Papua New Guinea (PNG) has a population of approximately 7.3 million. The PNG mainland and its six hundred islands have a total area of 463,000 square kilometres. Most people living in PNG are Melanesian, but some are Micronesian or Polynesian. PNG has over 800 known languages. English, Tok Pisin (Pidgin), and Hiri Motu (the lingua franca of the Papuan region) are the official languages.
The spectrum of PNG society now ranges from traditional village-based life, dependent on subsistence and small cash-crop agriculture, to modern urban life in the main cities of Port Moresby (capital), Lae, Madang, Wewak, Goroka, Mt Hagen, and Rabaul. Some 85 per cent of the population directly derive their livelihood from farming, and 15 per cent of the population live in urban areas. Population growth is estimated to be 3.1 per cent annually.
The Road to Independence
The Papua and New Guinea Act, passed in Australia in 1949, confirmed the administrative union of New Guinea and Papua under the title of 'The Territory of Papua and New Guinea' and placed it under the International Trusteeship System. The Act provided for a Legislative Council (established in 1951), a judicial organisation, a public service, and a system of local government. The first House of Assembly, which replaced the Legislative Council in 1963, opened on 8 June 1964. In 1972, the name of the territory was changed to Papua New Guinea and elections saw the formation of a ministry headed by Chief Minister Michael Somare, who pledged to lead the country to self-government and then to independence. Independence from Australia was proclaimed in 1975, and Somare became the first Prime Minister of Papua New Guinea.
System of Government
Papua New Guinea is a constitutional monarchy. The Head of State is HM Queen Elizabeth II, represented in Papua New Guinea by a Governor-General, currently Sir Michael Ogio, GCMG, CBE. The Governor-General is elected directly by Members of the National Parliament and performs mainly ceremonial functions.
Papua New Guinea has three levels of government - national, provincial and local. The National Parliament is a 111 member unicameral legislature elected for five-year terms by universal suffrage. The Prime Minister is appointed and dismissed by the Governor-General on the proposal of Parliament. The Cabinet – known as the National Executive Council or NEC – is appointed by the Governor-General on the recommendation of the Prime Minister. The Supreme Court, National Court, and local and village courts form an independent justice system.
Members of the National Parliament are elected from 89 single-member electorates and 22 regional electorates. The regional electorates correspond to Papua New Guinea's 20 provinces, plus the Autonomous Region of Bougainville and the National Capital District. Members from regional electorates also serve as provincial Governors. Each province has its own provincial assembly and administration.
Up to and including the June 2002 general election, members of parliament were elected on a first-past-the-post basis and, due to the large number of candidates, they frequently won with less than 15 per cent of the vote. After the 2002 election a system of limited preferential voting was introduced, under which voters are required to list a first, second, and third preference.
To date, all governments have been coalitions. Historically, there has been a high turn-over of parliamentarians at general elections. In 2002, for example, around 80 per cent of sitting members lost their seats. In the 2012 elections, the figure was almost 60 per cent, with 45 incumbents re-elected.
From 2013, PNG governments are protected by the Constitution from no-confidence motions for the first 30 months of a five-year term (up from 18 months). Once the 30-month moratorium expires, a successful no-confidence motion results in an alternative Prime Minister (nominated in the no-confidence motion) being able to form a new government without the need for a national election, unless the no-confidence motion occurs during the last twelve months of a five-year term in which case a national election must be held. With the exception of the 2002-07 and 2007-12 parliamentary terms, changes in government following motions of no-confidence have been a characteristic of PNG politics since independence.
Geographic proximity and historical links have given PNG a special place in Australia's foreign relations and the bilateral relationship is one of our most complex and wide-ranging. Government relations are underpinned by the Joint Declaration for a New Papua New Guinea-Australia Partnership, which built on the Joint Declaration of Principles of 1987, revised in 1992. The current bilateral agenda includes close cooperation on economic, development, security, immigration and people to people issues. Our leaders and ministers are in close and regular contact and there is a burgeoning trade and investment relationship.
