Economy Of Papua New Guinea

The economy of Papua New Guinea (PNG) remains largely underdeveloped, with a significant portion of its population living below the poverty line. Despite the country’s abundant natural resources and economic potential, widespread poverty persists, reflecting challenges in translating resource wealth into broad-based economic prosperity. According to projections by the Asian Development Bank, Papua New Guinea’s gross domestic product (GDP) was expected to grow by 3.4% in 2022 and further accelerate to 4.6% in 2023, signaling a gradual recovery and expansion of economic activities following the disruptions caused by the COVID-19 pandemic. This anticipated growth underscores the resilience and potential of the PNG economy, albeit from a low base and amid ongoing structural challenges. Papua New Guinea’s economy is predominantly characterized by two principal sectors: the agricultural, forestry, and fishing sector, and the minerals and energy extraction sector. The agricultural, forestry, and fishing sector employs the majority of the country’s labor force, reflecting the subsistence nature of much of PNG’s economy. Most rural households engage in small-scale farming, hunting, and fishing, which serve as primary sources of livelihood and food security. This sector remains largely traditional and subsistence-oriented, with limited integration into formal markets, although it continues to be vital for the sustenance of the population. In contrast, the minerals and energy extraction sector plays a dominant role in the country’s export earnings. This sector encompasses the extraction of gold, copper, oil, and natural gas, which collectively constitute the backbone of PNG’s foreign exchange earnings. Mineral deposits, particularly gold and copper, have historically been the mainstay of the export economy, while oil and natural gas have gained increasing prominence in recent decades. The revenues generated from these extractive industries have been critical for government finances and have driven much of the country’s economic growth. Since the mid-2000s, Papua New Guinea’s GDP growth has been primarily propelled by the extraction industries, with real GDP growth per capita averaging around 4% during this period. This growth was largely fueled by rising commodity prices and increased production capacity in mining and energy sectors. However, the overall GDP growth rate for PNG in 2021 was relatively modest at 1.3%, reflecting the economic disruptions caused by the global COVID-19 pandemic and associated public health measures. Despite this slowdown, the extractive industries continued to underpin economic activity and government revenue. Significant progress has been made in channeling proceeds from oil and gas revenues into infrastructure development, which is essential for supporting long-term economic growth. Investments in roads, ports, and utilities have been prioritized to improve connectivity and facilitate the movement of goods and people. This infrastructure development has been particularly evident in major urban centers such as Port Moresby, the capital, and Lae, the country’s second-largest city and a key industrial hub. These cities have attracted increased international investor attention, resulting in an unprecedented building boom characterized by the construction of commercial buildings, residential complexes, and public infrastructure projects. The urban development boom in Port Moresby and Lae reflects Papua New Guinea’s emergence as a regional economic leader in the South Pacific. As the country seeks to capitalize on its economic potential, these urban centers are becoming focal points for business activity, financial services, and government administration. The growth of these cities is also indicative of broader demographic trends, including urban migration and population growth, which are reshaping the economic landscape of PNG. Papua New Guinea’s strategic geographic location enhances its economic potential by serving as a gateway between the Pacific region and Asia. Situated along key maritime routes, PNG offers access to major markets and trade networks, positioning it as a potential hub for regional commerce and investment. This strategic advantage is complemented by the country’s large landmass and demographic profile, which is nearly seven times that of other smaller Pacific Island nations. With a population exceeding eight million people, PNG represents a significant market and labor pool in the Pacific, contributing to its economic significance within the region. Despite these advantages, the International Monetary Fund (IMF) has noted that Papua New Guinea faces considerable challenges in fully exploiting its natural resource wealth. The country is richly endowed with minerals, forests, fisheries, and energy resources, yet the rugged terrain and the high cost of infrastructure development have hindered effective resource extraction and economic diversification. Mountainous landscapes, dense rainforests, and limited transport infrastructure increase the logistical difficulties and expenses associated with mining, agriculture, and trade, constraining economic growth and development. Agriculture remains the primary source of subsistence livelihood for the majority of Papua New Guinea’s population. Most rural communities engage in smallholder farming, cultivating crops such as sweet potatoes, taro, yams, and coffee, which are central to both food security and cultural practices. While some agricultural products, including coffee, cocoa, and palm oil, are exported, the sector overall remains underdeveloped and vulnerable to climatic and market fluctuations. The predominance of subsistence agriculture highlights the limited integration of rural economies into formal markets and the ongoing challenges of rural poverty. Mineral deposits, including oil, copper, and gold, constitute approximately 72% of Papua New Guinea’s export earnings, underscoring the economy’s heavy reliance on the extractive sector. The prominence of these minerals in the export portfolio exposes the country to commodity price volatility and external market shocks. Efforts to diversify the economy have been constrained by infrastructural and institutional limitations, making the management of resource revenues critical for sustainable development. Budgetary support from Australia and development aid coordinated under the auspices of the World Bank continue to play a vital role in sustaining Papua New Guinea’s economy. Australia remains PNG’s largest aid donor, reflecting the close historical and political ties between the two countries. In 2023, Australia planned to provide approximately $479.2 million in aid to Papua New Guinea, supporting a range of development initiatives including health, education, governance, and infrastructure projects. This aid is instrumental in supplementing government revenues and addressing development challenges. In response to the COVID-19 pandemic, the World Bank approved a US$100 million operation in June 2021, equivalent to approximately PGK 352 million, aimed at supporting Papua New Guinea’s pandemic response and establishing the foundations for sustainable economic recovery. This funding was directed towards strengthening health systems, improving social protection, and enhancing economic resilience. The operation reflects the international community’s recognition of PNG’s vulnerabilities and the need for coordinated support to mitigate the pandemic’s socioeconomic impacts and promote long-term growth.

Papua New Guinea (PNG) is classified as a developing economy by the International Monetary Fund (IMF), with its economic structure heavily reliant on the extraction and export of natural resources. As of 2018, natural resource extraction accounted for approximately 28% of PNG’s overall Gross Domestic Product (GDP), underscoring the significance of minerals, oil, and natural gas as key contributors to the national economy. The prominence of these sectors reflects the country’s rich endowment of mineral deposits and hydrocarbon reserves, which have attracted substantial foreign investment and shaped economic development trajectories. The Investment Promotion Authority of Papua New Guinea identifies the major economic sectors that underpin the nation’s economy, encompassing agriculture and livestock, forestry, mining and petroleum, tourism and hospitality, fisheries and marine resources, manufacturing, retailing and wholesaling, building and construction, transport and telecommunications, and finance and business trade. This broad spectrum of sectors illustrates the diverse economic activities present within PNG, although the relative contribution of each varies significantly, with natural resource-based industries typically dominating economic output and export earnings. PNG’s economy is generally divided into subsistence and market sectors, although this distinction is often blurred by the widespread practice of smallholder cash cropping. Many rural households engage in the cultivation of coffee, cocoa, and copra, which serve as important sources of cash income alongside subsistence farming. Approximately 75% of the population relies primarily on the subsistence economy for their livelihood, highlighting the continued importance of traditional agricultural practices and local food production in sustaining the majority of Papua New Guineans. This reliance on subsistence agriculture also reflects limited access to formal employment opportunities and market integration in many rural areas. The minerals, timber, and fish sectors are predominantly dominated by foreign investors, who bring capital, technology, and expertise necessary for large-scale extraction and processing activities. In contrast, manufacturing in PNG remains limited, with a relatively small formal labor sector as a result. The limited development of manufacturing industries constrains economic diversification and employment generation, reinforcing the economy’s dependence on resource extraction and export-oriented activities. This dynamic has implications for income distribution and economic resilience, as fluctuations in global commodity prices can significantly impact national revenue and employment. Timber and marine resources represent significant export commodities for PNG, with the country recognized as one of the few global suppliers of tropical timber. The forestry industry holds considerable economic importance, yet it operates with low and semi-intensive technological inputs. This technological limitation confines the range of forestry products primarily to sawed timber, veneer, plywood, block board, moulding, poles and posts, and wood chips. Only a few finished wood products are exported, reflecting constraints in value addition and processing capabilities within the sector. The limited industrial processing capacity reduces the potential for higher export earnings and employment opportunities in downstream manufacturing. Several challenges confront the forestry sector in PNG, including a lack of automated machinery and inadequately trained local technical personnel. These factors hinder productivity improvements and the development of higher-value products. Additionally, legal uncertainties surrounding land tenure and resource rights, coupled with issues of corruption, complicate sustainable forest management and regulatory enforcement. Estimates suggest that up to 70% of logging activities in the country may be illegal, raising concerns about environmental degradation, loss of government revenue, and social conflicts. These challenges underscore the need for improved governance, capacity building, and technological investment in the forestry sector. Marine fisheries also contribute significantly to PNG’s economy, with the country providing around 10% of the global fish catch. PNG’s marine resources include a large portion of the world’s major tuna stocks, which are highly valued in international markets. The fisheries sector supports livelihoods, food security, and export earnings, particularly for coastal communities engaged in artisanal and commercial fishing. Sustainable management of marine resources remains critical to maintaining the sector’s long-term viability, given the pressures from overfishing and environmental changes. Renewable resources such as forests, marine resources, and agriculture continue to play a vital role in PNG’s economy. Agriculture, in particular, provides livelihoods for approximately 85% of the population and contributes around 30% of GDP. This sector remains the backbone of rural economies and is essential for food security, employment, and income generation. Among agricultural commodities, oil palm production has experienced steady growth in recent years, driven primarily by output from estates and extensive outgrower schemes. Palm oil has emerged as the main agricultural export, reflecting both domestic production capacity and international demand. Coffee remains PNG’s major export crop, predominantly produced in the Highlands provinces where climatic and soil conditions favor its cultivation. Following coffee, cocoa and coconut oil/copra are significant agricultural exports, mainly produced by smallholders in coastal regions. These crops form the basis of rural cash economies and contribute substantially to foreign exchange earnings. Additionally, tea is produced on estates, and rubber cultivation also exists, although these commodities play a smaller role in the overall agricultural export portfolio. The diversity of agricultural production reflects the varied agroecological zones across PNG and the importance of smallholder farming systems. Measuring PNG’s economic growth presents challenges due to distortions in GDP figures caused by the resource-dependent nature of the economy. Fluctuations in commodity prices and production volumes can lead to significant volatility in GDP estimates. Moreover, alternative metrics such as Gross National Income (GNI) are difficult to measure accurately, given data limitations and the informal nature of much economic activity. Historical GDP estimates for PNG have changed dramatically over time, reflecting these measurement challenges and revisions in national accounting methodologies. Such complexities complicate economic planning and policy formulation. In 2019, PNG’s real GDP growth rate was recorded at 3.8%, accompanied by an inflation rate of 4.3%. This economic growth was primarily driven by strong commodity prices, particularly in minerals and agricultural products, supported by buoyant demand from Asian markets. The mining sector experienced a boom during this period, benefiting from high global prices and increased production. Additionally, a positive economic outlook was associated with the construction phase of natural gas exploration, production, and exportation in liquefied natural gas (LNG) form. This phase involved multibillion-dollar investments in exploration activities, production wells, pipelines, storage facilities, liquefaction plants, port terminals, and LNG tanker ships, signaling a significant expansion of the energy sector’s capacity. Despite these developments, formal employment levels in PNG remain low. Although a minimum wage exists, it has declined in real terms since independence, reflecting challenges in wage growth and labor market conditions. In the late 2010s, approximately 40% of employed persons in urban areas worked outside agriculture, compared to only about 20% in rural areas. This disparity highlights the limited diversification of rural economies and the concentration of non-agricultural employment opportunities in urban centers. The predominance of subsistence and informal employment further complicates efforts to improve living standards and reduce poverty. The Papua New Guinean kina is managed through a crawling peg exchange rate system, whereby its value is adjusted periodically in response to economic conditions. The currency’s value is heavily influenced by the country’s natural resource exports, making it sensitive to fluctuations in global commodity markets. This exchange rate regime aims to maintain competitiveness and macroeconomic stability, although it also exposes the economy to external shocks linked to resource price volatility. Australia is PNG’s largest bilateral trade partner, reflecting historical, geographic, and economic ties. Japan ranks as the second-largest trade partner, followed by China in third place. These relationships shape PNG’s trade patterns, investment flows, and economic diplomacy. The prominence of these countries in PNG’s external trade underscores the importance of regional and global economic linkages in sustaining the country’s economic development.

