PNG lacking industrialization

1 Introduction
Despite Papua New Guinea is rich in natural resources like gold, copper, and timber, yet PNG is
one of the least developed countries in the world with a poor economy. The lack of
industrialization has been a major barrier to economic growth and development in the country.
PNG's economy is primarily based on agriculture, fisheries, and forestry, which employ a
significant small portion of the population. The country's rugged terrain and limited
infrastructure also pose significant challenges for transportation and communication, further
hindering industrial development. As a result, PNG has struggled to compete in the global
market and faces significant social, economic, and environmental challenges.

1.1 PNG Agrarian Society

Papua New Guinea is a culturally diverse country that is home to many different agrarian
societies. Agriculture is the main economic activity in Papua New Guinea, with approximately
80% of the population living in rural areas and engaged in subsistence farming.
The traditional agrarian societies of Papua New Guinea are characterized by a strong connection
to the land and a deep respect for the natural environment. Most agricultural practices in these
societies are based on traditional knowledge and techniques that have been passed down from
generation to generation.

(people choose their type of society to suit their needs)

In many Papua New Guinea agrarian societies, land is owned and managed collectively by
families or clans. The land is often used for subsistence farming, with crops such as sweet
potatoes, taro, yams, and bananas being the main sources of food. Livestock such as pigs,
chickens, and cows are also kept in some areas.
In addition to subsistence farming, some Papua New Guinea agrarian societies also engage in
cash crop production. Cash crops such as coffee, cocoa, and palm oil are grown in some areas
and provide an important source of income for farmers.

(agriculture is important to local grassroots people)

To summarize Papua New Guinea's agrarian societies, play an important role in the country's
economy.

2 PNG Industry Overview (current)

Papua New Guinea's industry is characterized by its diverse natural resources and traditional
agricultural practices. The country's economy heavily relies on the export of minerals, oil, and
gas. The mining industry is a major contributor to the economy, with gold, copper, and nickel
being the primary minerals mined. The oil and gas industry has also seen significant growth in
recent years, particularly with the development of liquefied natural gas (LNG) projects. In
addition, the agriculture sector plays a crucial role in the economy, with crops such as coffee,
cocoa, and palm oil being the primary exports. The country also has a nascent manufacturing
sector, which includes the production of processed foods, beverages, and textiles. Despite its
potential, the industry in Papua New Guinea faces challenges such as inadequate infrastructure, a
small domestic market, and high transport costs.
Here are some companies operating in Papua New Guinea categorized by industry:
Industry Company
Mining and Resources Barrick Gold Corporation
Newcrest Mining Limited
Oil Search Limited
Harmony Gold Mining Company Limited
K92 Mining Inc.
Nautilus Minerals Inc.
Agriculture and Forestry New Britain Palm Oil Limited
Ramu Agri Industries Limited
Trukai Industries Limited
Mainland Holdings Limited
Innovative Agro Industries Limited
 Energy and Utilities
Telecommunications and ICT
Retail and Consumer Goods
Construction and Engineering
Banking and Finance
(taken from the world bank page)
PNG Power Limited
ExxonMobil Corporation
TotalEnergies SE
Oil Search Limited
Energy Developments Limited
Digicel Group Limited
Telikom PNG Limited
Bmobile-Vodafone PNG Limited
PNG DataCo Limited
City Pharmacy Limited
Goodman Fielder International (PNG) Limited
Coca-Cola Amatil (PNG) Limited
New World Foods (PNG) Limited
Lae Biscuit Company Limited
Trukai Industries Limited
Monier Limited
Curtain Bros (PNG) Limited
Fletcher Morobe Constructions Limited
Bank South Pacific Limited
Westpac Bank PNG Limited
Kina Bank Limited
National Development Bank Limited
BSP Finance (PNG) Limited

