Papua New Guinea

Last Updated on Monday, 7 February 2011 11:40

{accordion mode=”manually” select=”1″ event=”click” animated=”slide” theme=”overcast” autoheight=”false”} Geography ::

Total land area 462,000km2 [1]
Exclusive economic zone (EEZ) area 3.1m2 [1]

|||| People ::

Resident population (2008 estimate) 6,468,405 [2]
2015 forecast 7,490,303 [2]
Average annual growth rate 2004-10 2.4% [3]
Population density 2008 14/km2
Women in parliament 1
Human Development Index – HDI score (estimate) 0.541[6]

|||| Government ::

Papua New Guinea has a long and prescriptive Constitution, provision for a number of constitutionally mandated bodies and office-holders, and a large number of entrenched Organic Laws. Organic Laws can only be amended by successive special majority votes of Parliament. Many legal practices and structures have been inherited from Australia, though many have been simplified and PNG is adapting many practices to its own context. The judicial arm is considered to be the best performing constitutional organ. It has developed a solid body of jurisprudence and demonstrated a good degree of independence, though it faces administrative and case management challenges. The legal framework has to be placed within context. The indigenous population of Papua New Guinea is one of the most heterogeneous in the world. PNG has several thousand distinct communities, most with only a few hundred people, divided by language, customs, and tradition, and some of these communities have engaged in low-scale tribal conflict with their neighbours for millennia. As a result, enforcing a formal legal framework at the sub- national or rural level represents an extreme challenge to the authorities. The Independent State of Papua New Guinea (PNG) is a constitutional monarchy with a Westminster-style parliamentary democracy political system. There is a unicameral national parliament that has 109 seats, of which 20 are occupied by the governors of the 19 provinces and the National Capital District (NCD). Members of parliament are elected by the people every five years. Electoral reforms in 2001 introduced a limited preferential vote system (LPV). The 2007 general election was the first to be conducted using LPV. Papua New Guinea gained independence from Australia on 16 September 1975.

