Diverse natural resources place Papua New Guinea on firm footing

Papua New Guinea is a vast archipelago, of which the main island – shared with Indonesia – forms the largest tropical island on Earth. Known for its unique flora and fauna, the country is famous for its environmental variety. However, with more than 850 languages spoken within its borders, it is also considered one of the most culturally diverse nations in the world. While it enjoys heterogeneous landscapes and cultures, PNG is seen as a frontier market in economic terms. Hydrocarbons and mining are the cornerstones of production, thus there is significant scope for the development of nearly all other sectors. Agriculture and tourism are seen as prime engines for diversification, offering the potential to generate much-needed foreign exchange and employment.

The nation is an exporter of hydrocarbons, mining and agricultural products. PNG became a major exporter of liquefied natural gas (LNG) in 2014 with the launch of the PNG LNG project, which resulted in a notable uptick in the size and strength of its economy. The agreement for a second LNG project, Papua LNG, was signed in April 2019. Two prominent gold mines in the Morobe and Sepik Provinces present additional opportunities for extractive exports.

Historic Roots 

The earliest archaeological traces of human life in the country date back at least 40,000 years, with inhabitants thought to have arrived across a long-vanished land bridge from other parts of South-east Asia. Some of the earliest-known agricultural activities took place within the region, with irrigation works dating back at least 10,000 years.

In the 14th century the Javanese Majapahit Empire had contact with Onin, a kingdom in Western Papua. New Guinea was one of the final areas in the world to be subjected to European colonisation, and its relative isolation explains the cultural and linguistic diversity that have persisted to this day.

European influence seldom penetrated beyond coastal settlements for several centuries, with colonisers mostly managing small-scale agricultural operations, especially in palm oil and coffee. The first European contact with New Guinea likely occurred in 1512 upon the arrival of António d’Arbreu, a Portuguese navigator, although unrecorded Indonesian and Chinese seafarers certainly arrived on the island before this. Jorge de Menezes, another Portuguese explorer, landed on the Vogelkop Peninsula of West Papua in 1526, dubbing one of the islands Ilhas dos Papuas, from the Malay Orang papuwah, which roughly translates to “the land of the fuzzy people”. Spanish explorers who subsequently sailed to the island named it Nueva Guinea.

The east of the island remained virtually unexplored by Europeans until the 1880s, when – following expeditions by the Russian anthropologist Nicholai Miklukho-Maklai in the previous decade – the German Empire annexed the north-east, including the Niugini Islands, and the British Empire annexed the south-east portion of the island. The western region had come under Dutch influence in the 17th century and was officially recognised by Britain and Germany in 1885 and 1895, respectively.

Australian Influence

Following the creation of the Commonwealth of Australia in 1901, control of then-British New Guinea was transferred to the new Australian government – a move that formed the beginning of this long-standing connection between the two countries. In 1905 Australia passed the Papua Act, renaming it the Territory of Papua, with direct Australian rule beginning in 1906. Meanwhile, in the north-east, the German New Guinea Company exercised sovereign rights over the territory until 1899, when the German government took direct control.

This lasted until the outbreak of the First World War, when Australian troops took over the colony. In 1920 Australia was given a mandate from the League of Nations to run the former German colony, then named the Territory of New Guinea, with Rabaul as its capital. While the Japanese army arrived during the Second World War and conquered several islands in New Guinea, Australia remained in power of the mainland. Between this 1941 invasion and the end of the war in 1945, some of the heaviest fighting took place on the mainland, as the Japanese forces advanced on Port Moresby. Eventually, Australian and US troops beat back the invading army.

The influence of Australian rule can still be appreciated along the Kokoda Track: it was a strategic route through the Owen Stanley Range that was fiercely fought over and remains an important place of pilgrimage for a large number of Australians to this day. Following the Second World War, the former Australian and German colonies were combined into the Territory of Papua and New Guinea in 1949. A legislative council and a system of local government were established, with the former replaced by the House of Assembly in 1963. PNG achieved its independence from Australia on September 16, 1975.

Geography 

PNG is located in the Asia-Pacific region, separated from Australia’s Cape York Peninsula by the 160-km wide Torres Strait. The Solomon Sea lies to the east and the Coral Sea stretches to the south and south-east. The country has a surface area of 462,840 sq km, a coastline of 5152 km sheltered by 40,000 sq km of coral reefs, and an 820-km land border with the Indonesian province of West Papua, which remained a Dutch colony until 1962.

PNG’s diverse interior consists of highland valleys, grasslands, vast expanses of rainforest, swamps and mangroves. Primary rainforest covers approximately three-quarters of the landscape, while its backbone is composed of mountain ranges and grassy lowlands that rise to Mount Wilhelm, the highest summit at 4509 metres above sea level. Criss-crossing the surface and acting as a key lifeline in terms of sustenance and access are a collection of waterways, the largest of which are the Sepik, Purari, Markham, Watut, Strickland and Fly Rivers.

