Papua New Guinea is at a crossroads today: the country is poised to enter a period of unprecedented economic prosperity, led by the PNG liquefied natural gas (LNG) project that is being developed by ExxonMobil. Revenue from this project is expected to double PNG’s GDP growth, and a second LNG project in the Gulf province, being developed by InterOil, is also progressing well. While these developments are under way, production is expected to commence soon at a number of mines nationwide, including the Ramu nickel, Yandera, Wafi and Hidden Valley mines. In the coming years, the revenue inflows from the export of gas and minerals will be phenomenal and radically change the level of prosperity in PNG.
However, as I have travelled the length and breadth of this country in the past nine months I have been shocked by the neglect that our educational and health facilities face, and the poor state of our key infrastructure, like roads and wharves. These have been allowed to deteriorate to a level where rebuilding them will require herculean effort.
Our roads are in such bad shape that potholes are common and accepted. Meanwhile, the ports in many of our towns are no longer used, making sea travel risky. Hospitals are run down, lack the proper staff and cannot provide the right drugs or treatments for certain ailments. Finally, our schools are overcrowded because of classroom and teacher shortages, and many of the nation’s airstrips have been closed due to lack of proper maintenance.
PNG’s economy has changed. The coffee and tea plantations in the Eastern and Western Highlands provinces, and the cocoa and copra estates in East and West New Britain, New Ireland and Bougainville, were all once strong contributors to the economy, but these have been neglected and fallen to ruin. In the past nine years, the country enjoyed a period continuous economic growth. Over PGK70bn ($33.3bn) flowed into the state’s coffers and five consecutive national budgets have recorded surpluses of over PGK6bn ($2.9bn), because of very high commodity prices. Unfortunately, there is little to show for all this wealth. Look around PNG, and everywhere the story is the same: dilapidated hospitals and classrooms, deteriorating roads and ports, airstrips rendered unusable due to a lack of maintenance, and so on.
Heading a government with only 10 months to govern, but so much to do, was not easy. However, I believe we have begun to lay the foundation for growth, improved services, and better education and health for all. We have introduced free education, which we are funding with PGK700m ($333m) in 2012, and we have also allocated PGK350m ($166.6m) to fund a free health care programme. We have also begun talks with the Exim Bank of China for a loan of PGK7bn ($3.33bn) to roll out a comprehensive infrastructure development programme, central to which is the rehabilitation of the highlands highway.
The Lae-Nadzab section of the highway will be expanded to four lanes, to complement the PGK700m ($333m) upgrade of the busy Lae Port. Once completed, the improved infrastructure will ensure businesses can be more efficient and expand, and this growth will bring more revenue to government.
Tackling corruption and improving law and order remain key goals as well. The recent graduation of 600 police recruits demonstrates our commitment to increasing police manpower to an acceptable level. The new Task Force Sweep will identify and prosecute perpetrators of corruption in government, and sets us on a path toward eradicating this cancer eating the nation’s resources and denying our people their rights.
The LNG and minerals beneath PNG are non-renewable resources, and revenue from their export has to be invested wisely to support the nation’s long-term economic growth and safeguard its future. We have passed legislation to establish a sovereign wealth fund that will manage these earnings. If we do not wisely protect and invest these revenues, we will leave behind a future with little for which our children can be proud.
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