Economy needs a boost

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By DALE LUMA
The Government must implement measures to boost the economy, create jobs and improve revenue to fund expenditure and pay off its growing debt, says an economist.
Previewing the 2021 national budget, Institute of National Affairs (INA) executive director Paul Barker told The National yesterday that expenditure control and some public sector reform and right-sizing would be needed.
Parliament sits next week to debate on the budget.
He said the budget must entail stronger focus on priorities including “genuine human resource development, through quality education and health services”.
“PNG’s population continues to grow at a relatively fast rate and 40 per cent of that population is below 15 years of age, eagerly seeking quality education and jobs,” Barker said.
“The formal job market remains very small – at around half a million.
“But these jobs play a critical part in the economy, sustaining households and often many relatives, as well as paying a large slice of the total tax bill.
“Boosting formal sector employment is critical, as well as boosting opportunities in the larger informal economy, which provides most of agricultural export earnings and food for the domestic market.
“Succeeding in launching some of the major resource projects in a short time period will provide a valuable stimulus and boost to wider economic confidence
“What will be critical will be providing greater assurance to domestic and foreign direct investors that there will be welcoming and particularly stable investment conditions.
“So, while it’s important to ensure fair benefit sharing from new resource projects, between the Government, investors and local interests and needs to quickly restore existing projects such as Porgera.
“Longer-term and broader-based investment requires confidence that the investor can make a profit, and potentially remit that profit, that the exchange rate is at the market level, that basic infrastructure will be restored and maintained.”