Head of State Her Majesty Queen Elizabeth II represented by His Excellency Sir Paulias Matane, Governor General (since 29 June 2004). The Governor General is appointed by the monarch on the advice of parliament for a six year term.
Head of Government Prime Minister The Rt Hon Grand Chief Sir Michael Somare (since 5 August 2002 – reelected 13 August 2007). Sir Michael was also the country’s first prime minister. The prime minister is elected by a majority vote in the parliament for a term of five years.
Executive The executive consists of the president as chief executive and the vice president, a council of chiefs and a cabinet of ministers. The Council of Chiefs is composed of one traditional leader from each of the republic’s states. Cabinet ministers are appointed by the president with the advice and consent of the Senate. The vice president serves as one of the ministers. The ministries include: – Ministry of Finance – Ministry of Community & Cultural Affairs – Ministry of Education – Ministry of Health – Ministry of Justice – Ministry of Public Infrastructure, Industries and Commerce – Ministry of State – Ministry of Natural Resources, Environment and Tourism
Civil Services The prime minister, elected by parliamentary vote, chooses the other members of the National Executive Council (NEC), which is PNG’s Cabinet. In practice the NEC dominates much of the decision-making and policy formulation.. Each ministry is headed by a cabinet member, who is assisted by a permanent secretary, a career public servant, who directs the staff of the ministry. Most secretaries and deputy secretaries are acting and therefore can be easily replaced. The capacity of the public sector to deliver quality public services remains limited. Since the late 1980s there have been at least four attempts to down size or ‘right-size’ the civil service; however, this has proven a difficult challenge at both the national and sub national level levels of government. The result has been low productivity and low levels of performance management as a few key officers undertake many of the jobs with the greatest level of responsibility. This also leads to a level ofdiscontinuity in policy design and implementation rendering capacity development largely unsustainable. Ageing workforce is a serious issue, especially in provinces, and limited intergenerational transfer of core public service skills is a concern. Most ministries, agencies and provinces have human resource management units to oversee personnel administration. There is an Institute for Public Administration, which has the mandate to train public servants, and there are plans to develop a School of Good Government and Administration with the Divine Word University.
Local Government Power struggles have been ever present between national and provincial politicians, largely over the control of revenue flows and the competition for recognition as leaders from among people in the rural areas. Reforms in the mid 1990s through the Organic Law on Provincial Governments and Local-Level Governments (OLPGLLG) brought about a system of 19 provinces and National Capital District, with the Autonomous Region of Bougainville sitting outside this system. There are 294 local level governments, which are an administrative unit of a provincial government – they do not form a separate level of government. Provincial assemblies consist of the regional member of the national parliament (who usually assumes the position of provincial governor), open members of the national parliament, local-level government presidents and some appointed members. The OLPGLLG system essentially shifted some power back towards the national level given the governors are also national parliamentarians. This means that there are expectation for provinces to follow national priorities, although the OLPLLG also promotes the concept of bottom-up planning that promotes local priorities. Service delivery in PNG operates in a decentralized system. The national government has only a minimal service delivery presence in provinces, outside the law and justice sector where it is responsible for police, courts and prison services. Responsibility for majority of social services rests with provincial governments. The provincial government system was reaffirmed as part of the Vision 2050 exercise.
Judiciary Papua New Guinea’s judiciary is independent of the government. It protects constitutional rights and interprets the laws. There are several levels, culminating in the Supreme Court of Papua New Guinea. The court system consists of the Supreme Court and the National Court. The Supreme Court is the highest, and decisions made by the panel of three or five judges are final. It has the jurisdiction to hear appeals and review decisions made by the National Court, give opinion or advice on whether a proposed parliamentary law is constitutional, develop rules of underlying law and enforce human rights. In the National Court decisions are made by one judge. The National Court unlimited jurisdiction and handles most legal cases. The Supreme Court Chief Justice and Chief Justice of the National Court are appointed by the Governor General on the proposal of the National Executive Council after consultation with the Minister responsible for justice. Other justices of the National Court, who are available to sit as members of ad hoc benches of the Supreme Court, are appointed by the Judicial and Legal Services Commission.
International Organisations ACP, APEC, AsDB, ASEAN (observer), C, CP, ESCAP, FAO, G-77, IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, Intelsat, IFRCS, IMO, ICRM, Interpol, IOC, IOM (observer), ISO (correspondent), ITU, NAM, OPCW, SPF, Sparteca, SPC, UNCTAD, UNESCO, UNIDO, UN, UPU, WFTU, WHO, WIPO, WMO, WTrO.

|||| National Strategy and Goals ::

The Papua New Guinea Vision 2050 is a forty-year strategy for the human, economic, institutional, environmental and community development for the nation. Supporting this is Papua New Guinea Development Strategic Plan 2010-2030 (DSP). The interaction between the DSP and Vision 2050 is not yet clear, though the DSP introduces more specific economic and public policies and sector interventions. A further series of 5 year Medium Term Development Strategies (MTDS) lay beneath the Vision 2050 and the DSP. The intention is for overarching longer term plans to cascade-down into a series of detailed implementation plans. The major 5 year plan presently is the MTDS 2005-2010 and the Medium Term Expenditure Framework , which provide a framework to guide the government’s development expenditure and serves as a guide for resource allocation and mobilisation. The strategy is based on export-driven growth, rural development and poverty reduction by means of promoting good governance and promoting key industries in which PNG has a comparative advantage on a sustainable basis. The MTDS identifies seven expenditure priority areas (EPAs) to guide public expenditure: Transport rehabilitation and maintenance; promotion of income earning opportunities; primary and preventive health; basic education; HIV/AIDS prevention; law and justice; and development oriented adult education. The government has decided on a balanced budget for 2010 to provide a stable macroeconomic and fiscal environment. The main over arching frameworks for financial management are the Medium Term Fiscal Strategy, Medium Term Debt Strategy, the Medium Term Development Strategy, the Public Finances (Management) Act 1995 and the Fiscal Responsibility Act 2006. Despite these extensive planning documents, and also the development of medium term expenditure frameworks in a number of sectors, there is not always a link between the higher level plans and the sector level national budgets. Similarly, plans are very rarely are linked to budgets at the provincial level. Program budgeting has also been introduced in the past few years. Like many other jurisdictions this has occurred in a piece-meal fashion such that in some agencies of government, programs are still organisational units. PNG has a ‘split-system’ of budgeting where ‘development’ expenditure of a ‘project’ or capital nature is budgeted separately from recurrent spending. Much of the development budget is controlled through Department of National Planning and Monitoring while Treasury manages the recurrent and national salary budget. However, some revenues are practically-speaking ‘off-budget’ and/or outside the reach of macroeconomic policy, such as flows from resource projects, state- business enterprises or old unspent monies from Trust Accounts. The overall credibility of the budget can vary. Provincial governments budget a mixture of national Function Grants tied to a number of service delivery sectors and partly to a range of ‘Minimum Priority Activities’, and unconditional internal revenue (largely resource rent and GST receipts). A limited number of provinces have significant internal revenue but most do not receive sufficient national government recurrent transfers to meet service delivery costs. Provincial and District Treasuries are outposts of the national Department of Finance and form the main control over provincial expenditure. Provinces report quarterly to national level on financial performance. The second quarter is a key report.

