Mekere: lock in funding for infrastructure to avoid missed opportunities
Sir Mekere: PNG could miss opportunity to harness potential.
Papua New Guinea (PNG) will fail to harness its potential unless it restored discipline to its budgetary processes, locked in funding for rural and national infrastructure maintenance, and recapitalise its public enterprise.
Retiring former prime minister and Public Enterprise Minister, Sir Mekere Morauta, sounded the warning today in an address to the PNG Sustainable Development Program (PNGSDP) annual general meeting.
PNG has experienced positive economic growth in recent years with the Bank of PNG estimating growth in 2011 was higher than the projected 9.5 per cent and would be about 8 per cent this year, with Sir Mekere confident the trend would continue due a new generation of resource projects in the Southern Highlands, Gulf and Western provinces in addition to the ExxonMobil-led PNG LNG Project and the Gulf LNG project.
“These projects will deliver huge revenues to government that have the potential to transform living standards in our country if the government can get incentives right, fund the right mix of public investments, diversify the economy and integrate effectively into the global economy,” he said.
While the country looks set to capitalise monetarily from the commissioning of new mines and LNG production facilities, the former PM warned PNG should avoid the “lost opportunities” era of the Somare government.
“For example, the Somare government spent a staggering K60 billion during its nine years in office. Yet our national infrastructure is crumbling around us. Our roads are full of potholes, our ports are congested and our universities and hospitals are dilapidated. Our people are suffering: there aren’t enough schools for our children, aid posts for our communities or jobs for our youths. One government; political stability; revenue galore; but where did all the money go? What can be seen for it? No dividend for our people. Why?”
The solutions, according to Sir Mekere, lies in restoring discipline to PNG’s budgetary processes and ensure funding for the maintenance of national infrastructure, provision of rural infrastructure and recapitalisation of public enterprises is locked in.
“I believe that we can make a difference now by locking in some sensible decisions on how revenues from the sovereign wealth fund will be allocated, while at the same time putting in place strong organisations to spend the money effectively. I’ve therefore argued that the sovereign wealth fund should earmark dividend flows from PNG LNG - about K500 million per year - for maintenance of national infrastructure (roads, ports, airports, universities, hospitals), the provision of rural infrastructure and the recapitalisation of public enterprises.”
He proposed that an “independent infrastructure authority”, modelled on the PNG National Roads Authority, would manage the government’s infrastructure assets and lead the drive to rehabilitate and maintain them.