PNG Post-Courier

PORT MORESBY, Papua New Guinea (December 31, 2008) – The end of year 2008 is upon us. In a few hours, many of us will be singing and voicing our joy at the start of a new year.

There will be hugs and congratulations that we have managed to get through this year unscathed and that we will do better in the next 12 months.

We echo these thoughts and wish every one of our readers the very best fortune for the coming year.

It will not be easy. The global financial crisis will see to that, that is for sure.

This crisis is not just something for the money-minded to worry about. It is a huge hurdle for all economies in the world to grasp and try to counter.

While there have been many utterances by people with insights into the PNG economy that we are largely sheltered from the crisis, it is becoming clearer day by day that this is not necessarily so.

Although we are far less subject to the immediate spillover effects, there is a real chance that there will be "collateral damage’’.

In other words, you might not be hit by the bomb that lands in the neighbouring street but when the houses in the next street start collapsing, their collapse can hurl projectiles that cut us down, many metres from the point of impact.

We have always been heavily affected by what hurts the Australian and American economies. Now we can add to that, China.

The powerhouse of Asia is realising that its surging economy is going to be knocked around more severely than was first thought.

And with traditional major player Japan already lurching from the finance collapse, there will be cutbacks in major programs and in demand for raw materials.

Australia is buckling down for a slashing of demand for its iron ore and coal from Asia.

The much touted liquefied natural gas project (LNG) is still on the drawing boards and its major spending programs are not due to kick in for another year or so.

The major players like ExxonMobil can afford to carry on regardless but some of the enthusiastic resource developers of smaller scale may have to follow the Nautilus lead in delaying or cancelling spending.

Of our major export income earners, oil has plummeted recently and the outlook is unpredictable; gold looks like holding up well as a safe haven in uncertain times; food sources like coffee, cocoa, tea and vanilla, may suffer as world consumers cut back on luxuries.

It is a time of uncertainty.

Let us hope that 2009 spares us the worst of the crisis.

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