Broad consensus has been reached for the establishment of the independent state of Papua New Guinea’s (PNG) sovereign wealth fund (SWF) according to latest International Monetary Fund country report.
The planned SWF consists of a consolidated pool of offshore funds with three coordinated and integrated funds: a savings fund, a stabilization fund, and an infrastructure fund.
“All mineral revenues are to be automatically deposited, with LNG tax and other mineral and petroleum taxes and dividends allocated to savings and stabilization funds and LNG dividends to the infrastructure fund” the report says
However, sacked treasury for finance, Don Polye gives a contradictory perspective to the discussion on the SWF.
“The proceeds from LNG will first be used to service the international loans before the SWF”
Mr Polye believes this is not healthy for general wellbeing of the people of PNG.
HETRI NOTES understands that the drawdown arrangements are currently under discussion.
A joint working group consisting of Bank of Papua New Guinea and department of treasury set up by the National Executive Council is overseeing the establishment of the fund.
The process of SWF creation is at phase three for working committee to conduct public consultation.