The Papua New Guinea economy grew by 4 per cent in 2019 driven by commodity exports, agriculture and logging. Government expenditure prioritized free primary healthcare, infrastructure projects, and the Provincial and District Services Improvement Program.
Despite socioeconomic challenges including high rates of unemployment, especially among young people, lack of educational opportunities, underrepresentation of women in governance and decision-making, violence against women and girls, malnutrition and limited access to improved water sources, life expectancy continues to increase in PNG. Digital economic innovative intervention, and information and communication technologies (ICTs), also gained momentum in several government sectors. Furthermore, the Bougainville Referendum Commission conducted a peaceful, violence-free referendum.
PNG, a lower-middle-income country ranked 155 out of 187 countries in the 2019 Human Development Index, is the only Pacific country in the low human development band of the Index. Population statistics indicate that 52 per cent of the population is below 24 years and 85 per cent of the population lives in rural areas.1 The country faces a number of challenges in translating economic growth into inclusive, sustainable human development, including chronic youth un- and underemployment, which remained unchanged at 2.40 per cent in 2019,2 as well as low absorption of school leavers into the formal employment sector.
Opportunities for formal tertiary education are minimal, and opportunities for paid untrained workers even more limited. Unemployment is felt, not only among the youth, but throughout the abled population. It is a substantial contributing factor to the challenge of law and order, to the continued, and indeed increasing, levels of crime and violence, and high costs of security protection. Uncertain economic conditions and rising fiscal pressure affect the country and contribute to the breakdown in the rule of law in both highland and coastal provinces. In all, there is an imperative for peace and greater social cohesion throughout the country.
The complex challenges and exciting opportunities PNG witnessed in 2019 included the change in National Government, a referendum on the political future of the Autonomous Region of Bougainville, two budgets, a cabinet reshuffle, and new infrastructure such as the Coral Sea Cable communications system. A vote of no confidence in the O’Neil government in early May ultimately led to a change in Prime Minister in late May. On 7 June, the new Prime Minister, James Marape, swore in a full cabinet. Significant reshuffling followed in mid-November. Years of deflated economic and social progress, including political will, have put a considerable constraint on the progress of the new Government’s focus and other development work.
The new Government expressed its commitment to improving the quality of life for Papua New Guinean citizens by addressing health, education, and law and order. The Government proposed to grow the economy through investing in the skills, business and employment opportunities that would unlock the country’s potential, promote economic development outside of Port Moresby, and clamp down on corruption.
The Government set out to increase the country’s internal revenue by 50 per cent, from a PGK10 billion a year on-average internal revenue.