Papua New Guinea (PNG) has a remarkable diversity of geographic and natural resources. The country occupies the eastern half of the West Pacific island of New Guinea, together with the islands of New Britain, New Ireland, and the Autonomous Region of Bougainville, and another 600 smaller islands and atolls.
PNG’s population is young and growing. PNG’s growth trajectory and abundant resource potential provides a strong platform for greater economic engagement with Asia and further abroad.
The country’s economy remains dominated by two broad sectors:
- the agricultural, forestry, and fishing sectors that engage most of PNG’s labor force (the majority informally); and
- the minerals and energy extraction sector that accounts for the majority of export earnings and GDP.
To diversify PNG’s asset base and increase employment, investment is needed to strengthen capacity in institutions, human capital, and physical infrastructure. Electricity, telecommunications, road and other transport infrastructure remain critical to supporting private sector-led growth.
PNG has complex cultural dynamics deeply rooted in tribal and ethnic identity, traditional social institutions, and relationship to land. These contribute to both the country’s unique challenges as well as its considerable resilience.
There are limited formal job opportunities for the growing employment age population and other risks include environmental management, population growth, political fragmentation, inequalities in PNG’s resource dominated economy, and social exclusion of some groups.
In January 2020 – prior to the COVID-19 global pandemic’s impact – the World Bank forecast that real GDP growth in PNG was projected to hover around 3% on average in 2020-2022, with downside risks – including unexpected external shocks or potential domestic political and economic turbulence – prevailing. PNG’s revenues continue to face challenges arising from lower global commodity prices. Sound macroeconomic management and more efficient service delivery is critical to ensure development benefits reach a greater number of Papua New Guineans, particularly given 87% of Papua New Guineans live in rural areas.
With such a highly dispersed and remote population of over 8 million people the consequences of a COVID-19 outbreak in PNG has the potential to be devastating. The future resilience and economic growth of the country will depend on how its health system responds to the pandemic in 2020.
Last Updated: Apr 30, 2020