Economist encourages Samoa to emulate P.N.G's success
Samoa should be looking to leverage the rapid development in Papua New Guinea (P.N.G.), according to Pacific Island Economist for A.N.Z., Dr Kishti Sen.
All signs are pointing to a massive boom in P.N.G’s economy in agriculture, oil and gas and even in consumer demand, making the large Pacific Island “the next China", he suggested.
P.N.G. accounts for nine million out of the 11 million people in the region, and contributes US$20 billion (T$52.27 billion) to the Pacific gross domestic product (G.D.P.) of $25 billion.
“That is something for Samoa to think about,” Dr Sen said.
In the next decade, P.N.G. will see a growing middle class, thanks to billion dollar investments pulling more people into employment.
The existing PNG LNG facilities at Port Moresby are lined up for a US$5 billion (T$13.06 billion) expansion, and another investment worth $15 million is coming.
“They are basically doubling the size of the economy in five years,” Dr Sen said, providing opportunities for Samoa to supply labour during the intense construction phase to come.
In the first PNG LNG construction, the nation imported nearly 10,000 people from Asia to help build the plant, Dr Sen said, meaning something similar will have to happen in the next decade.
P.N.G’s gas market is only going to grow as the world moves away from carbon for energy production to reduce greenhouse gas emissions.
“Gas has a future in a carbon constrained world and Papua New Guinea has a lot of it,” said Dr Sen.
“Who needs gas? China, all the Asian economies need gas, and Papua New Guinea is right at their doorstep.”
The agriculture sector is massive too: US$200 billion (T$522.73 billion) a year in exports of coffee, cocoa, copra and palm oil, Dr Sen said.
“Imagine, the PNG LNG debt will be paid early next decade, the government will be getting a lot more out of that project, investments are happening, once they start exporting, more revenue will be coming back because of better deals struck.
“They can do all of the infrastructure and spending needed to unlock the potential in agriculture, they have two sectors growing side by side.”
The developments will grow the middle class, which is not only young and grew up in an independent country, but also more informed and globally connected than their seniors.
“They understand a lot more and they want prosperity for P.N.G. now, they don’t want to wait another 20 years before they see the benefits of the huge endowment of their resources,” Dr Sen said.
“If you look at Papua New Guinea’s growing middle class, what do they need?
“This is where [Samoa] could come in, whether it is manufacturing, or supplying products to meet consumer demand.”