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 smaller islands of New Britain, New Ireland, and the Autonomous Region of Bougainville, and another 600 smaller islands and atolls.
PNG’s overall economic growth performance has been consistent with real GDP per capita averaging 4% since the mid-2000s.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.
Papua New Guinea’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, which engages most of PNG’s labor force (the majority informally);
- the minerals and energy extraction sector which 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 lead to both daunting risk factors and also provides a key platform for PNG’s 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.
Last Updated: Sep 26, 2019