Despite rich resources in the form of minerals, forests
and fish banks, Papua New Guinea is one of the least
developed countries in the South Pacific. Poverty is
widespread, and most people practice natural housekeeping.
Only a small proportion have paid work. Poor infrastructure,
low levels of education, corruption and social unrest are
hampering development, and the country is losing out on the
global knowledge-based economy. After a significant economic
downturn, gross domestic product (GDP) in 2003 was estimated
at USD 620 per capita. Agriculture, mining and forestry
dominate the economy, which is heavily dependent on
commodity prices on the world market. In the 1970s,
Australia contributed aid equivalent to 50% of GDP, but it
has subsequently fallen sharply. In 2003, the World Bank
assumed that over half of the working population was
underemployed, and estimated unemployment in cities at 70%.
This was given as an explanation for increasing social
unrest and crime.
countryaah, agriculture (including fishing) accounted for 28% of GDP
in 2004 and employed 63% of the economically active
population. In addition, there is a large group that feeds
only on natural households, and together, over 80% of the
population is counted as dependent on agriculture and
fishing for subsistence. Yams, bananas and sago are the most
common food products in the lowlands, while sweet potatoes
dominate in the highlands. Corn, rice, melons, tropical
fruits and sugar cane are also grown for their own use. The
most productive part of agriculture is found in the
highlands. Coffee (65 000 tonnes in 2003) is main selling
product for 1/4of the population.
Cocoa (42,000 tonnes), coconuts (for the production of copra
and copra oil), palm oil, rubber, pineapple, tea, peanuts
(peanuts) and spices are also grown for sale. Main animals
are pigs and poultry. Many grasslands have fueled a growing
Logging operated by Malaysian logging companies (from
Sarawak) is an important export industry. However, it is
estimated that the harvest has been three times above the
sustainable level, and the authorities have therefore tried
to impose restrictions on the harvest.
The country has some of the best fishing banks in the
South Pacific with particularly large stocks of tuna. Sales
of fishing rights to foreign shipping companies are an
important source of income. Mackerel (tuna) is the main
species of fish. Extraction of shark oil was a growth
industry in the 1990s, but has since faced criticism for
alleged predatory fishing.
The process industry is limited and has accounted for
less than 10% of GDP. Essentially, it only covers the
processing of agricultural products and various small
industries. Several fish canning factories were established
during the 1980s and 1990s, but many of them were later
closed down. A cement plant was opened in Lae in 1993. An
oil refinery is estimated to have opened in Port Moresby in
In 2003, mining and oil and gas extraction accounted for
approx. 30% of GDP. The mineral resources are rich and are
mainly extracted by Australian and American companies. The
most important metals are gold (65.5 tonnes, 2002) and
copper (150 600 tonnes). The gold deposits have been
important for European exploration of the area. In modern
times, gold is mined in several places. Porgera in the
highlands. The extraction is estimated to reach over 100
tonnes per year when extraction commences on Lihir Island,
which has the world's largest known gold deposits outside
South Africa. Copper is also mined in several places. One of
the world's largest copper mines can be found at
Bougainville. When it was closed during the 1989 civil war,
the country lost 40% of its export earnings. The loss was
replaced in the 1990s by new mines and by oil recovery.
Mining has led to major environmental damage,
Extraction of oil and natural gas takes place on the
south coast offshore in the Gulf of Papua, as well as on
Lake Kutubu in the highlands. In the 1990s, oil production
fluctuated between 100,000 and 150,000 barrels per day, but
in 2003 fell to below 50,000 barrels per day. Oil resources
are declining rapidly, and known reserves are expected to be
depleted by 2012. However, gas reserves are large. A gas
pipeline to Queensland in Australia is planned to be built.
Papua New Guinea has a huge potential for hydropower, but
most of the countryside is without electricity, and cities
are often hit by power outages.
Since the turn of the millennium, mineral exports have
amounted to approx. 3/4 of the
exports and black for 1/4 of GDP.
Mineral exports have produced solid foreign trade surpluses,
but revenues fluctuate strongly with commodity prices. The
country is also one of the world's largest exporters of
untreated tropical timber. In addition to industrial
products, imports include food products such as fish
products and rice. The main export market is Japan, while
Australia is the source of almost half of imports.
Transport and Communications
The rugged landscape prevents the development of a
national road network. The best developed road network is in
the Lae area and in the eastern highlands. The capital Port
Moresby has no road connection with any other major city.
The Sepik River is an important transport year in the
northwest. The country has no railroad. The lack of road
network has made air traffic particularly important for
domestic traffic. There are more than 400 airports and
airstrips. International Airport at Port Moresby. In 2006,
the State Air Niugini had routes to several Australian
cities, as well as Singapore, Manila and Tokyo.