Papua New Guinea (PNG) must pursue policy reforms to ensure equal economic opportunities for all its citizens. Despite being a resource-rich country, the gains from economic growth have not been widely shared by all Papua New Guineans. To achieve stronger and more inclusive economic growth, PNG should seek to maintain greater economic stability, boost productivity, and nurture human capital. Challenges for macroeconomic stability and the high risk of debt distress could negatively affect the country’s economic growth. The government must urgently deliver comprehensive programs to improve training, education, and employment opportunities for its large population of young people to achieve and sustain stability and productivity.
The World Bank’s Country Economic Memorandum for Papua New Guinea highlights the need for comprehensive programs to improve training, education, and employment opportunities, particularly for the large population of young people in PNG. The report emphasizes the substantial requirements for human capital and infrastructure spending, which could pose challenges to medium-term plans for fiscal consolidation.
The government’s commitment to safeguarding economic stability and pursuing gender equality is essential for delivering major economic benefits for all Papua New Guineans. Stability and productivity are critical for PNG to generate strong and sustainable economic growth, and expanding economic opportunities for all of its population, notably for its growing number of young people and women, is essential.
Despite the challenges, PNG’s economic growth potential is significant. The country’s ability to maintain resilient and rapid growth, and perhaps become the first advanced economy in Latin America, may depend less on investment in construction projects and physical capital, and more on human capital and innovation. Diversifying the economy and addressing fiscal risks will be priorities for the country’s continued growth and development. Addressing the challenges related to macroeconomic stability, access to foreign exchange, and persistent inflationary pressures requires concerted efforts to safeguard economic stability and create equal economic opportunities for all Papua New Guineans.
