Papua New Guinea is economy driven, largely by selected mineral exports because the country is endowed with rich mineral resources. It exports primary mineral products like gold, copper, and crude oil. This economic platform is owed largely to the dismal growth of the manufacturing sector. The growth in the value of merchandise exports was linked to the decline in the exchange rate of Papua New Guinea Kina (local currency) against foreign currencies of those countries to which the mineral resources were mostly exported, and also due to a significant increase in international prices of the mineral products that the country exports. Hence, it is suggested that the country should build its manufacturing sector to process the minerals and get the advantage of exporting value-added products, and the creation of employment to domestic human resources leading to the creation of ancillary and subsidiary industries within the country. Introduction Papua New Guinea (PNG) is a developing country with a dual economy comprising a formal, corporate-based economy and a large informal economy, where subsistence farming accounts for the bulk of economic activities (Department of National Planning 2005). PNG’s currency is Kina. PNG Kina=US$0.3655 as on 18th December 2013. (http://www.pngbd.com/finance/fx.php?rid=69CA881D271E). Papua New Guinea is endowed with a rich natural resource base including major gold and copper deposits, large oil and natural gas reserves, vast expanses of agricultural land, and extensive forests and maritime resources. These rich natural resources provide the foundation for a markedly dualistic economy in which a dynamic, capital-intensive enclave minerals sector dominates. However, 85 per cent of the 6.2 million (according to the 2007 estimate FROM WHERE? SOURCE) population derive their livelihood from agriculture, mainly low-productivity labourintensive farming. This indicates that the manufacturing sector in PNG has not grown to the extent of providing large-scale employment to its population. It is a popularly held view in the country and region that PNG’s human resource is also not ready to man the jobs of massive industrialisation. The country exports primary products like gold, copper and crude oil, coffee, tea, rubber, cocoa, copra, palm oil, rubber and timber. Merchandise exports of PNG play a vital role in the gross domestic product (GDP) of the country as a percentage of value of merchandise exports to GDP in current prices. This increased from 66.53% in 2004 to 75.11% in 2007, but declined to 60.22% in 2010. (Statistical Digest-2008 for GDP of the years 2004 to 2008) (http://www.indexmundi.com/papua_new_guinea/gdp_real_gro wth_rate.html). The Study Need for the study: Merchandise exports contribute significantly to the GDP of PNG. But the percentage of the value of merchandise exports in GDP at current prices declined in 2009 and 2010, due mainly to the decline in the total value of merchandise exports of PNG. International commodity prices and exchange rates and quantity of exports are the two significant factors that determine the value of merchandise exports. Hence the study was undertaken to ascertain the impact of these two factors on the value of merchandise exports. Vol. 3, No. 4, Oct-Dec. 2013 Management Today 57 Methodology: The study is based on secondary data collected from books, reports, journals, websites and other published studies. All relevant parameters of export-driven economies including export zones, cluster and supply-chain management approaches were identified. This study is a combination of both qualitative and quantitative methods of research and therefore appropriate statistical tools were used wherever applicable. Share of Minerals in total Merchandise Exports of PNG Papua New Guinea’s major merchandise exports are mineral products. Table -1 presents share of minerals in total value of merchandise exports for PNG between 1990 and 2010 in millions of Kina. The data showed that the value of total merchandise exports increased from K 1390.5 million in 1991 to K15, 579.5 million in 2010, recording an annual growth rate of 51.02%. In fact total exports declined from K15,655.6 million in 2008 to K 11,902.8 million in 2009 due to global economic recession. However, global economic recovery enabled the country to increase its total exports to K 15,579.5 million in 2010. The export value of crude oil was initiated in 1992. Exports of crude oil increased from K 301.4 million in 1993 to K 2224.8 million in 2010, recording an annual growth rate of 33.85%. However, exports of crude oil declined during 1997, 1998, 2002 and 2009. The value of export of gold increased from K 666.9 million in 1991 to K6380.3 million in 2010, recording an annual growth rate of 42.83%. However, exports of gold declined during 1993, 1996, 1997 and 2004. The value of export of copper increased from K 327.8 million in 1991 to K4329. 5 million in 2006, but declined to K3089.3 million in 2010, recording an annual growth rate of 42.70%. However, exports of copper declined during 1996, 1997, 1998, 1999, 2000, 2007, 2008 and 2009 owing to closure of Bougainville copper mine. (http://epress.anu.edu.au/sspng/mobile_devices/ch13.html). The value of total export of mineral products like crude oil, gold and copper increased remarkably from K 1005.3 million to K 11,782.8 million between 1991 and 2010, recording an annual growth rate of 53.60%. Annual growth rate of mineral exports by 53.60% (annual growth of merchandise exports was 51.02%) between 1991 and 2010 contributed phenomenally to the growth of total exports during the period of study. Table-1: Share of Value of Mineral Exports in total value of Merchandise Exports(in Millions of Kina) Year Crude Oil Gold Copper Value of Mineral Exports Total Merchandise Exports Share of mineral Exports to total merchandise exports (%) 1990 0.0 393.2 349.2 757.5 1122.4 67.48 1991 0.0 666.9 323.8 1005.3 1390.5 72.3