In 2013, Prime Minister Tony Abbott and Prime Minister Peter O’Neill agreed to establish an annual bilateral leaders meeting. Further, the Australia-Papua New Guinea Ministerial Forum is an annual high-level meeting between the two countries. Papua New Guinea hosted the 23rd Ministerial Forum on 15 December 2014 in Port Moresby. The Hon Julie Bishop, Minister for Foreign Affairs, and the Hon Rimbink Pato, PNG Minister for Foreign Affairs and Immigration, co-chaired the Forum. Ministers also met with business representatives and received a submission on issues of interest to the business sector.
Defence and security cooperation
We have a strong and wide-ranging defence partnership with PNG that builds on our shared history and is firmly focused on the future. We work together to make the PNG Defence Force a serious contributor to security and stability in the region and beyond, and a capable defence partner for Australia. The bilateral Defence Cooperation Program, Australia’s largest with any country, involves training and technical advice, a number of regular bilateral exercises. Australia is supporting PNG implement its 2013 Defence White Paper; the first Defence White Paper in almost 15 years sets out an ambitious agenda to modernise and professionalise the PNGDF. We continue to work together in the key area of maritime security, including continued operation of PNG’s Pacific Patrol Boats. Australia has made a strong commitment to support PNG’s hosting of APEC in 2018, particularly to assist PNG prepare for the security arrangements. This will involve support from both the Australian Defence Force and the Australian Federal Police. The PNG Defence Force made a valuable contribution to peace in the region through its decade long involvement in bringing peace and stability back to Solomon Islands.
PNG has experienced over a decade of comparatively robust economic growth, with expanding formal employment opportunities and strong growth in government expenditure and revenues. This economic performance has been driven by high international prices for PNG’s exports (including for agriculture), conservative fiscal policies and, more recently, construction activity related to the LNG project. Notwithstanding this favourable environment, PNG continues to confront considerable development challenges.
PNG remains off track against all the Millennium Development Goals. Over 2 million Papua New Guineans (an estimated 40 per cent of the population) are poor and/or face hardship (2013 Pacific Regional MDG Tracking Report). With around 80 to 85 per cent of Papua New Guinean’s residing in traditional rural communities, the majority secure their livelihoods from subsistence gardens and small scale cash cropping.
While exports of LNG will boost PNG’s GDP considerably in 2015, the PNG Government will need to practice fiscal discipline in order to maintain macroeconomic stability and increase broad-based economic growth. Australia is working with the PNG Government to support the establishment of a sovereign wealth fund to assist with sharing the economic gains of PNG’s resource sector with the people of PNG.
Trade and investment
Two-way merchandise trade between Australia and PNG was worth A$5.9 billion and total trade worth A$6.8 billion in 2013-14. Major Australian exports to PNG are crude petroleum, civil engineering equipment and parts, meat and electrical equipment. Major imports to Australia from PNG are gold, crude petroleum, and silver and platinum.
Australian investment in PNG is worth over A$20 billion. The resource sector has traditionally been a focus of this investment, particularly gold mining and oil and gas. Key Australian companies in the mining and petroleum sector include Santos, Oil Search Ltd and Highlands Pacific Ltd. Opportunities continue to exist for Australian companies to supply PNG’s resource sector, particularly the PNG LNG Project. Other key investors in PNG include Australia-based companies Coca Cola Amatil, Campbell's Australia Pty Ltd and Nestlé Australia.
See the Country Fact Sheet [PDF 34 KB] for further key trade and economic statistics.
Key Bilateral Agreements
The Australia-Papua New Guinea Economic Cooperation Treaty was signed by Prime Minister Abbott and Prime Minister O’Neill on 21 March 2014.
It effectively brings trade and economic cooperation and development assistance under a single agreement and provides a framework for growing economic ties between Australia and PNG. Subject to parliamentary processes in both countries being concluded, the ECT is expected to come into force in 2015.
