"We declare our first goal to be for every person to be dynamically involved in the process of freeing himself or herself from every form of domination or oppression so that each man or woman will have the opportunity to develop as a whole person in relationship with others".

- Papua New Guinea National Goals and Directive Principles

Tuesday, 23 November 2010

Sovereign Wealth Funds - Part 2

Peter Johnson (2010) from the National Research Institute, after considering global experiences with wealth funds, concludes that if the Sovereign Wealth Fund is to achieve its goals then:

"The PNG Government must also build the capacity of the public service to develop and
implement programs that achieve the goals of the Medium- and Long-Term Development
Strategy. Returns on economic and social expenditure will only increase if development
priorities are well developed and implemented. Under economic pressure the rules protecting resource revenues have historically failed, and the political tide has largely succeeded to the detriment of PNG.

The framework and the institutions that are responsible for the resource fund and spending those funds will determine if PNG succeeds or fails to develop from the proceeds for its latest boom. In broad terms, to overcome what has historically been low (and sometimes negative) social and economic returns from resource revenue, policy makers must design appropriate safeguards against poor public policy choices, a lack of governance, transparency and accountability, rentseeking behavior and corruption".

These conclusions are not new, Papua New Guinea's Auditor Generals and Ombudsmans have been making them since the early 1980s. Perhaps a substantial shift in the political terrain of the country is required, one directed from below.  

For Johnson's paper please follow this link.

The Department of Treasury and the Bank of PNG have also released a discussion paper on the Sovereign Wealth Fund, follow this link.

No comments:

Post a Comment