Infrastructure crucial
The National, Thursday September 11th, 2014
By SHIRLEY MAULUDU
HAVING reliable and efficient infrastructure is crucial for any country’s economic growth and prosperity, Asian Development Bank (ADB) vice-president Lakshmi Venkatachalam said.
She said based on ADB’s experiences in working with other countries in the region, it was critical for a growing economy to identify which services and infrastructure were best developed and run with public resources, and which should draw on finance and knowledge from the private sector.
Venkatachalam told the PNG Business Advantage Summit 2014 in Port Moresby yesterday that with ADB directly supporting projects in transport, regional integration, energy, and communication, the bank had given its backing to the PNG government in its increased spending in key enabling areas such as infrastructure, which would foster economic growth.
“Seventy per cent of ADB’s sovereign loan portfolio in PNG, amounting to almost US $1.1 billion (K2.77b), will be directed to enhancing road, civil aviation, shipping and port infrastructure networks.”
She said the current expansion of Lae’s port – which is being supported through ADB’s sovereign lending window – will be an economic hub of the country.
“I have no doubt that this important project will develop Lae as a regional gateway linking the world market with the PNG hinterland, stimulating the economy and creating jobs.
“Given the growth projections of Papua New Guinea and of the port, it struck me that future development of the Lae port could well be commercially viable,” she said. She said government funding for its four priorities or ‘development enablers’ namely infrastructure, education, health, and law and order, continued to grow rapidly as it should, rising from 20% of the budget in 2003 to 40% in 2013.
“While strongly supporting the growth agenda, ADB has recommended that the government commit itself to a period of lower expenditure growth so that it can rebuild fiscal buffers and ensure that any future economic shocks can be managed effectively.”