Why must my people suffer….
Point of Confusion

Papua New Guinea’s dual economy needs good governance


SINCE Papua New Guinea became an independent nation and gained sovereignty in formulating and administering its own affairs, it has operated under the two economy system: the traditional economy and the modern economy which was introduced by its colonial master.

The weird thing in PNG’s ongoing struggle is its knack of adapting to the new ideas of the western economy.

To adapt and accept ideas which are alien is a difficult mountain to climb in a nation that is so multicultural and which has people with different needs, perceptions and beliefs.

In fact, this diversity is one of the reasons why economic development in PNG is on a slow growth curve.

In traditional economic systems, it is the inherited system that people dwell in. People have to toil to satisfy their needs and wants through activities such as hunting, fishing, gathering and subsistence agriculture.

One of the most important resources that facilitate the system is land. Land in a traditional economic system is not a commodity for buying and selling. It is much more important than that.

Land is considered a means of life. Without it, one is unhurried to be an outcast.

And the collective good is vital. People have rights, it is true, but permission is endorsed by collective concord.

Land is held under collective guardianship and it is understood that descendants will take possession of it and the identity and well-being of the group will endure and society will live on.

During colonial rule, only three percent of PNG’s land was alienated for plantations and towns; the rest was under customary ownership.

Even today 85% of people live and practice subsistence agriculture while 15% live in the cash economy. Because the cash economy was established alongside the traditional economy, people have tried to acclimatise by integrating both economic systems.

Papua New Guinea is not isolated from the global community and therefore it has to instigate certain systems that are consistent with being a member of the international community.

In capitalism’s sagacity, money has a superior influence by bringing the conservative PNG society into the international economy.

So traditional food crops assimilate with the income earning opportunities of cash cropping coffee, cocoa, copra and rice.

Involving both traditional and cash economies without eradicating either of them is a matter of pride for PNG because it has a sense of respect for our way of life and shows our capability to muddle through with the global community.

We cannot say PNG is a scrawny nation compare with other successful nations and their economic transactions.

But sometimes it doesn’t work as well as it might. The PNG government has placed an embargo on the importation of certain goods that can be produced locally. But it turned out that the endeavour to replace imported rice with locally grown rice was botched and rice continued to be imported from Australia.

The cash economy is most important for Papua New Guinea as a contemporary nation living in the global community.

However, only 15% of the population is in the cash economy, including both private and public sectors.

There is no place in this world that someone can give you something for nothing. Giving something to someone is always initiated with a certain intention, usually self-interest. So PNG is of interest to many countries due to its rich natural resources. Today we have many foreigners intervening in the economy, indirectly taking advantages of the resources.

This is one result of the frail governance in our society – the substantial misappropriation of funds by the elite who have power over economic resources being another. This is what actually is happening in front of our eyes.

The solution depends on the principal figures in the country: their capabilities in leadership and their decisions and policy making.

Strong and high-quality government will result in economic prosperity for the people and an enhanced nation.

It is in our hands now to decide the future of Papua New Guinea.


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Robin Lillicrapp

The New Order is indeed a collectivist one posited to be of general benefit to all but in fact a realignment of control of assets absorbed into the global money matrix overseen by a cabal of banking interests.

It explains the wanton pursuit of modern governance toward overriding traditional ownership (collectivist as it might be) and re-leasing the control to foreign investment tied itself to strictly regulated capital issued by the aforesaid banking interests.

Jimmy Awagl

Most elites say no becomes yes and yes becomes no since what drives them to honour depends entirely on money.

Elites lose credibility from money. Shall we make decisions out off money to run our country.

Giorgio Licini

"There is no place in this world that someone can give you something for nothing. Giving something to someone is always initiated with a certain intention, usually self-interest."

Change should probably start there? Unless everyone and everything comes to be assimilated into the corporate world.

Barbara Short

A good essay, Felix.

I guess what is missing in PNG these days is "strength of character" or "strength of moral fibre" being able to stand up for what is right.

I have been encouraging the people of the East Sepik to stand up to the foreigners who come in and take over the land, remove all the best timber and say they will replace the forests with oil palm plantations.

I got thanked for my help. But one guy stood up to me. But it turned out he wasn't even from the area in question. It wasn't his land or forest that disappeared off to Asia. I guess he just happened to be gaining in some way from helping the foreigners.

A "strong and high-quality" government has to be elected by the people to control the exploitation of your precious rich natural resources.

In the Sepik there is talk of the Frieda River copper-gold mine. One day it will be up and running. But it must not be allowed to spoil the Sepik River as the Ok Tedi mine destroyed the Fly River.

This mine is in a very isolated part of the Sepik. It is likely that there may not be many PNG people aware of what is going on there. Parts of PNG are very isolated. the PNG government has not been taking care of the isolated areas. They have not been providing transport to and from these areas so the schools and health centres in the isolated areas have been closed down.

Australia also has many isolated areas. We call it the Outback. Over the years many men of fibre have shown a concern for them. John Flynn was one of them. He started the Flying Doctor Service, and the School of the Air, where children were taught via radio.

Something like this is needed in PNG.

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