AnInternational Monetary Fund study of Papua New Guinearsquo;s economy has found thatthe non-mineral sector ofthe economy will be a major player intothe Future.
The study was conducted atthe request ofthe Central Bank of Papua New Guinea
Dr Jan Gottchalk (pronounced YAN GOD –CHOK) fromthe IMF Pacific Technical Centre based in Fiji presented fascinating insights intPNG’s economy attheInstitute of National Affairs.
Economic Modeling by Dr Gottchalk and his colleagues contradicted what many believed aboutthe management oPNG’s natural resource wealth.
Dr Gottchalk was reflecting on hoPNG managed to maintain Micro economic stability inthe past decade whenthe rest ofthe global economies were in free-fall.
It found that inthe past decadethe non-mineral economy had grown by five per cent annually and contributed nine-billion kina tothe local economy.
What is even more fascinating is thatthe researchers found thatosaving mineral wealth inthe Sovereign Wealth Fund may not bethe best strategy under current circumstances as returns on investment maybe lower thanthe current cost of government borrowing.
Dr Gottchalk’s team found thaPNG may currently be in a golden era of a resource boom; however, revenue fromthe LNG project would merely be buffering a decline in mineral revenues from maturing oil and mining operations.
The IMF team found that future growth prospects for Papua New Guineawere inthe non-mineral sector with an estimated annual contribution of around ten billion kina by 2017, as opposed to three-billion kina fromthe mineral sector.
https://youtube.com/watch?v=1NtNBe30prY%3Ffeature%3Doembed%26wmode%3Dopaque%26showinfo%3D0%26showsearch%3D0%26rel%3D0