Country Profile 2006 Papua New Guinea This Country Profile is a reference work, analysing the country’s history, politics, infrastructure and economy. It is revised and updated annually. The Economist Intelligence Unit’s Country Reports analyse current trends and provide a two-year forecast. The full publishing schedule for Country Profiles is now available on our website at www.eiu.com/schedule The Economist Intelligence Unit 26 Red Lion Square London WC1R 4HQ United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. 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Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it. ISSN 0269-8099 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK. Main road International boundary Sae I. Ninigo Group Kaniet I. Main airport Pelleluhu I. Heina I. Manu I. Saint Matthias Group Capital Aua I. Mussau I. Hermit I. Admiralty Islands Nai Wuvulu I. Awin I. Major town Lorengau Manus Is. Tong I. Other town Western I. Pak I. Nauna I. Kabuli Rambutyo I. July 2006 Vanimo M'buke I. Kavieng Simberi I. Bis Meteran marck Tabar I. Arc Djaul I. Aitape hip 0 km 100 200 300 400 Kairiru I. ela Lihir I. go New Ireland ImondaImonda Mushu I. Boang I. Konogogo 0 miles 100 200 WewakWewak Bam I. BISMARCK SEA Malendok I. Namatanai Manam I. Rabaul Feni I. K PAPUA NEW R L.L. ChambriChambri e ay . r M i R a r m e Mundua I. Nissan I. am GUINEA Narage I. Taron s R Karkar I. o o . Garove I. r r o o Bagabog I. Unea I. TTelefominelefomin L K ag Buka I. aip R. Madang Tolokiwa I. LakeLake KopiagoKopiago WebagWWabagebag Talasea Long I. MountMount HagenHagen Pal Malmal Bougainville I. Siassi SipulSipul KKimbeimbe Kieta GorokaGoroka New Britain Torokina MendiMendi KainantuKainantu Kandrian INDONESIA ua R. T Mamagota SOLOMON LakeLake Pro L.L. KaimKaim K R. MurrayMurray ik Lae ISLANDS W o ri R. a R i L.L. SzagaSzaga . r a BBuloloulolo w l a la o i u a i V BaimuruBaimuru P L.L. DavDDaviumbaaviumbaiumba LL.. AAvuvu R KikoriKikori LL.. KKwiniawinia . L.L. AAmbuvembuvembuve BalinoBalino Kerema SOLOMON SEA Tapini Ioma Losuia MoreheadMorehead Gulf of Papua Bereina Popondetta Woodlark I. Tufi Daru Viviganl Guasopa PORT MORESBY Tutubea Torres Strait Kwikila Bwasiaiai Cape Rodney Alotau Samarai Bwagaoia MisimaMisima Is.II.s. Tagula Rossel I. AUSTRALIA Tagula I. CORAL SEA © The Economist Intelligence Unit Limited 2006 Comparative economic indicators, 2005 Gross domestic product Gross domestic product per head (US$ bn) (US$ '000) Australia 708.4 Australia 34.8 New Zealand 108.5 New Zealand 26.4 Papua New Guinea Fiji(a) Fiji(a) Samoa(a) Samoa(a) Tonga(a) Vanuatu(a) Vanuatu(a) Solomon Islands(a) Papua New Guinea Tonga(a) Solomon Islands(a) 0.0 1.0 2.0 3.0 4.0 5.0 6.0 0.0 1.0 2.0 3.0 4.0 5.0 (a) 2004. (a) 2004. Sources: Economist Intelligence Unit estimates; national sources. Sources: Economist Intelligence Unit estimates; national sources. Gross domestic product Consumer prices (% change, year on year) (% change, year on year) Solomon Islands(a) Samoa(a) Vanuatu(a) Tonga(a) Fiji(a) Solomon Islands(a) Samoa(a) Fiji(a) Papua New Guinea New Zealand Australia Australia New Zealand Vanuatu(a) Tonga(a) Papua New Guinea 0.0 1.0 2.0 3.0 4.0 5.0 6.0 0.0 5.0 10.0 15.0 20.0 (a) 2004. (a) 2004. Sources: Economist Intelligence Unit estimates; national sources. Sources: Economist Intelligence Unit estimates; national sources. Country Profile 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 Papua New Guinea 1 Contents Papua New Guinea 3 Basic data 4 Politics 4 Political background 6 Recent political developments 8 Constitution, institutions and administration 10 Political forces 11 International relations and defence 13 Resources and infrastructure 13 Population 14 Education 14 Health 15 Natural resources and the environment 15 Transport, communications and the Internet 17 Energy provision 17 The economy 17 Economic structure 18 Economic