Economy of Papua New Guinea
Papua New Guinea is one of the fastest developing countries in the southern hemisphere with an annual GDP of 9% spurred on by huge extrative industries. The country has made significant progress investing proceeds from oil and gas in infrastructure building. As a result, its major cities like Port Moresby and Lae have received increased international investor attention, giving rise to unprecedented building boom to exploit the opportunities presented by the country's rise as a regional economic leader in the South Pacific region. This is well supported by its strategic location as a Pacific's gateway to Asia as well as its comparatively huge landmass and demographic profile (almost 7 times that the rest of smaller Pacific Island nations). International Monetary Fund. Despite this poverty it is richly endowed with natural resources, but exploitation has been hampered by the rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for the bulk of the population. Mineral deposits, including oil, copper, and gold, account for 72% of export earnings. Budgetary support from Australia and development aid under World Bank auspices have helped sustain the economy. In 1995, Port Moresby reached an agreement with the International Monetary Fund (IMF) and World Bank on a structural adjustment program, of which the first phase was successfully completed in 1996. In 1997, droughts caused by the El Niño weather pattern wreaked havoc on Papua New Guinea's coffee, cocoa, and coconut production, the mainstays of the agricultural-based economy and major sources of export earnings. The coffee crop was slashed by up to 50% in 1997. Despite problems with drought, the year 1998 saw a small recovery in GDP. Growth increased to 3.6% in 1999 and may be even higher in 2000, say 4.3%.Mineral Resources
Government revenues and foreign exchange earning minerals. Copper and gold mines are currently in production at Porgera, Ok Tedi, Misima, Lihir, Simberi and Hidden Valley. As of 2014, talks of resuming mining operations in the Panguna mine have also resurfaced, with the Autonomous Bougainville Government and National Government of Papua New Guinea expressing interest in restarting mining operations in the area. New nickel, copper and gold projects have been identified and are awaiting a rise in commodity prices to begin development.Agriculture, Timber, and Fish
Papua New Guinea produces and exports agricultural, timber, and fish products. Agriculture currently accounts for 25% of GDP and supports more than 80% of the population. Cash crops ranked by value are coffee, oil, cocoa, copra, tea, rubber, and sugar. About 40% of the country is covered with timber rich trees, and a domestic woodworking industry has been slow to develop. Fish exports are confined primarily to shrimp, although fishing boats of other nations catch tuna in Papua New Guinea waters under license.
Papua New Guinea is the largest yam market in Asia. Industry
In general, the Papua New Guinea economy is highly dependent on imports for manufactured goods. Its industrial sector—exclusive of mining—accounts for only 9% of GDP and contributes little to exports. Small-scale industries produce beer, soap, concrete products, clothing, paper products, matches, ice cream, canned meat, fruit juices, furniture, plywood, and paint. The small domestic market, relatively high wages, and high transport costs are constraints to industrial development.
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