The Ok Tedi Mine, situated in the southwestern region of Papua New Guinea, stands as a significant mineral resource operated under state ownership. This mine has played a pivotal role in the country’s mineral sector, contributing substantially to both government revenues and export earnings. Its strategic location and resource richness have made it one of the cornerstone assets in Papua New Guinea’s extractive industry, reflecting the government’s direct involvement in managing key mineral resources. Papua New Guinea’s mineral exports are dominated by several key commodities, notably gold, copper, cobalt, and nickel. These minerals form the backbone of the country’s export economy, with gold and copper being particularly prominent due to their high market value and demand. In addition to these solid minerals, oil and liquefied natural gas (LNG) have emerged as important resource exports, diversifying the country’s export portfolio and contributing to its economic growth. The exploitation of these resources has allowed Papua New Guinea to leverage its abundant natural wealth on the global market. Extractive resources collectively account for a substantial 86% of all exports from Papua New Guinea, underscoring the country’s heavy reliance on its mineral and energy sectors. The high value of these exports has generally enabled Papua New Guinea to maintain current account surpluses, providing a stable source of foreign exchange and supporting the nation’s balance of payments. This economic dynamic highlights the crucial role that mineral and energy exports play in underpinning the country’s macroeconomic stability. Among the country’s mining operations, the largest mine is a privately owned gold mine located on Lihir Island. This mine surpasses others in scale and output, reflecting significant investment and development in the region. Following the Lihir mine, the state-run Ok Tedi Mine ranks as the second largest, while the Porgera Gold Mine holds the position of the third largest mining operation in Papua New Guinea. These three mines collectively represent the core of the country’s gold production and are central to its mineral export economy. Liquefied natural gas exports from Papua New Guinea began in 2014, marking a major milestone in the country’s energy sector development. This commencement of LNG exports introduced a new dimension to the nation’s resource economy, enabling it to tap into global energy markets. However, the initiation of additional LNG projects has faced delays, primarily due to disputes over revenue sharing arrangements. These disagreements have impeded the timely expansion of the LNG sector, reflecting the complexities of managing resource wealth in a multi-stakeholder environment. In 1999, mineral production accounted for 26.3% of Papua New Guinea’s gross domestic product (GDP), illustrating the sector’s significant contribution to the national economy at the turn of the millennium. This substantial share of GDP highlights the importance of mining activities not only as an export driver but also as a key component of domestic economic output. The mineral sector’s influence on GDP underscores its role in employment, infrastructure development, and government revenue generation. Minerals have consistently provided significant government revenues and foreign exchange earnings for Papua New Guinea. Active copper and gold mines are located at several sites including Porgera, Ok Tedi, Misima, Lihir, Simberi, and Hidden Valley. These mines contribute extensively to the country’s export earnings and fiscal resources, supporting public expenditure and economic development initiatives. The geographic distribution of these mines across various provinces reflects the widespread mineral wealth embedded within the country’s geology. As of 2014, discussions to resume mining operations at the Panguna mine re-emerged, signaling renewed interest from both the Autonomous Bougainville Government and the National Government of Papua New Guinea. The Panguna mine, which had been a significant source of copper and gold, had ceased operations due to longstanding conflicts and environmental concerns. The renewed dialogue between the regional and national authorities indicated a potential revival of mining activities, which could have substantial economic and social implications for the Bougainville region and the country at large. Several new nickel, copper, and gold projects have been identified within Papua New Guinea, reflecting ongoing exploration and resource assessment efforts. However, the development of these projects remains contingent upon higher commodity prices, which would improve their economic viability. This cautious approach to project development underscores the sensitivity of mining investments to global market conditions and the need for favorable price environments to justify substantial capital expenditures. By early 2011, exploration efforts at the Mount Suckling project confirmed the discovery of at least two large, highly prospective porphyry bodies located at Araboro Creek and Ioleu Creek. These discoveries represent significant potential for future copper and gold production, given the typical mineralization associated with porphyry deposits. The identification of these bodies has attracted interest from mining companies and investors, contributing to the expanding portfolio of mineral prospects in Papua New Guinea. Oil production and exportation in Papua New Guinea are led by a consortium headed by Chevron, operating primarily in the Southern Highlands Province. This consortium’s activities have established Papua New Guinea as a notable oil producer within the region, contributing to the country’s energy exports and government revenues. The presence of multinational corporations such as Chevron highlights the strategic importance of Papua New Guinea’s hydrocarbon resources and the role of foreign investment in their development. In 2001, Papua New Guinea had plans to commercialize its substantial natural gas reserves, estimated at 640 cubic kilometers (23 trillion cubic feet), through the construction of a gas pipeline to Queensland, Australia. This ambitious project aimed to export natural gas directly to the Australian market, enhancing regional energy integration and generating significant economic benefits. However, despite the initial planning and potential advantages, the pipeline project was ultimately shelved, reflecting challenges related to financing, market conditions, and logistical complexities. By 2019, Papua New Guinea had established itself as a major global producer of key minerals, ranking as the world’s eighth largest producer of cobalt and the fifteenth largest producer of gold. These rankings underscore the country’s significant role in the global supply chains for these critical minerals, which are essential for various industrial applications including electronics, batteries, and jewelry. The prominence in cobalt and gold production reflects both the scale of Papua New Guinea’s mineral deposits and the effectiveness of its mining sector. In 2017, Papua New Guinea produced 90 tons of silver, adding to its portfolio of mineral outputs. While silver production is smaller in scale compared to gold and copper, it nonetheless contributes to the country’s export earnings and mining sector diversity. The extraction of silver often occurs as a by-product of gold and copper mining, integrating into the broader mineral production framework. Mineral deposits contribute approximately 72% of Papua New Guinea’s export earnings, highlighting the overwhelming dominance of the mineral sector in the country’s trade balance. This heavy reliance on mineral exports makes the economy particularly sensitive to fluctuations in global commodity prices, while also emphasizing the critical importance of sustainable resource management and diversification efforts. The Iagifu/Hedinia Field, located within the Papuan fold and thrust belt, was discovered in 1986 and represents an important hydrocarbon resource for Papua New Guinea. This field’s geological setting within a complex fold and thrust belt indicates the presence of structurally trapped hydrocarbons, which have been a focus of exploration and development activities. The discovery contributed to the country’s expanding portfolio of oil and gas assets. The first major gas project in Papua New Guinea is the PNG LNG joint venture, operated by ExxonMobil and including partners such as Oil Search, Santos, Kumul Petroleum Holdings (the national oil and gas company), JX Nippon Oil and Gas Exploration, the Mineral Resources Development Company, and Petromin PNG Holdings. This consortium represents a broad coalition of international and national stakeholders, combining expertise and resources to develop the country’s natural gas reserves. The PNG LNG project has become a flagship initiative in Papua New Guinea’s energy sector. The PNG LNG project constitutes an integrated development encompassing gas production and processing facilities located in the Hela, Southern Highlands, and Western Provinces. Additionally, it includes liquefaction and storage facilities situated northwest of Port Moresby, with a capacity of 6.9 million tonnes per year. This comprehensive infrastructure enables the efficient conversion of natural gas into LNG for export, positioning Papua New Guinea as a competitive player in the global LNG market. Central to the PNG LNG project is an extensive network of pipelines exceeding 700 kilometers (430 miles) in length, which connect the various production and processing facilities. This pipeline infrastructure is critical for transporting gas from the inland fields to the coastal liquefaction plant. The scale and complexity of the PNG LNG project represent the largest private-sector investment in Papua New Guinea’s history, reflecting the transformative impact of the project on the national economy and industrial landscape. A second major gas project in Papua New Guinea is based on initial exploration and development rights held by the French oil and gas company TotalEnergies and the U.S.-based InterOil Corporation (IOC). In December 2013, TotalEnergies agreed to purchase 61.3% of IOC’s rights to the Antelope and Elk gas fields, with plans to commence development activities starting in 2016. This development included constructing a liquefaction plant dedicated to LNG export, further expanding Papua New Guinea’s capacity in the global LNG market. TotalEnergies also maintains a separate joint operating agreement with Oil Search, another key player in Papua New Guinea’s oil and gas sector. This partnership facilitates coordinated exploration and development efforts, enhancing the efficiency and scale of resource exploitation. The involvement of major international energy companies such as TotalEnergies and Oil Search underscores the strategic importance of Papua New Guinea’s hydrocarbon resources. Beyond oil and gas, additional gas and mineral projects have been proposed throughout Papua New Guinea, including the large-scale Wafi-Golpu copper-gold mine. This project represents one of the most significant mineral developments under consideration, with extensive exploration activities ongoing to assess its full potential. The continued identification and advancement of such projects reflect the dynamic nature of Papua New Guinea’s mineral and energy sectors, which remain central to the country’s economic prospects and development trajectory.

Traces of gold were first identified in 1852 through the examination of pottery artifacts uncovered at Redscar Bay, situated on the Papuan Peninsula in Papua New Guinea. These early findings indicated that gold had been present and possibly utilized by indigenous populations long before formal mining activities commenced. The discovery within pottery suggested that gold was incorporated into cultural objects, reflecting its significance in local societies. This initial evidence of gold set the stage for subsequent exploration and exploitation efforts in the region, highlighting the potential for valuable mineral resources in Papua New Guinea. The presence of gold in such artifacts also provided important insights into the historical trade networks and metallurgical knowledge of the indigenous peoples inhabiting the area.

Agriculture in Papua New Guinea encompasses a diverse range of activities, including the cultivation of crops for domestic consumption, international export, and subsistence farming. The country’s key export commodities have traditionally included copra, copra oil, rubber, tea, cocoa, and coffee. Despite their importance to the economy, these exports have not experienced significant growth in recent years, reflecting challenges such as fluctuating world market prices, limited infrastructure, and variable climatic conditions. The agricultural sector remains vital to the country’s economic fabric, providing the majority of employment and serving as a cornerstone of rural livelihoods. One of the most notable developments in Papua New Guinea’s agricultural landscape has been the conversion of forested areas into oil palm plantations for palm oil production. This transformation has become a significant and expanding source of both employment and income, particularly in rural regions where alternative economic opportunities are limited. The expansion of oil palm cultivation has been driven by increasing global demand for palm oil, which is used extensively in food products, cosmetics, and biofuels. This shift has contributed to changes in land use patterns and has implications for environmental sustainability, as it involves the clearing of tropical forests. Papua New Guinea contributes approximately 1.6% of the global palm oil supply, positioning it as a modest but meaningful player in the international market. In addition, the country accounts for about 1% of the global coffee supply, underscoring the importance of coffee as a traditional cash crop. Coffee cultivation, often undertaken by smallholder farmers, remains a key source of foreign exchange earnings. However, the overall scale of Papua New Guinea’s agricultural exports remains relatively small compared to major global producers, reflecting both the country’s geographic constraints and infrastructural challenges. Although agriculture is not the largest economic sector by gross domestic product (GDP), it provides the majority of employment in Papua New Guinea, accounting for around 85% of all jobs. This high level of employment reflects the predominantly rural nature of the population and the limited development of other sectors such as manufacturing and services. Nearly 40% of the population engage in subsistence farming, living relatively independently from the cash economy. These subsistence farmers cultivate crops primarily for household consumption, relying on traditional methods and local knowledge systems to sustain their livelihoods. The importance of traditional social groupings and customary land tenure systems is explicitly recognized in the Papua New Guinea Constitution. It expresses the desire for “traditional villages and communities to remain as viable units of Papua New Guinean society,” thereby protecting their ongoing significance in both local and national community life. This constitutional acknowledgment reflects the central role that kinship groups, clans, and village communities play in managing land, resources, and social relations. It also underscores the challenges of balancing modernization and economic development with the preservation of cultural heritage and social cohesion. Farming stands as the most widespread economic activity in Papua New Guinea, with agricultural practices predominantly characterized by simple rainfed surface irrigation systems. These methods vary considerably by location, influenced by factors such as altitude, soil type, and climate. In lowland areas, farmers often cultivate crops suited to warmer, wetter conditions, while highland regions support different crops adapted to cooler temperatures. The diversity of ecological zones across the country has fostered a range of agricultural techniques and crop choices, reflecting the adaptability and resilience of local farming communities. Historically, taro has been a staple crop in Papua New Guinea, forming a central component of the traditional diet. Over time, the introduction of the sweet potato has expanded the range of cultivable crops, enabling agriculture at altitudes as high as 2,700 metres (8,900 feet). This adaptation has allowed highland communities to sustain themselves in mountainous areas where other staple crops might not thrive. The sweet potato’s introduction has had profound implications for food security and agricultural productivity, becoming a key element of subsistence farming systems. The sago palm (Metroxylon spp.) is another common crop cultivated in Papua New Guinea, particularly in swampy lowland areas. Sago serves as an important carbohydrate source for many communities and is processed into a starchy flour used in various traditional dishes. Its cultivation and processing are deeply embedded in cultural practices and local economies, highlighting the diversity of food sources beyond the more widely recognized staples. The combined agricultural, forestry, and fishing sectors employ the majority of Papua New Guinea’s labor force, reflecting the country’s reliance on natural resource-based livelihoods. Agriculture alone accounts for approximately 25% of the nation’s GDP, supporting more than 80% of the population either directly or indirectly. This sector’s dominance in employment and subsistence underscores its critical role in poverty alleviation and rural development, even as the country seeks to diversify its economy. Most agricultural production in Papua New Guinea remains subsistence-based, with cash crops such as coffee, palm oil, cocoa, copra, tea, rubber, and sugar grown primarily for export. These cash crops provide essential foreign exchange earnings and contribute to rural incomes, but their cultivation often coexists with subsistence farming practices. The dual nature of the agricultural economy reflects the complex interplay between traditional livelihoods and market-oriented production. The timber industry in Papua New Guinea experienced a period of inactivity in 1998 due to low world prices, which rendered logging operations economically unviable. However, the sector rebounded in 1999 as global demand and prices improved, allowing timber exports to resume. Despite the country’s extensive forest resources, the domestic woodworking industry has developed slowly, constrained by factors such as limited infrastructure, capital investment, and skilled labor. Approximately 40% of Papua New Guinea’s land area remains covered with timber-rich forests, representing a significant natural asset with both economic and ecological value. Fish exports from Papua New Guinea are primarily limited to shrimp, which constitute the main seafood product marketed internationally. The country’s rich marine resources also attract foreign fishing vessels, particularly those targeting tuna. These vessels operate under license agreements, allowing them to fish within Papua New Guinea’s exclusive economic zone. This arrangement provides the government with revenue through licensing fees while also raising concerns about sustainable fisheries management and the equitable distribution of benefits. Papua New Guinea hosts the largest yam market in Asia, reflecting the crop’s cultural and economic significance. Yams are a staple food in many communities and feature prominently in traditional ceremonies and social exchanges. The prominence of yams in local markets underscores the continued importance of root crops in the country’s agricultural system. In 2021, Papua New Guinea’s agricultural production demonstrated the country’s diverse and substantial output. Palm oil production reached 3.0 million tons, ranking Papua New Guinea as the seventh largest global producer. Coconut production also stood at 1.8 million tons, securing the same global ranking. Banana production was significant at 1.3 million tons, while fresh fruits (not elsewhere specified) accounted for 1.1 million tons. Sweet potato production totaled 699 thousand tons, placing the country 17th globally in this crop. Other notable productions included 371 thousand tons of yam, 361 thousand tons of roots and tubers, 353 thousand tons of sugar cane, 322 thousand tons of vegetables, 278 thousand tons of taro, 247 thousand tons of green maize, 156 thousand tons of cassava, and 109 thousand tons of berries (not elsewhere specified). Coffee and cocoa production each reached 42 thousand tons, reflecting their ongoing role as important cash crops. Smaller agricultural outputs in 2021 included natural rubber at 7.7 thousand tons and tea at 5.5 thousand tons, illustrating the breadth of agricultural activity across the country’s varied ecological zones.

