Conflicts and paradoxes in economic development

Abstract

Papua New Guinea (PNG) relied heavily on exploitation of mineral wealth in the past for achieving economic growth. Although in terms of macroeconomic indicators, growth performance is not entirely unsatisfactory, the government failed to redistribute the benefits of this limited growth, and the beneficiaries have been localized and narrow. As a result, in terms of standard of living of its population, PNG remained one of the poorest nations in the world. In recent years, the new development strategy to a greater extent stresses renewable sources such as agriculture, fisheries, processing and downstream activities, and tourism. With its unique and pristine physical and cultural diversity, tourism can conveniently become the mainstream economic activity of this island nation. However, PNG tourism is entirely based on its natural, environmental and cultural resources. So any economic activity which disturbs these infrastructures is most likely to affect the tourism potential adversely. Development of agricultural activities, fisheries, forestry and mining, while undertaken indiscriminately (as it is done today), is actually affecting the potentiality of tourism growth and creating conflicts of economic interests. As a result, neither tourism nor other activities are being developed properly and the wellbeing of the country’s population remained unchanged. More importantly, these conflicts are often generating significant and far‐reaching social and political tensions. Unless controlled at this initial stage of development, the process can lead to a very unbalanced situation from where a turnaround would be extremely difficult.