Papua New Guinea ranks 12th in the world in terms of murders per capita, behind Columbia, South Africa and Ukraine

Brian Gomez:

DESPITE a positive short term outlook, current levels of growth and employment are insufficient to reduce poverty and improve the quality of life for most of the population, according to ANZ Bank’s head of international economics, Amy Auster.

She said the government was targeting long term growth of around 5%, which Bank of Papua New Guinea believed was close to the economy’s natural growth rate.

However, with agriculture providing 40% of gross domestic product the source of the faster growth rate “is critically important to social welfare in PNG”.

The contribution of agriculture contrasted with 25% for all resources combined and was also a much greater source of employment.

“In fact, the contribution of agriculture is likely to be underestimated in official data because of the prevalence of subsistence agriculture that is never recorded as GDP,” Ms Auster said.

Although the government believed agricultural development was a necessary focus for economic policy, there are many significant challenges to be addressed.

Ms Auster said the first major issue was crime because PNG suffered “from a degree of lawlessness that is out of proportion to its population or size of the economy.

“It ranks 12th in the world in terms of murders per capita, behind Columbia, South Africa and Ukraine.

“It ranks 13th in the world in terms of corruption, according to Transparency International, behind countries such as Nigeria and Bangladesh.”

Ms Auster said that if crime rates became intractable over the medium term this would be “one of the greatest ways to ensure the perpetuation of poverty in PNG,” she said.

A second very important issue was physical infrastructure investment and development with land tenure a “major outstanding issue” that also contributes to delays in infrastructure works, Ms Auster said.

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