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THE ECONOMY

Papua New Guinea has a multi faceted economy with two distinct systems operating side by side. The majority of the people live in a traditional non- monetary barter economy which existed long before European colonisation began. Co-existing with this is a modern economy system based on mining, petroleum, fishing, forestry and agriculture. Papua New Guinea is endowed with a rich natural resource base, including major gold and copper deposits, large oil and natural gas reserves, vast expanses of agricultural land, and extensive forests and maritime fisheries. These rich natural resources provide the foundation for a markedly dualistic economy in which a dynamic, capital-intensive enclave minerals sector dominates, but 85 percent of the population derive their livelihood from agriculture, mainly low-productivity labor-intensive farming. Economic development has been constrained by the difficulties of establishing transportation and communication between population centers, which are separated by rugged terrain on the mainland and large distances between the islands.

Much of the population of 5 million remains in the non-monetized subsistence sector and is highly fragmented— as mentioned there are over 800 distinct languages in the country. At independence, some 25 years ago, the tasks of nation-building and sustainable economic development had to begin from a frail base in terms of human resources, administrative capacity, and socio-political structures. In addition to the central government, provincial parliamentary governments were established and given responsibility for a number of public services, including education, health, and local infrastructure. These governments were supported by financial and staff resources from the center, but many did not function well. Papua New Guinea's per capita income of about $1,160 in 1994 should classify it as a middle-income country. But because the country's wealth is unevenly distributed, the average per capita income for more than 80 percent of the population is only $350, about one-third of the national average. Thus, for much of the population, the quality of life and social indicators are no better than those in the average low-income country.

THE HISTORY

It is believed that Papua New Guinea was originally inhabited by Asian settlers over 50,000 years ago. The first European contact was by the Portuguese explorer Jorge de Meneses in 1526-27 who named it Ilhas dos Papuas (Island of the Fuzzy Hairs). The Spaniard Inigo Ortiz de Retes later called it New Guinea because he thought the people similar to those of Guinea in Africa. Further exploration followed, including landings by Bougainville, Cook, Stanley and John Moresby.

A large, rather daunting place, New Guinea was left alone for several centuries, with only the Dutch making any effort to assert European authority over the island. But in 1824, the Dutch (seeking to shore up their profitable Dutch East Indies empire) formalised their claims to sovereignty over the western portion of the island. Germany followed, taking possession of the northern part of the territory in 1884. A colonial troika was completed three days later when Britain declared a protectorate over the southern region; outright annexation occurred four years later.

In 1906, British New Guinea became Papua and administration of the region was taken over by newly independent Australia. With the outbreak of WW I, Australian troops promptly secured the German headquarters at Rabaul, subsequently taking control of German New Guinea. In 1920, the League of Nations officially handed it over to Australia as a mandated territory. During WW II the northern islands and most of the northern coast fell to the Japanese who advanced southward until stalled by Allied forces. By 1945 the mainland and Bougainville had been recaptured, but the Japanese were impregnable in New Ireland and especially Rabaul in New Britain, where they dug 500 km of tunnels. They surrendered these strongholds at the end of the war. Wrecks of vessels and areoplanes can still be found in every province. Papua New Guinea became the 142nd member of the United Nations on October 10th, 1995, and is also a member of the British Commonwealth. Post-war, the eastern half of New Guinea reverted to Australia and became the Territory of Papua & New Guinea. Indonesia took control of Dutch New Guinea in 1963 incorporating it into the Indonesian state as Irian Jaya. PNG was granted self-government in 1973 and full independence was achieved in 1975.

Papua New Guinea's most immediate concern after independence was its relations with powerful neighbour Indonesia. After Indonesia's takeover of Irian Jaya, many West Papuans organised a guerrilla resistance movement - Organisasi Papua Merdeka (OPM) - which fought Indonesian forces with limited success. Tensions decreased markedly after 1985, as the flow of refugees (estimated at over 10,000) between Irian Jaya and PNG slowed. There are still 7500 Irian Jayan refugees living in camps in Western Province - the largest expatriate group in the country. The Human rights issue in Irian Jaya is a sore point for Indonesia.

