Economy downgrade means big challenges for PNG – Economist.

Economist and director of the Institute of National Affairs Paul Barker says the downgrade of the PNG rating by the Standard and Poor’s sgency was not too surprising.

Standard and Poor’s has downgraded PNG from being a stable economy to a negative due to the slide in energy prices.

Barker says this means PNG has major challenges to overcome in managing its economy.

He says the concern is over PNG’s failure to diversify the economy and encourage development in other industries which are more important than LNG in terms of job creation and broad based household income and opportunity.

Barker told LOOP that clearly, lower ratings are a reflection on the situation which makes it harder and costly for investors or others to secure finance but the prospect doesn’t need to be all gloom.

He says the country certainly has the potential to turn things around, but government needs to listen more and base policies on sound evidence-based advice

He added the government must concentrate resources on the needs and priorities of the population and lowering the costs and challenges (including cost of crime) for credible investors who'll generate diverse local skills and employment and opportunities in PNG.

Barker says some things the government can do is focus expenditure on core priorities includong h9uman resources, access road maintenance /upgrades, agriculture value chain, clean up and support law and justice, tackle corruption seriously, encourage  competition and removing unconstructive investment impediments.

He says the State should also consider stopping investment in private businesses and empower communities to be aware of laws, budgets and actual spending.

 

Author: 
Joy Kisselpar