By Sarah Byrne
TRANSLATING growth from resources projects into benefits for the broader population is an important but challenging task for the PNG Government, according to Christopher Edmonds, a senior economist at the Asian Development Bank’s Pacific department.
Speaking with PNG Resources, Mr Edmonds referred to the challenge as the “resource curse”, where the Government must attempt to take one sector that fuels growth, but doesn’t tend to engage much with the population and translate that growth into benefits for the broader population.
Published earlier this year, the Asian Development Bank’s Asian Development Outlook report for 2015 said growth in the Pacific will pick up pace as natural gas flows from PNG.
“In 2015, the first full year of gas production in PNG, growth in the Pacific is expected to peak at 10.7 per cent,” the report said.
Lower commodity prices were reported as supporting further expansion in most economies, according to the report.
Supporting this statement, Mr Edmonds said if a country, such as PNG did not have the history of a higher price; it would not suffer when the price of the commodity fell.
As a driving force behind the PNG economy, the energy and mineral sector is expected to continue to provide growth and development in PNG, but a lack of growth in other sectors is concerning, Mr Edmonds said.
“Mining and petroleum has been driving the economy and it’s set to continue to do so with LNG coming online, but the growth in other sectors has been much slower,” he said.
With the expectations of the people in PNG rising, Mr Edmonds stressed the importance of improving the livelihoods of Papua New Guineans, particular those living in poverty-stricken rural areas of the country.
Government expenditure on various development priorities has risen, but Mr Edmonds points out issues with implementation of budgets and ambitious plans for spending often not being spent on schedule or as efficiently as hoped.
“The reports aren’t very promising in terms of how much better things are getting given the amount of expenditure that has been devoted to these [projects], but if you look at the details on the budget execution you can see why there is a persistent issue,” Mr Edmonds said.
Developing government capacity, diversifying the economy and getting broader business activity going are important challenges for the PNG Government, Mr Edmonds said.
The 2015 Asian Development Outlook report is a key report by the Asian Development Bank, an organisation founded in 1966 that aims to help developing member countries through loans, grants, policy dialogue, technical assistance and equity investments.