<p> PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB4200 Project Name Urban Youth Employment Project Region EAST ASIA AND PACIFIC Sector Adult literacy/non-formal education (30%); Other social services (30%); Roads and highways (20%); General water, sanitation and flood protection sector (20%) Project ID P114042 Borrower(s) INDEPENDENT STATE OF PAPUA NEW GUINEA Implementing Agency National Capital District Commission Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD Date PID Prepared September 1, 2009 Estimated Date of November 30, 2009 Appraisal Authorization Estimated Date of Board March 25, 2010 Approval</p><p>1. Key development issues and rationale for Bank involvement</p><p>Papua New Guinea (PNG)’s recent macro economic growth has had little impact on the lives of poor people. Despite a fourth successive year of economic growth, PNG’s GDP per capita is estimated to be US$677; one of the lowest values in the Pacific region. 1 The UNDP’s Human Development Index of 2008 ranks PNG 145th out of 177 countries, well below the average for most countries in Asia and slightly higher than the average for Sub-Saharan Africa.2 </p><p>Increasing urban poverty. Although overall poverty in the rural areas is high (estimated at 37.5% compared with 16.1% in the urban areas3), the burden of poverty in urban centers is on the increase and may be rising at a faster rate than in rural areas.4 This has been exacerbated by rapid urban migration.5 The majority of urban migrants find themselves living in so-called informal settlements and slums characterized by a lack of basic public services such as running water and sanitation systems. In Port Moresby for instance, about 40% of the population live in settlements; 80% of which are unplanned (and the remaining are on state or customary land).6 The unclear demarcation of land and property has also led to disputes over ownership and fuelled tensions between migrants, land owners and local populations. </p><p>1 Human Development Report, 2006. http://www.socialwatch.org 2 UNDP, 2008, 2007/08 Human Development Index Rankings, http://hdr.undp.org/en/statistics/ 3 ADB, 2002, Priorities of the Poor in Papua New Guinea, Manila. 4 Based on the 2000 National Census, Port Moresby and Lae were identified as the two largest cities in PNG, followed by Mount Hagen and Goroka. 5 According to the 2000 PNG Census, Port Moresby’s migrant population, for example, was estimated to have increased from 48% in 1990 to 58% in 2000. However, since internal migration is not closely monitored or controlled, it is difficult to estimate the exact level of urbanization. 6 NCD, NCD Settlements Strategic Plan, 2007-2011, Port Moresby.</p><p>1 Young people under the age of 20 account for almost half of the PNG’s total population; and they constitute a disproportionate part of the urban poor. In Port Moresby, the largest city in PNG, youth between the ages of 15 and 29 represent about 35.1% of the total population as compared to 28.5% nationally; and it is estimated that the youth cohort will grow by at least another 13% by 2015 due to natural population growth and urban migration.7 These trends create tremendous pressures for service delivery and for employment generation. Furthermore, recent studies indicate that an increasing proportion of urban youth are being marginalized: they endure inequality, exclusion and poverty and are vulnerable to engaging in risky behaviors.8 Three underlying issues pose significant challenges for the socialization of these marginalized groups: i) their lack of access to the education system; (ii) their lack of access to the labor market; and iii) their increasing involvement in urban crime and violence.</p><p>Poor educational outcomes among youth raise serious concerns as school enrollments, accessibility, relevance and retention rates at the secondary and tertiary levels remain low despite ongoing reforms.9 PNG’s combined gross enrolment ratio for primary, secondary and tertiary education is 40.7%, which is similar to the regional average for Sub-Saharan Africa.10 National statistics indicate that only 53% of children have completed primary school, 30% are not attending school and as many as 33% never attended school. Only about 5% of the population has completed secondary school, with slightly higher figures for urban (13.6%) populations. Moreover, a greater proportion of girls have never attended school and a lower number complete grade 12.11 Low retention and school leaving can be attributed to a number of supply and demand side failures in the education system, including high school fees, inadequate facilities, a shortage of qualified teachers, lack of teaching and learning materials, poor parental attitudes towards the value of education, and the opportunity costs faced by some poor families for sending working age youth to school. </p><p>The transition from school to the labor market is identified as the weakest link between marginalized youth and mainstream society. A significant percentage of young people have reportedly turned to crime and violence in situations where they lack education, employment and the necessary social support between leaving school and finding work.12 In 2002, the International Labor Organization (ILO) estimated that while around 50,000 youth reach working age and look to enter the workforce in PNG each year, the absorptive capacity of the formal economy was limited to only about 5,000 people per year.13 In this limited labor market, youth of working age who lack education are greatly disadvantaged by unequal access to jobs and services because they lack the necessary qualifications to obtain formal employment or to compete effectively in the informal sector. For instance, in the National Capital District (NCD), the overall unemployment rate stood at 21.2 percent for men and 12.8 percent for women. However, unemployment rates rose to over 50 percent for males and 30 percent for females</p><p>7 National Statistical Office, 2000 Census; and UN Population Prospects, 2006 Revision. 