Papua New Guinea

The indigenous population of Papua New Guinea is one of the most heterogeneous in the world. Papua New Guinea has several thousand separate communities, most with only a few hundred people. Divided by language, customs, and tradition, some of these communities have engaged in tribal warfare with their neighbors for centuries.

The isolation created by the mountainous terrain is so great that some groups, until recently, were unaware of the existence of neighboring groups only a few kilometers away. The diversity, reflected in a folk saying, "For each village, a different culture," is perhaps best shown in the local languages. Spoken mainly on the island of New Guinea--composed of Papua New Guinea and the Indonesian province of West Papua--about 650 of these languages have been identified; of these, only 350-450 are related. The remainder seem to be totally unrelated either to each other or to the other major groupings. Native languages are spoken by a few hundred to a few thousand, although Enga, used in Enga Province, is spoken by some 130,000 people. Most native languages are extremely complex grammatically.

Melanesian Pidgin serves as the lingua franca. English is spoken by educated people and in Milne Bay Province.

The overall population density is low, although pockets of overpopulation exist. Papua New Guinea's Western Province averages one person per square kilometer (3 per sq. mi.). The Chimbu Province in the New Guinea highlands averages 20 persons per square kilometer (60 per sq. mi.) and has areas containing up to 200 people farming a square kilometer of land. The highlands have 40% of the population.

A considerable urban drift toward Port Moresby and other major centers has occurred in recent years. Between 1978 and 1988, Port Moresby grew nearly 8% per year, Lae 6%, Mount Haven 6.5%, Goroka 4%, and Madang 3%. The trend toward urbanization accelerated in the 1990s, bringing in its wake squatter settlements, unemployment, and attendant social problems. Almost two-thirds of the population is Christian. Of these, more than 700,000 are Catholic, more than 500,000 Lutheran, and the balance are members of other Protestant denominations. Although the major churches are under indigenous leadership, a large number of missionaries remain in the country. The bulk of the estimated 2,500 Americans resident in Papua New Guinea are missionaries and their families. The non-Christian portion of the indigenous population practices a wide variety of religions that are an integral part of traditional culture, mainly animism (spirit worship) and ancestor cults.

Foreign residents are just over 1% of the population. More than half are Australian; others are from the United Kingdom, New Zealand, the Philippines, and the United States. Since independence, about 900 foreigners have become naturalized citizens.

• The traditional Papua New Guinea social structure includes the following characteristics:
• The practice of subsistence economy;
• Recognition of bonds of kinship with obligations extending beyond the immediate family group;
• Generally egalitarian relationships with an emphasis on acquired, rather than inherited, status; and
• A strong attachment of the people to land.

Most Papua New Guineans still adhere strongly to this traditional social structure, which has its roots in village life.

Archeological evidence indicates that humans arrived on New Guinea at least 60,000 years ago, probably by sea from Southeast Asia during an iceage period when the sea was lower and distances between islands shorter. Although the first arrivals were hunters and gatherers, early evidence shows that people managed the forest environment to provide food. There also are indications of gardening having been practiced at the same time that agriculture was developing in Mesopotamia and Egypt. Early garden crops--many of which are indigenous--included sugarcane, Pacific bananas, yams, and taros, while sago and pandanus were two commonly exploited native forest crops. Today's staples--sweet potatoes and pigs--are later arrivals, but shellfish and fish have long been mainstays of coastal dwellers' diets.

When Europeans first arrived, inhabitants of New Guinea and nearby islands--while still relying on bone, wood, and stone tools--had a productive agricultural system. They traded along the coast, where products mainly were pottery, shell ornaments, and foodstuffs, and in the interior, where forest products were exchanged for shells and other sea products.

