Papua New Guinea

PNG’s banking sector is dominated by three major players: BSP, ANZ and Westpac. The challenges they face are familiar to emerging markets, including limited capital, riskier commercial loans and a largely unbanked population. The current issue is an excess of liquidity, as banks have accumulated plenty of cash through a build-up of foreign exchange reserves, yet are hesitant to lend it out. To...

PNG’s GDP grew 8.9% in 2011, thanks in large part to the fact that construction work on the PNG LNG project is in full swing. While growth likely cannot sustain such a high pace, government officials hope that revenues from the LNG facility will catalyse an economic transformation. Analysts, however, are worried about Dutch disease, where resource-driven growth drives inflation and makes local...

This chapter focuses on PNG’s rich natural resources, its ethnic diversity and relations with regional neighbours, with a specific focus on trade between mineral-rich PNG and resource-hungry China. This chapter includes viewpoints from Prime Minister Peter O’Neill; Julie Bishop, Australia’s Shadow Minister for Foreign Affairs and Deputy Leader of the Opposition; and William Hague, UK Secretary...