8 World Bank, 2008, Rapid Youth Assessment, Lorraine Blank, Washington D.C. 9 World Bank, 2006, Opportunities to Improve Education Sector Performance Summary Report, Washington D.C. 10 UNDP, 2008, 2007/08 Human Development Index Rankings, http://hdr.undp.org/en/statistics/ 11 National Statistics Office, 2000, PNG National Census and Department of Education statistics. 12 Dinnen, S., 1998, Urban raskolism and criminal groups in Papua New Guinea. In: Hazelhurst K, Hazelhurst C, eds. Gangs and youth subcultures: international explorations, New Brunswick, NJ. 13 ILO, 2002. Employment Opportunities for Papua New Guinea Youth reports that formal employment has increased by only 1.5% since 1996</p><p>2 between the ages of 15 and 24.14 Low school completion rates and a lack of adequate technical and life skills are a major factor contributing to their lack of employability. At the same time, employers in Port Moresby indicate that they struggle to fill employment gaps within the formal sector with staff that have the skills and discipline required to perform the work.15 </p><p>A recent comparative study noted that among the Pacific islands countries, the most extreme case of an apparent escalation in youth crime is evident in the urban areas of PNG.16 Rapid urban growth, poor living conditions, unemployment and the erosion of traditional systems of social support feed a sense of disenfranchisement, unfulfilled expectations and resentment among youths. The rise of criminal youth gangs, commonly called “raskols”, is currently the most visible manifestation of the ongoing instability and lawlessness in urban areas. A UN Habitat survey of 2004 reported that almost 70% of males in Port Moresby who considered themselves “unemployed” were earning a living through criminal activities, including armed robbery, home invasions, murder, and drug dealing.17 </p><p>While the dynamics underlying gang membership are complex, it is reasonable to believe that a lack of employment opportunities and a breakdown in social support and control mechanisms contribute to youth alienation and attraction to alternative sources of community and security. Given that a significant cohort of youth have limited prospects for reintegration into the formal education system due to their age and the state of the education system, efforts to strengthen their inclusion could start with helping them to access the labor market so that they have the opportunity to gain the skills and experience required to pursue productive livelihoods. </p><p>The GoPNG’s Medium Term Development Strategy (MTDS) for 2005-2010 prioritizes a number economic growth and social development activities that include young people as beneficiaries. Seven priority expenditure areas include: the promotion of income earning opportunities, development-oriented informal adult education and the rehabilitation and maintenance of transport infrastructure. To this end, the GoPNG has recently adopted a National Youth Policy (NYP) 2007-2017, which provides a more comprehensive foundation for youth development.18 In addition, city authorities, in the NCD, Lae and Mt. Hagen have begun to adopt youth-affirmative policies and are becoming increasingly aware of the need to expand and enhance labor market outcomes for youth. The NCDC is prioritizing efforts to integrate youth- oriented programs into its core budget, including programs for skills development, scholarships and labor reintegration as part of its broader urban safety and city development strategy. </p><p>Rationale for Bank involvement. The Bank’s Country Assistance Strategy (CAS) for 2008- 2011 recognizes the importance of empowering youth (and women) as a cross-cutting theme.19 In particular, it highlights the need to support the GoPNG’s broader agenda of promoting income</p><p>14 National Statistics Office, 2000, PNG National Census and Department of Education statistics. 15 PNG National Skills Training Council, 2008, Skills Training Needs Survey Report 2007-2008. 16 UNICEF/SPC/UNPF/NZAID, 2005, The State of Pacific Youth, Suva. 17 UNHABITAT, 2004. Youth and Crime Survey, Port Moresby. 18 It contains nine key policy directions: i) improving the quality of life for young people to alleviate poverty; ii) accessing integrated education to address illiteracy and school dropouts; iii) nurturing sustainable livelihoods for youth; iv) promoting healthy lifestyles to address health related issues; v) building stronger communities that involve young people as partners; vi) strengthening institutional capacity to promote youth development; vii) promoting youth and their identity through languages, culture and traditions; viii) conducting research and data collection on youth; and ix) promoting youth participation in law and justice programs.