ANZ on PNG
This week Australia New Zealand Banking Group Ltd (ANZ) released a commissioned report titled Bold Thinking: Imagining Papua New Guinea in the Asian Century.
Written by Port Jackson Partners, the report is a coherent and ambitious assessment of PNG’s economic potential over the next few decades. “PNG,” the report summarises, “has the opportunity to grow resource sector export revenues to four to six times current levels, or US$23 billion to US$36 billion by 2030.”
The challenges, however, are not glossed over. With land use restrictions and without “best practice policies” the windfalls of PNG’s resource boom will be much less significant. The report defines a world class regulatory environment, highly competitive taxation, no political risk or uncertainty, and fully stable mining regime as “best practice policies.” This will mean that, to maximise economic potential, PNG needs to morph into an economy like Hong Kong’s in a couple of decades – an unlikely feat.
The report also looks at where government development is required from law and order to tax efficiency. Woeful infrastructure, which has long been viewed as PNG’s Achilles Heel, also features prominently. The thinking is that, if infrastructure improves, agribusiness could be another boom sector of PNG’s economy. But, as discussed elsewhere, infrastructure is not just about building roads or ports but raises real questions of governance.
All roads, so to speak, point to the PNG government whose policies, laws and capacity will be tested in the coming decades as both revenues and public expectations increase.
The report can be found here.