LNG work windup bugs growth

Business, Normal

The National, Thursday 04th April, 2013

THE winding down of the construction phase of the PNG LNG project will likely affect economic growth and employment, Bank of Papua New Guinea (BPNG) Governor Loi Bakani said.
He said all the sectors, which benefited from the spin-off activities of the LNG project, will be affected.
“On the other hand, the winding down will free up a lot of resources, including manpower and capital goods, which could be utilised in other sectors of the economy to maintain the momentum of economic activity.
The strong level of investment in the non-mineral private sector, combined with the government’s fiscal stimulus in the 2013 budget is expected to partly offset the decline in activity as the PNG-LNG project winds down”, he said.
Bakani highlighted that the 2013 budget is very ambitious, which aims to drive economic growth by rehabilitating major infrastructures and investing significantly in priority areas such as education, health and agriculture as well as to other sectors of the economy.
He said this will also involve significant funding to the provincial and local level governments.
While this is a commendable undertaking to shift resources to the rural majority, Bakani cautioned that implementation capacity at lower levels of Government is still a major concern.
“Lack of capacity to spend efficiently and effectively can result in mismanagement of scarce resources.”