Posted at 03:05 on 19 February, 2010 UTC
Papua New Guinea’s Institute of National Affairs says it’s essential that a well-designed sovereign wealth fund be set up to manage projected revenue from PNG’s Liquified Natural Gas project.
This follows a comment from the head of the United Nations Development Programme that the organisation wants to help PNG establish the best sovereign fund it can so that the money is tied up for future generations.
The projected income from the massive LNG project is expected to double PNG’s gross domestic product in the next decade.
The Institute’s executive director, Paul Barker, says that without careful planning, PNG could squander the benefits of its resource wealth.
“I think it’s critical that the country has a sovereign wealth fund but it needs to be very carefully designed and managed. And it has to be sanitised so it can’t be tampered with for political expediency or for short-term needs because that completely self-defeats the whole thing so how you actually design that so that people don’t tamper with it, that is quite a challenge.”
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