Clinton pledges US support to PNG

US Secretary of State Hillary Clinton reiterated “resource curse” arguments in relation to the PNG LNG project while she met with PNG Prime Minister Michael Somare in Port Moresby this week.
Clinton pledges US support to PNG Clinton pledges US support to PNG Clinton pledges US support to PNG Clinton pledges US support to PNG Clinton pledges US support to PNG

Back in 2008, Australian consultancy firm ACIL Tasman executive director Paul Balfe was recommending offshore investment for the billions of dollars worth of government revenue from the project to counter a possible resource curse.

He used the countries of the Democratic Republic of the Congo, plus Chad and Malawi as examples where the people became significantly worse off than before major resource developments.

While Clinton did not publicly name any countries that suffered from resource curses, she did pledge US support to PNG on technical training and assistance to implement regulations to ensure the big government PNG LNG revenues are well used.

Concerns of corruption are never too far removed from perceptions of the PNG government, despite the economic successes and resources industry expansion under Somare's leadership.

But inflation impacts flowing from the big expenditures of the PNG LNG project and other significant resources projects in the country could also undermine the quality of life for PNG nationals if average incomes do not increase accordingly.

Somare said he had a very good meeting with Clinton and PNG was honoured she could find the time amid her busy schedule for the visit.

"PNG has always enjoyed a mutually friendly relationship with the US and I wish to reaffirm my government's intention to pursue new opportunities for even greater cooperation," he said.

"We welcome the offer by the US government to assist PNG in specific areas of the LNG sector under the Energy Governance and Capacity Initiative.

"We look forward to the opportunity for our officials to discuss further the details to avoid duplication and ensure better coordination with other development partners."

On the bilateral front, Papua New Guinea appreciates the increasing US trade and investment interests in the country.

Somare noted that the US Exim Bank provided a $US3 billion loan for the PNG LNG project while American financial institutions helped fund InterOil's Napa Napa refinery in Port Moresby.

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