Papua New Guinea Economy, History and Politics

By | June 29, 2021


Most of the people live from agriculture

Papua New Guinea is rich in raw materials. There are many natural resources such as oil, gas, gold and copper. Even so, most of the people are employed in agriculture. They grow what they consume at the same time. One then speaks of a subsistence economy.

Taro, yams, bananas and sweet potatoes are mostly consumed by the farmers themselves. But in the mountainous regions the farmers can only grow very little, leaving only the lowlands that are at all suitable for arable farming.

Coffee is also grown in plantations

Coffee, cocoa, tea and rubber are some of the products that are harvested in large areas in plantations. Wood from the forest areas is also included. But the timber industry and the extraction of wood have meanwhile been restricted because too much was cut down.

Paying with mussels – how that?

A specialty of Papua New Guinea is the so-called mussel currency, which is now recognized as an official currency and can be exchanged. There is even a separate bank for this.

The money goes abroad

The industry processes products such as sugar, palm oil and fish, as well as the extracted raw materials such as crude oil. Even the mining plays a certain role. But these branches of the economy bring only little to the domestic population, as the companies are often in foreign hands and the money mostly flows abroad. Papua New Guinea is a very poor country despite the many raw materials.

Shell money

Shell money is simple money that is used by many indigenous peoples. There are countries like Papua New Guinea where this money is recognized in parallel with the official currency. The mussel money consists mostly of small shells that are drawn on strings and whose value is measured by the length of the strings. In the photo on the left you can see what these mussel strings can look like.

History and Politics

Early days

People have been living on the islands of Papua New Guinea for at least 30,000 years. In prehistoric times, parts of the islands were still connected to mainland Australia. It was not until the sea level rose during the last Ice Age that the islands were separated. People have been farming on the islands for around 10,000 years. The Lapita culture – a very old culture of Melanesia and some Polynesian islands – was also found in Papua New Guinea, a country in Oceania defined by ehotelat.

First European

The first European seafarers landed on the coasts at the beginning of the 16th century. The first was probably the Portuguese navigator named Jorge de Meneses, who entered the north-west of the island in 1526. The name Ilhas dos Papuas, which refers to the curly hair of the residents, probably comes from him.

A little later, in 1545, a Spaniard named Íñigo Ortiz de Retez passed the island and named it “New Guinea” after the example of the African country “Guinea”, whose coast probably reminded him of New Guinea. The name was then retained. The Netherlands had trade relations with this region from the 17th century.

Colonial times

Three colonial powers took an interest in New Guinea, namely the Netherlands, Great Britain and the German Empire. Roughly speaking, the western part of New Guinea came under the influence of the Dutch and was therefore called the Dutch New Guinea. The British and the Germans shared the east. This is the name of the southeastern part of British New Guinea and the northeastern Kaiser-Wilhelms-Land, after the German Kaiser Wilhelm.

In 1906 the part that until then belonged to Great Britain came to Australia and was called “Papua”. A little later, in 1919, shortly after the First World War, the Germans ceded the northern part of New Guinea to Australia as a League of Nations mandate.

Shortly after the Second World War in 1949, the two regions were linked together as the “Territory of Papua and New Guinea”. During the Second World War, the island was the site of clashes between the Japanese and Americans who were opponents.

Already in 1949 there were claims on the part of Indonesia, which had become independent in 1949, to the western part, which was to remain Dutch for a while.


Papua New Guinea did not become independent until 1973, after elections had been held the year before. But the country’s prime ministers changed frequently. There were also arguments, conflicts and coup attempts again and again. In 1989 there was a bad civil war on one of the islands called Bougainville. It was not until 1997 that this conflict, which cost many people their lives, ended. However, the island now enjoys special rights.

The official head of state of Papua New Guinea is Queen Elizabeth II. from England. She is Queen of Papua New Guinea and is represented by a Governor General. Papua New Guinea is a member of the Commonwealth of Nations. The parliament, which is based in the capital Port Moresby, is elected every five years.

From 2011 to 2019 the Prime Minister of Papua New Guinea was Peter O’Neill, who at the end of his reign came under strong criticism for suspected corruption. In May 2019, James Marape, former Treasury Secretary, was elected to succeed him. This decision was preceded by weeks of power struggles in parliament.

Papua New Guinea Politics