A new World Bank Public Finance Review says Papua New Guinea has significant potential to build a stronger, job-rich economy, but achieving this will require the country to generate greater value from its natural resources and invest more effectively in its people. Released on March 23, 2026, the report, Converting Resource Wealth into Human Capital, argues that stronger public finances and smarter spending on health, education, and skills development are essential if Papua New Guinea is to convert its resource wealth into meaningful opportunities for its fast-growing young population.
The review comes at a time when Papua New Guinea has set ambitious national development goals, including creating one million jobs, expanding the economy to K200 billion by 2030, and achieving a balanced budget by 2027. According to the World Bank, meeting these targets will depend on building stronger fiscal systems that can translate natural resource wealth into tangible economic and social outcomes, particularly through more efficient public investment and improved revenue generation.
To support stronger growth and employment, the report outlines three main priorities. First, it calls for Papua New Guinea to secure better returns from its resource sector while broadening the country’s tax base. Second, it stresses the need to improve how public funds are allocated and spent. Third, it highlights the importance of significantly increasing investment in human capital through health, education, and social protection systems that can strengthen long-term productivity and resilience.
Although Papua New Guinea’s resource sector has expanded rapidly over the past decade, the report notes that the government has captured only a limited share of the benefits. Between 2013 and 2024, resource revenues averaged just 1.9 percent of GDP, despite the fact that production from the sector nearly doubled during that period. This gap, the review suggests, has reduced the country’s ability to use its natural wealth as a foundation for broader and more inclusive economic development.
The World Bank also warns that underinvestment in people is already constraining productivity and job creation. Current data show that nearly half of young children in the country are stunted, one in 25 children dies before the age of five, and education outcomes remain among the weakest globally. As a result, a child born in Papua New Guinea today is expected to achieve only 42 percent of their potential productivity over their lifetime, underscoring the long-term cost of inadequate human capital investment.
To address these challenges, the report estimates that Papua New Guinea would need to increase annual spending by approximately 4.5 percent of GDP. This additional investment would support better-targeted education programs, expanded primary healthcare services, and the development of a national social safety net. The World Bank argues that such measures are critical not only for improving wellbeing but also for creating a more productive workforce and enabling more sustainable, diversified economic growth.
World Bank Division Director for Papua New Guinea, Solomon Islands, and Vanuatu, Han Fraeters, emphasized that the country’s future depends on the health, skills, and energy of its young people. He said that with focused reforms and sustained investment, Papua New Guinea can use its natural resource wealth to strengthen public services, diversify its economy, and generate more jobs for the next generation.
