That is the blunt message from ANZ Bank Group economists Kishti Sen and Tom Kenny, who argue that over the past five years, the PNG economy has been doing it tough, absorbing the shock of falling oil and gas investment since the completion of the PNG LNG project in 2014.
Writing in the ANZ's ‘Pacific Insight' bulletin which published this week, the authors say that the economy did not immediately go into recession because falling oil and gas investment was more than offset by increased gas production and exports.
"However, headwinds from a shortage of foreign currency and low business confidence due to uncertainty over the next round of major resource projects weighed on private investment, a driver of PNG's growth. With weak domestic demand, employment has gone backwards and growth in government revenue has been lacklustre.
"We believe PNG's economy and government revenue can recover if the government can get the next wave of resource projects over the line. The P'nyang gas agreement is particularly important as timely completion of this agreement is needed to prevent Papua LNG and PNG LNG expansion being indefinitely on hold.
"That would be a body blow to the country and could do irreversible damage to the economy. At the least, it will derail the economic recovery and be a major setback for PNG because the higher standard of living that accompanies stronger economic performance will be lost.
"We understand that the government is taking a tough negotiating position with potential investors seeking to achieve a larger equity, greater landowner involvement and more opportunities for SMEs and local communities.
"However, mining capital is not a limitless pool, and PNG - notwithstanding its unique value proposition including rich gas - is competing against discoveries in Mozambique, Guyana, Brazil and the United States. The government needs to strike the right balance between national interests and investor interests in negotiating distribution of project benefits.
"Prime Minister James Marape has said he wants to finalise all current project agreements including P'nyang, Wafi-Golpu and Porgera by September 16, 2020, which coincides with PNG's Independence Day. We hope a ‘win-win' agreements can be reached by then as that would lift business confidence and set PNG up for several years of strong GDP, employment and revenue growth."
Kishti Sen is an international economist for ANZ and Tom Kenny is ANZ's senior international economist