The National, Wednesday 28th December 2011
by SYD YATES
TWO significant social and economic issues involving PNG’s ongoing progress in the next decade provide important reviews of PNG’s progress opportunities.
As a follow on from the budget, the planning of the implementation of the sovereign wealth fund is a vital issue for all Papua New Guineans as a major generational development opportunity and the report of the Office of the High Commissioner for Human Rights (OHCHR) Regional Office for the Pacific is a further significant commitment.
The Department of Treasury Deputy Secretary, Economic and Financial Policy, Anthony Yauieb outlined that the sovereign wealth fund (SWF) will be onshore managed, offshore invested and onshore spent.
He indicated that the SWF will be fully integrated in the budget and fiscal framework and in line with international best practice and there will be governance, transparency, disclosure, accountability and asset management rules.
Yauieb said within the SWF integrated governance, on-shore managed, it had the stabilisation fund and the development fund.
“In terms of the inflows into the stabilisation fund, both taxes and dividends will go into the stabilisation Fund.
“The stabilisation fund is to protect the PNG economy from the volatility of mineral and petroleum prices.
So all the money will go into the stabilisation fund, and then it will be drawn down in the national budget,” Yauieb said.
Discussing the development fund, he said deposits into the fund will be from the national budget and the fund would have a number of accounts.
The purpose of the development fund is to support the implementation and realisation of the government’s development objectives, in the strategic plans; Vision 2050 and the medium-term development olan (MTDP).
To commence with, there will be two accounts, the state-owned enterprises capitalisation account as well as an infrastructure account.
“There’ll be a guaranteed minimum of funding for these two accounts and that will be equivalent to the expected flows from the dividends from the PNG LNG project,” he said.
He said as regards the state-owned enterprises capitalisation account, this is funding that would go to the Independent Public Business Corp (IPBC) and provided over a 10-year period.
The infrastructure account would provide funding to a proposed independent infrastructure authority that will be the umbrella organisation that will oversee the implementation of strategic nation-building infrastructure, so it will oversee programmes that fall under the Department of Works, the National Roads Authority, Border Development Authority as well as a proposed economic corridor implementation agencies in the development strategic plans.
This will be for major infrastructure projects and maintenance for highways like the Highlands Highway and the Buluminski Highway and will also see funding for major hospitals, as well as higher education institutions.
The fund’s independent board will have an administrative secretariat with the Bank of PNG proposed provide that function.
The independent board will be given an investment mandate by the government, and within that independent mandate, it will then make appropriate investment decisions.
The sovereign wealth fund and its legislation is part of the 2012 budget which is subject to final approval when the current political position is resolved.
Earlier this year, PNG appeared before the United Nations (UN) Human Rights Council in Geneva and made a series of commitments to progress human rights in the country as part of the universal periodic review process .
Matilda Bogner, the Office of the High Commissioner for Human Rights regional representative for the Pacific, said that PNG government t commitments this year to the international community on human rights had the potential to change things for the better.
l Syd Yates is the CEO of Kina Group of companies.
It accepted 114 of the 146 recommendations made by other member-states.
In a display of good faith, PNG declared that it was prepared to engage in frank and open discussions on the human rights situation in the country.
PNG committed to establish a national human rights institution, take steps to combat violence against women, take measures to prohibit corporal punishment, enact legislation to protect children from child labour and sexual exploitation and to ratify all remaining core human rights treaties.
While serious concerns have been raised this year about PNG’s human rights situation, the government has stated its commitment to improve and through the review process has been provided with a relevant road-map to follow.
Wishing you all a belated merry Christmas and a happy and prosperous new year.