Riding with square wheels: governing in PNG

A picture of Papua New Guinean tribespeople in 1884, just after official British colonisation (Photo: AAP).

Author: Sean Jacobs, Canberra

Sir Paul Hasluck, the Australian Minister for Territories from 1951 to 1963, once described PNG as ‘a task for Sisyphus’.

No matter how much he pushed the boulder to the top of the hill, Hasluck lamented, it could never quite stay at the top. ‘I think I did just as well as Sisyphus did’, he wrote in A Time for Building, ‘and certainly got just as tired’. Read more…

Papua New Guinea prepares for an Asian Century

Papua New Guinea Prime Minister Peter O'Neill speaks about development changes in the Pacific at the National Pess Club in Canberra, on Wednesday, 28 November 2012. (Photo:AAP)

Author: Sean Jacobs, Canberra

In late 2012 Papua New Guinea Prime Minister Peter O’Neill delivered a series of speeches that give clues to the country’s growth and political aspirations.

For some time, observers of the country have been kept on a slim diet of academic analysis or fragmented news items for their understanding of the country and the intentions of its political leaders. Read more…

PNG ‘land grab’ update

Trucks transport timber from areas undergoing deforestation in the Western Province of Papua New Guinea (Photo: AAP).

Author: Colin Filer, ANU

The Commission of Inquiry’s final report on Special Agricultural and Business Leases (SABLs) should soon be tabled in Papua New Guinea’s national parliament.

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Economic challenges for the new Papua New Guinea government

Newly re-elected Papua New Guinea Prime Minister Peter ONeill poses for a group photograph with his cabinet in Port Moresby on 3 August 2012. The biggest challenge for the new government for the next decade is improving the inclusiveness of economic growth. (Photo: AAP)

Author: Aaron Batten, ADB

Papua New Guinea’s (PNG’s) incoming government will inherit an economy buoyed by a decade of rapid economic growth and poised to reap the benefits of its vast natural wealth.

After the state was nearly bankrupted in 2001, real per capita income has risen by 150 per cent and private sector employment has more than doubled.

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Papua New Guinea’s development success depends on learning from its past

Port Moresby, the capital of Papua New Guinea (Photo: AFP)

Author: Aaron Batten, Ministry of Finance, Malawi

The PNG economy continued to perform well in 2009. Despite declines in the oil and gas sector, lower commodity prices, and reduced international demand because of the global financial crisis, real GDP grew by a solid 4.5 per cent. This growth was also relatively diversified with a 4 per cent increase in formal non-mining sector jobs adding further to the large employment gains made since 2005.

The government’s management of the economic expansion has been mixed, however. The fiscal surpluses of previous years have eroded, with this year’s budget recording a 0.4 per cent of GDP deficit after a 2.2 per cent of GDP deficit in 2008. Read more…

Hey big spender: PNG’s 2009 budget

Author: Aaron Batten

The 2009 Budget sets several records for PNG’s fiscal management under the theme, ‘Empowering and Transforming the Rural Economy’. Foreshadowed is the PNG Government’s contribution to the Development Budget which is a massive K1385 million ― an increase from K526 million in 2008.

This unprecedented increase in the Development Budget means that, for the first time since independence, PNG’s development expenditure appropriation will be larger than total donor funding of K974 million.

With the unfolding financial crisis, the 2009 Budget may also herald the official end to the commodity price boom which has been driving PNG’s growth and revenue since 2002. As a result, total tax revenue is expected to fall by almost 25 percent. Despite this fall in revenue, and increase in development expenditure, the Government still plans to maintain a relatively balanced budget ― a deficit of K10 million ― in the coming financial year. So where did all the Kina come from? and perhaps more importantly, where is it all going?

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Trust accounts and the management of Papua New Guinea’s commodity boom

Author: Aaron Batten

Just like the 1990’s trust accounts are shaping up to be a defining component of how PNG manages its resource revenues in this decade. Unlike the 1990’s however current revenues are being channeled into numerous smaller trust accounts instead of the single consolidated Mineral Resource Stabilization Fund (MRSF). Has PNG learnt from its mistakes or is it heading towards a repeat of the past? To answer these questions it is necessary to understand why these trust accounts have increased so much in prevalence over the last few years and what implications this has for fiscal management.

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