Other agreements include: the Papua New Guinea-Australia Trade and Commercial Relations Agreement (PATCRA II); the Agreement for the Promotion and Protection of Investment (APPI); the Double Taxation Agreement; and the Torres Strait Treaty.
The Governments of Australia and Papua New Guinea welcome dialogue with the business community. The annual Australia-Papua New Guinea Ministerial Forum usually includes interaction with business representatives. The Bilateral Business and Officials Working Group brings together senior officials from both governments and senior representatives from the business sector to discuss issues raised by the business community. Business representation at these meetings has included, but is not restricted to, the Papua New Guinea Business Council and the Australia-Papua New Guinea Business Council.
The Australian Trade Commission (Austrade) is the Commonwealth Government's agency which assists Australian companies to build and implement their export strategies. Austrade offers practical advice, market intelligence and ongoing support (including financial) to Australian companies looking to grow their business in PNG.
Australia's bilateral aid program in Papua New Guinea is our second-largest. Australia’s assistance to PNG is directed to priority areas jointly agreed and reflected in the Papua New Guinea–Australia Partnership for Development. These priority areas are health, education, law and justice, transport infrastructure, gender equality and governance. In line with Australian Government aid policy priorities and following a specific assessment of our PNG aid program in early 2014, Australia will strengthen its focus on private sector-led growth. We will increase the share of our aid program that is directed to infrastructure, agriculture, job skills, women’s economic empowerment and innovation. This will be complemented by programs that help improve PNG public service effectiveness and accountability, and community safety and security. We will continue to invest in improvements to PNG’s education and health systems, and efforts to prevent family and sexual violence and combat corruption.
See the AusTender website for opportunities in Papua New Guinea.
Direct Aid Program
A small grant scheme that partners with various organisations to support projects which directly contribute to the welfare and the income-generating capacity of poor or disadvantaged groups, or enhance the long-term productivity and sustainability of the physical environment. For more information, visit our page on the Direct Aid Program.
The Australian Centre for International Agricultural Research (ACIAR) makes an important contribution to PNG’s development. ACIAR’s work supports the PNG Government’s Medium Term Development Plan to promote economic growth in the rural sector (comprising agriculture, forestry and fisheries). PNG faces many challenges to agricultural development, including poorly developed infrastructure, weak market signals and services, new pest and disease threats, poor product quality, and pressure on land and renewable resources as a result of population increases and mining development. ACIAR’s research in PNG aims to help secure improvements in food supply, food access and rural incomes for smallholders through increased productivity and enhanced access to markets and services. For more information visit the ACIAR website.
People to people links
Reflecting the close historical association between Australia and Papua New Guinea, there are over 10,000 Australians in PNG at any time, and approximately the same number of PNG nationals in Australia.
The Australia-Papua New Guinea Network is an initiative to strengthen people-to-people links between the two countries, and to foster practical partnerships and sharing of knowledge between business, civil society, communities and academia. The Network is run by the Lowy Institute for International Policy, in partnership with the National Research Institute of Papua New Guinea.
The annual Australia-PNG Emerging Leaders Dialogue, first held in 2013, brings together young leaders from each country across a range of sectors to exchange views on the bilateral relationship and contemporary challenges.
PNG will be an early participant in the New Colombo Plan, giving Australian undergraduates the opportunity to undertake study, research, work placements and internships in PNG.
The Australia Awards provides opportunities for Papua New Guineans to study at Australian or regional universities supported by Australian scholarships. Applications are open to both public sector employees and individuals employed in the private sector or endorsed by other institutions, such as non-government organisations. Individuals must be able to demonstrate how their studies will help contribute to the development needs of the country.
For more information see the Australia Awards website.
The Australian Volunteers for International Development (AVID) program promotes economic growth and poverty reduction in the Indo-Pacific region by assisting host organisations to deliver effective and sustainable development outcomes.
Australia’s overseas volunteer program, Australian Volunteers for International Development, has a one-stop entry point to Australian volunteering. See the AVID website for further information.