3 PNG current Industries Statistics (taken from NSO and world bank
website)
Listed are some key industry statistics for Papua New Guinea:
3.1 Agriculture
Agriculture is the largest industry in Papua New Guinea and accounts for approximately 25% of
the country's GDP. The major agricultural products include coffee, cocoa, palm oil, tea, and
rubber.
3.2 Mining
The mining industry is a significant contributor to Papua New Guinea's economy, accounting for
approximately 15% of the GDP. The country has significant reserves of gold, copper, silver, and
nickel.
3.3 Petroleum and Gas
Papua New Guinea is a significant producer of petroleum and natural gas and the industry
accounts for approximately 7% of the country's GDP.
3.4 Forestry
Papua New Guinea has vast forest resources, and the forestry industry is a major contributor to
the country's economy, accounting for approximately 4% of the GDP.
3.5 Fisheries
Papua New Guinea is rich in marine resources, and the fishing industry is an important
contributor to the economy, accounting for approximately 1% of the GDP.
(taken from NSO website)

3.6 Manufacturing
Manufacturing is a relatively small industry in Papua New Guinea, accounting for approximately
5% of the GDP. The major manufacturing products include food and beverages, tobacco
products, and textiles.
3.7 Tourism
Tourism is a growing industry in Papua New Guinea, accounting for approximately 3% of the
GDP. The country has a rich cultural heritage and diverse natural attractions such as tropical
rainforests, coral reefs, and exotic wildlife.

key industries in PNG

mining
8%
2% tourism
7% 25% agriculture
petrol and gas
12% forestry
5% fisheries
manufacturing

42%

These statistics provide an overview of the key industries in Papua New Guinea and their contribution to
the country's economy
4 Negative Incentives caused by current industry level.

4.1 High level of poverty

Papua New Guinea is a country with a high level of poverty, with over one-third of its population
living below the poverty line. The poverty situation is particularly severe in rural areas where
access to basic services and economic opportunities is limited. The lack of infrastructure,
education, and healthcare services has further exacerbated the poverty situation in Papua New
Guinea. Additionally, high levels of inequality, corruption, and limited economic diversification
contribute to the perpetuation of poverty in the country. The government has implemented
various poverty alleviation programs, but these efforts have been hampered by inadequate
funding, institutional weaknesses, and political instability. Addressing poverty in Papua New
Guinea requires a comprehensive approach that addresses the root causes of poverty and
provides targeted interventions to improve the well-being of the most vulnerable populations.
4.2 High level of unemployment
Papua New Guinea has been experiencing high levels of unemployment in recent years, with the
rate hovering around 15%. The country's population is growing rapidly, and this has led to an
increase in the number of job seekers. However, the economy has not been able to keep up with
the demand for employment opportunities, leading to a high level of underemployment and
unemployment. Youth unemployment is particularly high, with young people making up a large
proportion of the job seekers. This has led to social and economic challenges, including poverty,
crime, and social unrest.

(due to high unemployment PNG has high crime rates in the world)

The government has taken steps to address the issue, including implementing policies to
encourage private sector growth and improve access to education and training. However,
significant progress is still needed to address the root causes of unemployment and create
sustainable employment opportunities for all Papua New Guineans.
4.3 PNG Vulnerable to Crisis
PNG, or the Independent State of Papua New Guinea, is a country located in the southwestern
Pacific Ocean. Like any other country, PNG is vulnerable to economic crises that may affect its
economic growth and stability. PNG's economy is heavily dependent on its natural resources,
particularly its mining and petroleum industries, which account for a significant portion of its
GDP. These industries are subject to global commodity price fluctuations, and any significant
downturn in global commodity prices can have a significant impact on PNG's economy.
Additionally, PNG faces challenges related to its infrastructure, education, and healthcare
systems, which can hinder economic growth and development. These challenges may also be
exacerbated during an economic crisis, as governments may have less funding available to
address these issues. Finally, PNG's economy is also susceptible to external factors such as
political instability, trade disputes, and natural disasters, which can have significant impacts on
its economy.

5 Reasons why PNG Needs More Industry

There are several reasons why Papua New Guinea (PNG) needs to develop more industries:
5.1 Diversification of the Economy:
PNG's economy is heavily dependent on its natural resources, particularly its mineral and oil and
gas reserves. While these industries have provided significant revenue, they are vulnerable to
fluctuations in global commodity prices and demand. Developing more industries can help
diversify the economy, reduce its dependence on resource exports, and create more stable
sources of income.

