032_G19_Spotlight_PNG

Global

Spotlight Papua New Guinea ExxonMobil’s LNG project plant has seen the largest ever private sector investment in PNG and could help GDP rise by 50 per cent 400 billion cubic metres, are driving the banking sector’s growth, which started from a low base – in 2013, there were just 1.5 million active bank accounts in the country. Following national policy, the government has taken out shareholdings in most of the major industrial and mining developments. A massive ExxonMobil gas project is set to be fully operational by 2017, when it is Around 85 per cent of the country’s labour force is employed in the agriculture sector, mostly working as smallholders. Only a very small fraction of land is able to sustain cash crops forecast to raise the country’s GDP and tax revenue by up to 50 per cent. By May 2014 it had managed to ship its first cargo of liquefied natural gas (LNG) months ahead of schedule. The $19 billion PNG LNG project, in which ExxonMobil holds a 33.2 per cent operating stake, is expected to produce around 6.9 million tons per year – that’s more than nine trillion cubic feet of gas and 200 million barrels of associated liquids over its scheduled 30-year lifespan. According to Exxon- Mobil’s Economic Impact Study, the project is the largest private sector investment ever contemplated in the country, and there are hopes that it will boost PNG’s economy and help fund government development efforts, as well as create more employment opportunities for citizens. Currently, around 85 per cent of the country’s labour force is employed in the agriculture sector, working mostly as smallholders. Only a very small fraction of land is able to sustain cash crops, such as coffee and cocoa, and while abundant stretches of rainforest provide ample opportunity for logging, such activities have been heavily criticised by conservation groups. Although initiatives are being undertaken to increase production and foster access to niche markets, many obstacles remain – among them limited market access, lack of access to credit, poor training and institutional support, and general land issues. UNDP administrator Helen Clark met with Papua New Guinean private-sector leaders in Port Moresby to discuss the sector’s potential in April of this year. “Evidence shows that extractive industries can play a significant role in equitable growth, if they are well managed. PNG as a ‘late starter’ can learn from the positive experiences of Norway, Botswana, Ghana and some other countries, and ensure that the proceeds from extractives lead to real improvements in human development,” says Clark. “The challenge to the private sector and the government is to decide their respective roles and how they can work together to maximise resource benefits for all.” So far, PNG has focused on a select portion of its resources for economic development, typically neglecting its primary resource, which is – in common with every other country – its people. The workforce is and should be the lifeblood of the economy, and its prioritisation is paramount to significant and widespread development. While it remains a country of contrasts, with the right initiatives there is an opportunity to make these into a colourful spectrum of activities that would develop Papua New Guinea’s economy and help lift its people out of poverty. four 32 l www.global -br ief ing.org th quar ter 2014 global © PNG LNG Project 


Global
To see the actual publication please follow the link above