policy 22 Economic performance 24 Regional trends 24 Economic sectors 24 Agriculture 25 Mining and semi-processing 28 Manufacturing 29 Construction 29 Financial services 30 Other services 31 The external sector 31 Tra d e i n go od s 32 Invisibles and the current account 33 Capital flows and foreign debt 34 Foreign reserves and the exchange rate 35 Regional overview 35 Membership of organisations 39 Appendices 39 Sources of information 40 Reference tables 40 Population 40 Formal employment in the private sector by industry 40 Central government finances 41 Central government revenue © The Economist Intelligence Unit Limited 2006 www.eiu.com Country Profile 2006 2 Papua New Guinea 41 Central government expenditure 41 Public debt outstanding 42 Gross domestic product 42 Gross domestic product by sector 42 Gross domestic product by expenditure 43 Money supply 43 Consumer prices 43 Commercial production and value of forestry, agriculture and marine resources 44 Commercial production and value of major minerals and petroleum 44 Foreign trade 45 Main exports 45 Main trading partners 46 Balance of payments, national series 46 Net official development assistance 47 External debt 47 International liquidity 48 Exchange rates Country Profile 2006 www.eiu.com © The Economist Intelligence Unit Limited 2006 Papua New Guinea 3 Papua New Guinea Basic data Land area 462,840 sq km Population 5.77m (2004, IMF mid-year estimate) Major islands New Britain, New Ireland, Manus, Bougainville Population in ‘000 (2000 census) Port Moresby (capital) 254 Lae 79 Madang 29 Wewa k 2 0 Goroka 20 Rabaul 24 Mount Hagen 28 Climate Tropical Weather in Port Moresby Hottest month, December, 24-32°C (average daily minimum and maximum); (sea level) coldest month, August, 23-28°C; driest month, August, 18 mm average rainfall; wettest month, February, 193 mm average rainfall Languages Tok Pisin (Pidgin English), English and Hiri Motu; more than 800 other distinct languages also in use Measures Metric system Currency 1 kina=100 toea. Average exchange rate in 2005: Kina3.10:US$1; Kina2.37:A$1. Exchange rate on July 14th 2006: Kina3.15:US$1; Kina2.37:A$1 Time 10 hours ahead of GMT Public holidays January 1st (New Year’s Day); April 14th (Good Friday); April 17th (Easter Monday); April 25th (National Day); June 12th (Queen’s Official Birthday); September 16th (Independence and Constitution Day); December 25th (Christmas Day); December 26th (Boxing Day) © The Economist Intelligence Unit Limited 2006 www.eiu.com Country Profile 2006 4 Papua New Guinea Politics Papua New Guinea (PNG) is a pluralist democracy modelled on the UK. However, the party system is weak: traditional society lacks hierarchy, and parties have few ideological precepts or organisational structures. Parliamentary groupings therefore tend to form around dominant personalities or “big men”, and governments tend to be composed of fragile coalitions, which rely on significant numbers of small parties and independent members of parliament (MPs). In 2002 PNG held its sixth general election since independence in 1975. The prime minister, Sir Michael Somare, heads a coalition government. Political background Colonisation came late to PNG Settled agriculture has been practised in PNG for 10,000 years. The country only began to engage with the rest of the world about four or five generations ago, about 300 years later than neighbouring Indonesia. The country now known as Papua New Guinea was colonised by several European powers during the 19th century. Australia assumed responsibility for the administration of British New Guinea (the southern part of eastern New Guinea, later renamed Papua) in 1906 and of the German New Guinea territories (the north-eastern part of eastern New Guinea) in 1914, under a League of Nations mandate. In 1942 the Japanese occupied all of New Guinea and parts of eastern Papua.