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  #11  
Old 08-02-2012, 12:22 AM
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mon mon is offline
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Hi there,
I am a new user. Can anybody enlighten me on the economic impacts the Agriculture, Trade, Employment, Tourism, Mineral, Gross Domestic Product and Hospitality industry will have on the PNG economy due to the trillion kina LNG project??
Your help is appreciated.
Thanks,still learning...
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  #12  
Old 16-03-2012, 09:17 PM
kristine kristine is offline
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There are many promising businessmen out there, but the main problem is, they don't have enough budget to start big. As an online marketer, I strongly recommend hiring an offshore virtual assistant who has enough administrative knowledge and skills to do all your office jobs. The catch is, they save up your time and boost your productivity in acquiring clients. Though small businesses don't have an income as big as established companies, strengthening them can help the economy as a whole. Virtual administrative assistants, such as the one I have, are great secretaries who can escalate your income.
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  #13  
Old 29-03-2012, 09:19 AM
Cool_Guy1 Cool_Guy1 is offline
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Economic overview of Papua New Guinea

This is in response to Mon's enquiries on the impact of the LNG project on Agriculture, Trade, Employment, Tourism, Mineral, GDP and Hospitality industry. I will respond to your query based on anacdotal evidence rather than empirical findings. Empirical work has been done by ACIL by modelling the economy. BPNG and Treasury did some empirical work on the impact of LNG project using CGE model, which is more technical to discuss here. Large models cannot quantify the real impact LNG project have on each sector but, gives a basic outline of the effect it would have and how it would impact the various sectors. Therefore, i will try to answer your queries using anecdotal evidences and a bit of expereince.

LNG project impact on Agriculture can be twofold. On the one hand, as a result of wage disparities created by the booming sector it is expected that technical people employed in the agricuture sector such as engineers, mechanics, truck drivers, welders, machinist, managers etc, will shift to the booming LNG project. The agriculture sector can not match the sort of wage that is paid by the LNG project, if they want to match the wage disparities, the agriculture sector will have cost over-runs and it would have to close shop. Noone can operate a business with cost over-runs and no profit. This is not happening in PNG, because PNG has already had mineral booms and had the capacity to meet the labor demands. The gas industry is a new industry and most of the technical people are brought in from offshore, therefore not having much impact on the agriculture sector. The second thing that could happen in PNG is that, due to large inflows of Foreign Direct Investment (FDI), this would lead to appreciation of the real exchange rate, and this would make PNG's manufacturing and agriculture sectors non-competitive with the rest of the world. This hasnt happened in PNG, because the Government of PNG has allowed LNG project operators to operate foreign currency accounts so that all FDI inflows that are targeted toward purchasing capital equipment are kept offshore used to buy them offshore. Only operational funds have been brought onshore which the Foreign currency market is able to absorb. Over the past two years, the real exchange rate has remained stable and it the FDI flows have not had major impact. The real exchange rate appreciation in recent years has been the result of high commodity prices.

LNG projects impact on the GDP is one interesting enquiry. In one of its working paper series, the BPNG published a paper titled, "FDI and Economic growth in PNG". In this paper, they found that, after the 4th year of initial FDI flow, it would have an impact on GDP. This is because, the mineral sector is an enclave sector and spill over benefits can cause growth in the country. However, this findings can be quiried as the LNG project financing arrangements are quite unique to any other mineral projects in PNG. Its unique in a way that, the Government of PNG has dished out a low of money to the LNG project landowners to engage in businesses to benefit from the LNG project from its development phase. This has never happened to any other mineral projects and we have seen a surge in business activities in and around the LNG project site with the set up of major trasport companies, to building accomodations, providing securities, providing transportation, etc. The spill over effect has seen a surge in domestic demand and it can be reflected on GDP growth and pass through to inflation. Expectations are that, as a result of the large LNG project, we would expect PNG economy to still grow and my guesstimate is that the lagged impact of the FDI flow to GDP growth has been shortened. If somebody does a research following from that of BPNG, they would find that the lagged effect of FDI flow on GDP would be shortened.

