Secrecy Of PNG’s Sovereign Wealth Fund Criticized

admin's picture

Secrecy Of PNG’s Sovereign Wealth Fund Criticized NRI: Structure, management of fund must be openly debated

By Grace Salmang

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Oct. 22, 2014) – The success of the Sovereign Wealth Fund (SWF) will depend on its structure, legal framework and management, according to a National Research Institute report.

The report said the level of secrecy surrounding the structure of the fund and the lack of open debate on this important issue are serious.

NRI director Dr Thomas Webster said the SWF could be a useful tool to manage the risks of external shocks to the PNG economy while advancing the development aspirations.

The report said while the steps taken by leaders to create this fund were in the right direction, the failure of the political leadership to have the SWF established and made operational prior to the start of export of PNG natural gas this year was of grave concern.

Dr Webster added that there were many reasons why the structure and operations of the fund must be fully debated.

The report by Dr Webster, Osborne Sanida and Charles Yala said that revenues from past extraction of natural resources had failed to impact the lives of the average citizens; in fact Papua New Guineans had become poorer.

The report placed its emphasis on ensuring that the LNG income stream and revenues from other similar projects transform positively the lives of the average citizen, both now and into the future.

"As we write this article, we are well aware that the PNG LNG has started exporting.

"Proceeds from these sales accruing to PNG need to be deposited responsibly," they stated.

The report is timely given the legislation for the establishment of the PNG SWF to be tabled in next month’s parliament’s sitting.

Rate this article: 
No votes yet

Add new comment