“Government, which was designed for the people, has fallen into the hands of the masters and their employers, the special interests. An invisible empire has been established above the forms of democracy." -Woodrow WilsonThe Independent State of Papua New Guinea, like many of its neighbors, has struggled with governance issues since the country gained independence in 1975. The influx of capital and foreign exchange that will result from natural gas exploration of Papua New Guinea Resources will definitely affect the country. The new financial resources offer the opportunity to improve infrastructure and create a path for the majority of Papua New Guinea's population to enter the formal economy. By analyzing the impact of infrastructure improvements and governance challenges associated with large reserves of natural resources in otherwise poor nations and applying them to the specific case of Papua New Guinea, this paper will present policy proposals that the U.S. government should implement to improve possibility of success in Papua New Guinea. Background The country of Papua New Guinea consists of the eastern half of the island of New Guinea (the second largest in the world) and an archipelago of adjacent islands. From 1949 until independence in 1975, it was administered as a trusteeship by Australia, its neighbor to the south from which it is separated only by the narrow Torres Strait. Papua New Guinea's geography is dominated by tropical jungles and nearly impassable mountains, contributing to the isolation and diversification of the people who live there. Even within the population living on the main island, there is an incredible diversity of customs, traditions and language. “Diversity, reflects... middle of paper......rvey 42, n. 6 (November/December 2002): pp. 906-927. http://www.jstor.org/stable/10.1525/as.2002.42.6.906.Ross, Michael L. “What Do We Know About Natural Resources and Civil War?” Journal of Peace Research 41, no. 3 (May 2004): pp. 337-356. http://www.jstor.org/stable/4149748.Sachs, Jeffrey D. “Solving the Low-Income Country Debt Crisis.” Brookings Papers on Economic Activity 2002, no. 1 (2002): pp. 257-286. http://www.jstor.org/stable/1209181.Wesley-Smith, Terence. "Papua New Guinea in 1991: Law and Order Issues". Asian Survey 32, no. 2, A Survey of Asia in 1991: Part II (February 1992): pp. 154-161. http://www.jstor.org/stable/2645213.Whitford, Andrew B. and Karen Wong. "Political and social foundations for environmental sustainability". Policy Research Quarterly 62, no. 1 (March 2009): pp. 190-204. http://www.jstor.org/stable/27759856.