Then National, Tuesday 11th September, 2012
THE LNG project offers a means
of unlocking value from the extensive gas resources of Southern Highlands/Hela region.
The benefits offered by the project are expected to come from capital investments, employment, direct cash flows to government and landowners as well as the potential for increased petroleum exploration and production activities in the country.
This project has the potential to transform PNG’s economy, boosting GDP and export earnings, providing a major increase in government revenue, bringing royalty payments to landowners, creating employment opportunities and providing a catalyst to further gas-based industry development.
The benefits would spread when the government spends the earnings on social and economic programmes.
They should improve Papua New Guineans’ living standard by providing essential services.
Landowners stand to benefit from direct payments of royalties
as well as improved social and
A project of this magnitude would improve our economy and
its balance of trade.
While the direct benefits above are important, the true significance of the LNG project lies in its potential to influence economic performance, as a result of flow-on effect on other industry sectors.
Spending by project participants, employees and govern-ment and landowner beneficiaries will lead to multiplier effects.
Investments in physical assets such as roads and airports, or in social assets such as improved education and health services, would also enhance economic factors.
One of the significant impacts is creating business opportunities, including out-sourcing of services such as catering, engineering, security, fuel supply, managerial and technical assistance.
In conclusion, the LNG project would have a profound effect and would inevitably create some strains across the economy as well.
But the net benefits would be massive, provided the adverse pressures on some sectors are properly managed.
Responsible government expenditure policies and strong governance would be required to ensure the economic gains from the project translate into equivalent socio-economic development for the nation as a whole.