Economy Papua New Guinea

port moresby s central business district

papua new guinea richly endowed natural resources, including mineral , renewable resources, such forests, marine (including large portion of world s major tuna stocks), , in parts agriculture. rugged terrain — including high mountain ranges , valleys, swamps , islands — , high cost of developing infrastructure, combined other factors (including serious law , order problems in centres , system of customary land title) makes difficult outside developers. local developers handicapped years of deficient investment in education, health, ict , access finance. agriculture, subsistence , cash crops, provides livelihood 85% of population , continues provide 30% of gdp. mineral deposits, including gold, oil, , copper, account 72% of export earnings. oil palm production has grown steadily on recent years (largely estates , extensive outgrower output), palm oil main agricultural export. in households participating, coffee remains major export crop (produced largely in highlands provinces), followed cocoa , coconut oil/copra coastal areas, each largely produced smallholders , tea, produced on estates , rubber. iagifu/hedinia field discovered in 1986 in papuan fold , thrust belt.

former prime minister sir mekere morauta tried restore integrity state institutions, stabilise kina, restore stability national budget, privatise public enterprises appropriate, , ensure ongoing peace on bougainville following 1997 agreement ended bougainville s secessionist unrest. morauta government had considerable success in attracting international support, gaining backing of imf , world bank in securing development assistance loans. significant challenges face prime minister sir michael somare, including gaining further investor confidence, continuing efforts privatise government assets, , maintaining support of members of parliament.

in march 2006, united nations development programme policy called papua new guinea s designation of developing country downgraded least-developed country because of protracted economic , social stagnation. however, evaluation international monetary fund in late 2008 found combination of prudent fiscal , monetary policies, , high global prices mineral commodity exports, have underpinned papua new guinea s recent buoyant economic growth , macroeconomic stability. 2012 png had enjoyed decade of positive economic growth, @ on 6% since 2007, during global financial crisis years of 2008/9. png s real gdp growth rate @ 2011 8.9%, , 9.2% 2012, according asian development bank.

this economic growth has been attributed strong commodity prices, particularly mineral agricultural, high demand mineral products largely sustained during crisis buoyant asian markets booming mining sector, , particularly since 2009 buoyant outlook , construction phase natural gas exploration, production, , exportation in liquefied form (liquefied natural gas or lng ) lng tankers (lng carrier), of require multibillion-dollar investments (exploration, production wells, pipelines, storage, liquefaction plants, port terminals, lng tanker ships).

the first major gas project png lng joint venture. exxonmobil operator of joint venture, comprising oil search, santos, kumul petroleum holdings (papua new guinea’s national oil , gas company), jx nippon oil , gas exploration, png government s mineral resources development company , petromin png holdings. project integrated development includes gas production , processing facilities in hela, southern highlands , western provinces of papua new guinea, including liquefaction , storage facilities (located northwest of port moresby) capacity of 6.9 million tonnes per year. there on 700 kilometres (430 mi) of pipelines connecting facilities. largest private-sector investment in history of png.

a second major project based on initial rights held french oil , gas major total s.a. , company interoil corp. (ioc), have partly combined assets after total agreed in december 2013 purchase 61.3% of ioc s antelope , elk gas fields rights, plan develop them starting in 2016, including construction of liquefaction plant allow export of lng. total s.a. has separately joint operating agreement png company oil search.

further gas , mineral projects proposed (including large wafi-golpu copper-gold mine), extensive exploration ongoing across country.

economic development based on extractive industries carries difficult consequences local communities. there has been contention around river tailings in vast fly river, submarine tailings new ramu-nickel-cobalt mine, commencing exports in late 2012 (after delay landowner-led court challenges), , proposed submarine mining in bismarck sea (by nautilus minerals). 1 major project conducted through png department community development suggested other pathways sustainable development should considered.

the png government s long-term vision 2050 , shorter-term policy documents, including 2013 budget , 2014 responsible sustainable development strategy, emphasise need more diverse economy, based upon sustainable industries , avoiding effects of dutch disease major resource extraction projects undermining other industries, has occurred in many countries experiencing oil or other mineral booms, notably in western africa, undermining of agriculture sector, manufacturing , tourism, , them broad-based employment prospects. measures have been taken mitigate these effects, including through establishment of sovereign wealth fund, partly stabilise revenue , expenditure flows, depend upon readiness make real reforms effective use of revenue, tackling rampant corruption , empowering households , businesses access markets, services , develop more buoyant economy, lower costs, small- medium-size enterprises.

the institute of national affairs, png independent policy think tank, provides report on business , investment environment of papua new guinea every 5 years, based upon survey of large , small, local , overseas companies, highlighting law , order problems , corruption, worst impediments, followed poor state of transport, power , communications infrastructure.

land tenure

the ok tedi mine in southwestern papua new guinea

the png legislature has enacted laws in type of tenure called customary land title recognised, meaning traditional lands of indigenous peoples have legal basis inalienable tenure. customary land notionally covers of usable land in country (some 97% of total land area); alienated land either held privately under state lease or government land. freehold title (also known fee simple) can held papua new guinean citizens.

only 3% of land of papua new guinea in private hands; privately held under 99-year state lease, or held state. there virtually no freehold title; few existing freeholds automatically converted state lease when transferred between vendor , purchaser. unalienated land owned under customary title traditional landowners. precise nature of seisin varies 1 culture another. many writers portray land in communal ownership of traditional clans; however, closer studies show smallest portions of land ownership cannot further divided held individual heads of extended families , descendants or descendants alone if have died.

this matter of vital importance because problem of economic development identifying membership of customary landowning groups , owners. disputes between mining , forestry companies , landowner groups devolve on issue of whether companies entered contractual relations use of land true owners. customary property — land — cannot devised will. can inherited according custom of deceased s people. lands act amended in 2010 along land group incorporation act, intended improve management of state land, mechanisms dispute resolution on land, , enable customary landowners better able access finance , possible partnerships on portions of land, if seek develop urban or rural economic activities. land group incorporation act requires more specific identification of customary landowners hitherto , more specific authorisation before land arrangements determined; (a major issue in recent years has been land grab, using, or rather misusing, lease-leaseback provision under land act, notably using special agricultural , business leases (sabls) acquire vast tracts of customary land, purportedly agricultural projects, in cases back-door mechanism securing tropical forest resources logging — circumventing more exacting requirements of forest act, securing timber permits (which must comply sustainability requirements , competitively secured, , customary landowners approval). following national outcry, these sabls have been subject commission of inquiry, established in mid-2011, report still awaited initial presentation prime minister , parliament.