trainees in 6 weeks UWS to

Contract Wards Name G

Trainees

GroupsWards in operationUWS Intakes

dropout: 9% BLST intakes (2-3 weeks prior)dropout 6% Skills Development intakes 188

1 2 3 4 5

207 207 169

19 20 21 22 23

20

20

4

20 20 20

20

6 7 9 10 11 12

23-Jan 10-Apr 5-Jun 5-Jun 31-Jul

20

20

20

20

20

20 20 20 20

20 20

25-Sep 20-Nov

5

7

6-Jan 23-Mar 18-May 13-Jul 7-Sep

Ward 4 Hohola 3

7 Ward 1 Hanuabada

28-Nov

15 Ward 10 North Waigani - Morata20 20 20 20 20 20

20 20 20 20 20 20

20

3 4 4 4 4 4 4 4 5129

220 220 220 180 220

9 11 1111 11 11

13 14 15 16 17 184 4

12

20

5 5 5 4 4 4 48

20

11

20 20 20

4 4 3

2-Nov 11-Jan 8-Mar 3-May 28-Jun 23-Aug 18-Oct 21-Feb 18-Apr 13-Jun 8-Aug 3-Oct

20

4

20 20

20 20

20

Ward 2 Konedobu - Koki

20 20 20 20 20 20

20 20 20

2020 20 20

20 2020

20 20 2020 20 20 20

20 20 20 20

20 20 20 20 20

20 20 20

20

Ward 5 Boroko

20 2020 20

20 20 20 20

Ward 7 Burns Peak - Hohola 1

20 20 20

20Ward 3 Kaugere - Taurama

20

20

20 20

20

20

20 20

20

20 20

20

20

20

20

20 20 20 20

20 20

20

20

20 20

20

20

20

20 20

20 20 20

20 20 20

20 20 20

20 20 20 20

2020 20

20

Ward 11 Gerehu - Renbo

20 20 20

20 20

20

20

20

20

2020 20

20

20 20

20 20

20 20

20 20

20

20

20

20

20

11 811 11 11 11 12 11

160240 220 220 220 220 240 220 220 220

1110 9 8

20

20

Ward 12 ATS - 9 Mile

20

1, 11

1, 13

3, 14

11

220 220220 200 180 160 180 240

20 20 20

4, 10

20 20 2020 20

20 20

20 2020

20 20 20

20

3, 8

2, 12

2, 9 20 20 20 20 20

20 20

20 20

20

20

20

20

20

20

20

20Gordons - ErimaWard 9

20

20 20 20 20 20 20 20

20

20

20 20 20

20

20 20

20

6 Mile - Saraga

20

20 20

2020

6 Tokarara - June Valley20 20 20 20 20

20Ward 8

20 20

20Ward 6

20 20 20 20

20 20 20 20 20 20

207

20

20

20

226 207 207 207

240 240 240 262 240240 240 240 196 240 240 218 196 174

207

196 262 262 240

207 207207 207226 207226

0174

207 150

5-Aug

2019 2020

169 150 169

240 240

207

240 240

32,760.00

2021 2022 2023

109,200.00

1

4

5

6

7

8

9

10

11

12

13

14

15

7

2

3

Preparatory Activities and Set up of new PMU

First Intake

ESS ans Base Line Surveys starts

14th October 2019


Page 56 of 72

Diagram 5. Schedule of contracts and work groups for urban works and services in NCD.

94. Works and services contracts in Lae will cover 23 Wards in total. The principle applied in this schedule is that the group sizes are kept small to assist incumbent contractors in managing these groups, and to allow for an average of three cycles of work in each ward (see Diagram 6).

Diagram 6. Schedule of contracts and work groups for urban works and services in Lae. Component 2: Skills Training 95. Skills training under UYEP II will prepare youth for employment in the formal and informal sectors. The training

will involve creating a competency framework for each course, and, to the extent possible, putting youth on a pathway for competency‐based qualification. After going through 10 days of BLST training followed by a 30‐day experience in urban works projects, the youth will be channeled to one of two steams of skills training for three months to facilitate their transition to labor markets: (a) internship (or firm training provided by employers partnering with the project); and (b) vocational education delivered by credible organizations.

96. Key issues identified during the technical review of the UYEP I training include: (i) the need for more attention to

improving soft skills for youth and attitudes to work; (ii) the need for more regular assessment of the training quality and provision of a competency‐based skills development pathway; (iii) a stronger preference expressed by

Preliminary Contracting schedule LAE1 contract covering different Wards and different groups

20 = 20 trainees in 6 weeks UWS10 = 10 trainees in 6 weeks UWS

Contract Lae Urban Name

U-ward 3

U-ward 2

U-ward 4

U-ward 5

U-ward 6

Contract Lae Ahi

A-ward 1

A-ward 2

A-ward 4

LAE-A1 A-ward 5

A-ward 6

A-ward 7

A-ward 3

A-ward 9

A-ward 15

LAE-A2 A-ward 14

A-ward 17

A-ward 10

A-ward 8

LAE-A3 A-ward 11

A-ward 12

A-ward 13

A-ward 16

TraineesNo of groups

Wards in operationUWS Intakes

dropout: 9% BLST intakes (2-3 weeks prior)dropout 6% Skills Development intakes

LAE-U2

LAE-U1

LAE-U3

00

U-ward1

20 20 20 20 20 20

20 20 20 20 20 20

17-Oct 12-Dec 6-Feb 3-Apr 29-May 24-Jul29-Mar 24-May 13-Sep 8-Nov 10-Jan 7-Mar 2-May 27-Jun 22-Aug5-Aug 30-Sep 2-Mar 27-Apr 22-Jun 17-Aug 12-Oct 7-Dec 1-Feb