Medium Term Resource Framework[7]

The Medium Term Resource Framework (MTRF) is an expenditure tool to ensure that the Budget is aligned to the Medium Term Development Strategy (MTDS) 2005-2010 Expenditure Priority Areas (EPAs), that the sequencing principle is followed and that development partners funds are matched to Government’s priorities, and therefore to its own allocation pattern. The MTRF assists the Government in achieving and managing an increased allocation of development expenditure towards the country’s greatest priority needs by modelling the shape of future annual budgets and generating parameters which guide how appropriations can be best used.

The MTRF produces two important outputs:

  • Funding Gaps, which provide a guide for the use of unallocated expenditure, based on a comparison of known future commitments to each EPA and the optimal affordable allocation to that EPA. These funding gaps refer to the total resource envelope – both GoPNG and donor – indicating the level of development expenditure that can be harnessed if GoPNG effectively coordinates all available funding. These funding gaps can assist donor expenditure planning (including the negotiation of new Country Strategies), improve coordination between different funding parties and serve as an early warning system for funding shortfalls.
  • Indicative Sector Ceilings, which set parameters for the optimal allocation of GoPNG’s direct financing component of the Development Budget. Adherence to these parameters ensures that GoPNG meets its own target for the alignment of the Development Budget with the MTDS. Furthermore, the application of these ceilings provides a deliberate and rational shape to GoPNG spending patterns, avoiding a situation where individual items are deliberately funded but the overall picture is accidental or certain priority areas are neglected.
  • When the resource envelope is known in advance, the MTRF and its two outputs can play a valuable role in enhancing the quality of Development Budget appropriations. In 2010 efforts will be made to further integrate the central expenditure planning systems of the Recurrent and Development Budget to enable key service delivery agencies to better plan their sector expenditure.

|||| Economy ::

GNI per person 2007 (Atlas method) 850 [2]
GDP current 2009 estimate US$8.28b [4]
GDP per capita 2009 estimate US$1,294 [4]

Labour market – Formal sector (2000)

Number of employees 2,344,734 [5]
% of workforce
% Female 48% [5]
% Public sector
% Private sector

