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The Papua New Guinea Sovereign Welfare Fund (SWF) will manage revenue from the mining and petroleum sector to support the economy and future developments.
Department of Treasury deputy secretary for economic and financial policy Anthony Yauieb made the comment while discussing the fund during the National Budget Forum in Port Moresby last Wednesday.
Yauieb said the Stabilisation Fund was to manage the impact of fluctuations in mineral and petroleum revenue on the country’s economy and budget, while the purpose of the Development Fund was to provide a definite and ongoing funding source for the provision of development in key economic and social priorities in accordance with government development plans.
“The Stabilisation Fund can help everyone in PNG by ensuring that a steady stream of revenue flows to the government budget for social and development spending,” Yauieb said.
“It will help protect PNG’s economy from the volatility and uncertainty in global markets that we continue to see.”
For the SWF Development Fund, Yauieb said the mining and petroleum resources would be exhausted in the future and revenue generated from this sector would stop.
As such, the Development Fund would safeguard a portion of revenue to provide a dedicated stream of funds for urgently needed nation–building infrastructure maintenance, the recapitalisation of state owned entities, and for future development priorities.
Yauieb said one key feature of the sovereign fund was that while investments were undertaken by an independent board, the state would retain full ownership and control over assets.
He said past lessons would lead to the sovereign fund being fully integrated into the budget to manage government spending and the economy.
“This is to ensure that all revenues, including dividends, from the LNG project and other mineral and petroleum projects and the timing of all expenditures can be used to advance PNG’s social and economic development.”
Yauieb said the importance of the sovereign fund could not be fully understated “as it aims to ensure the country’s resource revenue are well managed and used, and support the economy and future developments envisioned in the country’s development strategies”.
SOURCE: THE NATIONAL/PACNEWS
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