The Bougainville Crisis

However, a new trouble spot for PNG soon appeared on Bougainville Island, where the locals regarded themselves as racially and culturally distinct from mainlanders. Bougainvilleans were embittered by the environmental destruction caused by the giant Australian-owned Panguna copper mine and by the way revenue from the mine filled a third of the national coffers but did not find its way back to their island. (Panguna was one of the world's largest copper mines in its heyday, producing concentrates containing 165,957 t of copper, 446,000 oz of gold and 1.6 Moz of silver in 1988, its last full year of operation). They formed the Bougainville Revolutionary Army (BRA) and forced the mine to close in 1989. This act, coupled with rebel demands for secession, sparked a major military confrontation with PNG forces and a resulting slew of human rights abuses.

After much bloodshed - including the notorious St Valentine's Day Massacre of 1990 when gunships, supplied by Australia, were deployed in an offensive role by the PNG security forces - peace talks were tentatively staged. But in 1992, Prime Minister Wingti launched another major offensive against the rebels, further exacerbating the situation. The conflict claimed the scalp of the next prime minister, Sir Julius Chan, in early 1997 when PNG military leaders refused to co-operate with a US$35 million covert operation that involved South African mercenaries re-taking the island by force. The mercenaries were sent home and Sir Julius resigned. Elections in mid-1997 saw Bill Skate take up the office. The Bougainville war officially ended in April 1998 - during the course of the 10-year war around 40,000 Bougainville islanders became refugees, and up to 20,000 people were killed. The cease-fire is being monitored by a peace-keeping force.

Rising optimism over the ceasefire was rapidly tempered by a corruption scandal fizzing up around Bill Skate, and a catastrophic drought, caused by El Niño and felt worst in the central highlands provinces. Around 500 deaths were attributed to resulting hunger and disease and more than 650,000 people were severely affected. As if that wasn't enough, in July 1998 three giant tsunamis hit PNG's north-west coast - at least 1500 people, but up to 3000, were killed as villages along the coast were completely flattened.

Papua New Guinea Today

Today, Papua New Guinea has a population of almost 5 million, of mainly Melanesian race with dark skin, fuzzy hair and friendly smiles. Though the Papuans show a unified face to the outside world, to themselves they are more a federation of hundreds of tribes. New Guinea's Highland tribes weren't known to the outside world until the latter half of the 20th century, and a few were "found" as late as the 1980s. New Guinea's jungles are so dense that some tribes living within a few miles of each other often didn't know of the other's existence.

The rainforest is virtually intact, although PNG as many other tropical nations has been tempted to let in forgin logging companies. National and international organizations are trying to protect the forest. PNG’s indigenous cultures, too, have retained much of their original character. With an incredible 800 distinct languages still spoken (which constitute approximately 40% of all existing languages in the world), the country has tribal cultures as diverse as its flora and fauna. New Guinea offers an experience of life that’s truly different.

Unfortunately, those same qualities that make the country so unusual also contribute to its downside. Because many of its people have had their ancient cultures destroyed by missionaries and buisnessmen, - and due to the fact that they have remained as spectators to the wealth of expatriotes and local politicians,- in certain areas violent crime is widespread. Young men in the villages are bored and become frustrated learning about cars, beer and western goods which they have no chance of obtaining if they are to stay within the (western) law. They then move to the larger cities where they are hosted by "wantok uncles"("One talk" = same language = same clan/tribe), accordig to ancient traditions of hospitality, but without job possiblilities they end up involved in violent robberies in shops, homes and on public roads. In addition rape is widespread in some areas. Tribal figthing does exist in certain areas but it rarely affects outsiders. Generally crime is higher in the Highlands than on the islands and generally the situation is rather bad in the major cities like Port Moresby, Lae and Mt Hargen. Outside urban areas and away from major roads the situation is much better. The best way to avoid problems is to stay away from trubbled areas, to make friends with local people and to avoid the widespred paranoia which is common among the Australean expatriots. The saying that expatriotes in PNG are usually one of the 3M's (Missionaries, Mercants or Misfits) is not completely untrue. Never forget, that the vast majority of Papua New Guineans are very friendly !


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