For both the hospitality and tourism industry, as a result of the LNG project nothing has changed. There are lots of hotels, lodges and motels being build in recent times but not geared towards tourist. Those were geared towards the influx of foreign labourers for the LNG project, and are driving the prices of house up. As for the tourism industry, PNG remains one of the most volatile regions. Most foreigner come into the country risking their lives because they find that they can be compensated well with the large mineral, gas and oil deposits. Tourist for leisure tend to end up in Fiji, Bali, Samoa, etc. Unless the peoples attitude and behaviours change leisure tourists would find it risky to come to PNG. Though we have all the natural beauty, tourist inflow would still remain stagnant as a result of peoples attitude towards the industry.

cherio
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  #14  
Old 18-04-2012, 03:51 PM
Cool_Guy1 Cool_Guy1 is offline
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Recent Developments in PNG

Here is a post from one of the blogs.. http://researchpng.blogspot.com/

Tuesday, 17 April 2012

Prospects in PNG and possible shifts



The Bank of Papua New Guinea it its "monetary policy statement" for March 2012 projected the economy of PNG to grow by 7.8 percent in 2012. Headline inflation was focused at 9 percent, implying a nominal GDP growth of a whooping 16.9 percent. The predicted growth stems from spin-off benefits of the LNG construction. Apparently, most sectors of the economy are benefiting from the current LNG construction, with Government pumping in a lot of project finance to the land-owners like never before. Domestic demand should increase, thretening price stability. Anecdotal evidence shows that, due to the recent billion dollar LNG project there has been a structural change in the composition of CPI weights. Inflation pass through from exchange rate developments tend to be played down by domestic demand push inflation. Price bubbles expereinced in the domestic real estate market and the recent newspaper report of a up-surge in demand for real estate in Australia by PNG nationals has been the cause of the wealth effect created by the spin-off benefits of the LNG project.

There seem to be a shift in investment and service orientated business. Traditionally Australia used to be the major market for PNG, however, due to a lot of strict regulations by Australia on PNG business and individuals, recently, the shift is eminent. During a recent flight to Singapore, direct from Port Moresby, a lot of PNGeans are using that route to travel to other parts of Asia, Europe and even America's. Traditional travel routes through Australia is slowly weaning out, as Australian immigration rules have become to stringent.

The spill over effect of the LNG project and the double digit growth of PNG should have an impact in Australia. The real estate industry does seem to have picked up quiet a bit, however, the future looks bleam for Australia on the business side of things. Because of the stringent visa regulations, a lot of attention now for PNG nationals and businesses is either Asia or the other Pacific Island countries.

Double digit growth figures are sure to increase the wealth of a lot of Papua New Guineans and their spending and investment habits should increase in the near future and this should give rise to more offshore investments and surely, Australia will miss out on it.



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  #15  
Old 08-06-2012, 01:43 AM
jonsmith jonsmith is offline
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It is very important for economy progress that government should provide every facility of country people in every field of life.Like as agriculture banking and some others.The government should provide best facilities to exporters that they export things to other countries and make money for country economy.
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  #16  
Old 31-08-2012, 01:25 PM
Cool_Guy1 Cool_Guy1 is offline
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Strengthening the structures right

Nicely put, Jonsmith. This weeks paper highlighted a few things the new government needs to address in order to drive PNG forward. Buildings, bridges, whaves etc, need solid foundation to stand. For a country to grow and move forth and be reckoned among the best, foundations of growth need to be strenghtened. Currently the fabric of PNG society and the government machinery is riddled with corruption and is eating away the fabric/foundations of the society.

You dont have to have a PHD in economics to inform someone of the need to strenghten and support the agrciculture sector to grow because almost 85 percent of the population depends on it. With better roads, bridges, schools, aidposts and other government services, the agriculture sector can grow and sustain a lot of our rural people. I have driven around most of the provinces of the country and you need a 4-wheel drive to take you to places where the real Papua New Guineans live. The hype about the LNG project, and the mines is something that will be short-lived, but, the actual base for sustained growth for the PNG economy is the agriculture sector.

Too much politics have hindered the growth of the agriculture sector and has remain stagnanted over the years. Most of PNG's foreign exchange earnings are generated from the agriculture sector and it has contributed immensely to the 85% of PNG's population.

A lot of countries economic growth have been successfully driven by the agricultural sector, such as Vietnam. PNG is immensely blessed with natural resources but, we can not manage them well resulting in lots of corruption. The Logging industry has a fair share of corruption and has not been fixed, it still is riddled with transfer pricing, illegal under the counter deals, etc.