An evaluation by the International Monetary Fund (IMF) in late 2008 found that a combination of prudent fiscal and monetary policies, and high global prices for mineral commodity exports, have underpinned Papua New Guinea’s recent buoyant public revenues, economic growth and macroeconomic stability. Previous budget surpluses and continued demand for Papua New Guinea’s commodities exports meant the global financial crisis had relatively little impact on the health of the economy. The country is richly endowed with natural resources (including gold, copper, oil, natural gas and other minerals) however extraction is difficult due to the rugged terrain and the high cost of developing infrastructure. PNG’s poor prioritisation of institution building and service delivery in budgets, low efficiencies within public institutions, and weak expenditure management means these public revenue have not moved PNG from being low income country with low social and economic indicators. Fortunately, environmental conditions and local skills means agriculture is able to provide a subsistence livelihood for 85% of the population, and because food and bush housing can be easy to come by, many Papua New Guineans see themselves as less poverty-stricken than other developing countries where large portions of population depend on cash economy. The economy generally can be separated into informal (subsistence) and formal (market) sectors. Smallholder cash cropping of coffee, cocoa, and copra are the main entry into the formal economy. The minerals, timber, and fish sectors are dominated by foreign investors. Manufacturing is limited, and consequently the formal labour sector also is limited. There are clear supply- side constraints in private sector in provision of infrastructure and general construction. Mineral deposits, including copper, gold, and oil, account for nearly two-thirds of export earnings. Much of the medium term economic growth of the country is predicated on the exploitation of the estimated 227 billion cubic meters of natural gas reserves via the construction of a liquefied natural gas (LNG) production facility (expected to begin exporting in 2013 /14). Given the little positive impact seen from increased resource revenues of the last decade, the government faces international and domestic pressures to ensure transparency and accountability for the revenues flowing from the LNG and other large projects.

|||| Traditional Government ::

Significant number of Papua New Guineans have little contact with the state outside the realms of basic education and health and village court officials. The state has performed poorly as a provider of services, and has failed to play an active role in rural development. This reflects not just the high unit costs of service delivery, but also the absence of effective institutional structures. In the absence of the state, traditional and informal institutions, including chiefs, churches and a range of modern non- governmental and community based organisations, continue to try and provide basic governance functions and services at the village level, though their coverage of PNG is not complete. The feudal nature of some of the rural areas mean that even established churches and NGOs face difficulty in terms of service delivery. However, changing expectations among the rural population, greater mobility, access to information and the spread of the formal economy are placing increasing strains on local and traditional institutions. There is a major gap between the state institutions, concentrated in the urban areas, and the informal and traditional institutions that govern village life. This is regarded as being one of the key elements to the limited development success at the village level.


|||| Communications ::

The Press is mainly foreign owned with government operating radio broadcasters.

Telephone Telikom PNG Ltd is a public telecommunications network operator and service provider that is 100% owned by government. Telikom PNG Ltd which was established in January 1997 has been given exclusive rights to provide all telecommunications services including value-added services until the year 2002. Mobile services is provided by Pacific Mobile Communications which is a wholly owned subsidiary of Telikom PNG Ltd.
Internet 5,940,775 users as of September 2010 [7]. 31,860 Facebook users (0.54% population) [8].
Newspapers The National and The Post-Courier are two foreign-owned daily newspapers.
Television Television coverage (EMT, a commercial station and the National Television Service) is limited mainly to Port Moresby and the provincial capitals.
Radio The government operates a national radio station and a network of provincial stations. BBC World Service and Radio Australia are available on FM.

|||| Military and Police ::

Papua New Guinea has a national police force (Royal PNG Constabulary – RPNGC) and a small military force (the Papua New Guinea Defence Force), which includes elements for maritime and air operations. In addition there are a significant number of private security firms that are engaged mainly by the private sector for the protection of assets and physical security. Anecdotal evidence suggests that private security forces outnumber the police and military mainly due to the aging RPNGC population and police cross-overs to the private sector. At a rural level, security is seen as a village responsibility. Due to the nature of the complex tribal structures, villagers often see justice and retribution as their responsibility and this can lead to conflicts both internally and with the state. The right to exercise retribution or seek compensation can be claimed by entire clan groups, even in cases where crimes involve small numbers of individuals.

|||| Donor Support ::

The Government of Papua New Guinea has been gradually reducing its reliance in aid ever since independence. The recent increase in resource rents has accelerated this, nevertheless external aid investment remains significant. Australia is the largest donor partner and key aspects of the relationship are encompassed in a number of formal bilateral arrangements. The umbrella agreement is the Joint Declaration of Principles of 1987, revised in 1992. Other major sources of aid to Papua New Guinea are Japan, the European Union, China, the United States, the United Nations, the Asian Development Bank, the International Monetary Fund and the World Bank. Papua New Guinea is by far the largest Pacific island nation and has traditionally viewed itself as part of the Pacific. However, in recent years it has also been cultivating stronger relations with Asian nations. Papua New Guinea has diplomatic relations with 56 countries.



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