by Hera Hoi – EM TV Online
The recent PNG Economic Update that was held at the University of Papua New Guinea was jointly organised by the Australian National University and School of Business of UPNG.
The two day seminar covered reports reflecting Papua New Guinea’s socio-economic realities; among them were those from the agricultural sector, mining, migration, politics and even the special case of Bougainville.
Present were academics, politicians, policy experts, and representatives from different business houses who all gathered to discuss the country’s socio-economic state and how to best make PNG a powerhouse in the Pacific.
One of the keynote addresses was presented by Jim Adams, who spent 37 years in the World Bank giving valuable advice to governmen’s and ministries and has extensive Africa and Pacific experience.
Adams’ speech focused on a bit of role reversal and explored key areas that a low-middle income developing nation should pay most attention to.
“My first priority would be on economic reform and the need to continuously review key economic challenges,” Adams said.
Jim Adams, while using the palm oil scenario between Nigeria and Indonesia, highlighted the importance of assessing policy choices and the significant impact they could have on the future of the country.
“I am firmly of the view that all countries need to constantly assess the impact of global shifts and be prepared to continuously assess the impact of key developmen’s on policy choices. Indeed, this is no longer a challenge for developing countries alone.”
Excessive Chinese demand, whether it might be for iron ore or other minerals has always generated millions, if not billions of dollars. Consequently, not only is this demand and upward trend an uncertain one, it also creates the thought that current policies are also working for the growth of each economy.
While appreciating resource revenues created by foreign demand, Adams says sensible structural policies should not be taken lightly.
“Turning to developing countries and PNG specifically, I am worried that the recent resource boom related to Chinese demand created a level of confidence in ongoing policies that is not justified.”
Nigeria and Indonesia each had an palm oil industry but followed differing policy choices and consequently are in different economic positions. Nigeria began in the 50s and 60s as a global supplier in palm oil but due to its policy choices is now a marginalised global supplier.
Meanwhile, in Indonesia, macroeconomic, agricultural and exchange rate policies provided a stable and supportive environment for palm oil. Today, combined with Malaysia, it produces 85% of global palm oil output.
“Although Nigeria began the 1970s with per capita income that was double that of Indonesia, its income fell dramatically during the 1980s and 90s and is today approximately half that of Indonesia’s.
“The message to me is clear – policy choices do matter, even to the resource rich. It is clear to me that ensuring policies are in place in PNG to manage the emerging situation of lower resource prices will be critical to long term growth and ‘poverty reduction,” Adams said.