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Old 28-10-2009, 09:54 AM
Cool_Guy1 Cool_Guy1 is offline
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Ace, It was an interesting read. This were developments taking place during that time in 2005. The latest development trend since 2005 has been substantial. PNG has experience positive economic growth since then, due to better international prices of Papua New Guinea's export commodities.

The government has collected huge amounts of money through tax because of the substantial price increases in crude oil and gold. The government consecutively ran budget surpluses since 2006, and the PNG economy is still growing at a pace that far outweighs any growths that were experienced in the short history of the country.

The prospects for PNG to achieve double digit growth figures are there, given the proposed trillian dollar LNG project, the Ramu NIckel Cobalt project, other new mines. As you can see, that the growth in PNG has been driven primarily by the increase in international prices of crude oil, gold and all major agricutural commodities. Measure growth in terms of GDP has it short comings, because it does not take into account the benefits and disincentives faced by the local subsitant farmer.

This is to say, positive growth in GDP has any impact in the small subsistance farmer in the village? GDP does not take into account the social or welfare impact growth has on individual persons and thats the short coming. Why do i say that? Did the growth in GDP, filtered into the rural population? did it have an impact on individual small subsistance farmers?

Nepal uses something they call "Happiness Index" to measure the impact of such growths experienced in their country. PNG and other countries dont have that index to measure, whether everyone in the village up to the urban areas are content and happy with the current economic groth situation and the growth has filtered equally to every sector of the economy.

In PNG's case, growths have been concetrated in the urban areas, while the rural areas have been neglected for so long. Road in the rural areas are deteriorating, which is making it impossible for coffee growers to bring their prioduces to market them in towns, consequently coffe cherries are rotting away in the villages. While most of the growth has been concentrated in the urban areas, the rural area pays the price for the constant price increases in imported items, and other input prices.

The future looks really bright. One minister spoke of the LNG project as the answer to all the problems faced in PNG. I believe the same sentiment was shared by former ministers, when the Porgera, Ok Tedi, LIhir Gold mines and even the Kutubu and Moran crude oil projects were going into full swing. Did this impact projects had any kind of real impact on the people of our nation? Absolutely not. Roads still are inaccessible in the rural areas, while those that represent them in Parliament, live in luxury in the cities, neglecting the suffering rural population. So the answer the the question raised by the minister about the LNG project being the answer to PNG's problem, is rhetoric an nonsense, because there is no equal distribution of productive capacity which would allow a fair share of the wealth distributed to the rural population where, good health, education and road services are desperately needed.

The LNG project poses a major challenge for PNG. Currently, the influx into the city of landowners trying to claim their share in the project, and to make quick bucks to live extravagant lives in Port MOresby while the real landowners sufffer back in the village trying to figure out what happened to their share of royalty payments. A huge influx of so called local landowners and con-artists have decided to take the city by storm, virtually occupying small guest houses, and pokies and prostitution venues, to show their prowess as the wealthy and rich tycoons. So the problem, of prostitution, debt burdens, lawlessness has been promted by such influx of so called local landowners.

I am of the view, that this problem, will continue on when the actual LNG project kicks off. The government has pumped in a lot of cash into the system, and i wont be surprise, if PNG faces double digit inflation outcomes towards the end of this year.
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