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PAPUA NEW GUINEA EXPORTS Trends and development impacts
Aaron Batten, Country Economist Port Moresby Resident Mission
June 27th 2013
INTRODUCTION
What has the last decade of economic growth meant for the export linkages of the PNG economy? Are PNG businesses integrating themselves with ‘factory Asia’ or opening up other new partnerships? What implications do these trends have for encouraging more inclusive growth?
Underpinning the last decade of economic growth has been a dramatic increase in PNG’s exports…
PNG exports ($US, billions)
Export sales have increased from $1.6
billion in 2002 to $7.5 billion in 2012.
Share of exports to GDP has increased from 40% in 2002
to 51% in 2012.
0
2
4
6
8
2000 2002 2004 2006 2008 2010 2012*
By 2012, sales of gold, copper and oil, were contributing roughly two thirds,
or $4.5 billion, of total export
earnings.
0
2
4
6
8
2000 2002 2004 2006 2008 2010 2012*
Oil
Copper
Gold
Total
…driven by increasing sales of gold, copper and oil…
PNG exports ($US, billions)
With strong commercial links to PNG’s mining and petroleum sectors
these two countries now purchase
roughly ¾ of PNG’s total exports, with
Australia alone responsible for 55%
in 2012.
0
2
4
6
8
2000 2002 2004 2006 2008 2010 2012*
Japan
Australia
Total
…reinforcing PNG’s traditional export partnerships with Australia and Japan.
PNG exports ($US, billions)
Excluding Japan,
about 20% of PNG’s exports sold to Asia
while North America and Europe
accounted for less than 15% of sales.
…and painting a stagnant picture of PNG’s export diversification.
PNG exports ($US, billions)
0
2
4
6
8
2000 2002 2004 2006 2008 2010 2012
Other Pacific
Europe Rest of Asia
Total
BUT the PNG economy has been more dynamic than aggregate figures suggest…
Asian and European economies have
driven rapid growth in non-mineral
exports over the last decade.
Between 2000 and 2011, PNG’s non-
mineral export earnings rose in value by 230%, from $660
million to $2.2 billion.
PNG non-mineral exports ($US, billions)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2000 2002 2004 2006 2008 2010 2012
US Pacific
Japan Australia
Europe Rest of Asia
0
100
200
300
400
500
600
700
2000 2002 2004 2006 2008 2010 2012*
Thailand Singapore
Philippines Malaysia
Japan Indonesia
India PRC
…Asian non-mineral exports led by PRC along with Malaysia, Thailand, Singapore, Philippines & Indonesia…
PNG non-mineral exports ($US, billions) China dominates
non-mineral Asian exports, with
Malaysia, Thailand, Philippines, India
and Indonesia also growing.
Japan has been declining as an
export destination.
0
200
400
600
800
1,000
1,200
1,400
2000 2002 2004 2006 2008 2010 2012
OtherOil seed & fruit oilRubberAnimal and vegetable oils, fats and waxesFish and crusteceansCoffee, tea, cocoa and spicesWood
PNG non-mineral exports ($US, billions)
…dominated by sales of logs and log products…
Wood products
make up roughly 65% of sales to Asia.
0
100
200
300
400
500
2000 2002 2004 2006 2008 2010 2012
Other
Oil seed & fruit oil
Rubber
Animal and vegetable oils, fats and waxes
Fish and crusteceans
Coffee, tea, cocoa and spices
…but also with significant growth in a number of other commodities.
PNG non-mineral exports ($US, billions)
Coffee, cocoa, and fish have all been major sources of
growth.
European exports increased almost
fourfold from $220 million in 2000 to
$810 million in 2011.
European export growth led by Germany, Netherlands, UK and Italy…
0
100
200
300
400
500
2000 2002 2004 2006 2008 2010 2012
Germany Netherlands
Italy UK
PNG non-mineral exports ($US, billions)
Growth focused on
vegetable oils, seafood, coffee,
cocoa, tea, spices, and rubber.
0
200
400
600
800
1,000
2000 2002 2004 2006 2008 2010 2012
Other
Fish and crusteceans
Coffee, tea, cocoa and spices
Animal and vegetable oils, fats and waxes
Palm oil, copra, cocoa and fish have led these growing export sales…
PNG non-mineral exports ($US, billions)
Other markets are also becoming important, like the United States.
0
20
40
60
80
100
120
140
160
2000 2002 2004 2006 2008 2010 2012
Other
Fish and crustaceans
Coffee, tea, cocoa, spices
Petroleum
Growing sales to USA comprised of coffee, cocoa, fish
and vanilla.
PNG non-mineral exports ($US, billions)
Conclusion 1/3: PNG’s export performance has been more dynamic than aggregate figures suggest.
Export volumes (2002 = 100)
0
50
100
150
200
250
Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12
Non-Mineral
Gold
Copper
Crude Oil
Non-mineral export growth driven by both
price and volume increases.
Mineral export growth driven exclusively by
prices.
Source: BPNG QEB 2013.
Conclusion 2/3: Non-mineral exports have been a key driver of employment growth, formal and informal.
Employment growth (annual % change)
-10
-5
0
5
10
15
20
Mar-02 Jul-03 Nov-04 Mar-06 Jul-07 Nov-08 Mar-10 Jul-11
Agriculture/Forestry/Fisheries Total
Non-mineral exports and total
employment growth are closely
related.
Source: BPNG QEB 2013.
Conclusion 3/3: PNG’s progress towards extending its domestic value chains has been limited.
PNG economic complexity of exports index (out of 128 countries)
0
32
64
96
128
1975 1982 1989 1996 2003
PNG economic complexity rank
(out of 128 countries)
Index measures the diversity and
ubiquity of products
exported by a country.
PNG has become one of the worlds least ‘knowledge based’ exporters.
Source: Hausman and Hidalgo (2012).
Thank you.
Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines
Tel + 632 632 4444
Port Moresby Resident Mission Level 13, Deloitte Tower
Port Moresby, PNG
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