When PNG nationals who are tasked with big responsibilities of secretaries, managing directors, CEO, etc start to be patriotic about their particular organisation, will PNG start to move forward, otherwise we will be like ostriches who stuck their head in the mud trying to escape from its attacker without realising its rear-end sticking out for a clear shot.

Resources allocations havent reached the greater poor in the provinces, villages and towns of PNG, as a result, PNG is expaning one-sided. When there is no balance, one-sided growths lead to a fall towards the fatter side, no wonder we see a lot of squatters in the cities. People flocking into the cities to get better services.
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  #17  
Old 19-09-2012, 03:21 PM
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PNG Economic Update for 2012

As construction phase for the LNG project is at its peak, employment growth due to increased economic activity in the private sector has led to favorable economic outlook for PNG for 2012. Inflation outcomes for the June quarter stands at 1.4 percent. Forecasted double digit growths for this year as a result of LNG related private sector activity and the spin off benefits from the project is likely to strenghten the persistent growth in the country.

Growth prospects for countries all over the world have been dampened by the euro debt crisis which seem to have contagion effect on both developed and emerging economies. While those countries are looking at fiscal stimulus to re-ignite growth, PNG has been riding high on large inflows of FDI due to the LNG project and related private sector activity.

Commodity prices have been declining so as government tax collection. Compared to previous years, tax collections for the government should be much lower than what it has been due to decline in commodity prices. There has been much talk about a K500 million budget deficit in the papers. If this was so and the government had to seek funds to re-finance the budget, it would be either domestic or external borrowing, which would result in the debt burden of the government increasing again. Pas few years have been good ride for the government as a result of good prices for its commodity exports, however, this year, the challenge is imminent.

As for business, the properties market seem to have a field day with property prices and rentals sky rocketing. The issue would be, "are this demand drive price increase?" If the price increase are not demand drive but speculative, then it creates what they call a "asset price bubble". When this bubble burst, it can cripple financial systems and even bring the economy to its knees. This is another challenge that hangs in the air for the country.

All in all, the economy is projected to grow for the year 2012. The growth would be significant and it should be monitored properly to contain inflation at a level that is acceptable to the people and businesses of PNG.

cherio
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  #18  
Old 09-11-2012, 10:17 AM
Cool_Guy1 Cool_Guy1 is offline
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6 billion kina Exim loan

I would like to raise some issue's regarding the K6 billion Exim loan from China. We have heard the government speak of the loan which will be targeted towards developing our infrastructure, but, that is it and there is no more details of the loan.

I have heard, most of the project funds would have a boomerang effect like that of AUSAID etc, with most of the construction activities to involve Chinese companies. Sketchy detail of the loan, and who sourced the loan and under whose advise is not known yet.

The proper process that i know of loan negotiations of this magnitude is for the Government to give its priorities to senior beaurocrats in the Department of Planning and Treasury to come up with a budget, which would set their objectives, either it be focused on education, health, infrastructure, etc. The beauracrats then set out a fiscal strategy that matches the desires of the current government. If the budgeted revenue is not sufficient, the beauracrats then return to the government and advise them of the short-fall, only then the government endorses the senior officials to negotiate external financing through commercial or concessional loans.

In this case, a budget wasnt put forth, and the negotiation of the loan seems a bit sketchy, meaning there is something wrong with the loan.

The talk along the corridors of Vulupindi house is that, the much talked about Sovereign Wealth Fund (SWF) is likely be scraped. This then brings to question, how will the loan be repaid and by when and how much?

History tends to repeat itself, as we seem to get sketchy picture of this K6 billion loan. In the past, when OK Tedi, Porgera, Misima and Kuutubu were about to start production, the Government negotiated a UBS loan, porpularly known as the "Cayman Island" deal, which tied down all mineral proceeds to the loan. For instance when dividends, royalties and taxes were paid to the Government, the first call on those payments was UBS bank, and the remaining were transmitted to PNG. Nobody knew what the deal was and who benefited from that deal.

