- Partnership with the people -

When it comes to natural resources, Papua New Guinea has it all gold, copper, oil, forests, fish and fertile land. Yet its people depend on subsistence farming to live. Export-driven growth, reform and empowerment of local communities are the keys to a brighter future

apua New Guinea is a country defined by diversity. Located to the north of Australia and bordered by Indonesia to the west, PNG comprises a mainland and an archipelago of some 600 islands scattered across the South Pacific Ocean.

The largest and most populated country in the Pacific after Australia, PNG is home to almost 5 million people, an ethnic mix of Melanesians, Papuans, Micronesians and Poly nesians, most of whom live in isolated rural communities with their own unique traditions and cultures. Some 800 distinct languages have been identified.

This human diversity echoes the extraordinary range of flora and fauna on land and of marine life in PNG’s waters. The landscape itself is spectacular and beautiful, comprising mountains, volcanoes, mangrove swamps and islands, atolls and coral reefs, much of it difficult of access.

PNG is extraordinarily rich in natural resources. It has gold, copper and oil, tropical forests to provide timber, fertile agricultural land and waters full of fish, notably tuna.

The country has a varied, dualistic economy. Cash crops such as oil palm, coffee, cocoa and copra are an important source of revenue, as are forestry and fishing, but the mining and oil industries established by foreign – the majority of which are Canadian and Australian – resource companies are the chief earners, accounting for more than 70 percent of foreign exchange earnings. Most of PNG’s population, however, depend on traditional subsistence farming and fishing for their livelihood.

Land use is a complex and sensitive issue in PNG, where only 3 percent of the total land mass is owned by the state. The remaining 97 percent is in the people’s hands through customary land ownership. One of the biggest challenges faced by the government is how to reconcile the need to use the land as an economic asset for the national good while treating the customary landowners in an equitable manner.

For some years before the present government led by Prime Minister Sir Michael Somare was elected in 2002, PNG’s economy had been performing well below its potential. Weak governance, the aftereffects of the Bougainville secessionist revolt in the 1990s, and external factors such as the Asian financial crisis and lower prices for gold and copper combined to slow growth.

Since then, however, the government has taken decisive and effective action to put the nation back on course. Its strategy has three main aims: to ensure good governance, promote an export-driven economic growth strategy and to foster rural development, poverty reduction and empowerment of the people.
“We need more investment, more jobs and a productive rural community that can support its population adequately,” says the Prime Minister.

Sir Michael acknowledges that it will take time to create the right environment to generate the economic and social development the country needs. “We have to get down to a lot of basic housekeeping and maintain our political resolve and efforts over the medium and long term.”

The government has embarked on a drive to improve the country’s economic performance, stabilise and revitalise the system of government and create a peaceful law and order. Greater fiscal discipline has been introduced and a process of progressive administrative and political reform is under way to bring about a more cost-effective government.

An independent state since 1975 – although it retains the Queen as its formal head of state – PNG has a constitution based on the Westminster model and is a robust parliamentary democracy with many political parties and independent MPs. The downside of this political diversity has been a series of coalition governments, with no government managing to stay in office for its full 5-year term. Changes introduced in 2000, however, have tightened up the constitutional rules to ensure greater political stability.

The government’s strategy for reform in the public sector is focused on achieving a clear sense of direction, affordable government, improved performance, compliance and accountability, and improved service delivery.
Decentralisation is regarded as the key to fostering self-reliance among the communities that make up the nation, empowering them to contribute to economic production and social development.

“The nation cannot afford the costly political structure it has and the over-centralised and expensive use of public sector resources to deliver basic services,” says Sir Michael.

“Political and administrative reforms need the people behind them. To have this cooperation from the people, they must be empowered to participate in the reforms.”

The government is committed to improving law and order and stamping out corruption. One of the strengths of its programme is the focus on building a partnership with the community in the fight against crime, which has handicapped the country's development. The administration has carried out the most extensive and detailed review of the law and justice sector and the courts since the 1990s.

The government is fostering closer ties with the private sector, which it recognises as an important engine of growth, but has rejected the full-scale approach to privatisation of state companies adopted by its predecessor.
Minor assets have been sold but core entities such as communications company Telikom PNG, the national airline Air Niugini and PNG Harbours are deemed more suitable for public- private partnerships following restructuring and rehabilitation.

PNG’s leading development aid partners are Australia, the Asian Development Bank, the World Bank, Japan and the European Union. The government wants to ensure that aid and investment is targeted to make a lasting impact on the country’s development, and, in the longer term, is aiming for less long-term dependence on outside assistance.


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