20

20

20 20

20 20 20

20

20 20

20

20 20

20 20 20

0 080 0 090 80 30 0120

20

10

10

6 780

06 3 0 00

20 20

20 20 2020

20 20 2020

10

1010

10

10

10 10

10 10

10 10 10

10 10

10

10 10 10

10

10 1010

10 10 10 10

10 10

10

10

10 10 10 1010

8 9 1020 60 130 130 130 140 150

570 0 0 0

7 6 6 500 0

10

10 10

6 7 8 9 10 11 12 13 14

0 0

131 87 98 87 33 0 0 0 0

75 85 75 28 0 0

76 65 142 142 142 153 164

19 66 56 122 122 122 132 141 113

0

0 0

10 10

5 6 4 4 2 0

10

2019 2020

00 0 0 0

0 0 0 0

0 0 0 0 0

20-Jan

221 2 3 4 51 5 4 6 61 4 8 8

2021 2022 2023

20

U1

U2

U3

A1

A3

A2

U1

Prep

aratory Activities an

d Set up of n

ew PMU

First Intake

ESS Surveys starts 13th January 2020

First UWS en

gagemen

t starts on 2nd M

arch 2020

A1


Page 57 of 72

employers for market‐oriented or industry‐linked vocational training94; (iv) the need for formal certification or trade licensing; (v) the importance of regular coaching and mentoring support; and (vi) the establishment of graduation pathways for education and income generation. The training design in UYEP II estimates that 80 percent of the participants will join the internship scheme and the remaining 20 percent will join vocational training. However, the numbers will need to be monitored and may need to be adjusted accordingly after the first 12 months. The training quality assurance will include: (i) developing Request for Proposals (RFPs) that involve strengthening the provision of Vocational and Trade Certification and standards (e.g., inclusion of modernized equipment to support practical training and demonstrated links to industry); and (ii) more regular monitoring and management of trainers’ and trainees’ data. The project will engage a Skills Development Team leader and Training Quality Assurance Officer supported by Short‐Term technical assistant (Instructional Designer to revise the BLST) to devise a pathway for accreditation and meet the minimum requirements for NTC and NATTB certification as well as monitor quality during training delivery. A scoring‐based ranking of students will also be administered during the internship. The Vocational Education training will execute a monitoring and measurement system in agreement with the service providers.

Component 3: Referral Services and M&E 97. This component will build on the systems and processes under UYEP I, focusing on delivering comprehensive data

and analysis to support project operations and inform public research and policy development. The subcomponents are largely described in para. 27 et seq. Further implementation details for the Referral Services and MIS are given below.

98. Referral Services will provide support services to the youth as part of its post‐training support services. It will

involve: (i) the provision of job search, microenterprise and training referral services; and (ii) the provision of referral services for identified GBV cases. The services will operate as “referral desks” in Port Moresby and Lae which candidates can approach. Participants will be briefed on the arrangements during the BLST to ensure they are aware of what is available and how to use the referral services. Coordinators will be appointed to manage the referral process (i.e. act as a conduit between the candidates and screen and refer candidates to third‐party services such as job recruitment agencies, other training providers, micro‐finance agencies, industry schemes, company HR recruitment departments and the like). Counselling and GBV services are specialized and are expected to be outsources to an NGO with good track record and contacts in PNG.

99. Management Information System. As with UYEP I, a Management Information System (MIS) will be used to

record most of the project’s operational information, including registration, allocation of trainees to work‐sites, attendance and performance score cards, survey data, electronic stipend payments, and training certificates. The MIS developed in UYEP I is based on a system that provides operational support for key work processes of the project, from which it derives a range of detailed information on youth engaged by the program and their progress through the project, including the Quarterly Progress Report. This currently includes the screening and registration process, allocation to the various components, attendance within those components, and stipend

94 The project’s consultations with employers and TVET training providers revealed that the disconnect between industry and TVET institutions are largely due to (i) a mismatch between industry requirements and TVET provided competencies; (ii) the limited capacity of TVET to provide adequate learning facilities with up‐to‐date industry‐standard equipment; and (iii) a lack of capacity to insert trainees into work placement opportunities as part of the course. In response to training needs, certain industries have set up their own in‐house training and apprenticeship services which can also be trade certified. UYEP II will focus on such market oriented vocational skills with provision for certification up to National Certification I and II or trade license where possible. This will be done in coordination with NTC and NATTB.


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calculations. The raw data from the extended screening survey (baseline), and IE surveys are also recorded in the database, but analysis is currently done through external statistical tools. A portal for public dissemination of information, that draws upon periodic updates from the MIS database, is being developed and is now available as a working prototype. The MIS is supplemented by data entry software for the various surveys, which currently record data on paper forms for subsequent entry. It is proposed that the new project will progressively deploy tablet devices for data collection, for surveys as well as field visits by supervisors. This is intended to improve accuracy and verification and to reduce workload. It is further proposed that other technologies that provide greater verification potential, such as geo‐tagging for field data and bio‐metrics (facial recognition or finger printing) for identification, be explored and progressively introduced, subject to cost‐benefit assessments. Further technology support option that are being investigated include more strategic use of social media to engage youth, and enhanced GIS platforms to map project interventions against other relevant data, such as crime reports, new economic developments and other projects that may impact the same groups and localities.

Financial Management and Disbursements 100. Budgeting. All donor funded projects will be included in the Government of Papua New Guinea (GoPNG) Public

Investment Program (PIP) and National Budget to have aid on plan and aid on budget. Currently UYEP II is not in either the PIP 2019‐2023 nor the 2020 National Budget. A Program Formulation Document (PFD) will need to be submitted, by NCDC and LCA, to the Department of National Planning and Monitoring, as part of the 2020 supplementary budget, to have UYEP II included in future PIPs and National Budgets. Annual budget submissions will be required to be submitted by NCDC and LCA to the Department of Treasury from 2020 onwards. LCA also need to provide a copy of the budget to the Provincial Government. A budget for the whole project is required, as well as one for each implementing agency. Each budget will need to be broken down by year, and appropriate levels of detail (e.g. component or category, activities, etc. whichever is deemed most relevant and useful).