Papua New Guinea’s economy exhibits a pronounced dependence on imports for manufactured goods, underscoring the limited capacity of its domestic industrial sector to produce a wide array of finished products. This reliance reflects structural challenges within the country’s industrial base, where local production has not expanded sufficiently to meet the demand for manufactured items, necessitating substantial inflows of goods from overseas markets. The constrained domestic manufacturing capacity stems from multiple factors, including infrastructural limitations, a relatively small consumer market, and the high costs associated with production and distribution within the country. Consequently, the importation of manufactured goods remains a critical component of the national economy, fulfilling consumer and industrial needs that local industries are currently unable to satisfy. Excluding the mining sector, which is a dominant contributor to Papua New Guinea’s economy, the industrial sector accounts for only about 9 percent of the country’s Gross Domestic Product (GDP). This modest share highlights the relatively minor role that industrial activities play in the overall economic landscape when compared to other sectors such as agriculture, mining, and services. The limited contribution of industry to GDP reflects both the nascent stage of industrial development and the structural impediments that have constrained expansion. Despite efforts to diversify the economy beyond resource extraction, industrial growth has remained sluggish, with manufacturing and processing industries struggling to achieve significant scale or productivity improvements. This small industrial footprint underscores the challenges faced in transforming Papua New Guinea’s economic structure toward greater industrialization. In terms of export earnings, industrial production in Papua New Guinea contributes minimally, indicating a lack of competitiveness in international markets for manufactured goods. The country’s export profile remains heavily skewed toward primary commodities, particularly minerals, petroleum, and agricultural products, rather than value-added manufactured items. This limited presence of industrial products in export markets reflects both the scale and sophistication of domestic manufacturing, which has yet to develop the capacity to produce goods that can compete on quality, price, or branding at the global level. The minimal contribution of industry to exports also signals missed opportunities for economic diversification and the generation of foreign exchange through higher-value manufacturing sectors. Within the domestic industrial landscape, small-scale industries produce a diverse range of products, reflecting both local demand and the adaptation of manufacturing activities to available resources and market conditions. These industries encompass the production of consumer goods such as beer, soap, clothing, ice cream, canned meat, and fruit juices, as well as industrial and construction-related products including concrete items, plywood, paint, and matches. Additionally, small-scale manufacturing extends to the production of paper products and furniture, indicating a degree of diversification in the types of goods produced. This variety of products demonstrates the entrepreneurial efforts and localized industrial activities that exist despite the broader constraints on industrial expansion. However, the scale and technological sophistication of these small-scale industries are generally limited, restricting their ability to compete beyond the domestic market or to achieve significant economies of scale. The development of Papua New Guinea’s industrial sector faces significant constraints arising from the small size of the domestic market, which limits the potential for economies of scale and reduces the overall demand for locally produced goods. With a population of just over nine million people, dispersed across challenging geographic terrain, the domestic consumer base is relatively limited both in size and purchasing power. This fragmentation inhibits the growth of large-scale manufacturing enterprises that rely on substantial and consistent demand to justify investment in production capacity and technology. The limited market size also discourages foreign and domestic investors from committing significant resources to industrial ventures, as the potential returns are constrained by the narrow scope of local consumption. As a result, the industrial sector remains characterized by small-scale operations that struggle to expand or modernize. Relatively high wage levels in Papua New Guinea present an additional barrier to industrial growth by increasing the cost of production compared to other countries in the region. Labor costs in Papua New Guinea tend to be higher than in many neighboring economies, where abundant low-cost labor pools have attracted manufacturing investment. These higher wages raise the overall expenses associated with producing goods domestically, reducing the competitiveness of Papua New Guinea’s industrial products both at home and in export markets. The wage differential limits the ability of local manufacturers to compete on price, particularly in labor-intensive sectors, and constrains the attractiveness of Papua New Guinea as a destination for labor-intensive foreign direct investment. Consequently, wage-related cost pressures contribute to the challenges faced by the industrial sector in achieving sustainable growth. Transport costs within Papua New Guinea further compound the difficulties in industrial development by elevating the expenses related to the distribution of goods both domestically and internationally. The country’s rugged terrain, limited infrastructure, and dispersed population centers result in logistical challenges that increase the cost and complexity of moving raw materials to factories and finished products to markets. High transport costs reduce profit margins for manufacturers and limit their ability to price goods competitively, thereby discouraging investment in industrial production. Moreover, the inefficiencies in transportation networks hinder access to export markets, constraining the potential for industrial products to reach international buyers in a timely and cost-effective manner. These logistical barriers represent a significant impediment to the expansion and modernization of Papua New Guinea’s industrial sector, reinforcing the broader structural challenges that limit its contribution to the national economy.

Until the second half of 2007, information and communication technology (ICT) services in Papua New Guinea (PNG) were largely restricted to urban centres and operated under the exclusive control of Telikom PNG, the national telecommunications provider. This monopoly meant that telecommunications infrastructure and services were concentrated primarily in major cities such as Port Moresby and Lae, leaving vast rural and remote areas with limited or no access to modern communication technologies. Telikom PNG’s dominance in the sector constrained competition and innovation, resulting in relatively high costs and limited service options for consumers. The telecommunications landscape during this period was characterized by basic fixed-line telephone services and minimal mobile coverage, reflecting the broader challenges of infrastructure development in a country with rugged terrain and dispersed populations. The telecommunications environment in Papua New Guinea underwent a significant transformation in the latter half of 2007 when Digicel, an Irish-owned telecommunications company, entered the mobile market. Digicel’s arrival effectively ended Telikom PNG’s longstanding monopoly and introduced competitive dynamics that reshaped the sector. Leveraging substantial investment and modern technology, Digicel rapidly expanded mobile network coverage across the country, including many rural and previously underserved regions. This expansion was facilitated by the deployment of new cellular towers and infrastructure tailored to PNG’s challenging geography, enabling mobile signal availability in areas where fixed-line services had been impractical or unavailable. Digicel’s market entry not only increased consumer choice but also drove down prices and improved service quality, catalyzing a broader adoption of mobile telecommunications. The entry of Digicel played a pivotal role in enhancing connectivity for a broad segment of Papua New Guinea’s population, transforming the communications landscape from one characterized by limited urban access to one marked by widespread mobile availability. Prior to Digicel’s expansion, many Papua New Guineans, especially those in rural communities, had little to no access to telephony or internet services. The improved mobile coverage facilitated by Digicel allowed individuals to communicate more easily for personal, commercial, and emergency purposes, fostering social inclusion and economic opportunities. Mobile phones became essential tools for accessing information, conducting business, and maintaining social ties, significantly altering daily life across the country. This rapid diffusion of mobile technology also laid the groundwork for future developments in digital services and internet connectivity. By 2014, these efforts culminated in a substantial increase in mobile phone penetration in Papua New Guinea, which had reached 41 percent of the population. This figure marked a remarkable growth trajectory given the relatively short period since Digicel’s market entry and the previous limitations on telecommunications access. The 41 percent penetration rate reflected the widespread adoption of mobile devices across diverse demographic and geographic segments, including many rural areas that had previously been disconnected. The growing mobile subscriber base underscored the success of competitive market dynamics and infrastructure investments in overcoming historical barriers to communication. Moreover, this expansion contributed to broader economic and social development goals by enabling improved access to information and services. As of 2017, mobile phone usage in Papua New Guinea continued to expand, with approximately 42.68 mobile phone users per 100 population. This figure indicated ongoing growth in mobile telecommunications adoption, albeit at a somewhat slower pace compared to the rapid gains observed immediately following Digicel’s market entry. The sustained increase in mobile users reflected continued improvements in network coverage, affordability of handsets and services, and the increasing integration of mobile technology into daily life. Despite this progress, challenges remained in extending reliable service to the most remote and difficult-to-reach areas, where infrastructure costs and logistical difficulties persisted. Nonetheless, mobile telephony had become a critical component of Papua New Guinea’s communication infrastructure by this time. Despite the notable advancements in mobile telephony, Papua New Guinea exhibited a low level of broadband uptake as of 2017, highlighting ongoing challenges in internet accessibility and infrastructure development. Broadband penetration was estimated at only 0.213 per 100 population, a figure that underscored the limited availability and affordability of high-speed internet services across the country. The low broadband adoption rate was attributable to several factors, including inadequate infrastructure, high costs, limited digital literacy, and the dispersed nature of the population. While mobile networks had expanded coverage, the capacity to deliver reliable broadband internet, especially in rural and remote areas, remained constrained. This digital divide posed significant obstacles to the country’s efforts to leverage ICT for economic growth, education, healthcare, and governance, emphasizing the need for continued investment and policy focus on broadband infrastructure development.

In Papua New Guinea, a substantial portion of the population, especially those residing in rural areas, depends heavily on traditional biomass energy sources for their cooking needs. This reliance primarily involves the use of firewood, charcoal, and other organic materials such as agricultural residues and animal dung. These biomass fuels are often gathered directly from local forests and surrounding environments, reflecting the limited access to modern energy infrastructure in many remote communities. The widespread use of biomass is deeply rooted in cultural practices and economic constraints, as alternatives like liquefied petroleum gas (LPG) or electricity remain prohibitively expensive or unavailable for much of the rural population. This dependence on traditional biomass has significant implications for health and the environment, as indoor air pollution from open fires contributes to respiratory illnesses, while unsustainable harvesting can lead to deforestation and land degradation. Efforts to promote cleaner and more efficient cooking technologies have been initiated, but the transition remains gradual due to logistical challenges and the entrenched nature of biomass use in everyday life.

By the year 2017, access to electricity in Papua New Guinea exhibited a pronounced disparity between rural and urban populations, underscoring the challenges faced in extending reliable power to remote areas. Only 50.42% of the rural population had access to electricity, a figure that highlighted the limited reach of electrification efforts beyond the country’s urban centers. This low level of rural electrification was attributable to several factors, including the country’s rugged terrain, dispersed settlements, and the high costs associated with extending grid infrastructure to remote villages. Many rural communities continued to rely on traditional energy sources such as kerosene lamps, wood, and other biomass fuels for lighting and cooking, which posed health and environmental concerns. Efforts to improve rural electrification often involved a combination of grid extension and off-grid solutions like solar home systems and mini-grids, yet progress remained gradual due to logistical and financial constraints. In contrast, the urban population of Papua New Guinea experienced significantly higher rates of electricity access, with 80.23% of city and town residents connected to the power grid in 2017. This disparity reflected the concentration of infrastructure development and economic activity in urban areas, where demand for electricity was higher and more economically viable to serve. Urban centers such as Port Moresby, Lae, and Mount Hagen benefited from relatively better-developed transmission and distribution networks, which facilitated broader access to electricity for households, businesses, and public services. The higher electrification rates in urban areas contributed to improved living standards, enabling greater use of electrical appliances, enhanced educational opportunities, and expanded commercial activities. Nevertheless, the urban electrification rate, while substantially greater than that of rural areas, still indicated that nearly one-fifth of the urban population lacked access to electricity, pointing to ongoing challenges in achieving universal coverage. Despite the comparatively higher access to electricity in urban centers, frequent power outages remained a persistent issue throughout Papua New Guinea’s cities and towns. These outages were primarily caused by limitations and vulnerabilities within the transmission and distribution infrastructure, which struggled to meet growing demand and cope with maintenance challenges. The power system often faced constraints such as aging equipment, insufficient generation capacity, and a lack of redundancy in the network, which made it susceptible to failures and disruptions. Additionally, the country’s complex geography and susceptibility to natural events like heavy rains and flooding sometimes damaged infrastructure, further exacerbating reliability problems. These frequent interruptions in power supply had significant economic and social impacts, disrupting business operations, affecting public services such as healthcare and education, and reducing overall quality of life. Efforts to modernize and expand the electricity grid, improve maintenance practices, and diversify energy sources were ongoing priorities aimed at enhancing the stability and resilience of urban power supply in Papua New Guinea.

In 2012, Papua New Guinea’s electricity consumption was estimated at 3.116 billion kilowatt-hours (kWh), reflecting the country’s growing demand for electrical power amid ongoing economic development. This level of consumption indicated a gradual increase compared to previous years, driven by expanding urban centers and increased industrial activity, particularly in mining and manufacturing sectors. Despite this growth, electricity access remained limited in many rural areas, where a significant portion of the population relied on traditional energy sources such as biomass and kerosene for lighting and cooking. The national grid primarily served urban and peri-urban regions, with infrastructure challenges and geographic constraints impeding widespread electrification. Efforts to improve energy supply included investments in hydroelectric projects and exploration of renewable energy sources to meet rising consumption needs while addressing environmental concerns. The 3.116 billion kWh figure thus underscored both the progress made and the ongoing challenges faced by Papua New Guinea in expanding reliable and sustainable electricity access across its diverse and often remote population.

In 2012, Papua New Guinea’s electricity production was estimated at approximately 3.35 billion kilowatt-hours (kWh), reflecting the country’s ongoing efforts to develop its energy infrastructure to meet growing demand. This level of electricity generation was indicative of both the challenges and opportunities faced by the nation as it sought to expand access to reliable power across its diverse and often remote regions. The generation capacity during this period was predominantly derived from a mix of hydroelectric and thermal power sources, with hydroelectricity playing a significant role due to the country’s abundant water resources. Despite this, the overall electricity production remained relatively modest in comparison to more industrialized nations, highlighting the need for continued investment in generation capacity and grid expansion. The 2012 output also underscored the importance of sustainable energy development in Papua New Guinea, where increasing electrification rates were critical for economic growth, improved living standards, and the advancement of key sectors such as mining, agriculture, and manufacturing.

