Port Moresby, PNG
The proposed Sovereign Wealth Fund (SWF) to be set up to invest funds generated from the LNG project abroad will boost Papua New Guinea’s (PNG) economy to about K50 billion in GDP (Gross Domestic Product).
This is double the current GDP rate of K25 billion, PNG’s deputy secretary of Treasury and chairman of the SWF working group Anthony Yauieb revealed yesterday.
Mr Yauieb said huge dividends estimated at about K50 billion in GDP would flow into the fund in 2014 when the LNG project was in full operation. “This is a significant amount and will have a huge impact on the economy,” Mr Yauieb said.
He made the comments at the National Research Institute (NRI) during the launching of the NRI report “Creation of a Sovereign Wealth Fund’ yesterday.
Bank of PNG deputy governor and deputy chairman of SWF working group Benny Popotai supported Mr Yauieb’s remarks, saying the fund will boost the country’s economy if managed well.
Mr Popotai was the guest speaker at the launch said the Central Bank had done an excellent job in investment of the country’s foreign reserves and assets when outsourcing them abroard which can similarly be done to SWF. He said previous experiences showed that the government had not handled well its trust accounts when in 2008 rapidly drew down the trust accounts.
NRI senior research fellow Peter Johnson said SWF must be managed in a way that it could resist political pressure. Mr Johnson said by 2014 revenue from the PNG LNG was expected to flow to the Government and if history was not to repeat itself, lessons had to be learnt from the past.
He said in terms of direct benefit, the majority of employment would take place during the early construction phase of the project. After construction phase only a relatively small number of employees will be required to maintain the facility.
SOURCE: POST COURIER/PACNEWS
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