101. Counterpart Funding. Under PNG Country Financing Parameters (CFP), funding of taxes is allowed, and the

project costings and budget will be prepared inclusive of taxes. The IDA financing will also be inclusive of taxes. The IDA funding covers all planned activities under the Project to achieve the development outcomes, results and indicators. World Bank Guidelines on CFP discourages waivers or reduction of duties and taxes of Bank financed projects and activities. This approach is taken by PNG where, under PNG laws, when donor funds are financing inclusive of taxes, no tax exemptions are allowed. Accordingly, no tax exemptions will be approved by GoPNG for UYEP II. Therefore, no counterpart funding is required to cover the taxes.

102. Flow of Funds. Funds will flow from the World Bank to Government of PNG via: (a) advances; (b) direct payments;

(b) reimbursement of GoPNG expenditures; and (d) special commitments, if required (refer to the Disbursements section below for more details on disbursement arrangements). Diagram 7 illustrates funds flow arrangements under UYEP II.


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Diagram 7. Funds Flow Arrangements Under UYEP II (solid lines show the transfer of funds subject to documentation

provided by the PMU to the World Bank/IDA. Actions required to issue, and supporting documentation required for, special commitments is given in the IDA Disbursement Handbook).

103. Accounting and Maintenance of Accounting Records. All government funds are bound by the Public Finances

Management Act (PFMA) 1995 and the PNG Financial Management Manual (FMM). GoPNG is currently implementing a new IFMIS (Finance One) and transitioning national departments, provincial governments, and statutory authorities, over from the old PGAS system, or whatever approved accounting systems were used, to the new IFMIS. At present, neither NCDC nor LCA have been transitioned to IFMIS. IFMIS rollout plans do not currently include transition of either NCDC or LCA by the likely effectiveness date of the project. NCDC currently use two different accounting systems and split their accounts across MYOB and Attache. NCDC will use MYOB for reporting the financial transactions of the UYEP II aspects implemented by NCDC. LCA currently does not have an accounting system to record accounting transactions and prepare financial report and statements (refer above on LCA not having adequate FM systems to meet FM requirements of BP10.00). LCA will use Sybiz for reporting the financial transactions of the UYEP II aspects implemented by LCA. GoPNG, NCDC and LCA operate on a cash basis of accounting. Accounting records are to be maintained by NCDC and LCA and are to be made available to both auditors and the World Bank, as required.

104. Internal Controls. NCDC and LCA are bound by the PFMA and PNG FMM for its policies and procedures manual.

GoPNG required NCDC to have an internal audit division and audit committee. The Project should be included in the annual internal audit plan for the NCDC and included in relevant reports to the Audit Committee. LCA does not currently have an internal audit unit or audit committee. LCA’s governance structure and arrangements of internal audit and oversight will be established by LCA’s Board and the Provincial and Local‐level Service Monitoring Authority.

105. Financial Reporting. Interim unaudited financial reports (IFRs) of the consolidated Project, and the Project

activities of each implementing agency, will be prepared on a quarterly basis. The financial reports will include an analysis of actual expenditure for the current period, year‐to‐date and for the cumulative to date, plus outstanding commitments, compared against total project budget. The format will be developed and agreed by the implementing agency and the World Bank prior to due date for the submission of the first IFRs. The IFRs will be forwarded to the World Bank within 45 days of the end of each calendar quarter. Copies of the consolidated IFRs will be submitted to DOT and DNPM.


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106. External Audit. An annual audit of the consolidated Project financial statements, and the project activities of each implementing agency, will be required. The Auditor General’s Office (AGO) of PNG is mandated to audit all Government funds. The Auditor General requires annual financial statements to be prepared in accordance with IPSAS accounting standards. The audited financial statements, audit report and management letter must be received by the World Bank within six months of the end of the fiscal year and shall be made publicly available by the Recipient in a manner acceptable to the Bank as per the General Conditions for IDA Financing, Investment Project Financing.

107. Financial Management Action Plan. A summary of the Financial Management Action Plan is shown below:

No. Action Date by which action

required Responsible

1 NCDC shall update its financial management and information system for managing Project accounting and reporting, in a manner satisfactory to the Association.

(1) month after the

project’s Effective

Date

NCDC

2 An accountant or accounting firm has been appointed

and commenced work to perform the financial and

accounting functions of LCA95

Prior to disbursements

of funds to LCA

LCA

3 A bank account has been established for LCA’s

operation.96


of funds to LCA

LCA

4 An accounting system has been implemented and is

functioning.97


of funds to LCA

LCA

5 LCA has received adequate funding to support its

operations.98


of funds to LCA

LCA

6 Prepare and agree format of unaudited IFRs that will be

used for quarterly reporting.

Prior to the due date

for the submission of

the first IFR.

NCDC, LCA and

World Bank FM

Specialist

108. Disbursement Methods and Supporting Documentation Arrangements. The project could use four disbursement

methods: (a) advances; (b) direct payment; (c) reimbursement; and (d) special commitments. Direct payments would be used for most of payments due to the risks and issues identified by audit reports on incorrect use of project and donor funds. Reimbursement would only be used if the Government of PNG funds were used for project expenses. Special commitments may be needed if goods are purchased from overseas. Disbursements will be against List of Payments and Statements of Expenditure. Required supporting documentation for disbursements will be outlined in the Disbursement and Financial Information Letter.

109. Designated Account. The PFMA and Financial Management Manuals allow for donor sourced funds for projects

to be held in separate trust accounts. Two segregated Designated Accounts (DAs) will be required, one for each implementing agency in NCDC and LCA. At present, a single central treasury account is not being used for donor

95 Evidence of contract for the Accountant or Accounting Firm has been signed and is effective with start date. 96 Evidence of bank account set up under LCA with bank accountant number provided. 97 Evidence of Chart of Accounts set up and initial data loaded. Book of accounts or manual ledger can be accepted. 98 Evidence that funding has been received in the LCA bank account.


