Papua New Guinea

Phone Code: 00675

Root-level Domain Code: .pg

CIA Info

Background: The eastern half of the island of New Guinea - second largest in the world - was divided between Germany (north) and the UK (south) in 1885. The latter area was transferred to Australia in 1902, which occupied the northern portion during World War I and continued to administer the combined areas until independence in 1975. A nine-year secessionist revolt on the island of Bougainville ended in 1997 after claiming some 20,000 lives.

Economy Overview: Papua New Guinea is richly endowed with natural resources, but exploitation has been hampered by rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for 85% of the population. Mineral deposits, including oil, copper, and gold, account for nearly two-thirds of export earnings. The government of Prime Minister SOMARE has expended much of its energy remaining in power and should be the first government in decades to serve a full five-year term. The government also brought stability to the national budget, largely through expenditure control, however, it has relaxed spending constraints in 2006 and 2007 as elections approach. Numerous challenges still face the government including regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and balancing relations with Australia, the former colonial ruler. Other socio-cultural challenges could upend the economy including a worsening HIV/Aids epidemic and chronic law and order and land tenure issues. Australia annually supplies $240 million in aid, which accounts for nearly 20% of the national budget.

Geography Note: shares island of New Guinea with Indonesia; one of world's largest swamps along southwest coast

Location: Oceania, group of islands including the eastern half of the island of New Guinea between the Coral Sea and the South Pacific Ocean, east of Indonesia

Natural Resources: gold, copper, silver, natural gas, timber, oil, fisheries

Geographic Coordinates: 6 00 S, 147 00 E

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