The first Europeans to sight New Guinea were probably the Portuguese and Spanish navigators sailing in the South Pacific in the early part of the 16th century. In 1526-27, Don Jorge de Meneses accidentally came upon the principal island and is credited with naming it "Papua," a Malay word for the frizzled quality of Melanesian hair. The term "New Guinea" was applied to the island in 1545 by a Spaniard, Ynigo Ortis de Retez, because of a fancied resemblance between the islands' inhabitants and those found on the African Guinea coast. Although European navigators visited the islands and explored their coastlines for the next 170 years, little was known of the inhabitants until the late 19th century.

New Guinea
With Europe's growing need for coconut oil, Godeffroy's of Hamburg, the largest trading firm in the Pacific, began trading for copra in the New Guinea Islands. In 1884, Germany formally took possession of the northeast quarter of the island and put its administration in the hands of a chartered company. In 1899, the German imperial government assumed direct control of the territory, thereafter known as German New Guinea. In 1914, Australian troops occupied German New Guinea, and it remained under Australian military control until 1921. The British Government, on behalf of the Commonwealth of Australia, assumed a mandate from the League of Nations for governing the Territory of New Guinea in 1920. It was administered under this mandate until the Japanese invasion in December 1941 brought about the suspension of Australian civil administration. Following the surrender of the Japanese in 1945, civil administration of Papua as well as New Guinea was restored, and under the Papua New Guinea Provisional Administration Act, 1945-46, Papua and New Guinea were combined in an administrative union.

Papua
On November 6, 1884, a British protectorate was proclaimed over the southern coast of New Guinea (the area called Papua) and its adjacent islands. The protectorate, called British New Guinea, was annexed outright on September 4, 1888. The possession was placed under the authority of the Commonwealth of Australia in 1902. Following the passage of the Papua Act of 1905, British New Guinea became the Territory of Papua, and formal Australian administration began in 1906. Papua was administered under the Papua Act until it was invaded by the Japanese in 1941, and civil administration suspended. During the war, Papua was governed by a military administration from Port Moresby, where Gen. Douglas MacArthur occasionally made his headquarters. As noted, it was later joined in an administrative union with New Guinea during 1945-46 following the surrender of Japan.

Postwar Developments
The Papua and New Guinea Act of 1949 formally approved the placing of New Guinea under the international trusteeship system and confirmed the administrative union of New Guinea and Papua under the title of "The Territory of Papua and New Guinea." The act provided for a Legislative Council (established in 1951), a judicial organization, a public service, and a system of local government. A House of Assembly replaced the Legislative Council in 1963, and the first House of Assembly opened on June 8, 1964. In 1972, the name of the territory was changed to Papua New Guinea.

Elections in 1972 resulted in the formation of a ministry headed by Chief Minister Michael Somare, who pledged to lead the country to self-government and then to independence. Papua New Guinea became self-governing in December 1973 and achieved independence on September 16, 1975. The 1977 national elections confirmed Michael Somare as prime minister at the head of a coalition led by the Pangu Party. However, his government lost a vote of confidence in 1980 and was replaced by a new cabinet headed by Sir Julius Chan as prime minister. The 1982 elections increased Pangu's plurality, and parliament again chose Somare as prime minister. In November 1985, the Somare government lost a vote of no confidence, and the parliamentary majority elected Paias Wingti, at the head of a five-party coalition, as prime minister. A coalition, headed by Wingti, was victorious in very close elections in July 1987. In July 1988, a no-confidence vote toppled Wingti and brought to power Rabbie Namaliu, who a few weeks earlier had replaced Somare as leader of the Pangu Party.

Such reversals of fortune and a revolving-door succession of prime ministers continue to characterize Papua New Guinea's national politics. A plethora of political parties, coalition governments, shifting party loyalties and motions of no confidence in the leadership all lend an air of instability to political proceedings. Under legislation intended to enhance stability, new governments remain immune from no-confidence votes for the first 18 months of their incumbency.

Papau New Guinea is rich in natural resources, including minerals, timber, and fish, and produces a variety of commercial agricultural products. The economy generally can be separated into subsistence and market sectors, although the distinction is blurred by smallholder cash cropping of coffee, cocoa, and copra. About 75% of the country's population relies primarily on the subsistence economy. The minerals, timber, and fish sectors are dominated by foreign investors. Manufacturing is limited, and the formal labor sector consequently also is limited.