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projects. Should donor projects also be moved to single central treasury account (likely after transition to IFMIS) then, while there may be one physical bank account, there will need to be general ledger sub‐codes for each implementing agency and project to ensure the segregation of funds. The ceiling for each of the DAs will be specified in the Disbursement and Financial Information Letter (DFIL) and be set to enable enough cash flow to cover 3–4 months of project operations.

110. Eligible Expenditures:

Category Amount of the Credit Allocated

(expressed in SDR)

Amount of Credit

Allocated

(expressed in US$)

Percentage of

Expenditures to

be Financed

(inclusive of

Taxes)

(1) Works for NCDC’s Respective Part of

the Project

4,440,000 6,079,000 100%

(2) Works for LCA’s Respective Part of

the Project

1,130,000 1,520,000 100%

(3) Goods, non‐consulting services,

consulting services, Operating Costs,

Training and Workshops and

Stipends for NCDC’s Respective Part

of the Project

15,450,000 21,238,000 100%

(4) Goods, non‐consulting services,

consulting services, Operating Costs,

Training and Workshops and

Stipends for LCA’s Respective Part of

the Project

4,480,000 6,163,000 100%

TOTAL AMOUNT 25,500,000 35,000,000

111. Disbursement Conditions. No withdrawal shall be made under Categories (1) and (2) unless and until the

Association is satisfied that the Recipient, through NCDC and LCA, have adopted the POM satisfactory to the Bank. No withdrawal shall be made under Categories (2) and (4) unless and until: (i) document(s) demonstrating that LCA is authorized to undertake its roles and responsibilities under the project, in form and substance satisfactory to the Bank, have been provided to the Bank; (ii) the Project Agreement between the Bank and LCA has been signed; (iii) the Subsidiary Agreement between PNG and LCA has been signed; (iv) a Legal Opinion has been issued on behalf of PNG and LCA attesting that the aforementioned Project and Subsidiary Agreements to which they are a party have been duly authorized, executed and delivered and are legally binding upon them; and (v) LCA has completed all the four actions listed in the table in paragraph 107, all in a manner satisfactory to the Bank.

112. Retroactive Financing. As requested by GoPNG, to ensure the project’s timely start‐up, retroactive financing for

all categories of expenditure is required for payments up to SDR 3.8 million (US$5 million equivalent) made on or after July 1, 2019.


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Procurement 113. Institutional Arrangement for Procurement. The Implementing Entities will be responsible for ensuring the

procurement requirements of all the sub‐components are met. 114. Applicable Procurement Regulations. Procurement for the UYEP II will be carried out in accordance with the

World Bank Procurement Regulations for IPF Borrowers (Procurement Regulations), July 2016 (revised November 2017 and August 2018), and the provisions stipulated in the Financing Agreement. For international competitive procurement activities based on method thresholds, the Bank’s Standard Procurement Documents (SPD) shall be used.

115. Procurement Risk Assessment. A procurement risk assessment of the IAs responsible for implementing the

procurement activities under the Project was carried out and the overall procurement risk rating is “substantial”. 116. Procurement Types. The various types of procurements to be financed by the proposed IDA grant and indicative

cost estimates are noted in the following table and described below.

Type of Procurement

(1) Works (US$7.518 million equivalent)

(2) Goods (US$1.031 million equivalent)

(3) Consulting Services (US$14.427 million equivalent)

(4) Non‐Consulting Services (US$1.692 million equivalent)

117. Procurement of Works. The procurement of works will involve some 21 contracts for the Urban Works and

Services under Component 1 in NCD and Lae. Contracts will typically range in value from US$150,000 to US$600,000. In the first 18 month it is anticipated the following contracts will be let: NCDC Works Contract (Wards 2 and 7); NCDC Works Contract (Wards 3 and 5); NCDC Works Contract (Wards 11 and 12); NCDC Works Contract (Ward 9); NCDC Works Contract (Ward 8); NCDC Works Contract (Wards 1 and 4); NCDC Works Contract (Ward 12); LCA Works Contract (Lae Urban Ward 1); LCA Works Contract (Lae Urban Wards 2–4); LCA Works Contract (Lae Ahi Wards 1–9); and LCA Works Contract (Lae Ahi Wards 15–17).

118. Procurement of Goods. The procurement of goods will include the Personal Protective Equipment (PPE) for

trainees and works supervisors; BLST consumable materials and training resources; vehicles; computers/tablets; computer servers; survey entry tools; software; MIS database; and accounting systems.

119. Procurement of Consulting Services (firms and individuals). It is anticipated that several specialist individual

consultants and/or firms will be hired to support: specialist procurement inputs (also see the paragraph below); a curriculum review; a MTR; ICR review; violence prevention mapping; M&E surveys; and GBV prevention and referral services. In addition, the PMUs will be staffed through with long‐term consultant positions necessary to cover all the activities under Components 1, 2, 3, and 4. These include the team leaders supporting ITS, youth awareness and mobilization, BLST training, urban works and services, skills training and referrals, financial management, and procurement. Each team leader will be supported by other staff to carrying out assigned role within their operation areas. The PMUs will be led by Project Managers based in NCD and Lae, and coordination between the PMUs and other stakeholders will be led by a Program Coordination Manager. Details of all the proposed positions are defined in the PPSD and an initial Procurement Plan. A summary of the consulting positions is given in Diagram 3 under para. 73.


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120. Advance Contracting. Provision for Advance Contracting will be included for the procurement process.

121. Frequency of Procurement Supervision. In addition to the prior review to be carried out by the WB, implementation support missions will be undertaken at least once per year. One in five procurement packages not subject to WB prior review will be examined ex‐post on an annual basis.