PNG Power Ltd (PPL) holds the critical responsibility of operating and managing the electrical transmission and distribution infrastructure across Papua New Guinea. Its mandate encompasses three distinct electrical grids that collectively serve different geographic and demographic sectors of the country. These grids vary significantly in size, capacity, and energy sources, reflecting the diverse topography and settlement patterns of Papua New Guinea. The largest and most significant of these grids is the Port Moresby system, which caters to the National Capital District. As the administrative and economic hub of Papua New Guinea, Port Moresby demands a reliable and robust electricity supply to support its governmental institutions, commercial enterprises, and residential communities. The Port Moresby grid is the backbone of the country’s urban electricity network, providing power to a population concentrated in the capital city and its immediate surroundings. This grid’s infrastructure includes a combination of transmission lines, substations, and distribution networks designed to handle the relatively high demand associated with the capital’s dense urban environment. The system’s operation is crucial for sustaining economic activities, public services, and daily life in the capital region. Beyond the capital, PPL manages the Ramu grid, which is distinguished by its extensive reach into the highlands region of Papua New Guinea. The highlands are a geographically challenging area characterized by rugged terrain and dispersed rural communities, making electricity transmission and distribution complex and resource-intensive. Despite these challenges, the Ramu grid plays a vital role in connecting numerous towns and villages, facilitating access to electricity in an area that is otherwise difficult to serve. The grid’s infrastructure must accommodate the region’s topographical constraints, requiring innovative engineering solutions to maintain stability and reliability. The Ramu grid’s operation is integral to regional development, enabling economic activities such as agriculture, small-scale industry, and local commerce, while also improving the quality of life for residents through enhanced access to lighting, communication, and other electrical services. In addition to these two large grids, PNG Power Ltd operates a smaller but strategically important electrical network known as the Gazelle Peninsula Grid. This grid serves the Gazelle Peninsula, located in the northeastern part of the country, and represents a more localized approach to electricity supply. The Gazelle Peninsula Grid’s scale is modest compared to the Port Moresby and Ramu systems, but it is significant in demonstrating the application of renewable energy technologies within Papua New Guinea’s power sector. The grid primarily derives its electrical power from a 10 megawatt (MW) run-of-river hydroelectric plant, which harnesses the kinetic energy of flowing water without the need for large reservoirs or dams. This method of power generation is environmentally sustainable and aligns with global trends toward reducing carbon emissions and promoting clean energy sources. The run-of-river hydroelectric plant on the Gazelle Peninsula exemplifies how renewable energy can be integrated into the country’s electricity infrastructure, particularly in regions where traditional fossil fuel-based generation may be less feasible or more costly. The plant’s 10 MW capacity, while relatively small in absolute terms, provides a significant portion of the peninsula’s electricity needs, supporting local communities, businesses, and public services. The use of hydroelectric power in this context also reduces reliance on imported fuels and contributes to energy security. Furthermore, the Gazelle Peninsula Grid’s operation highlights PNG Power Ltd’s commitment to diversifying energy sources and expanding access to electricity in remote areas through sustainable means. Together, these three grids operated by PNG Power Ltd illustrate the multifaceted nature of electricity transmission and distribution in Papua New Guinea. The Port Moresby system addresses the demands of the urban capital, the Ramu grid extends power into the challenging highlands, and the Gazelle Peninsula Grid incorporates renewable energy to serve a more localized population. Each grid reflects tailored approaches to infrastructure development, energy generation, and service delivery that respond to the unique geographic and socio-economic conditions of their respective regions. Through these efforts, PNG Power Ltd plays a pivotal role in advancing the country’s electrification goals, supporting economic growth, and improving living standards across Papua New Guinea.

The Electricity Commission (ELCOM) of Papua New Guinea underwent a significant transformation following the enactment of the Electricity Commission (Privatization) Act in 2002, which marked the formal beginning of its privatisation process. Prior to this legislative change, ELCOM functioned as a government-owned entity responsible for managing the country’s electricity supply. The 2002 Act aimed to restructure the electricity sector by transferring ownership and operational responsibilities from the public sector to a corporatized entity, thereby promoting efficiency, encouraging investment, and improving service delivery within the energy market. This legislative framework set the foundation for the transition from a state-run monopoly to a more commercially oriented utility company. Following the implementation of the Electricity Commission (Privatization) Act 2002, PNG Power Limited (PPL) emerged as the successor entity to ELCOM, assuming full control over the electricity sector in Papua New Guinea. Established as a corporatized and commercially driven organisation, PPL was designed to operate as a vertically integrated utility, meaning it consolidated all functions related to electricity supply under a single management structure. This vertical integration included the generation of electrical power, its transmission through high-voltage networks, the distribution of electricity to end-users, and the retailing of electricity services. The creation of PPL represented a strategic effort to streamline operations, reduce inefficiencies, and enhance the reliability of electricity supply throughout the country. PNG Power Limited’s responsibilities encompass the entire spectrum of electricity services across Papua New Guinea’s diverse and geographically challenging terrain. As the sole provider of electricity generation, PPL manages a portfolio of power plants that utilize various energy sources, including hydroelectric, diesel, and other thermal generation methods. The company oversees the transmission network, which involves the high-voltage transfer of electricity from generation facilities to distribution substations, ensuring that power is efficiently moved across long distances to reach urban and rural areas alike. In addition to transmission, PPL handles the distribution network, which delivers electricity directly to residential, commercial, and industrial customers through a complex system of substations, transformers, and power lines. Beyond the physical infrastructure, PNG Power Limited also functions as the retailer of electricity, managing customer billing, service connections, and customer support services across the entire country. This comprehensive operational model allows PPL to maintain control over the entire supply chain, facilitating coordinated planning and investment decisions that are critical in a country where infrastructure development faces logistical and environmental challenges. The vertically integrated structure of PPL is intended to foster improved service quality and reliability, as well as to support the government’s broader goals of expanding access to electricity and promoting economic development throughout Papua New Guinea.

A study conducted by Bloomberg New Energy Finance placed Papua New Guinea (PNG) among the top ten countries worldwide in terms of potential renewable energy resources. This ranking was based on an extensive evaluation of the country’s natural endowments, geographic conditions, and existing infrastructure that could support the development of renewable energy projects. The assessment highlighted PNG’s diverse energy landscape, which includes abundant hydropower, solar, wind, and geothermal resources, positioning the nation as a significant player in the global renewable energy sector. The study’s findings underscored PNG’s strategic advantage due to its vast untapped renewable energy capacity, which could contribute substantially to both domestic energy needs and regional energy markets. According to the same analysis, Papua New Guinea possesses approximately 2.5 gigawatts (GW) of renewable energy potential, a figure that reflects the combined capacity of various renewable sources available within the country. Hydropower constitutes the largest share of this potential, given PNG’s mountainous terrain and numerous rivers, which provide ideal conditions for the development of hydroelectric power plants. In addition to hydropower, solar energy potential is significant due to the country’s equatorial location, resulting in high solar irradiance levels throughout the year. Wind energy resources, although less extensively studied, also contribute to the overall renewable energy potential, particularly in coastal and highland regions where wind speeds are favorable. Furthermore, geothermal energy prospects exist due to the country’s position along the Pacific Ring of Fire, where volcanic activity creates opportunities for geothermal power generation. The cumulative potential of these resources amounts to an estimated 2.5 GW, indicating a substantial capacity for clean energy production that remains largely unexploited. Despite the considerable renewable energy potential identified, only about 2% of Papua New Guinea’s renewable resources have been developed and utilized to date. This limited exploitation reflects a range of challenges, including infrastructural constraints, financial limitations, and regulatory hurdles that have impeded large-scale investment and deployment of renewable energy technologies. The country’s energy infrastructure has historically relied heavily on fossil fuels and traditional biomass, which continue to dominate the energy mix. Additionally, logistical difficulties associated with PNG’s rugged terrain and dispersed population have complicated the expansion of renewable energy projects, especially in remote and rural areas. Policy frameworks and institutional capacity for renewable energy development have also been evolving, with recent government initiatives aiming to improve the regulatory environment and attract investment. Nonetheless, the current utilization rate of approximately 2% highlights the significant gap between PNG’s renewable energy potential and actual generation capacity, underscoring the need for concerted efforts to harness these resources more effectively for sustainable economic growth and energy security.

The Yonki Dam project, situated on the Ramu River in Papua New Guinea, commenced operations in 1991, marking a significant development in the country’s pursuit of renewable energy sources. This hydroelectric facility was established to harness the river’s flow for electricity generation, contributing to the national grid and supporting the growing energy demands of the region. The dam’s construction was part of broader efforts to diversify Papua New Guinea’s energy infrastructure beyond traditional fossil fuel sources, aiming to capitalize on the abundant hydrological resources available within the country’s rugged terrain. At present, the Yonki Dam, also referred to as Ramu 1, possesses an installed generation capacity of 77 megawatts (MW), which translates to approximately 103,000 horsepower (hp). This capacity enables the facility to supply a substantial portion of the electrical power required by local communities and industries, thereby playing a crucial role in regional development and economic growth. The 77 MW output reflects the combined capacity of the turbines and generators housed within the dam’s powerhouse, which convert the kinetic energy of flowing water into electrical energy. This generation capacity positions the Yonki Dam as one of the key hydroelectric power stations in Papua New Guinea, contributing to the country’s overall energy mix and reducing reliance on imported fuels. In recognition of the growing demand for electricity and the potential for further utilization of the Ramu River’s hydropower resources, plans have been proposed to expand the Yonki Dam’s generation capacity by an additional 18 MW. This proposed augmentation would increase the total installed capacity to 95 MW, enhancing the facility’s ability to meet the escalating energy needs of the region. The expansion project involves the installation of new turbines and associated infrastructure upgrades to optimize power generation efficiency. By increasing the dam’s output, the initiative aims to bolster energy security, support economic activities, and promote sustainable development through the use of clean energy. The proposed capacity addition reflects ongoing efforts by the Papua New Guinea government and energy stakeholders to invest in renewable energy projects that can provide reliable and environmentally friendly power solutions for the future.

The proposed Ramu 2 hydroelectric project on the Ramu River represents a significant investment in Papua New Guinea’s energy infrastructure, with an estimated value of US$2 billion. This ambitious development is planned to be executed through a public-private partnership arrangement, involving the Shenzhen Energy Group, a major Chinese energy company. The collaboration between the Papua New Guinean government and Shenzhen Energy Group aims to leverage both public oversight and private sector expertise to ensure the project’s successful implementation. The Ramu 2 project is expected to harness the substantial hydropower potential of the Ramu River, contributing to the country’s efforts to diversify its energy sources and increase renewable electricity generation capacity, which is critical for sustainable economic growth. In addition to the Ramu 2 initiative, the Edevu Dam project is another key proposed hydroelectric development intended to bolster the national grid. Scheduled for construction by PNG Hydro Development Ltd (PNGHDL), a local company specializing in hydroelectric projects, the Edevu Dam is designed to generate 50 megawatts (MW) of electricity. This capacity would provide a meaningful boost to the country’s power supply, particularly in regions where electricity demand is rising due to population growth and expanding commercial activities. The Edevu Dam project reflects a broader strategy to exploit Papua New Guinea’s abundant water resources for clean energy production, reducing reliance on imported fossil fuels and enhancing energy security. Feasibility studies for the Naoro Brown hydroelectricity project have been conducted by consultants engaged by PNG Power, the state-owned enterprise responsible for electricity generation and distribution. This project is intended to supply up to 80 MW of electricity directly to the Port Moresby grid, which serves the capital city and its surrounding areas. The feasibility assessments have focused on evaluating the technical, environmental, and economic viability of the proposed hydroelectric installation, including hydrological analysis, engineering design, and cost-benefit considerations. The Naoro Brown project is poised to play a crucial role in meeting the growing electricity demand in Port Moresby, where urbanization and industrial development have placed increasing pressure on existing power infrastructure. By integrating this new source of renewable energy, PNG Power aims to improve the reliability and sustainability of electricity supply in the country’s most populous urban center. Together, these proposed hydroelectric projects—Ramu 2, Edevu Dam, and Naoro Brown—illustrate Papua New Guinea’s strategic commitment to expanding its renewable energy portfolio. Each project targets different regions and scales of generation capacity, collectively addressing both national and local energy needs. The involvement of international partners, such as Shenzhen Energy Group, alongside domestic enterprises like PNGHDL and PNG Power, highlights a collaborative approach to infrastructure development. This approach is intended to overcome challenges related to financing, technical expertise, and environmental management, which are critical for the successful realization of large-scale hydroelectric projects in Papua New Guinea’s diverse and often rugged terrain.