Mineral Resources
In 1999 mineral production accounted for 26.3% of GDP. Government revenues and foreign exchange earning depend heavily on mineral exports. Indigenous landowners in areas affected by minerals projects also receive royalties from those operations. Papua New Guinea is richly endowed with gold, copper, oil, natural gas, and other minerals. Copper and gold mines are currently in production at Progera, Ok Tedi, Misima, and Lihir. New nickel, copper and gold projects have been identified and are awaiting a rise in commodity prices to begin development. A consortium led by Chevron is producing and exporting oil from the Southern Highlands Province of Papua New Guinea. In 2001, it expects to begin the commercialization of the country's estimated 22.5 trillion cubic feet of natural gas reserves through the construction of a gas pipeline from Papua New Guinea to Queensland, Australia.

Agriculture, Timber, and Fish
Papua New Guinea also produces and exports valuable 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. The timber industry was not active in 1998, due to low world prices, but rebounded in 1999. About 40% of the country is covered with exploitable trees, and a domestic woodworking industry has been slow to develop. Fish exports are confined primarily to shrimp. Fishing boats of other nations catch tuna in Papua New Guinea waters under license.

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. Smallscale 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.

Trade and Investment
Australia, Singapore, and Japan are the principal exporters to Papua New Guinea. Petroleum and mining machinery and aircraft are perennially the strongest U.S. exports to Papua New Guinea. In 1999, as mineral exploration and new minerals investments declined, so did U.S. exports. Australia is Papua New Guinea's most important export market, followed by Japan and the European Union. Crude oil is the largest U.S. import from Papua New Guinea, followed by gold, cocoa, coffee, and copper ore.

U.S. companies are active in developing Papua New Guinea's mining and petroleum sectors. Chevron operates the Kutubu and Gobe oil projects and is developing its natural gas reserves. A 30,000-40,000 barrel-per-day oil refinery project in which there is an American interest also is under development in Port Moresby.

Papua New Guinea became a participating economy in the Asia-Pacific Economic Cooperation (APEC) Forum in 1993. It joined the World Trade Organization (WTO) in 1996.

Development Programs and Aid
Australia is the largest bilateral aid donor to Papua New Guinea, offering about $200 million a year in assistance. Budgetary support, which has been provided in decreasing amounts since independence, was phased out in 2000, with aid concentrated on project development. Other major sources of aid to Papua New Guinea are Japan, the European Union, the People's Republic of China, the Republic of China, the United Nations, the Asian Development Bank, the International Monetary Fund, and the World Bank. Volunteers from a number of countries, including the United States, and mission church workers also provide education, health, and development assistance throughout the country.

Current Economic Conditions
By mid-1999, Papua New Guinea's economy was in crisis. Although its agricultural sector had recovered from the 1997 drought and timber prices were rising as most Asian economies recovered from their 1998 slump, Papua New Guinea's foreign currency earnings suffered from low world mineral and petroleum prices. Estimates of minerals in exploration expenditure in 1999 were one-third of what was spent in 1997. The resulting lower foreign exchange earnings, capital flight, and general government mismanagement resulted in a precipitous drop in the value of Papua New Guinea's currency, the kina, leading to a dangerous decrease in foreign currency reserves. The kina has floated since 1994. Economic activity decreased in most sectors; imports of all kinds shrunk; and inflation, which had been over 21% in 1998, slowed to an estimated annual rate of 8% in 1999.

Citing the previous government's failure to successfully negotiate acceptable commercial loans or bond sales to cover its budget deficit, the government formed in July 1999 successfully requested emergency assistance from the International Monetary Fund and the World Bank. With assistance from the Fund and the Bank, the government has made considerable progress toward macroeconomic stabilization and economic reform.