122. Procurement Plan. A Project Procurement Plan has been prepared covering the planned procurement activities

for the first 18 months of project implementation. The procurement arrangements for the key procurement activities under the Project are detailed in the PPSD.

123. Systematic Tracking of Exchanges in Procurement. Use of the WB’s Systematic Tracking of Exchanges in

Procurement (STEP) system will be mandatory under UYEP II. This system is currently being used on UYEP I and other Projects in Papua New Guinea. Ongoing face‐to‐face STEP training is being conducted in country on use of the system.

Implementation Support Plan and Resource Requirements

124. The implementation support strategy proposed for UYEP II has been developed based on the project’s

requirements and risk profile. Notwithstanding the project is a follow‐on operation of a successful, long running project, the overall risk rating is “Substantial”. This is because of the fiduciary risks and the scale up of the project to a new Province with a relatively newly establish Implementing Agency (the LCA) with no prior record of World Bank projects. Risk mitigation measures involve retaining the existing PMU and key staff based in NCDC, using that PMU to support the new LCA PMU until it is fully established and operating, and building on existing systems and approaches. The PCO Manager, in part through the TCC, will oversee operations of both PMU, ensuring both are operating smoothly and efficiently.

Time Focus Skills Needed Resource Estimate

Partner Role

First twelve months Team Leadership Task Team Leader

US$200,000 per annum

BLST Curriculum Curriculum Design Sp. and Training Sp.

Procurement Training Procurement Sp.

FM Supervision Financial Sp.

Environmental Training Environmental Sp.

Bid Documents and Engineering Services

Engineer

Gender and Community Engagement

Social/Gender Sp.

Survey Design M&E Sp.


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MIS Databased Design ICT/MIS Sp.

Team Support Team Assistant

12‐48 months Team Leadership Task Team Leader

US$150,000 per annum

BLST Training Specialist (Sp)

Procurement Training Procurement Sp.

FM Supervision Financial Sp.

Environmental Training Environmental Sp.

Review of Bid Documents and Engineering Services

Engineer

Gender and Community Engagement

Social/Gender Sp.

Survey Design M&E Sp.

MIS Databased Design ICT/MIS Sp.

Team Support Team Assistant

Other ICR Evaluations Sp. US5,000

Skills Mix Required

Skills Needed Number of Staff Weeks Number of Trips Comments

Task Team Leader 48 8 Based in the region

FM Specialist Sp. 4 8 Based in the region

Procurement Sp. 4 8 Based in the region

Training Specialist 18 6 Based in the region

Engineering Sp. 18 6 Based in the region

ICT/MIS Sp. 18 6 Based in the region

M&E Sp. 20 6 Based in the region

Social Safeguards Sp. 4 5 Based in the region

Environmental Sp. 4 5 Based in the region

Gender Sp. 4 5 Based in the region


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ANNEX 2: Economic Analysis


Urban Youth Employment Project II Experience with Similar Types of Programs

125. Globally, there has been many impact evaluations of Active Labor Market Programs (ALMPs) in a variety of

contexts. The majority have shown their costs tend to outweigh the benefits according to a 2017 World Bank working paper.99 ALMPs often consist of one of the following components: subsidized job placements, vocational training or job search and matching assistance. The direct employment benefits from subsidized job placements, whereby participants complete ‘internships’ in which their wages are subsidized, tend to only be short lived as the effect quickly diminishes once the program is completed.100 Another World Bank paper shows that providing participants with technical and vocational education and training (TVET) rarely generates jobs (unless a cash grant is provided).101 The final type of ALMP program consists of reducing friction in the employment market through job search and matching assistance. This is substantially cheaper than the first two, however, there is little evidence to suggest they have any effect.102 Even though the costs of ALMPs tend to be larger than the quantifiable benefits, the programs are still justified by policy makers because of a range of non‐quantifiable benefits such as a reduction in crime and anti‐social behavior.

126. The quantifiable costs and benefits of UYEP II are estimated by drawing upon project administrative data and

the results of multiple impact evaluations that have been conducted on the first phase of the program.103 There are other benefits associated with the project such as reduced anti‐social behavior and improved job‐search behavior, confidence levels and mental health that are difficult to quantify. E.g., UYEP I participants were less likely to engage in aggressive behavior, gratuitous property damage and be out late at night by up to 65 percent.104 In contrast, the costs of the program are easily measurable. Therefore, the analysis is likely to underestimate the value for money of the project.

127. The quantifiable benefits are around 15 percent larger than the costs. The table below shows the expected

benefits and costs from the program over the next five years (a detailed table of calculations is presented at the end of this Annex105). The main reason why the quantifiable benefits of UYEP II far outweigh the cost, is because large post‐program employment impacts are expected. Rigorous impact evaluations showed this was the case for the first phase of the program where almost half of the youth who complete the internships, and around one quarter of youth who complete vocational training, are expected to be gainfully employed well after they exit the program. The two largest costs of UYEP II are the stipends paid to program participants and materials and capital costs associated with the public works.

99 http://ibread.org/bread/system/files/bread_wpapers/507.pdf 100 ibid 101 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2622220 102 http://ibread.org/bread/system/files/bread_wpapers/507.pdf 103 https://openknowledge.worldbank.org/handle/10986/26470\ 104 ibid 105 For the purposes of the economic analysis, the US$5million project contingency is excluded (i.e. the total cost of the project for the purposes of the economic analysis is US$30million). It is expected the contingency will be drawn on to fund more opportunities for youth to participate in the program, however the exact number of placements cannot be determined at this point in time.