5.2 Employment Opportunities

PNG has a growing population, and there is a need to create more job opportunities for its
citizens. Developing more industries can provide employment opportunities in various sectors,
including manufacturing, agriculture, and services.
5.3 Import Substitution
PNG currently imports many goods, including food and basic consumer goods. Developing
more industries can help PNG produce these goods domestically, reducing its dependence on
imports and promoting local businesses.
5.4 Economic Growth
Developing more industries can lead to economic growth by increasing production, improving
infrastructure, and attracting foreign investment. This can lead to increased GDP, higher living
standards, and improved social welfare.
5.5 Sustainable Development
Developing industries in a sustainable way can help PNG achieve its sustainable development
goals, including reducing poverty, improving access to education and healthcare, and promoting
gender equality.
6 Challengers faced by industry in PNG
6.1 Limited infrastructure
PNG's infrastructure is underdeveloped, particularly in the areas of transportation, electricity, and
telecommunications. This lack of infrastructure makes it difficult for businesses to operate and
increases the cost of doing business.
6.2 Access to finance
Access to finance is limited, especially for small and medium-sized enterprises (SMEs). The
high cost of borrowing and limited collateral options make it difficult for businesses to secure
financing.
6.3 Weak governance
Corruption and political instability are major obstacles to investment in PNG. This uncertainty
makes it difficult for businesses to plan for the long term and undermines the rule of law.
6.4 Geographical isolation
PNG is located on the eastern half of the island of New Guinea, and is separated from Australia
by the Torres Strait. This makes transportation and trade difficult, which can limit the growth of
industries that rely on exports or imports of goods and materials.
6.5 Low levels of education and skill development:
PNG has relatively low levels of education and skill development, which can limit the ability of
its workforce to participate in more advanced industries. This can make it difficult for PNG to
attract foreign investment in higher-value industries.
6.6 Political instability
PNG has experienced political instability in the past, including periods of violence and unrest.
This can create a challenging environment for businesses, and can make investors wary of
committing resources to the country.
6.7 Dependence on natural resources
PNG has a strong resource extraction industry, including mining and logging. However, this has
meant that the country has relied heavily on exports of raw materials, rather than developing
higher-value industries that can create more jobs and generate more wealth.

7 Opportunities PNG industries have

7.1 Abundance of natural resources
PNG has vast reserves of natural resources, including minerals, oil, gas, and timber. This
presents significant opportunities for downstream processing and value addition.
7.2 Strategic location
PNG is strategically located near Asia, providing a gateway to the Pacific region. This makes it
an attractive location for businesses looking to access markets in the Asia-Pacific region.
7.3 Growing middle class
PNG's middle class is growing, presenting opportunities for businesses to tap into a new
consumer market.
7.4 Government support
The government of PNG is committed to promoting industrial development. They have
implemented policies and initiatives to support businesses, including tax incentives and
investment promotion. These are provided in the form of support for SME and establishing
Economic zones throughout the country.

8 How PNG can industrialize its economy (Industrialization Strategies)

Papua New Guinea (PNG) is a resource-rich country that has the potential to industrialize its
economy. Here are some ways PNG can industrialize its economy:
8.1 Diversify the economy
PNG can diversify its economy by developing sectors such as agriculture, fisheries, tourism, and
manufacturing. This will help reduce the country's dependence on its natural resources and create
more job opportunities.
Invest in infrastructure
PNG can invest in infrastructure, such as roads, ports, airports, and energy facilities, to improve
its connectivity with the rest of the world and attract more foreign investment.
8.2 Improve education and skills development
PNG can improve its education system to provide more skilled workers that can contribute to the
development of the economy. This can be achieved by providing more access to quality
education and vocational training.
8.3 Promote entrepreneurship
PNG can encourage entrepreneurship by providing access to financing and business support
services. This can help create new businesses and promote innovation.
8.4 Develop renewable energy
PNG has significant potential for renewable energy, including solar, wind, and hydro.
Developing renewable energy can reduce the country's reliance on imported fossil fuels and
provide more affordable and sustainable energy for industrialization.
8.5 Develop small and medium-sized enterprises (SMEs)
PNG can promote the growth of SMEs by providing business development services and access to
finance. This can help create more job opportunities and promote economic growth.
8.6 Encourage foreign investment
PNG can attract foreign investment by creating a business-friendly environment, improving
infrastructure, and providing incentives for investors.

