The most linguistically diverse country in the world, with approximately 750 languages, Papua New Guinea (PNG) achieved independence from Australia in 1975. The country occupies the eastern end of New Guinea, the world's third-largest island, and several other groups of islands. Much of the country is still isolated and much of the rural population experiences basic living conditions.

PNG has an extraordinary diversity of peoples, with around 750 different language groups and even more tribes. The key distinction is between the lowlanders, with frequent contacts with the outside world, and the very isolated highlanders. Highland tribes see all strangers as potentially hostile. Vendettas can last for generations and tribal battles are not infrequent. A majority of people are nominally Christian, but indigenous beliefs and practices are widespread.

Strengths

Significant mineral reserves of copper, gold, nickel, cobalt, oil, and natural gas. A proposed gas pipeline between the highlands and Australia is expected to net $219 million a year. Agriculture sustains the population.

Weaknesses

Agricultural production and mining were significantly disrupted by severe drought caused by El Niño of 1997–1998. Poor transportation and banking infrastructures. Political instability. Foreign exploitation of resources.

PNG's many political parties lack clear ideological foundations, creating long-term political instability. The patronage required to maintain coalition groupings tended to encourage corruption. Prime Minister Sir Mekere Morauta has worked to overhaul the precarious system, and in May 2001, following many political realignments within parliament, his PDM claimed the first ever simple majority.

A ten-year insurgency by separatists on Bougainville ended with the 1998 cease-fire, and Morauta has promised autonomy for the island and a future referendum on independence. Elsewhere, strong local traditions and communications problems have made centralization difficult.

PNG is rich in minerals. The Ok Tedi gold/copper mine in the Star Mountains is the most productive in the country; the Porgera gold mine is one of the world's largest. The severity of the drought in 1998 significantly affected production at both. Prospecting has revealed extensive oil and natural gas reserves.

The health system has suffered from recent cuts. HIV and tuberculosis co-infections are at crisis level. Life expectancy rates are among the lowest in the Pacific. Access to clean water and sanitation are major issues.

Education is not compulsory. Equipment charges and fees have been introduced. Universities are suffering funding cuts.

There is a growing gap between the country's rich and poor, particularly in urban areas. The government has cut expenditure on public services in order to raise capital for investing in basic infrastructure, education, and public health.

The British annexed the southeast and the Germans the northeast of the island of New Guinea in 1884.

• 1904 Australia takes over British sector; renamed Papua in 1906.
• 1914 German sector occupied by Australia.
• 1942–1945 Japanese occupation.
• 1964 National Parliament created.
• 1971 Renamed Papua New Guinea.
• 1975 Independence under Michael Somare, leader since 1972.
• 1988 Bougainville Revolutionary Army begins guerrilla campaign.
• 1997 El Niño effect causes severe drought and tsunamis. Sir Julius Chan resigns as prime minister over the use of Western-led mercenaries in Bougainville.
• 2000 Loloata Understanding promises autonomy for Bougainville.
• 2001 PDM claims parliamentary majority. Final peace agreement with Bougainville after three-year cease-fire.