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The Economic Activity of Papua New Guinea

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Papua New Ginea is endowed with great natural resources which have to be exploited well to benefit the country’s economy. The rugged terrain and high cost of infrastructure usually hamper exploitation of these natural resources, leaving its economy largely agriculture-based and dependent on exports of mineral products. Agriculture provides subsistence livelihood for more that 75% of the country’s population of more than six million. The country’s exports of mineral deposits of oil, copper and gold account for 72% of the country’s earnings. Copper and gold mines are operated mostly in Porgera, Ok, Tedi, Misima and Lihir areas.

The country’s export market consists mainly of Australia, Japan, European Union and the United States. Most of the export products to these countries are gold, copper ore, cocoa and coffee. Alongside these export activities, the country also imports petroleum and mining machineries to help boost local production of mineral products.

A project to commercialize the country’s 637 billion cubic meters of natural gas reserves has been launched by a consortium led by a major American oil company with the construction of a manufacturing facility for liquefied natural gas (LNG) which aims to double the country’s GDP, which stood at US$13.29 billion in a 2008 estimate. Following the economic crisis in mid-1999, the country is now also implementing programs, launched in 2007, to regain investor confidence, restore integrity in government institutions, and promote economic efficiency.

The government also expects to tap the manufacturing sector, which has been sluggish, and the tourism industry which has remain largely untapped but promises a big potential, and other industries to make them contribute to exports, such as beer, soap making, clothing, paper products, matches, canned meat, furniture, plywood, and paint making industries.