Papua New Guinea Overview The government also brought stability to the national budget, largely through expenditure control; however, it has relaxed spending constraints in 2006 and 2007 as elections approach. Numerous challenges still face the government including regaining investor confidence, restoring integrity to state institutions, promoting economic efficiency by privatizing moribund state institutions, and balancing relations with Australia, its former colonial ruler. Other socio-cultural challenges could upend the economy including a worsening HIV/Aids epidemic and chronic law and order and land tenure issues. Australia annually supplies $240 million in aid, which accounts for nearly 20% of the national budget. Agriculture provides a subsistence livelihood for 85% of the population. In 1988, an environmental protest over a copper mine on Bougainville Island escalated into a decade-long guerrilla war for the island's secession, during which some 20,000 died, many through indirect causes such as malnutrition and disease. In 2001, the government of Papua New Guinea agreed to allow Bougainville greater autonomy and an eventual referendum on secession. The residents of Bougainville elected their first autonomous government in 2005; the federal government retains jurisdiction over defense and economic matters. Papua New Guinea suffers from a number of social and economic problems, including widespread corruption and crime, chronic unemployment, underdeveloped infrastructure, an economy heavily reliant on international aid, and a national government with little control over affairs in outlying provinces. This complex set of challenges presents an ongoing threat to Papua New Guinea's stability and progress. Many analysts say Papua New Guinea is in danger of political and economic collapse. The country's political system is unstable, the crime rate has soared, corruption is rampant, and essential services including health care and education continue to decline. According to the World Bank, 70% of the country lives in poverty. In 2006, Australia announced that it was gravely concerned about the country and had peacekeeping forces at the ready. World Vision’s Work |
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