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Benefits US$’000 Costs US$’000

Post program employment 20,515 Youth Job Corps 15,783 Public works and infrastructure delivered

9,480 Skills training 6,961

Stipends paid to youth 4,010 Project management 3,443 Training received 429 M&E and referrals 2,878 Contingency 935

TOTAL 34,435 TOTAL106 30,000

Methodology 128. Benefits. The basis for each of the expected benefits from UYEP II are discussed one by one below. The value of

benefits is determined over a ten‐year time frame as is the standard practice for World Bank cost benefit analysis.107 More than 90 percent of program funds will be spent in NCD or Lae so there is likely to be significant multiplier effects. Previous analysis suggests the multiplier effects may be in the order of $5 for every $1 spent.108 However, the precise magnitude is debatable and as such the multiplier effects are excluded, which means it is likely the total benefit of the program is underestimated

129. BLST Training—The main immediate benefit participants receive from ten days of BLST training is the daily

lunch/water stipend of PGK 7. This is straightforward to quantify as it is the total payment made in stipends to youth. There are other benefits from the program that are likely to exist such as increased knowledge about the labor market. However, they are excluded from this part of the cost benefit calculation as it is assumed these benefits will be reflected in post‐Project employment.

130. YJC Stipends—The main immediate benefit for YJC participants that can be quantified is the training stipend they

are paid of PGK 3.50 per hour (7 hours a day) for the 30 days of the program. There are other benefits from the program that are likely to exist such as basic skill development and improved self‐confidence. However, they are excluded from this part of the cost benefit calculation as it is assumed these benefits will be reflected in post‐Project employment.

131. Value of Public Works Program—The value of the public works component of this program is equal to the cost of

the public works program net of stipends as was the case in the 2015 economic analysis of this program. The benefits are likely to be greater but difficult to quantify.

132. Post Project Employment—The 2017 UYEP I impact evaluation showed that YJC participants were on average 24.1

percentage points more likely to be employed than the comparison group 12 to 18 months following the completion of the program.109 It is assumed that these additional employment benefits will last over a period of ten years and the participants will receive the minimum wage. Based on a forthcoming impact evaluation around 60 percent of those employed are assumed to work full time (240 days a year), while 40 percent work part time (120 days a year). This benefit is calculated for the 956 youth who are only expected to partake in YJC (i.e. not participate in the training part of UYEP II) and the 1,494 youth who will complete the vocational training.

106 The costs include taxation at a rate of around 15 percent. For the purposes of the cost benefit ratio, we use costs net of taxes. 107 https://openknowledge.worldbank.org/bitstream/handle/10986/2561/624700PUB0Cost00Box0361484B0PUBLIC0.pdf?sequence=1 108 See the 2015 Economic Analysis for UYEP I 109 https://openknowledge.worldbank.org/handle/10986/26470


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133. Vocational Training—The main benefit from vocational training is the additional education youth receive. This is challenging to measure, but an earlier World Bank report provides a crude estimate of the economic returns to education in PNG.110 In this report, the average return to an additional year of education in PNG is estimated to be 7.7 percent. This rate of return for 66 days of education is applied to the minimum wage over a period of ten years to arrive at an estimate of the gains in income from vocational training. Importantly, these benefits are in additional to the higher rates of employment youth are expected to attain from completing YJC.

134. Internship Stipends—The main immediate benefit for internship participants that can be quantified is the training

stipend they are paid of PGK 3.50 per hour (7 hours a day) for the 110 days of the program. Other benefits from the internship (such as the development of skills relevant for the formal workforce) are excluded from this component of the cost benefit calculation as it is assumed these benefits will be reflected in post‐Project employment.

135. Post Internship Employment—A 2018 UYEP I impact evaluation has shown that the additional benefit of doing

Internships (beyond just YJC) was an employment rate of 25 percentage points between 6 to 12 months following the completion of the program. It is assumed these additional employment benefits will last over a period of ten years and the internship participants will receive the minimum wage. Based on the forthcoming impact evaluation around 60 percent of those employed are assumed to work full time (240 days a year), while 40 percent work part time (120 days a year).

136. Costs. Project costs are broken down by four components, which are YJC, Skills building, monitoring and

evaluation and referral services as well as project management. On average, the total cost per YJC youth trained is around PGK10,990 (US$3,300) inclusive of overheads (i.e. project management, monitoring and evaluation and referral services). The additional cost per youth who completes an internship is around PGK3,690 (US$1,110) and who completes vocational training is around PGK5,417 (US$1,627) inclusive of overheads (i.e. project management, monitoring and evaluation and referral services). The table below shows the estimates of the costs and benefits of the program using the assumptions outlined above.

BENEFITS Days (per year)

No. Beneficiaries

Total days

Hourly wage

Hours per day

PGK US$

Youth Job Corps

BLST Training (lunches + water) 10 6,700 67,000 1.0 7 469,000 140,841

Public works & services employment 30 6,700 201,000 3.5 7 4,924,500 1,478,829

Value of works contracts 31,568,970 9,480,171

Skills Training

Vocational training

Vocational training—value of education 66 1,149 3.5 7 1,430,608 429,612

Vocational training—Stipends paid 66 1,149 75,834 1.0 7 530,838 159,411

Post training employment (part time) 120 200 239,970 3.5 7 2,939,632 882,773

Post training employment (full time) 240 305 732,540 3.5 7 8,973,615 2,694,779

Internships

Internship employment (stipends paid) 66 4,595 303,270 3.5 7 7,430,115 2,231,266

Post internship employment (part time) 120 942 1,130,370 3.5 7 13,847,032 4,158,268

110 http://documents.worldbank.org/curated/en/830831468147839247/Comparable‐estimates‐of‐returns‐to‐schooling‐around‐the‐world


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BENEFITS Days (per year)

No. Beneficiaries

Total days

Hourly wage

Hours per day

PGK US$

Post internship employment (full time) 240 1,147 3,473,820 3.5 7 42,554,295 12,779,068

