The Future Prospects for Entrepreneurship in Papua New Guinea

Abstract

Papua New Guinea is the largest, most populous, and most resource-rich island country in the South Pacific and has received technical and financial assistance from Australia; its economic performance, however, has been disappointing to date. Following discussions of Papua New Guinea's history, geography, culture, economy, and government, the climate for entrepreneurship is described.An entrepreneurial class scarcely exists in Papua New Guinea; instead, most people work for the public sector or for large resource development companies.Those who are self-employed generally farm. Outside the rural sector, small businesses struggle to obtain credit from most financial institutions.The country is not devoid of an entrepreneurial spirit: residents fund small commercial enterprises with capital raised through cash crops. The fact that these ventures generally fail further indicates that the climate is not conducive to entrepreneurial behavior.A number of factors have contributed to the country's failure to grow: increasing political instability, an ineffective central government, an under-developed infrastructure, an acute shortage of skilled labor, a lack of foreign investment capital, and a high rate of population growth are all barriers to prosperity.In spite of these barriers, and in spite of the fact that education levels are low and travel difficult, there are areas (such as tourism, fishing, and agriculture) that offer business opportunities to prospective entrepreneurs.Overcoming these obstacles will require an expansion of the modern cash economy, a greater degree of political stability, the participation of national and provincial governments, and a change in the general attitude toward entrepreneurship.(SAA)

Keywords: Social conditions & trends, Business conditions, Economic development