Papua New Guinea Papua New Guinea Background The eastern half of the island of New Guinea - second largest in the world - was divided between Germany (north) and the UK (south) in 1885. The latter area was transferred to Australia in 1902, which occupied the northern portion during World War I and continued to administer the combined areas until independence in 1975. A nine-year secessionist revolt on the island of Bougainville ended in 1997, after claiming some 20,000 lives. Papua New Guinea Economy Papua New Guinea is richly endowed with natural resources, but exploitation has been hampered by rugged terrain and the high cost of developing infrastructure. Agriculture provides a subsistence livelihood for 85% of the population. Mineral deposits, including oil, copper, and gold, account for 72% of export earnings. The economy has faltered over the past three years but will probably improve slightly in 2003. Former Prime Minister Mekere MORAUTA had tried to restore integrity to state institutions, stabilize the kina, restore stability to the national budget, privatize public enterprises where appropriate, and ensure ongoing peace on Bougainville. The government has had considerable success in attracting international support, specifically gaining the backing of the IMF and the World Bank in securing development assistance loans. Significant challenges face Prime Minister Michael SOMARE, including gaining further investor confidence, continuing efforts to privatize government assets, and maintaining the support of members of Parliament. Papua New Guinea Location Oceania, group of islands including the eastern half of the island of New Guinea between the Coral Sea and the South Pacific Ocean, east of Indonesia Papua New Guinea Flag divided diagonally from upper hoist-side corner; the upper triangle is red with a soaring yellow bird of paradise centered; the lower triangle is black with five, white, five-pointed stars of the Southern Cross constellation centered
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