Total Benefit 114,668,606 34,435,017

COSTS

Youth Job Corps 6,700 52,557,390 15,783,000

Internships 4,595 16,956,360 5,092,000

Vocational Training 1,149 6,223,770 1,869,000

Project Management 11,465,190 3,443,000

M&E and referrals 9,583,740 2,878,000

Contingencies 3,113,550 935,000

Total Cost 999,000,000 30,000,000

Benefit Cost Ratio 1.15 1.15

137. The success of UYEP II is contingent on public finance as the employment benefits would not be generated if

left to the private sector alone. Employers face large screening costs that UYEP II helps overcome by providing them an opportunity to examine participants’ capability who have been matched with that job at no cost. Surveys of UYEP I employers highlight the subsidized wages and matching participants to roles is incredibly crucial without which many employers would not hire the youth. In addition, UYEP II provides basic orientation training prior to employment. This helps ensure participants have skills suited for the workplace which directly addresses skill shortages in the labor market. Most participants are not in a financial position to borrow money in advance to receive this training, further highlighting that relying on the private sector is not a realistic substitute for public finance.

138. In the past, UYEP I generated benefits beyond the participants and employers themselves, such as reduced anti‐

social behavior and improved job‐search behavior, confidence levels and mental health, which have been routinely verified in qualitative/incidence surveys undertaken by the project.111 E.g., 60 percent of youth who completed an Internship were involved in crime in the six months prior to the participating in the program, compared to 38 percent in the six months after the program.112 These positive externalities are not fully captured by private actors as they benefit the community at large, which means public finance is required to ensure that these activities are not underfunded.

139. The World Bank has played an important contribution to ensure the quality of UYEP I by providing international

expertise on the design of the program and monitoring and evaluation. By drawing upon best practice from programs across the globe, UYEP II has been designed to ensure that it is more comprehensive than most ALMPs to overcome multiple challenges in the labor market. In addition, the impact evaluations that have been conducted and will be conducted provide rigorous evidence about the order of magnitude of the effect of different components of UYEP II. It would be challenging for these evaluations to be conducted without the World Bank’s involvement.

111 See the February 2018 World Bank UYEP ISM Aide Memoire 112 ibid


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ANNEX 3: UYEP I Impact Evaluation and Results Working Paper Executive Summary


Urban Youth Employment Project II The following is an extract from the Papua New Guinea Urban Youth Employment Project 2018 Impact Evaluation and Results Working Paper.113 From 2015 to 2017, there were two impact evaluations of UYEP I conducted to examine how well the project is meeting its development objectives, as well as other related impacts. The implementation of the impact evaluations is a significant achievement in itself because of the lack of availability of such impact evaluations operating at scale in PNG and the Pacific. UYEP I impact evaluations involved a baseline survey of ‘treatments’ (youth who participated in the UYEP I study) and ‘controls’ (selected participants that do not participate in the program), two major Follow‐Up Surveys of treatments in 2015 and 2017, an annual employer survey and an annual community survey. The collected data was then analyzed to measure the following key indicators:

• Whether UYEP I increases the employment and labor market engagement (including job and education seeking behavior) of participant youth;

• If UYEP I provides other benefits to participant youth beyond employment, particularly in relation to social behavior, attitudes to gender and crime;

• If the project had a positive impact on communities and business, more broadly; and • Whether all three components of UYEP I contribute to the increasing employment of participant youth.

The main results of the UYEP I demonstrated in this working paper are: (i) increased youth employment; (ii) increased youth employability; and (iii) increased perceptions of youth resiliency to crime and violence. In support of these reported achievements, this working paper presents the five major findings of the impact evaluations and supporting surveys. First, there are large employment impacts from UYEP I. The data shows that participation in the UYEP I significantly increases employment rates for both young men and women aged between 16 to 35 years by eight to 11 percentage points. The follow‐up survey conducted in 2015 found that 14 percent of YJC participants and 21 percent of OJT participants were currently employed, while only 3 percent of control youth reported being employed. These results were statistically the same for men and women. The 2017 follow‐up study also provides strong evidence of substantial employment gains due to the pre‐employment training and the work placement with a firm. In the 2017 follow‐up survey, 41 percent of OJT participants reported having been employed in full‐time or part‐time work in the last six months. This was 28 percentage points higher than for a control group of participants, who did not receive training and who had no prospects of continuing employment. The UYEP I employment results are also corroborated by surveyed community members, 68 percent of whom report an increase in employment opportunities for youth in their communities. These results are particularly significant because none of the participants was employed in the six months prior to the project.

113 The Paper was prepared by Sonya Woo, Team Leader, World Bank (East Asia and Pacific Region) and Darian Naidoo, Economist, World Bank with inputs from Christopher Hoy and other World Bank Task Team members, the Government of Papua New Guinea through the National Capital District Commission and with the support of the Government of Australia, Exxon Mobil, Bank of South Pacific Ltd and Republic of Korea.


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The UYEP I’s employment results are much stronger than for similar youth employment projects in other countries.114 There has been a significant number of impact evaluations of active labor market programs (ALMPs) in a variety of contexts and the clear majority have shown they tend to have limited effect ranging from no employment gains to increasing, at best, employment by seven to eleven percent. Other studies show that providing participants with technical and vocational training rarely generates jobs (unless a cash grant is provided) and almost always the costs outweigh the benefits.115

