reet, Port Moresby
mailing address: P. O. Box 1492, Port Moresby
telephone: [675] 321-1455
FAX: [675] 321-3423

Flag: divided diagonally from upper hoist-side corner; the upper
triangle is red with a soaring yellow bird of paradise centered; the
lower triangle is black with five white five-pointed stars of the
Southern Cross constellation centered

Economy
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Economic overview: Papua New Guinea is richly endowed with natural
resources, but exploitation has been hampered by the rugged terrain
and the high cost of developing an infrastructure. Agriculture
provides a subsistence livelihood for the bulk of the population.
Mining of numerous deposits, including copper and gold, accounts for
about 60% of export earnings. Budgetary support from Australia and
development aid under World Bank auspices have helped sustain the
economy. In 1995, Port Moresby reached agreement with the IMF and
World Bank on a structural adjustment program. PNG will receive
loans totaling $350 million over the next two years from a variety
of lenders including the Fund, the Bank, the Australian Government,
and the Japanese Export-Import Bank. The loans will be provided only
if Port Moresby implements significant reforms to liberalize trade
and investment policies, reduce the public sector, and promote
sustainable development of the forestry sector. At the start of
1996, Port Moresby is looking primarily to the exploitation of
mineral and petroleum resources to drive economic development but
new prospecting in Papua New Guinea has slumped as other
mineral-rich countries have stepped up their competition for
international investment. Output from current projects will probably
begin to taper off in 1996, but no new large ventures are being
developed to succeed them.

GDP: purchasing power parity - $10.2 billion (1995 est.)

GDP real growth rate: -3% (1995 est.)

GDP per capita: $2,400 (1995 est.)

GDP composition by sector:
agriculture: NA%
industry: NA%
services: NA%

Inflation rate (consumer prices): 15% (1995)

Labor force: 1.941 million
by occupation: agriculture 64% (1993 est.)

Unemployment rate: NA%

Budget:
revenues: $1.86 billion
expenditures: $1.9 billion, including capital expenditures of $NA
(1995 est.)

Industries: copra crushing, palm oil processing, plywood
production, wood chip production; mining of gold, silver, and
copper; constr