Papua New Guinea (PNG) is home to more than seven million people and is rich in gold, oil, gas, copper, silver, timber, and is home to abundant fisheries. Its population is strikingly diverse, speaking over 800 distinct languages.
Economically, despite some recent diversification, PNG’s economy remains dominated by two sectors: the agricultural, forestry and fishing sector, which engages most of the labor force (the majority informally); and the minerals and energy extraction sector which accounts for the majority of export earnings and, from 2015, the country’s Gross Domestic Product (GDP).
2014 saw the completion of a large Liquefied Natural Gas (LNG) plant which is expected to provide a significant boost to PNG’s overall GDP . Yet while exports from this project will eventually provide revenue to the state, they are unlikely to be felt in the short term. Furthermore, non-mining GDP is forecast to grow by four percent in 2015, supported by a rebound in the construction sector, driven mostly by increased infrastructure expenditure associated with facilities constructed for the 2015 Pacific Games, and the ongoing upgrading of the roads.
To diversify PNG’s asset base and increase employment, investment is needed to strengthen capacity in institutions and in physical infrastructure. Electricity, telecommunications, road and other transport infrastructure continue to be a critical need to enable private sector-led growth.
Translating strong macroeconomic performance and revenues from the extractive industry into strong, tangible improvements to living standards for all Papua New Guineans remains the key challenge for the Government of PNG, yet other challenges are also immense. Improving public financial management, efficiency of public spending and service delivery, raising the performance of the civil service, and improving transparency and accountability in budget management will be crucial in converting resources revenue into inclusive growth and, consequently, a genuine improvement in the livelihood of ordinary Papua New Guineans.
Last Updated: Oct 06, 2015