Second, there is evidence of increased youth employability. While the main reason for employer participation in the OJT was to contribute to development, employers also confirmed the importance of all three components of UYEP I ̶ training, job matching and fully subsidized work placements. The wage subsidy helps to off‐set financial risks for employers and provides youth with income while the skills training and work experience are designed to increase the human capital and employability of youth. Employers reported that youth are developing technical skills and that most of youth are “fairly” or “very qualified” for formal employment. Ninety‐seven percent of employers also reported that participants were perceived to be qualified for a full‐time job. The main reported constraint for firms taking on more permanent employees were difficulties in finding staff with the “right skills”, training costs being too high followed by poor economic conditions. Taken together with the high employment rates, particularly for OJT youth, these findings suggest the importance each of these three activities have on employment outcomes. Third, youth who participated in UYEP I were shown to be more engaged with the labor market than youth who did not participate in the project, as evidenced by increased job search behavior and increased confidence in future employment. In the 2015 follow‐up survey, the number of participant youth seeking wage employment in the last three months increased from 21 percent to 33 percent, reflecting their belief that they are more likely to be employed in the future, because of their newfound experience and skills (gained in CV writing, public speaking, work place experience). Similarly, 76 percent of OJT graduates and 64 percent of YJC graduates said that they felt participation in the project increased their employability. Youth participating in UYEP I were also more likely to have bank accounts than controls. The evidence shows that UYEP I youth are also more likely to want to enroll in education in the next six months compared with control groups: half of the participant youth reported increased interest in pursuing education and training following the project (46 percent of YJC youth and 50 percent of OJT youth, respectively), while four percent of YJC and six percent of OJT youth were already enrolled in education. Pre‐ UYEP I, the majority (60 percent) of participants expressed interest in further education in the baseline survey and this fell to 27 percent for control youth and 47 percent for treatment youth. The effect of OJT is therefore a 21.7 percentage point increase relative to control youth, which is highly significant. Fourth, there is evidence that UYEP I has improved the lives of youth participants and their communities in a few non‐pecuniary ways beyond employment, including through increased happiness and well‐being. 85 percent of community members in project locations believed crime and violence reduced because of the project. The number of youth who reported having friends involved in violence or robbery fell by eight percent (from 24 percent pre‐ UYEP I to 16 percent by the time of the 2017 follow‐up survey). The results also show a significant decline in the reported incidence of “using threat or force with somebody” for participant youth (from 16 percent to eight percent), while this behavior increased among control youth. The survey results are also corroborated by

114 McKenzie, David (2017) "How Effective Are Active Labor Market Policies in Developing Countries? A Critical Review of Recent Evidence" World Bank Research Observer, World Bank Group, vol. 32(2), pages 127‐154 115 Blattman, Christopher and Laura Ralston (2015) “Generating employment in poor and fragile states: Evidence from labor market and entrepreneurship programs”, Mimeo. Chicago


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community members in project areas, 85 percent of whom believed UYEP I had reduced crime in their community. Because of the training and work experience provided by the OJT program, the number of OJT participants who reported “feeling happy most of the time” in the past four weeks, rose by 15 percent. Fifth, there is evidence that UYEP I has helped to empower women and improve attitudes to gender equality. A Gender and Labor Study for the UYEP I 116 confirms that in most aspects of training, women have shown a higher propensity to complete the training offered, which suggests that the project has been successful at engaging young women. UYEP I recruits both young men and women into both its programs, and it also provides gender training to all its participants. In providing these opportunities, UYEP I has improved not only the status and economic opportunities available to these young women, but it is also transforming gender attitudes among its youth more broadly. For many women, the biggest incentive to participate was the fortnightly stipends paid by UYEP I to supplement household expenses. Survey results show that the percentage of participant women who believed that women should be at home and not in waged work, fell from 13 percent before the project to two percent after the project (and from 16 percent to nine percent for men). Recommendations and moving forward The results of the Follow‐Up Surveys and the impact evaluation suggest that UYEP I has, to date, been successful in improving the economic situation and social welfare of participant youth. The evidence also suggests that these gains occur relatively quickly – within two years of youth graduating from UYEP I, however the longevity of these impacts is yet to be determined. As such, the project’s short to medium term impacts and trends will need to be verified over the longer term, and with supplementary data and evidence to capture the value and effects of individual project interventions. While beyond the scope of the project, further collection and analysis of labor market data is also required to strengthen our understanding of the nature of youth unemployment and how it interacts with labor force participation in PNG, as well as the economy more generally. Finally, more focused research on UYEP I’s impacts on gender, crime and urban safety needs to be undertaken. Lessons learned, and evidence gathered from the impact evaluation will be used as a guide for the design of the follow‐on project. Some of these lessons learned include:

(i) The importance of retaining all three programmatic components of UYEP I ̶ soft skills training, job‐matching and fully subsidized work placements given their collective role in promoting positive employment outcomes for youth and other externalities.

(ii) Targeting of unattached youth, many of whom were highly transient and reported to have prior

experience with crime and violence, made the implementation of the impact evaluation, including the screening and selection process particularly challenging. The experience from UYEP I highlighted the importance of consulting with a range of local level community stakeholders in advance of screening to raise awareness and disseminate project information regarding target groups and the application

116 Voight‐Graf, C. 2018. Gender and Labor Market Study, Port Moresby, Papua New Guinea. Other key challenges faced by females related to household and family obligations includes: not finding a babysitter and pregnancy. Most women were expected to tidy their houses before leaving in the morning and therefore often arrived late. For others, unsupportive husbands were a major obstacle. Previous studies reported that some female participants had to deal with aggressive resistance from husbands towards their participation in UYEP I. Focus group participants also talked about incidents of jealous husbands turning up at worksites and forcing women to withdraw. Interviews for this study suggest that there are considerable costs for providing childcare for mothers in terms of energy, financial expenses, and missing training and work experience days.


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of the randomization process as well as maintaining effective communication with youth on project participation selection. This includes potentially offering the program to the control group at a later stage so that they do not feel discriminated against;

(iii) Problems acquiring and maintaining the quality and longevity of control groups with the re‐contacting

of participants proving to be difficult even after six months. This suggested the need to ensure that both control and treatment groups were oversubscribed to compensate for attrition; and

(iv) Problems in the management and execution of monitoring and evaluation activities suggest the need

for additional resourcing and enhanced implementation support to be provided by the World Bank and/or external partner with experience in implementing impact evaluations.

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