Papua New Guinea’s transport infrastructure is profoundly influenced by its rugged and mountainous terrain, which presents significant challenges to the development and maintenance of connectivity across the country. The central spine of the island is characterized by steep mountain ranges, dense rainforests, and deep river valleys, all of which complicate the construction of roads, railways, and other transport networks. This topographical complexity has historically limited the extent and quality of land-based transport routes, resulting in a fragmented and often inaccessible road system, particularly outside urban centers and coastal regions. The difficulties posed by the terrain have necessitated reliance on alternative modes of transport, especially air travel, to bridge the gaps between isolated communities and economic hubs. Since the colonial period, aeroplanes have played a pivotal role in opening up Papua New Guinea’s interior and connecting its dispersed population centers. The use of aircraft became essential for overcoming the obstacles presented by the country’s geography, enabling the movement of people, goods, and services to areas that were otherwise reachable only by arduous footpaths or river routes. Air transport continues to serve as the primary mode of travel and freight movement for much of the country, particularly for high-density and high-value cargo that requires timely delivery. The importance of aviation is underscored by the extensive network of airstrips scattered throughout the nation, many of which are situated in remote and inaccessible locations. This reliance on air travel reflects both the limitations of the ground transport infrastructure and the necessity of maintaining vital connections for economic and social activities. The capital city, Port Moresby, exemplifies the challenges faced by Papua New Guinea’s road transport system. Despite being the largest urban center and the administrative heart of the country, Port Moresby is not connected by road to any of the other major towns in Papua New Guinea. This lack of interurban road links highlights the limited and fragmented nature of the national road network, which is constrained by the difficult terrain and the high costs associated with road construction and maintenance in such an environment. The absence of road connectivity between major population centers means that travel and freight movement often rely on air or sea transport, further emphasizing the importance of these modes in the country’s overall transport system. Many remote villages, particularly those located in the highlands region, remain accessible only by light aircraft or on foot. The highlands are characterized by steep slopes, narrow valleys, and dense vegetation, which make road construction both technically challenging and economically prohibitive. In these areas, small airstrips serve as critical lifelines, allowing for the delivery of essential goods, medical supplies, and passenger transport. The reliance on footpaths for access underscores the isolation of many communities and the ongoing difficulties in integrating these areas into the broader national economy. This situation also reflects the broader pattern of uneven infrastructure development across Papua New Guinea, where geographic and logistical constraints continue to shape patterns of mobility and access. Jacksons International Airport, situated approximately 8 kilometres (5 miles) from the center of Port Moresby, functions as the principal international gateway for Papua New Guinea. As the country’s major international airport, Jacksons International facilitates both passenger and cargo flights, connecting Papua New Guinea to regional and global destinations. The airport’s proximity to the capital city enhances its accessibility and importance as a hub for international air traffic. It is equipped to handle a range of aircraft and supports the operations of the national airline as well as various international carriers. The airport’s role is crucial in maintaining Papua New Guinea’s external connectivity, given the country’s limited land transport infrastructure. Beyond Jacksons International Airport, Papua New Guinea operates two additional international airfields, which further augment the country’s air transport capacity. In total, the nation boasts over 500 airstrips, the majority of which are unpaved and located in remote or rural areas. These airstrips vary significantly in size and condition but collectively form an extensive network that enables air travel to otherwise inaccessible parts of the country. The prevalence of unpaved airstrips reflects the logistical challenges and financial constraints associated with infrastructure development in Papua New Guinea’s difficult terrain. Nevertheless, this network is vital for domestic connectivity, emergency services, and the transportation of goods, especially in regions where alternative transport options are limited or nonexistent. The national airline, Air Niugini, operates primarily out of Jacksons International Airport and serves as Papua New Guinea’s main carrier. Established to provide both domestic and international air services, Air Niugini plays a central role in the country’s aviation sector. It connects the capital with other major towns and regional centers, facilitating passenger travel and freight transport across the archipelago. The airline’s operations are integral to maintaining the flow of commerce, tourism, and government services, particularly given the constraints on road and sea transport. Air Niugini’s presence underscores the strategic importance of air travel in Papua New Guinea’s overall transport system. Papua New Guinea does not possess any major railway systems, reflecting the challenges posed by its geography and the historical focus on other modes of transport. However, some disused railway tracks remain at certain mining sites, indicating limited historical use of rail infrastructure in specific industrial contexts. These remnants suggest that railways were once employed on a small scale to facilitate the movement of minerals and other resources within mining operations. The absence of a broader rail network highlights the country’s reliance on road, air, and maritime transport for most passenger and freight movement. The limited historical presence of railways also reflects the economic and logistical considerations that have prioritized other transport modes better suited to Papua New Guinea’s terrain and settlement patterns. Waterways constitute an important component of Papua New Guinea’s transport network, with the country possessing approximately 10,940 kilometres (6,800 miles) of navigable rivers and inland waterways. These waterways provide natural transport routes that have historically been used for the movement of people and goods, particularly in regions where road and air access are limited. Rivers and coastal channels facilitate local trade and communication, supporting subsistence activities as well as commercial enterprises. The extensive network of waterways complements other transport modes and offers an alternative means of connectivity, especially in remote and rural areas where infrastructure development is constrained. Commercial port facilities are strategically located at multiple sites around Papua New Guinea, supporting maritime trade and transport essential to the country’s economy. Key ports include those at Port Moresby, Alotau, Oro Bay, Lae, Kimbe, Kieta Madang, Buka, Rabaul/Kokopo, Kiunga, Wewak, and Vanimo. These ports serve as vital nodes for the import and export of goods, linking Papua New Guinea to international shipping routes and facilitating domestic coastal shipping. The distribution of ports along the coastline reflects the country’s archipelagic geography and the necessity of maritime transport for both economic activity and regional connectivity. Each port varies in capacity and specialization, with some focusing on containerized cargo, others on bulk goods, and several serving as hubs for passenger ferry services. Together, these ports underpin the maritime dimension of Papua New Guinea’s transport infrastructure, complementing air and land transport networks.

The Bank of Papua New Guinea (BPNG) functions as the central bank of Papua New Guinea, holding the primary responsibility for issuing the nation’s official currency, the kina. Established to serve as the banker and financial agent to the Government of Papua New Guinea, BPNG plays a pivotal role in managing the country’s monetary policy and financial infrastructure. As the central monetary authority, the bank oversees the issuance and circulation of currency, ensuring that the supply of money aligns with the economic needs of the country. This function includes maintaining the integrity and security of the currency, which is essential for fostering public confidence and facilitating domestic and international trade. In addition to currency issuance, the Bank of Papua New Guinea is charged with the regulation and supervision of banking institutions and other financial service providers operating within the country. This regulatory role is critical in maintaining the stability and integrity of Papua New Guinea’s financial sector. By setting prudential standards, monitoring compliance, and enforcing regulations, BPNG works to safeguard the financial system against risks such as insolvency, fraud, and systemic crises. The bank’s oversight extends to commercial banks, credit institutions, and non-bank financial entities, ensuring that these institutions operate soundly and transparently to protect depositors and support economic growth. The management of Papua New Guinea’s gold reserves, foreign exchange reserves, and other international reserves constitutes another vital function of BPNG. These reserves serve as a buffer to stabilize the national currency and support the country’s balance of payments. By holding and managing these assets, the bank can intervene in foreign exchange markets to smooth out excessive volatility and maintain exchange rate stability. This role is particularly important for a resource-dependent economy like Papua New Guinea, which is subject to fluctuations in commodity prices and external economic shocks. Effective reserve management also underpins the country’s creditworthiness and ability to engage in international financial relations, including borrowing and trade. Beyond its traditional central banking functions, the Bank of Papua New Guinea actively pursues policies aimed at promoting financial inclusion across the country. Recognizing that access to financial services is a key driver of economic development and poverty reduction, BPNG has implemented initiatives to extend banking and financial products to underserved populations, including rural and remote communities. These efforts include encouraging the expansion of branch networks, supporting mobile banking technologies, and fostering the development of microfinance institutions. By increasing the accessibility and affordability of financial services, the bank seeks to empower individuals and small businesses, facilitating savings, credit, and secure payment systems that contribute to broader economic participation. The bank’s commitment to financial inclusion is further demonstrated by its membership in the Alliance for Financial Inclusion (AFI), a global network established in 2008 to support the development of inclusive financial sectors. Through participation in AFI, BPNG engages with other central banks and financial regulators worldwide to share knowledge, adopt best practices, and collaborate on innovative solutions to financial exclusion. This membership underscores the bank’s dedication to aligning its policies with international standards and leveraging global expertise to address domestic challenges in financial accessibility. In 2013, the Bank of Papua New Guinea made a formal commitment under the Maya Declaration, a global initiative launched by the Alliance for Financial Inclusion to promote measurable progress in financial inclusion. By endorsing the Maya Declaration, BPNG pledged to create an enabling environment that fosters the growth of an inclusive financial sector within Papua New Guinea. This commitment involved setting specific targets and implementing regulatory reforms to remove barriers to financial access, enhance consumer protection, and promote the use of digital financial services. The declaration also reinforced the bank’s role as a catalyst for inclusive growth, recognizing that broadening financial participation contributes to economic resilience and social development. The official currency of Papua New Guinea, the kina, is issued exclusively by the Bank of Papua New Guinea. The kina was introduced on 19 April 1975, coinciding with the country’s move toward full sovereignty and economic independence. This new currency replaced the Australian dollar, which had previously circulated as the official medium of exchange. The introduction of the kina marked a significant milestone in Papua New Guinea’s monetary history, symbolizing national identity and providing the government with greater control over monetary policy. Since its inception, the kina has been managed by BPNG to maintain its stability and purchasing power, reflecting the bank’s ongoing responsibility in supporting the country’s economic objectives.

In 2014, Papua New Guinea’s merchandise exports were characterized by a diverse composition, reflecting the country’s rich natural resources and agricultural base. Fuels and mining products constituted the largest share, accounting for 41% of total exports. This significant proportion underscored the country’s reliance on its mineral wealth, including crude oil, gold, and copper, which have historically been central to its export economy. Agriculture followed as the second-largest category, representing 23.8% of exports, highlighting the importance of commodities such as cocoa, coffee, and palm oil to the national economy. Manufacturing contributed a smaller but notable 6.2%, encompassing processed goods and light industrial products, while the remaining 29% comprised various other categories, including fisheries and forestry products, which collectively demonstrated the breadth of Papua New Guinea’s export sectors. The geographic distribution of Papua New Guinea’s merchandise exports in 2014 revealed strong trade linkages with several key international partners. Australia emerged as the dominant destination, receiving 39.9% of the country’s exports, a reflection of the close economic and historical ties between the two nations. The European Union was the second-largest market, accounting for 20.2%, driven largely by demand for agricultural products and minerals. Japan followed with 11.7%, reflecting its role as a major importer of raw materials and fuels from the Asia-Pacific region. China, rapidly expanding its global trade footprint, absorbed 6.7% of Papua New Guinea’s exports, while Singapore accounted for 5.6%, serving as a regional hub for re-export and processing activities. This distribution underscored Papua New Guinea’s integration into global trade networks, particularly within the Asia-Pacific region. On the import side, Papua New Guinea’s merchandise imports in 2014 were dominated by manufactured goods, which made up 69.4% of total imports. This high percentage reflected the country’s dependence on foreign-manufactured products, including machinery, vehicles, electronics, and consumer goods, necessary to support its developing economy and infrastructure. Fuels and mining-related imports constituted 17.8%, indicating the need for energy resources and mining equipment to sustain domestic industries. Agricultural imports accounted for 11.4%, including foodstuffs and agricultural inputs not sufficiently produced locally, while other categories made up a marginal 1.4%. This import structure highlighted the country’s ongoing challenges in achieving self-sufficiency and the critical role of manufactured goods in its consumption and production processes. The principal source countries for Papua New Guinea’s merchandise imports in 2014 reflected its strategic trading relationships and geographic proximity. Australia was the largest supplier, providing 34.4% of imports, consistent with the close bilateral ties and Australia’s role as a regional economic leader. Singapore was the second-largest source, accounting for 14.3%, benefiting from its position as a major transshipment and manufacturing hub in Southeast Asia. The European Union contributed 8.3%, supplying a range of manufactured and agricultural products. China supplied 6.9% of imports, reflecting its growing influence in the region and its role as a global manufacturing powerhouse. Japan rounded out the top five import sources with 6.4%, continuing its long-standing trade relationship with Papua New Guinea, particularly in machinery and technology goods. These import patterns illustrated Papua New Guinea’s reliance on a combination of regional and global partners to meet its consumption and industrial needs. Historically, the United States has played a significant role in Papua New Guinea’s trade, particularly as an exporter to the country. U.S. exports to Papua New Guinea have been dominated by petroleum products, mining machinery, and aircraft, reflecting American strengths in energy, heavy equipment, and aerospace sectors. These exports supported Papua New Guinea’s resource extraction industries and infrastructure development, facilitating the growth of its mining and petroleum sectors. However, in 1999, the United States experienced a decline in exports to Papua New Guinea, which was closely linked to a downturn in mineral exploration and new mineral investments within the country. This reduction in investment activity led to decreased demand for U.S.-supplied mining equipment and related goods, illustrating the sensitivity of trade flows to sectoral investment cycles. On the import side, the largest U.S. commodity imported from Papua New Guinea was crude oil, underscoring the country’s role as an oil producer and exporter. Following crude oil, gold was a significant import, reflecting Papua New Guinea’s rich mineral deposits and active gold mining industry. Other notable U.S. imports included cocoa and coffee, two of the country’s key agricultural exports, which have long been valued in international markets for their quality. Copper ore also featured prominently among U.S. imports, highlighting the diversity of Papua New Guinea’s mineral exports and their importance to global supply chains. These commodities collectively represented the backbone of Papua New Guinea’s export economy to the United States, linking the two countries through resource trade. U.S. companies have maintained an active presence in Papua New Guinea’s mining and petroleum sectors, contributing to the development and exploitation of the country’s natural resources. Chevron, a major American multinational energy corporation, has been particularly prominent, operating significant oil projects such as the Kutubu and Gobe fields. These projects have been central to Papua New Guinea’s oil production, generating substantial export revenues and supporting local economic growth. Additionally, Chevron has been involved in the development of natural gas reserves, which hold considerable potential for future energy exports and domestic use. The involvement of U.S. firms in these sectors has brought technological expertise, investment capital, and international market access, fostering the growth of Papua New Guinea’s resource industries. A notable development in Papua New Guinea’s petroleum sector has been the establishment of a refinery project in Port Moresby, in which American interests are involved. This refinery is designed to process between 5,000 and 6,000 cubic meters of oil per day, equivalent to approximately 30,000 to 40,000 barrels daily. The project aims to enhance the country’s capacity to refine crude oil domestically, reducing dependence on imported refined petroleum products and supporting energy security. The refinery is expected to contribute to local employment, infrastructure development, and the broader industrial base, representing a significant step in Papua New Guinea’s efforts to add value to its natural resource exports. The involvement of American investors and technology providers in this project underscores the continuing strategic economic ties between the two nations. Papua New Guinea’s integration into the regional and global economic system has been marked by its participation in key international organizations. In 1993, the country became a participating economy in the Asia-Pacific Economic Cooperation (APEC) Forum, joining a group of economies committed to promoting free trade and economic cooperation across the Asia-Pacific region. This membership provided Papua New Guinea with opportunities to engage in dialogue, policy coordination, and trade facilitation initiatives alongside major economies such as the United States, China, Japan, and Australia. Participation in APEC has helped Papua New Guinea to align its trade policies with international standards and to attract investment by demonstrating its commitment to economic openness. Further solidifying its commitment to global trade norms, Papua New Guinea joined the World Trade Organization (WTO) in 1996. Membership in the WTO signified the country’s adherence to multilateral trade rules and its willingness to participate in the global trading system on an equal footing. Through the WTO, Papua New Guinea gained access to dispute resolution mechanisms, trade policy reviews, and technical assistance programs aimed at improving its trade capacity. This membership also helped to enhance transparency and predictability in its trade regime, fostering a more favorable environment for foreign investment and international commerce. Together, Papua New Guinea’s participation in APEC and the WTO marked important milestones in its efforts to integrate more fully into the global economy and to leverage international trade as a driver of economic development.

