By PATRICK TALU
DESPITE eight consecutive years of economic growth, Papua New Guinea’s poverty level remains high at 50% and ranks 148 out of 182 countries in the human development index complied in 2009 by the United Nations Development Programme.
According to the Outlook 2010 report presented by economist from the Asian Development Bank (ADB), Dominic Patrick Mellor, infrastructure was in a bad state and human development indicators are low.
However, when the substantial revenues from the LNG project start to flow, the Government will have an opportunity to fund development projects that would improve the living standard and alleviate the poverty level.
Mr Mellor said in order to have an improved living standard and reduce poverty, it would be better for the Government to manage the revenue flow prudently and share the benefits widely through well designed public programmes.
He said programmes such as the district services improvement programme (DSIP) was a good idea, but he was not sure the programme had really touched the lives of the bulk of the rural populations.
“It will be critical to avoid the ‘resource curse’ that mining and energy exporting countries often bear.
“This will require a fiscal framework that saves part of the resources revenue so that it will be spent over time, transparently, accountably and most importantly the revenue be translated down to real development where bulk of the population feel the impact of the growing economy,” he said.
Mr Mellor said he was concerned that although elements of such framework were spelled out in the existing policy statements and were previously followed, the system broke down last year when a large disbursement of funds were made that never had an impact on the socio-economic development.
He said that an enhanced public financial management system was now required so that services could reach the people who are still living below poverty level.