Overall, industrializing the economy of PNG will require a coordinated effort by the
government, private sector, and civil society to create an enabling environment for economic
growth and development.

9 Papua New Guinea Industry: Government Help

There are several ways that the Papua New Guinea government can help the industry in the
country:
9.1 Investment in infrastructure
The government can invest in infrastructure development to improve the transport and
communication networks in the country. This will make it easier for businesses to transport their
goods and services across the country and to international markets.
9.2 Investment in education and training
The government can invest in education and training programs to develop a skilled workforce
that can meet the needs of the industry. This can include vocational training programs and
scholarships for students to study in relevant fields.
9.3 Regulatory reform
The government can review and reform regulations that impact businesses, such as tax laws and
import/export regulations. This can create a more favorable business environment and attract
more investment to the country.
9.4 Investment in research and development
The government can invest in research and development to support innovation and technological
advancements in the industry. This can lead to the development of new products and services, as
well as increased efficiency and productivity.

9.5 Support for small and medium-sized enterprises (SME)

The government can provide support for small and medium-sized enterprises (SMEs) by
providing funding and resources to help them grow and succeed. This can include access to
finance, training, and mentorship programs.
10 Benefits of industrializing PNG
Papua New Guinea (PNG) can benefit from industrializing in a number of ways. Here are some
potential benefits:
10.1 Economic Growth
More industry can lead to increased economic growth in the country. New industries create jobs
and income for Papua New Guineans, which can boost consumer spending and stimulate demand
for goods and services.
10.2 Diversification of Economy
PNG has a heavy reliance on the extractive industries, such as mining and oil and gas. More
industry can help to diversify the economy and reduce the country's dependence on these
industries. Diversification can also help to reduce the impact of global commodity price
fluctuations on the country's economy.
10.3 Increased Government Revenue
More industry can lead to increased tax revenue for the government, which can be used to fund
social services and infrastructure development.
10.4 Technology Transfer
The development of new industries can lead to the transfer of technology and knowledge into the
country. This can help to develop local capacity and skills and create new opportunities for
Papua New Guineans.
10.5 Improved Trade Balance
More industry can lead to the development of export-oriented industries, which can improve the
country's trade balance and reduce its reliance on imports.
10.6 Regional Development
Industry can also help to promote regional development in Papua New Guinea. Development of
industries in rural areas can create jobs and opportunities for local communities, and can help to
reduce urban migration.

11 conclusion
In conclusion, the lack of industrialization in Papua New Guinea has negative effects on the
country's development. On one hand, the absence of large-scale manufacturing and industrial
activities has allowed PNG to preserve its unique cultural heritage and natural environment. On
the other hand, this has also resulted in limited economic growth and development, high rates of
poverty and unemployment, and inadequate infrastructure. The government of Papua New
Guinea needs to promote economic growth through sustainable industrialization. This can be
achieved by investing in education, infrastructure, and technological innovation Ultimately, it is
up to the people of PNG and their leaders to determine the best path forward for the country's
future.

12 Recommendation
Papua New Guinea is some country rich in natural resources and cultural diversity, yet it lacks
industrialization, which is essential for economic growth and development. One of the main
challenges for Papua New Guinea is to leverage its natural resources to promote sustainable
development without causing environmental degradation. Therefore, it is recommended that the
government focuses on attracting foreign investments in key sectors such as agriculture, forestry,
fisheries, and tourism. This can be achieved by creating a business-friendly environment,
improving infrastructure, and offering tax incentives. Additionally, the government should invest
in education and training to provide the local workforce with the necessary skills to work in
modern industries. By promoting sustainable industrialization, Papua New Guinea can achieve
economic growth and development while preserving its natural environment and cultural
heritage.
13 Works Cited
creech, h. (2015). university of melboune. Retrieved from university of melboune library guides:
http://unimelb.libguides.com/png

Kera, M. (2023, 5 23). National statistics office/PNG. Retrieved from NSO.gov: http://www.nso.ac.gov.pg

Megan, D. (2023, 4 20). wikipedia. Retrieved from wikepedia.com: http://www.wikipedia.com

Norman, J. (2023, 4 20). world bank organization. Retrieved from worldbank.org:

http://www.worldbank,org.pg