Papua New Guinea has exhibited a pronounced reliance on foreign aid as a cornerstone of its economic development and ongoing support mechanisms. This dependence reflects the country’s challenges in mobilizing sufficient domestic resources to finance its development objectives, given its relatively small and dispersed population, infrastructural constraints, and vulnerability to external economic shocks. Foreign aid has played a critical role in supplementing government revenues, funding essential public services, and facilitating various development projects aimed at improving health, education, infrastructure, and governance. Among the international donors, Australia has historically been the most significant bilateral aid provider to Papua New Guinea. In 2016, Australia contributed approximately AUD 506 million, equivalent to USD 376 million, underscoring its position as the largest single-country donor. This substantial financial commitment has been part of a longstanding partnership rooted in geographical proximity, historical ties, and shared regional interests. Australian aid has targeted a wide range of sectors, including health, education, governance, law and justice, and economic infrastructure, reflecting a comprehensive approach to supporting Papua New Guinea’s development needs. Since Papua New Guinea’s independence in 1975, Australia had provided direct budgetary support, which involved channeling funds directly into the Papua New Guinean government’s budget to assist in meeting recurrent expenditures and stabilizing fiscal management. However, this form of aid was gradually phased out by the year 2000, as part of a strategic shift in aid modalities. Following the cessation of direct budget support, Australian aid efforts concentrated more on project-based assistance and programmatic interventions. This transition aimed to enhance aid effectiveness by focusing on specific development projects, capacity building, and institutional strengthening rather than general budgetary financing, thereby promoting greater accountability and targeted outcomes. Beyond Australia, Papua New Guinea receives development assistance from a diverse array of international partners, reflecting a broad spectrum of geopolitical and multilateral engagement. Japan has been a notable bilateral donor, providing technical and financial support for infrastructure and social development projects. The European Union has contributed through development cooperation programs aimed at governance, rural development, and environmental sustainability. The People’s Republic of China has increasingly expanded its aid footprint, often focusing on infrastructure development, including roads, public buildings, and energy projects. Similarly, the Republic of China (Taiwan) has maintained a development partnership with Papua New Guinea, primarily in health and education sectors. Multilateral organizations also play a critical role; the United Nations supports various humanitarian and development initiatives, while financial institutions such as the Asian Development Bank, the International Monetary Fund (IMF), and the World Bank provide both concessional loans and technical assistance geared toward economic reform, poverty reduction, and infrastructure development. In addition to formal aid flows, Papua New Guinea benefits from the contributions of volunteers and mission church workers who operate across the country. Volunteers from countries including the United States have been actively involved in grassroots development activities, particularly in education and health services. These individuals often work in remote and underserved areas, providing critical support in teaching, medical care, and community development. Mission church workers, affiliated with various religious organizations, have historically played a significant role in delivering social services, establishing schools, clinics, and community programs that complement government efforts and international aid interventions. Their involvement underscores the multifaceted nature of development assistance in Papua New Guinea, where non-governmental actors contribute substantially to social welfare and capacity building. In July 2024, the International Monetary Fund planned to extend immediate financial assistance to Papua New Guinea amounting to approximately USD 125 million. This injection of funds was designed to provide urgent support amid ongoing economic challenges, including fiscal pressures, external shocks, and the need to sustain essential public services. The IMF’s engagement reflects a broader commitment to stabilizing Papua New Guinea’s economy and fostering conditions conducive to sustainable growth. The IMF funding was explicitly intended to underpin Papua New Guinea’s reform agenda, which encompasses a range of policy measures aimed at improving economic management, strengthening public financial systems, and enhancing the business environment. A key objective of this assistance was to protect vulnerable populations from the adverse effects of economic adjustments, ensuring that social safety nets and essential services remained accessible during periods of fiscal consolidation. By supporting inclusive economic growth, the IMF sought to promote equitable development outcomes and reduce poverty levels across the country. Moreover, the IMF’s assistance focused on several critical areas to bolster Papua New Guinea’s economic resilience. Strengthening debt sustainability was paramount, given concerns about rising public debt levels and the need to maintain fiscal discipline. Addressing foreign exchange shortages was another priority, as limited access to foreign currency posed risks to import-dependent sectors and overall economic stability. Enhancing governance frameworks and anti-corruption measures formed a central pillar of the IMF’s support, recognizing that transparent and accountable institutions are essential for effective economic management and the efficient use of public resources. Through these targeted interventions, the IMF aimed to facilitate structural reforms that would lay the foundation for long-term economic stability and growth in Papua New Guinea.

Over 97 percent of Papua New Guinea’s land is designated as customary land, a category held collectively by indigenous communities under traditional tenure systems. Despite this overwhelming predominance, many customary land titles remain unregistered and effectively informal, reflecting the complex interplay between customary law and statutory land administration. Efforts to register customary land have met with limited success, hindered by the intricate nature of customary ownership, the diversity of indigenous groups, and the logistical challenges of formalizing collective tenure. This situation has contributed to a dual land tenure system in which customary land exists largely outside the formal land registration framework, complicating land management and economic development initiatives. The Papua New Guinea legislature has enacted laws to recognize a form of tenure known as “customary land title,” which provides traditional indigenous lands with a legal basis for inalienable tenure. This recognition affirms the collective ownership of land by indigenous groups and aims to protect their rights against alienation or sale outside the community. Customary land title covers approximately 97 percent of the country’s total land area, underscoring the centrality of customary tenure to Papua New Guinea’s landholding structure. By granting customary land a statutory foundation, the government sought to reconcile traditional landholding practices with modern legal frameworks, although practical challenges in implementation persist. Alienated land in Papua New Guinea is either held privately under state leases or classified as government land. The freehold title, or fee simple ownership, is restricted exclusively to Papua New Guinean citizens, reflecting national policy aimed at preserving land ownership within the indigenous population. This restriction limits foreign ownership and ensures that land remains under the control of local stakeholders. The alienated land sector, therefore, consists primarily of state leases, which confer long-term but ultimately revocable rights to use and develop land, and government land, which remains under direct state control. Only about 3 percent of Papua New Guinea’s land is held in private hands, predominantly under 99-year state leases or by the State itself. Virtually no freehold titles exist in the country; any freehold titles that do exist are automatically converted to state leases upon transfer between vendor and purchaser. This legal mechanism prevents the proliferation of freehold ownership and maintains the predominance of state leases as the primary form of alienated land tenure. The 99-year lease terms provide a degree of security for lessees while preserving the State’s ultimate sovereignty over land resources. Unalienated land is owned under customary title by traditional landowners, with the precise nature of ownership, or seisin, varying significantly among different cultural groups. While many observers portray customary land as communally owned by clans or larger social units, detailed anthropological and legal studies reveal a more nuanced picture. The smallest indivisible portions of land are often held by individual heads of extended families and their descendants, indicating a layered system of ownership and stewardship. This complexity reflects the diverse social structures and customary laws across Papua New Guinea’s many indigenous communities, where land rights are closely tied to kinship, ancestry, and social obligations. Identifying the membership and rightful owners of customary landowning groups has emerged as a critical issue for economic development. Disputes frequently arise between mining and forestry companies and landowner groups, often hinging on whether contractual agreements were made with the true landowners. The lack of clear documentation and the fluidity of customary ownership complicate negotiations and can lead to protracted conflicts. These disputes underscore the importance of accurate identification and recognition of customary landowners to ensure equitable benefit-sharing and to uphold indigenous rights in resource development projects. Customary property, primarily land, cannot be devised by will but must be inherited according to the customs of the deceased’s people. This customary inheritance system ensures that land remains within the traditional community and is passed down through established kinship lines. The prohibition on testamentary disposition reflects the communal nature of landholding and the cultural imperative to maintain continuity of land ownership within indigenous groups. Such customary inheritance practices coexist with statutory land laws, creating a complex legal landscape for land tenure in Papua New Guinea. In 2010, the Lands Act and the Land Group Incorporation Act were amended to improve state land management, enhance dispute resolution mechanisms, and enable customary landowners better access to finance and partnerships for developing portions of their land for urban or rural economic activities. These legislative reforms aimed to address longstanding challenges in land administration, including unclear ownership, limited economic utilization of customary land, and conflicts arising from land disputes. By strengthening legal frameworks and institutional capacities, the amendments sought to facilitate more effective land use planning and to empower customary landowners to engage in economic development while safeguarding their rights. The Land Group Incorporation Act mandates more precise identification of customary landowners and requires their explicit authorization before any land arrangements are finalized. This provision was introduced to address prior issues of unclear ownership and lack of consent, which had often led to disputes and exploitation. By requiring documented consent from legitimate landowning groups, the Act enhances transparency and accountability in land dealings. This measure also aims to protect customary landowners from unauthorized transactions and to ensure that any development or leasing arrangements reflect the genuine wishes of the community. A significant recent problem has been the misuse of the Lease-Leaseback provision under the Land Act, particularly through Special Agricultural and Business Leases (SABLs). These leases have been used to acquire large tracts of customary land purportedly for agricultural projects but have effectively served as a back-door method to secure tropical forest resources for logging. The Lease-Leaseback mechanism was originally designed to facilitate access to land for commercial development while preserving customary ownership, but in practice, SABLs have been exploited to circumvent customary land rights and environmental regulations. This misuse has led to widespread deforestation, loss of biodiversity, and social conflict. SABLs circumvent the Forest Act’s stricter requirements for Timber Permits, which mandate sustainability compliance, competitive securing processes, and customary landowners’ approval. By obtaining land through SABLs rather than Timber Permits, logging companies have avoided the rigorous environmental and social safeguards intended to regulate forest resource extraction. This loophole has undermined forest conservation efforts and deprived customary landowners of their rightful control and benefits from forest resources. The exploitation of SABLs has therefore become a focal point of environmental and indigenous rights advocacy in Papua New Guinea. Following widespread national outcry over SABL abuses, a Commission of Inquiry was established in mid-2011 to investigate these leases. The Commission was tasked with examining the legality, processes, and impacts of SABLs, as well as recommending measures to rectify abuses and prevent future exploitation. As of the latest information, the Commission’s report is awaited for initial presentation to the Prime Minister and Parliament. The findings of this inquiry are expected to play a crucial role in shaping future land policy and governance, particularly in balancing economic development with the protection of customary land rights and environmental sustainability.

