Cover of The Report: Papua New Guinea 2019

The Report: Papua New Guinea 2019

Efforts to improve public governance are gradually bolstering confidence in Papua New Guinea’s economy, despite national performance being heavily dependent on the extractive industries. Backed by macroeconomic development plans, Prime Minister James Marape’s administration is seeking to improve debt management, reduce foreign exchange imbalances, widen access to social services and provide greater employment opportunities.

Papua New Guinea has seen a mixed performance over the last 12 months, with the extractive industries recovering from the impact of the 2018 earthquake, while political uncertainty contributed to fluctuating investor confidence. It remains to be seen to what extent Prime Minister James Marape and his recently reshuffled government will enact far-reaching reforms to laws and regulations governing the extractive industries, although investors will be heartened by his administration’s endorsement of the $13bn Papua LNG project in September 2019 after protracted talks. Looking forward, renewed efforts towards economic diversification are expected in an effort to reduce reliance on the extractive industries and enhance self-sufficiency. The agriculture sector, in particular, offers significant potential to emerge as a new growth engine for the economy, particularly if infrastructure gaps can be addressed. To this end, the PNG Electrification Partnership, which aims to extend power to the 70% of the population by 2030, combined with the Coral Sea Cable System, should help unlock new opportunities for investment and wealth generation across the country. Furthermore, there is hope the tourism industry will further leverage the exposure it enjoyed on the global stage when PNG played host to up to 20,000 delegates as chair of APEC in 2018.

 

OBG & Papua New Guinea