Papua New Guinea

Introduction

Introduction

Papua New Guinea , officially the Independent State of Papua New Guinea, is an Oceanian country that occupies the eastern half of the island of New Guinea and its offshore islands in Melanesia, a region of the southwestern Pacific Ocean north of Australia. Its capital, located along its southeastern coast, is Port Moresby. The western half of New Guinea forms the Indonesian provinces of Papua and West Papua.

Papua New Guinea is one of the most culturally diverse countries in the world; 852 languagesare listed for the country, of which 12 have no known living speakers. Most of the population of over 7 million people live in customary communities, which are as diverse as the languages. It is also one of the most rural, as only 18 percent of its people live in urban centres. The country is one of the world's least explored, culturally and geographically; many undiscovered species of plants and animals are thought to exist in the interior, as well as groups of uncontacted people.

Papua New Guinea is classified as a developing economy by the International Monetary Fund. Strong growth in Papua New Guinea's mining and resource sector led to the country becoming the sixth fastest-growing economy in the world in 2011, although growth was expected to slow once major resource projects came on line in 2015. Mining remains a major economic factor, however, with talks of resuming mining operations in the previously closed-off Panguna mine ongoing with the local and national governments. Nearly 40 percent of the population lives a self-sustainable natural lifestyle with no access to global capital.

At the local level, the majority of the population still live in strong customary societies and – while social life is overlaid with traditional religious cosmologies and modern practices, including conventional primary education – customary subsistence-based agricultureremains fundamental. These societies and clans are explicitly acknowledged within the nation's constitutional framework. The Papua New Guinea Constitution expresses the wish for "traditional villages and communities to remain as viable units of Papua New Guinean society" and for active steps to be taken in their continuing importance to local and national community life.

At the national level, after being ruled by three external powers since 1884, Papua New Guinea established its sovereignty in 1975 following almost 60 years of Australian administration. It became a separate Commonwealth realm with Queen Elizabeth IIas its head of state and became a member of the Commonwealth of Nations in its own right.


Geography

At 462,840 km2 (178,704 sq mi), Papua New Guinea is the world's fifty-fourth largest country. Including all its islands, it lies between latitudes 0° and 12°S, and longitudes 140° and 160°E.

The country's geography is diverse and, in places, extremely rugged. A spine of mountains, the New Guinea Highlands, runs the length of the island of New Guinea, forming a populous highlands region mostly covered with tropical rainforest, and the long Papuan Peninsula, known as the 'Bird's Tail'. Dense rainforests can be found in the lowland and coastal areas as well as very large wetland areas surrounding the Sepik and Fly rivers. This terrain has made it difficult for the country to develop transportation infrastructure. Some areas are accessible only on foot or by aeroplane. The highest peak is Mount Wilhelm at 4,509 metres (14,793 ft). Papua New Guinea is surrounded by coral reefswhich are under close watch, in the interests of preservation.

The country is situated on the Pacific Ring of Fire, at the point of collision of several tectonic plates. There are a number of active volcanoes, and eruptions are frequent. Earthquakes are relatively common, sometimes accompanied by tsunamis.

The mainland of the country is the eastern half of New Guinea island, where the largest towns are also located, including Port Moresby (capital) and Lae; other major islands within Papua New Guinea include New Ireland, New Britain, Manus and Bougainville.

Papua New Guinea is one of the few regions close to the equator that experience snowfall, which occurs in the most elevated parts of the mainland.


Climate

Papua New Guinea is just to the south of the equator and has a tropical climate. In the highlands, though, temperatures are distinctly cool. The (very) wet season runs from about December to March. The best months for trekking are June to September.


Demographics

Papua New Guinea is one of the most heterogeneous nations in the world. There are hundreds of ethnic groups indigenous to Papua New Guinea, the majority being from the group known as Papuans, whose ancestors arrived in the New Guinea region tens of thousands of years ago. The other indigenous peoples are Austronesians, their ancestors having arrived in the region less than four thousand years ago.

There are also numerous people from other parts of the world now resident, including Chinese, Europeans, Australians, Indonesians, Filipinos, Polynesians, and Micronesians (the last four belonging to the Austronesian family). Around 40,000 expatriates, mostly from Australia and China, were living in Papua New Guinea in 1975.

Religion

The courts and government practice uphold the constitutional right to freedom of speech, thought, and belief, and no legislation to curb those rights has been adopted. The 2011 census found that 95.6% of citizens identified themselves as members of a Christian church, 1.4% were not Christian, 3.1% did not answer this census question. These who stated no religion accounted for, approximately, 0%. Many citizens combine their Christian faith with some traditional indigenous religious practices.

Christianity in Papua New Guinea is predominantly made up of Protestants, who collectively constitute roughly 70% of the total population. They are mostly represented by the Evangelical Lutheran Church of Papua New Guinea, the Seventh-day Adventist Church, diverse Pentecostaldenominations, the United Church in Papua New Guinea and the Solomon Islands, the Evangelical Alliance Papua New Guinea, and the Anglican Church of Papua New Guinea. Apart from Protestants, there is a notable Roman Catholic minority with approximately 25% of the population.

Among non Christians, the Bahai Faith has a strong standing. There are also approximately 4,000 Muslims in the country. The majority belong to the Sunni group, while a small number are Ahmadi. Non-traditional Christian churches and non-Christian religious groups are active throughout the country. The Papua New Guinea Council of Churches has stated that both Muslim and Confucian missionaries are active, and foreign missionary activity in general is high.