Papua New Guinea adopted its National Vision 2050 in 2009, marking a strategic commitment to long-term sustainable development with a strong emphasis on the role of science and technology. This visionary framework led to the establishment of the Research, Science and Technology Council, a key institutional body tasked with promoting and coordinating scientific research and technological advancement across the country. The Council was designed to foster innovation and ensure that scientific endeavors aligned with the broader national goals of economic growth, environmental sustainability, and social development. By embedding science and technology into the core of national planning, Papua New Guinea sought to harness these fields as critical drivers for sustainable development. At a meeting held in November 2014, the Research, Science and Technology Council reaffirmed its dedication to sustainable development through science and technology initiatives. This gathering underscored a renewed emphasis on aligning scientific research and technological innovation with the country’s sustainable development objectives. The Council recognized the need to intensify efforts in various scientific domains and to strengthen institutional capacities to support the Vision 2050 goals. This reaffirmation reflected an understanding that science and technology were indispensable tools for addressing Papua New Guinea’s developmental challenges, including infrastructure deficits, economic diversification, and environmental conservation. The medium-term priorities outlined in Vision 2050 articulated specific areas of focus to guide the country’s scientific and technological progress. Among these priorities was the development of emerging industrial technologies aimed at downstream processing, which involved adding value to raw materials before export to enhance economic returns. Another key priority was the advancement of infrastructure technology to support the creation of economic corridors, facilitating improved connectivity and trade within the country and with international markets. Vision 2050 also emphasized the importance of knowledge-based technology, recognizing the need to foster innovation ecosystems that could support new industries and services. Enhancing science and engineering education was identified as a critical enabler for building a skilled workforce capable of driving technological advancement. Additionally, the Vision set an ambitious target of investing 5% of the country’s gross domestic product (GDP) in research and development (R&D) by the year 2050, signaling a commitment to significantly increase funding for scientific inquiry and innovation. Despite these ambitious goals, Papua New Guinea’s actual investment in research and development remained modest. In 2016, the country allocated only 0.03% of its GDP to R&D activities, a figure that highlighted a substantial gap between current expenditure and the Vision 2050 target. This low level of investment reflected broader challenges, including limited financial resources, competing national priorities, and the need to build institutional capacity for research management. The disparity underscored the necessity for increased commitment and strategic planning to mobilize resources and create an enabling environment for scientific research. Within the scientific workforce, women constituted 33.2% of researchers in Papua New Guinea in 2016. This representation indicated a significant presence of women in the country’s research community, although gender disparities persisted in certain scientific fields and leadership positions. The participation of women in research was seen as vital for ensuring diverse perspectives and inclusive innovation processes. Efforts to promote gender equity in science and technology were aligned with broader social development goals and international commitments to gender equality. Papua New Guinea demonstrated a leading role in scientific publication output among Pacific Island states. According to data from Thomson Reuters’ Web of Science, the country produced 110 scientific publications in 2014, surpassing Fiji, which had 106 publications. This leadership position reflected Papua New Guinea’s growing engagement with the global scientific community and its capacity to contribute to knowledge production relevant to the region’s unique challenges and opportunities. The volume of publications also indicated active research efforts despite limited financial resources. The thematic focus of Papua New Guinea’s scientific publications in 2014 was concentrated in areas such as immunology, genetics, biotechnology, and microbiology, which accounted for approximately 90% of the total output. This concentration suggested a research agenda oriented towards health sciences and biological studies, likely driven by the country’s public health priorities and biodiversity. Such focus areas were critical for addressing diseases endemic to the region, understanding genetic diversity, and exploring biotechnological applications for agriculture and medicine. International collaboration played a significant role in Papua New Guinea’s scientific research. Around 90% of the country’s scientific publications in 2014 were co-authored with researchers from other countries, highlighting the importance of partnerships in enhancing research quality and capacity. The primary collaborators included scientists from Australia, the United States of America, the United Kingdom, Spain, and Switzerland. These collaborations facilitated access to advanced research infrastructure, expertise, and funding, enabling Papua New Guinea to participate in global scientific networks and contribute to international knowledge exchange. By 2019, Papua New Guinea’s scientific output had increased to 253 publications indexed in the Scopus database maintained by Elsevier. Health sciences remained the dominant field, accounting for 49% of these publications, thereby continuing the trend observed in earlier years. The growth in publication numbers reflected an expanding research base and improved capacity for scientific inquiry. This increase also suggested progress towards the country’s aspirations for greater scientific engagement and contribution to regional and global knowledge. Between 2017 and 2019, Papua New Guinea’s top scientific collaborators continued to include Australia, the United States of America, and the United Kingdom, with France and India also emerging as significant partners. This diversification of collaborative relationships indicated a broadening of international engagement and opportunities for multidisciplinary research. The inclusion of countries such as France and India highlighted Papua New Guinea’s expanding scientific diplomacy and the potential for new avenues of cooperation in areas like health, environmental science, and technology transfer. Renewable energy sources constituted a substantial portion of Papua New Guinea’s electricity supply, accounting for approximately two-thirds of the total. This reliance on sustainable energy underscored the country’s rich natural resources and commitment to environmentally responsible energy generation. Hydropower, in particular, played a major role in the energy mix, supported by the country’s abundant rivers and mountainous terrain. The emphasis on renewable energy aligned with global efforts to reduce carbon emissions and promote sustainable development. In 2015, the Secretariat of the Pacific Community recognized Fiji, Papua New Guinea, and Samoa as leaders in the Pacific region for their implementation of large-scale hydropower projects. These projects demonstrated the countries’ capacity to harness renewable resources for significant electricity generation, contributing to energy security and economic development. At the same time, the Secretariat acknowledged the substantial potential for expanding other renewable energy options across the Pacific, including solar, wind, geothermal, and ocean-based technologies. This recognition highlighted opportunities for Papua New Guinea to diversify its renewable energy portfolio and enhance resilience against climate change. From 2013 to 2017, the European Union funded the Renewable Energy in Pacific Island Countries Developing Skills and Capacity programme (EPIC), which aimed to build human capacity and institutional frameworks for renewable energy management in the region. A key achievement of the EPIC programme was the development of a master’s degree programme in renewable energy management, which was accredited in 2016 at the University of Papua New Guinea. This academic programme provided specialized training and education to equip professionals with the knowledge and skills necessary to advance renewable energy initiatives within the country. The EPIC programme also supported the establishment of a Centre of Renewable Energy at the University of Papua New Guinea. This centre served as a hub for research, education, and policy development related to renewable energy technologies and sustainable energy solutions. By fostering collaboration between academia, government, and industry, the centre contributed to building national capacity and advancing the country’s renewable energy agenda. Papua New Guinea was one of fifteen beneficiaries of the €37.26 million Adapting to Climate Change and Sustainable Energy programme, which resulted from an agreement signed in February 2014 between the European Union and the Pacific Islands Forum Secretariat. This programme aimed to support Pacific Island countries in enhancing their resilience to climate change impacts while promoting sustainable energy development. The inclusion of Papua New Guinea among the beneficiaries reflected the country’s vulnerability to climate change and its commitment to adopting sustainable energy practices. The other fourteen beneficiaries of the Adapting to Climate Change and Sustainable Energy programme included the Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Niue, Palau, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu, and Vanuatu. This regional initiative fostered cooperation among Pacific Island nations to address shared environmental challenges and to build capacity for climate adaptation and renewable energy deployment. Through this collective effort, Papua New Guinea and its Pacific neighbours sought to advance sustainable development pathways that balanced economic growth with environmental stewardship.

By the middle of 1999, Papua New Guinea’s economy was experiencing a severe crisis despite some positive developments in the preceding years. The agricultural sector had shown signs of recovery following the devastating drought of 1997, which had significantly reduced crop yields and rural incomes. Additionally, timber prices had risen, buoyed by the economic recovery of several Asian economies that had slumped in 1998, providing some relief to the forestry sector. However, these improvements were insufficient to counterbalance the broader economic challenges facing the country. The overall economic environment remained fragile, with underlying structural weaknesses and external shocks contributing to a precarious situation. A significant factor exacerbating the economic downturn was the sharp decline in Papua New Guinea’s foreign currency earnings during 1999. This decline was primarily driven by low world prices for minerals and petroleum, which constituted major export commodities for the country. The slump in global commodity prices severely reduced export revenues, undermining the country’s balance of payments and fiscal position. Correspondingly, expenditure on minerals exploration plummeted, estimated to have fallen to just one-third of the level recorded in 1997. This contraction in exploration activity reflected diminished investor confidence and reduced capital inflows into the mining sector, further limiting prospects for future production and export growth. The decline in foreign exchange earnings, combined with capital flight and mismanagement by the government, precipitated a sharp depreciation of Papua New Guinea’s currency, the kina. Since the kina had been allowed to float freely since 1994, its value was subject to market forces, and the loss of confidence led to a rapid fall in its exchange rate. This depreciation caused a dangerous reduction in the country’s foreign currency reserves, which are critical for meeting import payments and servicing external debt. The depletion of reserves heightened vulnerability to external shocks and constrained the government’s ability to stabilize the economy through monetary policy interventions. Economic activity contracted across most sectors throughout 1999 as the crisis deepened. The reduction in foreign exchange availability led to a decrease in imports, reflecting both lower demand and limited foreign currency to finance purchases. Inflation, which had soared to over 21% in 1998 due to currency depreciation and supply constraints, moderated significantly, dropping to an estimated annual rate of 8% in 1999. This decline in inflation was partly attributable to reduced domestic demand and tighter fiscal and monetary policies, but the overall contraction in economic activity underscored the severity of the downturn. In response to the escalating crisis, a new government led by Sir Mekere Morauta was formed in July 1999. The Morauta administration inherited a difficult economic situation, characterized by a large budget deficit and a lack of access to acceptable commercial loans or bond sales to finance the government’s obligations. Recognizing the urgent need for external support, the government successfully negotiated emergency assistance from the International Monetary Fund (IMF) and the World Bank. This intervention was critical in providing the financial resources and policy guidance necessary to stabilize the economy and restore investor confidence. With the backing of the IMF and World Bank, the Morauta government embarked on a program of macroeconomic stabilization and economic reform. These efforts included measures to restore fiscal discipline, stabilize the kina, and improve the management of public finances. The government also pursued structural reforms aimed at enhancing the efficiency of public enterprises and creating a more conducive environment for private sector development. These initiatives marked a significant departure from previous policies and laid the groundwork for gradual economic recovery. Despite statistical indicators suggesting some recovery by 2019, Papua New Guinea continued to face substantial economic challenges. The country’s rugged terrain, characterized by high mountain ranges, deep valleys, extensive swamps, and numerous islands, posed significant obstacles to infrastructure development and economic integration. The high costs associated with building and maintaining roads, bridges, and other critical infrastructure limited connectivity and increased the cost of doing business. Additionally, law and order problems in certain regions further complicated efforts to attract external investment and develop commercial activities. The customary land title system, which grants communal ownership and restricts land sales, also created barriers for external developers seeking to acquire land for industrial or agricultural projects. Local developers faced additional constraints stemming from long-term underinvestment in essential services such as education, health, and access to finance. The limited availability of skilled labor and inadequate healthcare infrastructure impeded productivity and economic diversification. Access to credit and financial services remained restricted, particularly for small and medium-sized enterprises, limiting opportunities for entrepreneurship and business expansion. These structural weaknesses contributed to persistent poverty and hindered inclusive economic growth. The country’s challenging topography also hindered the development of transportation infrastructure. Air travel emerged as the most efficient and reliable mode of transport, given the difficulties of constructing and maintaining roads through mountainous and swampy areas. Papua New Guinea had five highways, but only two extended into the interior regions, limiting overland connectivity. Domestic shipping services were also limited, constraining the movement of goods and people between coastal and island communities. This fragmented transport network increased costs and reduced the competitiveness of Papua New Guinea’s economy. Housing quality in Papua New Guinea was generally low during the late 2010s. Only about 15% of houses had finished floors, indicating widespread use of rudimentary construction materials and techniques. In urban areas, 55% of houses were connected to electricity as of 2016, reflecting moderate access to modern utilities. However, rural areas lagged significantly, with only 10% of houses connected to electricity, although this represented an improvement from 3% in 1996. Access to clean water also varied markedly between urban and rural settings; over half of urban households had piped water connections, whereas only 15% of rural households had similar access. Rural communities tended to rely more on wells for water supply. The average occupancy rate was approximately 2.5 persons per room, indicating relatively crowded living conditions in many households. Papua New Guinea generated hydropower from key facilities such as the Sirinumu Dam and the Yonki Dam, contributing to the country’s electricity supply. Despite this, sewage treatment infrastructure remained limited, even in the capital city of Port Moresby. Inadequate sewage management led to the discharge of untreated waste directly into the ocean, causing environmental pollution and public health concerns. The lack of comprehensive sanitation systems underscored broader challenges in urban infrastructure development and environmental management. Former Prime Minister Sir Mekere Morauta prioritized restoring integrity to state institutions and stabilizing the kina during his tenure. His administration focused on achieving national budget stability through prudent fiscal management and sought to privatize public enterprises where appropriate to improve efficiency and reduce fiscal burdens. Maintaining peace on Bougainville was another critical objective, following the 1997 agreement that ended the region’s secessionist unrest. The Morauta government’s efforts to strengthen governance and economic management helped to create a more stable foundation for future development. The Morauta government’s success in attracting international support was instrumental in securing development assistance loans from institutions such as the IMF and World Bank. This external financing provided much-needed resources to support reform programs and infrastructure investments. The cooperation with multilateral agencies also facilitated technical assistance and policy advice, enhancing the government’s capacity to implement complex economic reforms. Papua New Guinea’s long-term development strategy, articulated in Vision 2050 and supported by shorter-term policy documents such as the 2013 Budget and the 2014 Responsible Sustainable Development Strategy, emphasized the importance of economic diversification. Recognizing the risks associated with overreliance on extractive industries, these policies sought to promote sustainable industries that could generate broad-based employment and reduce vulnerability to commodity price fluctuations. The goal was to avoid the adverse effects of the so-called Dutch disease, a phenomenon observed in resource-rich countries where booming resource sectors lead to currency appreciation and the decline of other economic sectors such as agriculture, manufacturing, and tourism. The Dutch disease phenomenon, notably documented in several Western African countries with oil or mineral booms, undermines economic diversification and broad-based employment opportunities. In Papua New Guinea, policymakers aimed to mitigate these effects by implementing measures such as establishing a sovereign wealth fund. This fund was designed to stabilize government revenue and expenditure flows by saving excess resource revenues during boom periods and providing a buffer during downturns. However, the success of such measures depended heavily on the government’s ability to implement complementary reforms. These included improving the efficiency and transparency of revenue use, combating corruption, and empowering households and businesses to access markets and services, thereby fostering inclusive economic growth. Economic development centered on extractive industries posed difficult social and environmental consequences for local communities. Large-scale mining and petroleum projects often led to displacement, environmental degradation, and social disruption. Recognizing these challenges, the Papua New Guinea Department for Community Development conducted a major project recommending the exploration of alternative pathways to sustainable development. This approach emphasized community participation, environmental stewardship, and the promotion of diversified livelihoods to ensure that economic growth translated into improved well-being for all citizens. The Institute of National Affairs, an independent Papua New Guinea policy think tank, played a vital role in assessing the country’s business and investment environment. It produced a quinquennial report based on surveys of a broad range of companies, including large and small, local and foreign enterprises. The report consistently identified law and order problems and corruption as the most significant impediments to business development. These issues undermined investor confidence and increased the cost and risk of doing business. Following these concerns, poor transport, power, and communications infrastructure were cited as the next most critical constraints. The findings of the Institute highlighted the need for comprehensive reforms to improve governance, infrastructure, and the overall investment climate to support sustainable economic growth.