TOPOGRAPHY: While the eastern half of the island of New Guinea is the mainland, PNG also governs around 600 smaller islets and archipelagos off its coast, as well as the islands of New Britain, New Ireland, Manus and the Autonomous Region of Bougainville (ARB). The country is divided into four regions: the Highlands, Momase, Southern and New Guinea islands. The capital, Port Moresby, is on the south-eastern coast of the mainland and was named after British Admiral Sir Fairfax Moresby by his son, Captain John Moresby, in 1873. The latest census undertaken by the National Statistical Office was in 2011, which found that Port Moresby was home to approximately 364,000 people. However, subsequent estimates reach as high as 634,000 if city settlements and the National Capital District (NCD) as a whole are included. Other important urban areas include Lae, which is the capital of the Morobe Province and has a population of around 100,000; Mount Hagen, with 46,000 inhabitants; and Madang, with about 30,000. The country remains largely rural, though official estimates of the population distribution will not be made until the next census, planned for 2021.

Bougainville 

Situated at the easternmost edge of the New Guinea islands and in a different time zone that is one hour ahead of the rest of PNG, the ARB comprises two large islands, Buka and Bougainville, separated by a narrow tidal channel. Together with more than 200 smaller islands and countless atolls, it forms an archipelago that is geographically, geologically and culturally closer to the neighbouring Solomon Islands than to the rest of PNG.

Bougainville has approximately 300,000 inhabitants who speak a dozen different languages. The other major groups of islands in the autonomous province are Nukumanu, Takuu, Nuguria, Nissan, Tulun and Motlock, all located on strips of coral rising no more than one metre above sea level. Under the terms of the 2001 Bougainville Peace Agreement, the government of PNG amended the national constitution to guarantee an independence referendum on Bougainville’s future political status, to be held 10-15 years after the election of the first autonomous government of the region. The target date for this has been set for November 23, 2019.

Biodiversity  

Traversing New Guinea’s tropical topography are 4.5% of the world’s known land mammals. New Guinea is also home to more than 800 species of birds and 25,000-30,000 vascular plants. Between 1998 and 2008 some 1060 new species were discovered in New Guinea, including 218 plants, 580 invertebrates, 71 fish, 134 amphibians, 43 reptiles, 12 mammals and two birds, all housed in the third-largest tropical rainforest on Earth at around 288,000 sq km. Only the Amazon and Congo are larger, according to the World Wildlife Fund.

PNG is strongly associated with birds of paradise, sheltering 38 of the 42 known species. It is also home to several of the world’s largest species, including the colourful Queen Alexandra’s birdwing butterfly, which was first discovered in 1906 and is found on the coastal plains of the Oro Province, as well as the biggest tree frog, lizard, pigeon and orchid plant species known to man. PNG also hosts the only poisonous birds known to exist and 12 of the 14 known species of the tree kangaroo.

Climate 

Rainfall grades decline from the extreme north to the country’s south, with the highest average rainfall of over 700 cm per year recorded in Tabubil, which borders Indonesia. Port Moresby sees an average of 180.4 cm of rain every year. Temperatures and rainfall are subject to the Intertropical Convergence Zone, the South Pacific Convergence Zone and the West Pacific Monsoon. Given Port Moresby’s close proximity to the equator, temperatures do not vary substantially throughout the year. Daily lows remain steady at an average of 23-24°C, while daily highs vary from 26°C in July to 28°C in December and January.

The 10th-most disaster-prone country in the world, PNG is located on the Pacific Ring of Fire. This leaves the country vulnerable to a variety of natural risks, including earthquakes, tsunamis, tropical cyclones and volcanoes, as well as systemic weather risks such as flooding. The area is very seismically active, with 14 active and 22 dormant volcanoes as of 2018. According to the Humanitarian Contingency Plan, all of the dormant and 10 of the active volcanoes are located within the Bismarck Volcanic Arc in the south-west Pacific Ocean. Meanwhile, the Asian Disaster Reduction Centre reports that during the 20th century PNG suffered three droughts, 18 earthquakes, six floods, 10 volcanic eruptions and two tsunamis.

February 2018 brought another significant disaster. A 7.5-magnitude earthquake hit Hela Province in the Highlands Region and was followed by strong aftershocks, which caused some 200 deaths and significant damage to several LNG and mining facilities.

Hydrocarbons 

PNG is an important exporter of natural resources. The $19bn PNG LNG project has boosted the economy since 2014, with the facility producing around 6.9m tonnes per annum and an expected total output of more than 9trn cu feet of gas over its 30-year lifespan. Since the first shipment of gas was brought to Japan in June 2014, more than 200 deliveries have been made to Asian markets. Existing production initiatives are projected to meet demand from Asia through 2021 or 2022, after which analysts predict a shortfall in the market. However, this undersupply could be offset by the proposed three-train LNG expansion project, which would see one train dedicated to gas from the existing ExxonMobil-led PNG LNG project and two dedicated to gas from the $13bn Papua LNG project. The Papua LNG project is being led by Total along with Oil Search, the PNG government, ExxonMobil and Santos, with an agreement between Total and the PNG government signed in April 2019. In early September 2019 the government officially announced that the project was cleared for implementation after months of uncertainty, though Total had yet to publicly comment.

