An expert, Professor Stephen Howes from the Australian National University today highlighted during the Update PNG conference in University of Papua New Guinea that the much publicized economic growth of PNG is unsustainable.
“PNG is one of the most resource-dependent economies in the world. The economy is booming, but international experience confirms that in a resource-rice economy, growth and development are two different things.
“This is illustrated by the fact that the current economic growth is unsustainable” Prof Stephen argues.
Professor Howe’s argument on unsustainable economic growth is based on his research which concludes that physical and human capital investment is more than offset by natural resource depletion.
“What we do expect to happen is that over the next couple of years as growth becomes more concentrated in the mining and petroleum sectors are a slowing of that job creation and new income earning opportunities in PNG.
An Asian Development Bank economist, Aaron Batten, was earlier reported by ABC warning PNG that the unprecedented economic growth forecast for the country will widen the gap between rich and poor will widen. The reality is hitting the country now with the rise in the cost of living.
Professor Howes also voiced concern on the need to establish the Sovereigns Wealth Fund fast before the LNG revenue starts flowing in. He also urged the government to comprise with OK Tedi Sustainable Development Program to and increase the national savings to reduce the national debt and to sustain the economic growth.