</p><p>3 generation opportunities as well as the development of a program to tackle youth unemployment and exclusion. It is on this basis that the Bank agreed with the GoPNG to initiate preparation of the proposed Urban Youth Employment Project (UYEP).20 The Project will seek to help such youth to become economically active by making a concerted effort to foster their social and economic integration into the labor market. </p><p>The Bank is well placed to support the GoPNG’s youth priorities. At the request of the GoPNG, the Bank supported a Rapid Youth Assessment in Port Moresby in 2008.21 The assessment provided an analysis of the challenges that urban youth face, including the underlying factors that contributed to their alienation; circumstances that facilitated their involvement in crime and violence; and profile of actors working on urban youth issues. The resulting gap analysis pointed to a particular deficiency in labor market insertion programs for marginalized youth. The NCDC has demonstrated considerable interest in working with the Bank to expand and further institutionalize its employment generation schemes. </p><p>Lessons learned. The Project will build upon the significant experience gained with training, labor market insertion, public works and social protection by different state, donor and civil society actors that have generated employment and injected cash into the hands of the poor and unemployed in PNG. (E.g., City Mission, Ginigoada Foundation, Yumi Lukautim Mosbi Projek, NCD Beautification and the ADB’s Employment Oriented Skills Development Project). The Project would provide a platform for the NCDC to bring together its employment initiatives, scale up its engagement and strengthen its implementation mechanisms. </p><p>The Project would also draw lessons from relevant experience in other low income countries that have adopted labor intensive public works (or “workfare”) programs as a social protection measure for providing work for the unemployed/underemployed, to augment low incomes and reduce poverty (e.g., India, Bangladesh, South Africa, etc;); and labor market insertion schemes, (e.g., Dominican Republic, Jamaica, Nigeria, Sri Lanka, etc.,) that have helped to empower disadvantaged youth through building core general, technical and micro skills, facilitating their integration into the labor market and improving opportunities for self-employment. Some of the lessons reflected will include i) developing clear objectives and keeping the project design simple to adapt to institutional constraints; ii) building on city services that are already in place to facilitate execution; iii) leveraging private sector and civil society organization (CSO) partnerships to deliver results; iv) enhancing the prospects for a sustained integration into the labor market by providing market-oriented job training; and v) bundling a package of youth services that include skills training, life skills, on-the-job learning and job search assistance.</p><p>2. Proposed objective(s)</p><p>The development objectives of the UYEP are to provide socially and economically disadvantaged urban youth short-term employment opportunities utilizing labor-intensive methods; and to expand programs that provide the knowledge and skills for employment.</p><p>19 World Bank, 2007, IBRD Country Assistant Strategy for PNG for FY08-FY11. The CAS focuses on two pillars in support of the MTDS: (i) promoting and maintaining sound economic and natural resource management; and (ii) improving livelihoods and service delivery, especially for the rural poor. 20 World Bank Transmittal Letter to GoPNG Department of National Planning and Monitoring, August 21, 2008. 21 World Bank, 2008, Rapid Urban Youth Assessment, Lorraine Blank, Washington, D.C.</p><p>4 3. Preliminary description</p><p>The Project would be financed as a Specific Investment Loan and implemented over a period of five years, from 2010–2015. The Project would focus on disadvantaged urban youth between the ages of 15 and 29 that neither work nor study and who have limited social and economic opportunities, including inter alia: a) those that have never accessed or not completed the formal school system; and b) those that may have completed their formal education but have still not been integrated into the labor market. Given that each of these segments would have different initial conditions and needs, the Project design would differentiate among these groups to ensure that activities are tailored to the characteristics, needs and aspirations of each segment.</p><p>The Project would build entry points for these groups along three complementary tracks: i) providing short-term employment opportunities and life-skills training in the public and private sectors; ii) supporting their labor market integration by providing them with occupational skills and life skills that are valued by employers in the public and private sectors as well as opportunities for self-employment; and iii) socializing youth activities and strengthening the capacity of the NCDC and selected public, private and civil society service providers to plan, supervise, monitor and evaluate labor market insertion and public works projects; in order to sustain employment generation further downstream.</p><p>4. Safeguard policies that might apply</p><p>An Environmental and Social Safeguard Framework will be prepared during the course of Project preparation. Proper mechanisms will also be put in place to ensure that women are able to access the Project’s resources and services in an equitable manner.</p><p>5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 1.5 International Development Association (IDA) 13.5 Total 15</p><p>6. Contact point</p><p>Contact: Ingo Wiederhofer Title: Senior Operations Officer Tel: (202) 473.7031 Fax: (202)522.1666 Email: [email protected]</p><p>5</p>