by Stanley Ove Jr – EM TV News, Port Moresby
Director of the Institute of National Affairs, Paul Barker, said the Sovereign Wealth Fund (SWF) must be managed properly with the highest principle of governance.
Barker gave an insight into the newly passed bill saying the sovereign wealth fund depends highly on its stabilisation and savings components.
He explained that the stabilisation component depends on the revenue generated from the mining and agriculture sectors.
Barker said if the prices of commodities in world markets drop, the stabilisation fund is used to balance out the country’s revenue to keep the level of commodity prices steady in the country.
A report released by the National Research Institute last year revealed that Papua New Guinea’s high dependency on non-renewable s is not healthy to secure a sustainable SWF in the future.
Former NRI Director, Dr Thomas Webster, said if the country spends all its mining revenue now then there will be nothing left for the future. The report also revealed that revenue generated from s have failed to impact PNG with tangible development in most areas of Papua New Guinea.
However, Mr Barker said a higher legislation must be set to monitor the flow of revenue into the SWF.