Mining Activity 

Mining is also a significant contributor to the economy. Gold and copper are the sector’s main outputs, followed by much smaller amounts of nickel and cobalt. The biggest facility is Newcrest’s gold mine on Lihir Island. The state-run company Ok Tedi’s copper mine in the Star Mountains of the Western Province is the second-largest, followed by the Porgera gold mine, located more than 2000 metres above sea level in the Enga Province. Other locations include the Ramu nickel and cobalt mine on the north coast, the Hidden Valley gold and silver mine, Simberi gold mine and Alluvial Exports. The Frieda River copper-gold project in the Sepik Provinces and Wafi-Golpu – an initiative located in the Morobe Province under the management of Wafi-Golpu Joint Venture, an equally split joint venture between Newcrest and Harmony Gold – are two further projects with significant output potential.

Agriculture 

Minerals and hydrocarbons dominate exports, but agriculture is the largest employer in the country, providing jobs for around 85% of the economically active population, and accounting for around one-third of GDP. The country is known for its fertile soil and agricultural potential, with signature cash crops including coffee, palm oil, cocoa, coconut, copra and, to a lesser degree, vanilla, tea and rubber (see Agriculture chapter). PNG was the seventh-largest producer and fourth-largest exporter of palm oil in the world in 2018, having accounted for 1.6% of global exports. Coffee was an important output as well, with the country the 17th-largest producer in 2016 and accounting for 1% of global production.

In addition, the National Fisheries Authority puts annual catches of tuna at 150bn-200bn tonnes per year, representing about 10% of the global catch, with potential resources at 250bn-300bn tonnes per year. These figures are not inclusive of illegal takes from foreign-flagged vessels fishing in PNG waters.

Population 

The indigenous population is primarily of Melanesian ancestry and places a strong emphasis on kinship, extended family bonds and a strong attachment to communally held land. According to the 2011 census by the National Statistical Office, PNG had a population of about 7.28m that year, but a 2018 estimation by the World Bank pegs this at 8.61m, with other estimates running even higher. The 2011 census found that the population has grown by around 3.2% per year since the beginning of the century, with males outnumbering females 3.7m to 3.4m. The life expectancy of women exceeded that of men in 2017, at 68.3 years compared to 63.3 years, according to the World Bank.

The populace is fairly young, with a median age of just under 22 and an estimated 36% of Papua New Guineans under 15 years of age. The Highlands Region is the most populated part of the country, with some 43% of inhabitants, followed by 25% in Mamose, 18% in the southern provinces and the remaining 14% on the islands. PNG has not experienced the same urbanisation as other countries, with 86.8% of the population living in rural areas in 2018. People primarily practise subsistence agriculture, with sweet potato, cassava, taro, bananas, pork and fowl serving as dietary staples. Seafood represents a large part of the diet in coastal regions. Much of the hinterlands remain remote, and due to the geographical makeup, pockets of people live in complete isolation, operating in a non-monetised economy.

Languages 

PNG has more than 850 indigenous languages, some of which are spoken by communities of just a few hundred people. However, there are three official languages, with English widely spoken in urban areas and serving as the language of government and business. Hiri Motu, a trade language that was spread from Port Moresby by the local colonial constabulary, is spoken on the Papua side, while Melanesian Pidgin, or Tok Pisin, which borrows from a number of vernaculars, serves as PNG’s lingua franca.

Religion 

Christianity first arrived in PNG in the late 19th century, and some 96% of the population identified as Christian in the 2011 census. The country is highly diverse in terms of its denominational adherence, and many Papua New Guineans combine indigenous religious practices with the Western faith. Furthermore, the constitution guarantees freedom of religion, with no official state religion. Of the Christian population, 26% affiliate themselves with Roman Catholicism, followed by Evangelical Lutheranism (18%), Seventh-Day Adventism (13%), Pentecostalism (10%) and the United Church (10%). The other 23% belong to various other Christian groups, including the Evangelical Alliance and the Anglican, Baptist and Kwato churches.

National Government

PNG is a constitutional parliamentary democracy. The 111-member unicameral Parliament – consisting of 89 members from open electorates and 22 governors from provincial electorates – elects a prime minister to serve as head of government every five years. Reflecting the country’s colonial past, the British monarch remains the official head of state and is represented through a local governor-general elected by Parliament. However, this role is largely ceremonial, with several prominent members of society bequeathed with the designation of “lady” or “sir”.

Local Government 

PNG is divided into 20 provinces plus the ARB and the NCD. Each province has an elected assembly and local government, headed by a provincial governor, as well as local governors. There are also around 160 locally elected councils.