ADB lauds our growth

 By GYNNIE KERO

PAPUA New Guinea has benefited largely from the region’s rise in global economy, Asian Development Bank (ADB) president Takehiko Nakao says.

He said during a breakfast in Port Moresby yesterday that regional demand had encouraged foreign investment and driven up prices for PNG’s key commodity exports.

Nakao said “PNG’s export revenues have increased three-fold since 2000. 

“This has stimulated output, boosted government revenues and buffered the economy against some recent global economic shocks.

“And PNG has now undergone a remarkable 11 straight years of economic expansion – with GDP growth averaging just under 6% per annum. 

“Developing Asia and the Pacific economies is expected to grow by 6.6% this year and 6.7% next year … importantly, the region is making the transition to growth led by domestic and regional demand. 

Nakao stressed that while regional growth had been one of the reasons for the country’s strong economic performance, PNG’s growth has also been made possible by better government policies.

“ADB supports the improved monetary and fiscal policies that PNG has adopted over the last decade to create economic stability.

“ADB has assisted important structural reforms in such areas as financial services, small-to-medium enterprises, (SME) finance, aviation, telecommunications sector restructuring and regulatory reforms in many sectors. 

“These reforms have boosted business investment and enabled initial progress towards economic diversification.”

Despite this progress, PNG continues to face significant challenges in making the economy more broad-based with sustainable and inclusive development outcomes.

He stressed that PNG must be more than an exporter of raw materials and must embrace innovation and new technologies such as mobile telecommunications that would open up new business opportunities.

“The Government must use revenues effectively to restore and upgrade the national infrastructure network. 

“It must ensure that different parts of the PNG economy are well connected and that the benefits of economic growth are shared equitably.”

He stressed the importance of continued reforms of state-owned enterprises and improving transparency of resource revenue management. 

“PNG also needs to work toward creating a financial system that supports small-and mid-sized firms, which have been a key source of innovation and job creation across the Asia and Pacific region.”