A COUNTRY REPORT OF PAPUA NEW GUINEA

Roy C. Gacus
 Papua New Guinea is an island nation in the south-western Pacific. It encompasses New
Guinea's eastern half as well as several small offshore islands. Indonesia in the west, Australia in south,
and the Solomon Islands facing south-east are its neighbors. The population of Papua New Guinea,
which numbers eight million people, is growing and increasing. Its clear economic growth trend and ample
resource capacity provide a solid foundation for expanded economic engagement with Asia and beyond.
Natural resources exist in Papua New Guinea, but their extraction has been hindered by the country's
rough terrain, land tenure concerns, and the high cost of building infrastructure. Thus, economic growth
slowed and the government's fiscal problems have worsened during the time under review, though there
appears to have been some improvement in 2018. Thus, Papua New Guinea has grown rapidly
throughout the last decade as a result of its thriving extractive industries.

According to International Monetary Fund (IMF) forecasts, the economy will rebound in 2019 and
hit 5% of GDP, bolstered by more large-scale projects. Through the state ownership and control, the
government intervenes in several areas of the economy. To ensure debt sustainability and maintain
external balances, the IMF has emphasized the need for more prudent macro-economic policies. Papua
New Guinea's large hydrocarbon and mineral resources provides a valuable base for economic
development, but it also makes the state vulnerable to global commodity market fluctuations.

Political Economy

Formal and customary governance parties, systems, and institutions, as well as poor governance
and corruption, characterize Papua New Guinea's political economy. Traditional institutions and systems
such as ‘big man' politics, the wantok system, and customary land tenure have been replaced by formal
governance structures such as state, regional, and local governments, with administration situated at
certain three levels as well as at the local level. Furthermore, once this pattern of conduct among
politicians becomes established, it is likely to spread across the public sector, with bureaucrats preferring
their wantoks in the provision of services or demanding special favors from those to whom services are
given. Such factors account for a large part of the rising rivalry for political office.

There is a lot of political meddling in the administration's operations, and there is a range of
alleged corruption. Formal actors, such as the state parliament and political groups, are ineffective.
Despite the restraining pressures of the Leadership Code and the Ombudsman Commission, corruption
has become pervasive in Papua New Guinea throughout the last generation or so. The political structure
of Papua New Guinea is characterized by decentralization, with responsibility for service delivery
devolved to regional and local levels. Decentralization has raised concerns about increased state
intervention in service delivery.

As a response, the government has been promoting a long-term economic development plan that
seek to maximize the state's revenue share from favorable extractive ventures, foster economic
prosperity, and reach prospective investments in sectors deemed to have significant potential, such as
agriculture. The inability of previous administrations to easily integrate with an emerging fiscal
crisis represents more structural factors in the political economy of Papua New Guinea.

Political System

The nation is a constitutional parliamentary democracy and a Commonwealth realm, with the
queen of the United Kingdom as the chief of state and the prime minister as the head of state. The
constitution protects local government. A governor-general constitutes the head of state. The governor-
general can only serve two six-year terms and is primarily elected by the members of parliament with a
majority vote for the first term, but a two-thirds majority for the subsequent.

According to Commonwealth Local Government Forum, there are 22 provinces, the capital city
area of Port Moresby, the Bougainville autonomous area, and 89 districts in the country. Local
governments are also identified as local-level governments (LLGs). There are 296 local governments in
total, with 31 urban LLGs and 265 rural LLGs.

The Ministry of Inter-Governmental Relations' Department of Provincial and Local Government

Affairs (DPLGA) is accountable for the management relating to local government. Local governments
have the authority to levy a variety of local taxes and fees. Government payments are made to
compensate employee wages as well as specific construction programs.To diversify the country's
revenue sources and open new jobs for the increase of employment, funds must be invested in
institutions, human resources, and physical infrastructure such as electricity, telecommunications, roads,
and other modes of transportation, all of which are critical to supporting private-sector-led development.

Economic System

Papua New Guinea's economy is largely underdeveloped. Agriculture, forestry, and fishing, as
well as minerals and energy production, dominate the market. The agriculture, forestry, and fishing
sectors employ the majority of Papua New Guinea's workforce, while the minerals and energy extraction
sector generates the majority of the country's export revenue. While most of the population relies on
subsistence farming, Papua New Guinea has a mixed economy, with government monopolies in some
sectors due to a complete lack of a market economy. Manufacturing is restricted, and as a result, the
formal labor market is also limited. Although the majority of the national agricultural and resource-based
exports are authorized and unrestricted in terms of quantity and price, logs and fish are subject to
harvesting limits for sustainable management.

Papua New Guinea is a member of multilateral trade relationships and globalization. It is also a
recipient of the Generalized System of Preferences (GSP), which is provided by 27 developed and
transitional economies. Despite its small share of global trade, trade plays an essential part in
nation's economy because the country is relatively open to international trade and has export potential for
a wide range of products as part of its economic diversification and growth strategy.

Legal System

Regarding in their legal system, it is based on English common law. The Supreme Court is the
highest judicial body and final court of appeal in the United States. The National Court, federal courts,
which deal with summary and non-indictable offences, and state courts, which deal with minor offenses
and matters governed by local customs, are the other courts. The government of Papua New Guinea has
begun a judicial reform process in which village courts have been established to uphold and reactivate
traditional conventional avenues. Land titles and proceedings involving juveniles are handled by special
tribunals. Land ownership has generally been guided by customary customs and passed down through
the centuries of customary land rights.

The Capital Markets Act, which took effect on December 15, 2017, significantly amended and
updated the regulation of capital markets in Papua New Guinea. The Securities Commission Act 2015
and the Central Depositories Act 2015 are both part of a set of securities-law-related regulations that
includes the Capital Markets Act.
 The National Procurement Act of 2018 (NPA) repeals the Central Supply and Tenders Board and
replaces it with the National Procurement Commission (NPC). The new law also changes contracting
thresholds and grants exclusive rights to local businesses to bid on state contracts worth less than
PGK10 million.

Property Rights

Patents, trade marks, and prototypes are registered by the Intellectual Property Office of Papua
New Guinea (IPOPNG). All applications must currently be sent to the IPOPNG office in Port Moresby.
IPOPNG is working on developing an online registry. The electronic register, once completed, will allow
for not only e - filing but also trade mark and patent searches.

The Investment Promotion Authority, through the Papua New Guinea Intellectual Property Office,
assures that while promoting investment in an involved in the development setting, the sovereign interests
of Papua New Guinea and its people are secured, as well as the interests of the investor or developer of
intellectual property.

Moreover, modifying multilateral review process will have a direct and indirect impact on
international trade and its trading partners in sectors such as manufacturing and agricultural subsidies
(including fisheries subsidies), trade in services, intellectual property rights, and potential competition
policy, investment policies, government procurement, and economic cooperation.

In conclusion, the information helps to assess and identify national environment. As we

progressed in the contemporary world, we must be literate on the current standing of one country. The
country has been absorbed into the global economy. But that has had mixed results for the nation, which
is still struggling to formulate policies that work to its advantage. This will give focus to countries like
Papua New Guinea who is until today are struggling for economic development.