With the talk of stalling SWF, i wont be surprised, the K6 billion loan would be tied down to the LNG project. If this is so, we are repeating history again. I might be wrong, but, i have put two and two together, where the government is no long interested in setting up a SWF, which tend to confirm my suspicion that, the K6 billion loan is tied down to the LNG proceeds, where the first call on the income would be the EXIM bank, while PNG gets what is left over.

The SWF was set up in three forms to benefit the people of Papua New Guinea, an infrastructure component, a budgetary support component and a future generations fund. SWF was set up to benefit the rest of PNG people. If the SWF is done away with to lock up future benefits for loan repayment, i guess PNG will remain poor while the wealth of this nation is ripped off and sipphoned by a few.
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  #19  
Old 08-01-2013, 10:00 AM
Cool_Guy1 Cool_Guy1 is offline
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Is Papua New Guinea experiencing and asset price bubble?

The sky rocketing real estate prices in Papua New Guinea especially in Port Moresby tend to raise a lot of eyebrows. With the ever increasing rental and sale prices of properties in PNG, real estate moguls have started to borrow heavily from the commercial banks and started to build grand looking properties to cash in on the ever increasing prices, pushing prices even further.

Rental properties at Toaguba hill is around K6000.00/K8000.00 per week, which is over the top. A 3 bedroom property at the same location is going for more than K6 million. What is causing this prices hikes on properties in Port Moresby?

In economics, prices depend on supply and demand conditions in the market. When demand goes up and supply can not match the demand, it pushes prices up. The vice versa can happen, when demand goes up but supply is more than demand, pushing prices down.

The real estate market in PNG does not seem to follow market principles. Even though there is a real estate boom in the country, which would have matched the demand conditions in Port Moresby, prices continue to increase. As a result some new great looking properties that have been built along the ridges of Toaguba hill, can not seem to find the clients to rent the properties, as a result, inside sources tell me that, prices have been pushed down to get the properties rented. With the price hike, more and more people are moving away from the prime properties in Port Moresby, whose rental prices are beyond anyones income. More and more people are shifting to the fringes of Port Moresby, where they can afford the rentals, leaving behind the class houses, which stand forlone at the ridges of Toaguba hill with no tenants.

When price increases are not driven by demand conditions in the market and driven purely by expectations, in financial markets, they term this as a "asset price bubble". A lot of real estate moguls have speculated that the LNG project would create such a high demand for property and the living standards of most PNG people would improve, hence pushed their property prices up with that expectation and has caused a major stir in the property market. Those property moguls have locked themselves into huge mortgages and bought properties and even build properties that have high expectation prices attached to it, however, when this properties dont get tenants to meet debt obligations due to high rentals, they fall into arrears and then the crisis starts to hit. When asset price bubbles burst, it can criple an entire economy, like that of Japan, USA financial crisis recently, the Asian Financial crisis, all led by property price bubbles.

When the bubble burst, people with mortgages on properties, say borrowed, K5 million to buy a property on Toaguba hill, would see their property valued at K700 thousand. The person will own a property that is worth K700 thousand but owe K5 million in mortage to the banks. As a result, the person intentionally defaults and declare themselves bankrupt and the banks are forced to repossess a property which is worth less than their mortgage. When several or more people do that, the bank looses its profitability and a bank wide crisis ensues.

My best guestimate for the property market in Port Moresby is that, it is a asset price bubble, driven by expectations of the LNG project and not driven by real demand, and my fear would be for people who have locked themselves into large mortgages needed to take heed, when the bubble burst, they will be the big loosers. If i had a huge mortgage now, i would start to sell the property and make some money rather than carry over a mortgage that would be worth more than the property value in the near future when the bubble burst.

happy new year and safe investing
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Last edited by Cool_Guy1; 08-01-2013 at 10:07 AM.
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  #20  
Old 30-04-2014, 07:17 PM
kachan kachan is offline
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Remodeling


I would say that from my limited viewings (twice on both shows) that Cinci does have the better choreography to the music, but it also has the advantages of a smaller frontage (only one set of barges, not two sets), and having two bridges to fire from gives them a real advantage. The shots going from each bridge arching towards the other bridges are one of the best aspects of the show to me. But I think the shows at Thunder are designed both based on older concepts, like originally being manually fired, as well as needing more product, due to two barge firing sites, and a sponsor desire to be the biggest show, not the tightest scripted show or best musicality show.
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