In 1980, Papua New Guinea’s economy was characterized by a gross domestic product (GDP) at purchasing power parity (PPP) of 10.1 billion US dollars, reflecting the overall size of the economy adjusted for relative cost of living and inflation rates. The per capita GDP, which measures the average economic output per person, stood at 1,067 US dollars, indicating modest individual income levels relative to global standards. The nominal GDP, representing the market value of all final goods and services produced within the country at current prices, was 4.1 billion US dollars. During this period, the real GDP growth rate was negative, at −2.3%, signaling an economic contraction after adjusting for inflation. Inflation itself was relatively high at 12.1%, suggesting rising prices and a possible erosion of purchasing power. Data on government debt was not available for this year, limiting insights into fiscal sustainability. By 1985, Papua New Guinea experienced an increase in its GDP at PPP, which rose to 11.9 billion US dollars, demonstrating economic expansion over the five-year period. The per capita GDP increased to 1,323 US dollars, reflecting improved average income levels for the population. However, nominal GDP decreased to 3.3 billion US dollars, which could indicate fluctuations in exchange rates or price levels affecting the valuation of economic output in current terms. The real GDP growth rate turned positive, reaching 3.6%, marking a recovery from the previous economic contraction and suggesting increased production and economic activity. Inflation saw a significant decline to 3.7%, indicating greater price stability and potentially improved monetary policy effectiveness. Government debt data remained unavailable, continuing the challenge of assessing the country’s fiscal position. In 1990, the economy of Papua New Guinea further expanded, with GDP at PPP reaching 15.4 billion US dollars. This growth in economic size was accompanied by an increase in per capita GDP to 1,462 US dollars, signaling incremental improvements in average income. The nominal GDP was reported at 4.8 billion US dollars, showing a rebound from the previous nominal GDP figure in 1985. Despite these gains, the real GDP growth rate was negative again at −3.0%, indicating a contraction in economic output after adjusting for inflation. Inflation was moderate at 7.0%, reflecting ongoing inflationary pressures but at a reduced level compared to earlier years. Government debt data was not provided, leaving a gap in understanding the fiscal dynamics during this period. By 1995, Papua New Guinea saw a substantial rise in its GDP at PPP, which surged to 23.4 billion US dollars, reflecting considerable economic growth over the preceding five years. The per capita GDP increased markedly to 2,067 US dollars, suggesting notable improvements in individual economic well-being. Nominal GDP also increased significantly to 7.1 billion US dollars, indicating growth in the value of goods and services produced at current market prices. However, the real GDP growth rate was negative at −3.4%, revealing a contraction in the economy when adjusted for inflation. Inflation rose sharply to 17.3%, indicating a period of high price increases that could undermine economic stability and purchasing power. For the first time in this series, government debt was recorded, amounting to 36% of GDP, highlighting growing fiscal liabilities relative to the size of the economy. In 2000, Papua New Guinea’s GDP at PPP continued to increase, reaching 29.6 billion US dollars, signaling ongoing expansion in economic output. Interestingly, the per capita GDP slightly decreased to 2,056 US dollars, which may reflect population growth outpacing economic gains or uneven income distribution. Nominal GDP was 5.2 billion US dollars, showing a decline compared to 1995, which could be attributed to exchange rate fluctuations or changes in price levels. The real GDP growth rate remained negative at −2.5%, indicating continued economic contraction after inflation adjustments. Inflation remained elevated at 15.6%, suggesting persistent inflationary pressures that could affect consumer purchasing power and investment. Government debt increased to 42% of GDP, reflecting a rising fiscal burden and potential concerns about debt sustainability. The year 2005 marked a notable shift in Papua New Guinea’s economic indicators. GDP at PPP dropped significantly to 13.2 billion US dollars, a sharp decline from previous years, which may be attributed to methodological changes, data revisions, or economic shocks. Despite this, the per capita GDP increased to 2,280 US dollars, indicating that average income levels improved. Nominal GDP rose to 7.3 billion US dollars, reflecting growth in the market value of goods and services produced. Real GDP growth turned positive at 3.9%, signaling economic recovery and expansion. Inflation decreased sharply to 1.8%, suggesting improved price stability and effective inflation control. Government debt declined to 32% of GDP, indicating a reduction in fiscal liabilities relative to the economy’s size. In 2006, Papua New Guinea’s GDP at PPP experienced a slight increase to 13.9 billion US dollars, continuing the trend of economic growth. Per capita GDP also increased to 2,348 US dollars, reflecting rising average income levels. Nominal GDP grew substantially to 8.4 billion US dollars, indicating increased economic activity measured at current prices. Real GDP growth slowed to 2.3%, showing a deceleration in the pace of economic expansion compared to the previous year. Inflation was moderate at 2.4%, maintaining relative price stability. Government debt further decreased to 26% of GDP, suggesting improved fiscal management and reduced reliance on borrowing. By 2007, the economy expanded further with GDP at PPP rising to 15.9 billion US dollars. Per capita GDP remained steady at 2,348 US dollars, indicating stable average income levels. Nominal GDP increased to 9.5 billion US dollars, reflecting growth in the economy’s market value. Real GDP growth surged to 11.1%, representing a significant acceleration in economic activity and output. Inflation dropped to 0.9%, marking a period of very low price increases and enhanced purchasing power. Government debt was recorded at 23% of GDP, continuing the downward trend in fiscal liabilities relative to economic size. In 2008, GDP at PPP increased slightly to 16.1 billion US dollars, while per capita GDP grew to 2,617 US dollars, indicating rising average income. Nominal GDP reached 11.7 billion US dollars, reflecting continued growth in the economy’s market value. However, real GDP growth was marginally negative at −0.3%, suggesting a slight contraction in economic output after adjusting for inflation. Inflation rose to 10.8%, indicating renewed inflationary pressures that could affect economic stability. Government debt was 22% of GDP, maintaining a relatively low level of fiscal liabilities compared to previous decades. The year 2009 saw GDP at PPP rise to 17.3 billion US dollars, with per capita GDP slightly decreasing to 2,600 US dollars. Nominal GDP was 11.6 billion US dollars, showing a slight decline from the previous year. Real GDP growth rebounded strongly to 6.8%, indicating a robust recovery in economic output following the slight contraction in 2008. Inflation decreased to 6.9%, reflecting a reduction in price increases and improved economic conditions. Government debt remained stable at 22% of GDP, suggesting continued fiscal prudence. In 2010, Papua New Guinea’s GDP at PPP grew to 19.3 billion US dollars, with per capita GDP increasing to 2,891 US dollars, reflecting rising average incomes. Nominal GDP surged to 14.3 billion US dollars, indicating significant growth in the market value of goods and services produced. Real GDP growth was strong at 10.1%, demonstrating a period of rapid economic expansion. Inflation rose to 5.1%, suggesting moderate price increases that could accompany economic growth. Government debt declined to 17% of GDP, marking a further reduction in fiscal liabilities relative to the economy’s size. For 2011, GDP at PPP reached 20.0 billion US dollars, while per capita GDP slightly decreased to 2,830 US dollars, indicating a minor dip in average income levels. Nominal GDP rose sharply to 18.0 billion US dollars, reflecting increased economic activity at current prices. Real GDP growth slowed significantly to 1.1%, suggesting a deceleration in the pace of economic expansion. Inflation was moderate at 4.4%, maintaining relative price stability. Government debt further decreased to 16% of GDP, continuing the trend of improving fiscal health. In 2012, GDP at PPP increased to 21.3 billion US dollars, with per capita GDP at 2,861 US dollars, indicating modest growth in average income. Nominal GDP also grew to 21.3 billion US dollars, reflecting expansion in the economy’s market value. Real GDP growth improved to 4.6%, signaling a return to stronger economic growth. Inflation slightly increased to 4.5%, suggesting manageable price increases. Government debt rose to 19% of GDP, indicating a slight increase in fiscal liabilities but remaining relatively low. The year 2013 saw GDP at PPP rise to 22.4 billion US dollars, with per capita GDP increasing to 2,954 US dollars, reflecting continued improvements in average income. Nominal GDP remained steady at 21.3 billion US dollars, indicating stability in the market value of economic output. Real GDP growth was 3.8%, showing sustained economic expansion. Inflation increased to 5.0%, suggesting moderate inflationary pressures. Government debt increased to 25% of GDP, marking a rise in fiscal liabilities relative to economic output. In 2014, Papua New Guinea experienced a significant increase in GDP at PPP, which rose to 25.7 billion US dollars. Per capita GDP also increased notably to 3,313 US dollars, indicating substantial growth in average income. Nominal GDP grew to 23.2 billion US dollars, reflecting expansion in the economy’s market value. Real GDP growth surged to 12.5%, representing a period of rapid economic expansion and increased productivity. Inflation increased to 5.2%, indicating moderate price increases accompanying economic growth. Government debt rose to 27% of GDP, reflecting a growing fiscal burden amid economic expansion. For 2015, GDP at PPP further increased to 28.0 billion US dollars, with per capita GDP reaching 3,540 US dollars, signaling continued improvements in income levels. Nominal GDP decreased slightly to 21.7 billion US dollars, suggesting some volatility in current price valuations of economic output. Real GDP growth slowed to 9.0%, indicating a deceleration in the pace of economic expansion compared to the previous year. Inflation rose to 6.0%, reflecting increased price pressures. Government debt increased to 29% of GDP, continuing the upward trend in fiscal liabilities. In 2016, Papua New Guinea’s GDP at PPP was 29.1 billion US dollars, with a per capita GDP of 3,597 US dollars, indicating further growth in economic size and average income. Nominal GDP was 20.8 billion US dollars, showing a decline from the previous year’s figure. Real GDP growth slowed to 2.4%, suggesting a significant deceleration in economic expansion. Inflation increased to 6.7%, reflecting rising price levels. Government debt rose to 32% of GDP, marking an increase in fiscal liabilities relative to the economy’s size and signaling potential challenges for fiscal management.

In 2008, income distribution in Papua New Guinea exhibited notable disparities, with the lowest 10% of households accounting for only 4.3% of the total income or consumption across the country. This statistic highlights significant economic inequality, as the wealthiest 10% of households controlled a disproportionately large share, amounting to 36% of the total income or consumption. Such figures underscore the challenges faced in achieving equitable economic growth and poverty alleviation, reflecting structural issues within the nation’s economy and social framework. The concentration of income among the upper decile suggests that wealth generation and access to resources were unevenly distributed, impacting social development and economic opportunities for the broader population. The labour force of Papua New Guinea comprised approximately 2.078 million individuals, encompassing a wide range of employment sectors from agriculture and industry to services. This workforce size reflects the country’s demographic profile and its economic activities, with a significant portion engaged in subsistence farming and informal employment. The labour market dynamics are influenced by factors such as rural-urban migration, educational attainment, and the availability of formal employment opportunities. Given the population’s growth trends and economic development initiatives, the labour force plays a critical role in driving productivity and sustaining economic expansion. Electricity production in Papua New Guinea during 2008 totaled 2,200 gigawatt-hours (GWh), indicating the scale of energy generation necessary to meet the country’s consumption needs. The energy mix was predominantly reliant on fossil fuels, which accounted for 67.78% of the total electricity generated. This heavy dependence on fossil fuels reflects the country’s resource base and infrastructure development at the time, with thermal power plants playing a central role in electricity generation. Hydroelectric power contributed a significant but smaller share, providing 32.22% of the electricity output. The utilization of hydroelectric sources capitalized on the country’s abundant water resources, offering a renewable energy component within the national grid. Notably, there was no electricity production from nuclear or other alternative sources in 2008, indicating limited diversification in the energy sector. Electricity consumption in Papua New Guinea for the same year was recorded at 2,000 GWh, slightly lower than the total production, suggesting some level of energy losses or storage. The consumption patterns reflect the country’s industrial, commercial, and residential demand, shaped by factors such as population distribution, urbanization, and economic activities. Despite generating substantial electricity, Papua New Guinea’s electricity exports were minimal, totaling only 10 kilowatt-hours (kWh) in 2008. This negligible export figure indicates that the country’s electricity production was primarily intended for domestic use, with limited integration into regional power markets or cross-border energy trade. Correspondingly, electricity imports were recorded at zero kWh, demonstrating that Papua New Guinea was self-sufficient in electricity generation during that period and did not rely on external sources to meet its energy demands. Agriculture remains a cornerstone of Papua New Guinea’s economy, with a diverse array of primary products contributing to both domestic consumption and export revenues. Key agricultural commodities include coffee and cocoa, which are significant cash crops cultivated mainly for export markets. Coconut and palm kernels also play an important role, supporting the production of copra and palm oil, respectively. Other notable crops include tea and rubber, which contribute to the agricultural export portfolio. In addition to these cash crops, the country produces staple foods such as sweet potatoes, which are a dietary mainstay for many Papua New Guineans. The agricultural sector also encompasses various fruits and vegetables, reflecting the country’s rich biodiversity and varied climatic zones. Livestock farming is represented by poultry and pork production, which provide essential protein sources for local consumption. Vanilla cultivation, though less widespread, is a valuable niche crop with potential for high-value export. Collectively, these agricultural products form the backbone of rural livelihoods and contribute significantly to the national economy. The national currency of Papua New Guinea is the kina, abbreviated as K, which is subdivided into 100 smaller units known as toea. The kina serves as the primary medium of exchange within the country and is managed by the Bank of Papua New Guinea, which oversees monetary policy and currency stability. The subdivision into toea facilitates transactions of smaller denominations, supporting everyday commercial activities and pricing structures. The currency system reflects Papua New Guinea’s monetary sovereignty and economic identity. Historical exchange rate data for the kina against the United States dollar reveal a trend of depreciation over the years leading up to 2016. In April 2016, the exchange rate stood at 3.14 kina per US dollar, indicating a weakening of the kina relative to the dollar. This depreciation is evident when compared to previous years: in November 1999, the rate was 2.7624 kina per US dollar; earlier in 1999, it was 2.520 kina; in 1998, 2.058 kina; in 1997, 1.434 kina; in 1996, 1.318 kina; and in 1995, 1.276 kina per US dollar. These figures illustrate a gradual decline in the kina’s value over two decades, influenced by various economic factors such as inflation rates, trade balances, commodity price fluctuations, and monetary policy decisions. The weakening of the currency has implications for import costs, export competitiveness, and overall economic stability, affecting both consumers and businesses within Papua New Guinea.