Traditional religions are often animist. Some also tend to have elements of Veneration of the dead, though generalisation is suspect given the extreme heterogeneity of Melanesian societies. Prevalent among traditional tribes is the belief in masalai, or evil spirits, which are blamed for "poisoning" people, causing calamity and death, and the practice of puripuri (sorcery).


Economy

Papua New Guinea is richly endowed with natural resources, including mineral and renewable resources, such as forests, marine (including a large portion of the world's major tuna stocks), and in some parts agriculture. The rugged terrain — including high mountain ranges and valleys, swamps and islands — and high cost of developing infrastructure, combined with other factors (including serious law and order problems in some centres and the system of customary land title) makes it difficult for outside developers. Local developers are handicapped by years of deficient investment in education, health, ICT and access to finance. Agriculture, for subsistence and cash crops, provides a livelihood for 85% of the population and continues to provide some 30% of GDP. Mineral deposits, including gold, oil, and copper, account for 72% of export earnings. Oil palm production has grown steadily over recent years (largely from estates and with extensive outgrower output), with palm oil now the main agricultural export. In households participating, coffee remains the major export crop (produced largely in the Highlands provinces), followed by cocoa and coconut oil/copra from the coastal areas, each largely produced by smallholders and tea, produced on estates and rubber. The Iagifu/Hedinia Field was discovered in 1986 in the Papuan fold and thrust belt.

Former Prime Minister Sir Mekere Morauta tried to restore integrity to state institutions, stabilise the kina, restore stability to the national budget, privatise public enterprises where appropriate, and ensure ongoing peace on Bougainville following the 1997 agreement which ended Bougainville's secessionist unrest. The Morauta government had considerable success in attracting international support, specifically gaining the backing of the IMF and the World Bankin securing development assistance loans. Significant challenges face Prime Minister Sir Michael Somare, including gaining further investor confidence, continuing efforts to privatise government assets, and maintaining the support of members of Parliament.

In March 2006, the United Nations Development Programme Policy called for Papua New Guinea's designation of developing country to be downgraded to least-developed country because of protracted economic and social stagnation. However, an evaluation by the International Monetary Fund in late 2008 found that "a combination of prudent fiscal and monetary policies, and high global prices for mineral commodity exports, have underpinned Papua New Guinea's recent buoyant economic growth and macroeconomic stability. By 2012 PNG had enjoyed a decade of positive economic growth, at over 6% since 2007, even during the Global Financial Crisis years of 2008/9. PNG's Real GDP growth rate as at 2011 was 8.9%, and 9.2% for 2012, according to the Asian Development Bank.

This economic growth has been primarily attributed to strong commodity prices, particularly mineral but also agricultural, with the high demand for mineral products largely sustained even during the crisis by the buoyant Asian markets a booming mining sector, and particularly since 2009 by a buoyant outlook and the construction phase for natural gas exploration, production, and exportation in liquefied form (Liquefied Natural Gas or "LNG") by LNG tankers (LNG carrier), all of which will require multibillion-dollar investments (exploration, production wells, pipelines, storage, liquefaction plants, port terminals, LNG tanker ships).

The first major gas project is the PNG LNG project of a consortium led by ExxonMobil, scheduled to commence production in late 2014, for export largely to China, Japan, South Korea and other Asian countries. This ExxonMobil-led consortium includes a PNG company named Oil Search, based in Port Moresby, which has a 29% share.

A second major project is based on initial rights held by the French oil and gas major Total S.A.and the US company InterOil Corp. (IOC), which have partly combined their assets after Total agreed in December 2013 to purchase 61.3% of IOC's Antelope and Elk gas fields rights, with the plan to develop them starting in 2016, including the construction of a liquefaction plant to allow export of LNG. Total S.A. has separately another joint operating agreement with the PNG company Oil Search.

The Anglo-Dutch major Royal Dutch Shell has indicated in 2011 that it is considering the possibility of investing in gas exploration and production in Papua New Guinea.

Further gas and mineral projects are proposed (including the large Wafi-Golpu copper-gold mine), with extensive exploration ongoing across the country.

Economic 'development' based on the extractive industries carries difficult consequences for local communities. There has been much contention around river tailings in the vast Fly River, submarine tailings from the new Ramu-Nickel-cobalt mine, commencing exports in late 2012 (after a delay from landowner-led court challenges), and from proposed submarine mining in the Bismarck Sea (by Nautilus Minerals). One major project conducted through the PNG Department for Community Development suggested that other pathways to sustainable development should be considered.

The PNG government's long-term Vision 2050 and shorter-term policy documents, including the 2013 Budget and the 2014 Responsible Sustainable Development Strategy, emphasise the need for a more diverse economy, based upon sustainable industries and avoiding the effects of Dutch Disease from major resource extraction projects undermining other industries, as has occurred in many countries experiencing oil or other mineral booms, notably in Western Africa, undermining much of their agriculture sector, manufacturing and tourism, and with them broad-based employment prospects. Measures have been taken to mitigate these effects, including through the establishment of a sovereign wealth fund, partly to stabilise revenue and expenditure flows, but much will depend upon the readiness to make real reforms to effective use of revenue, tackling rampant corruption and empowering households and businesses to access markets, services and develop a more buoyant economy, with lower costs, especially for small- to medium-size enterprises.

The Institute of National Affairs, a PNG independent policy think tank, provides a report on the business and investment environment of Papua New Guinea every five years, based upon a survey of large and small, local and overseas companies, highlighting law and order problems and corruption, as the worst impediments, followed by the poor state of transport, power and communications infrastructure.

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