United Nations calls for responsible foreign investment

Port Moresby, Thursday 4 December 2014

The United Nations is urging for a cautious and planned approach to new foreign investments, following the Prime Minister’s invitation to overseas investors at this week’s PNG Mining and Petroleum Investment Conference.

Before further expanding mining and exploration activities in the country, the United Nations is encouraging Government, and investors in the extractives industry, to review the range of policy options put forward in the National Human Development Report which was launched in Port Moresby last week. United Nations Resident Coordinator in Papua New Guinea, Mr Roy Trivedy says while foreign investment is contributing to the country’s economy, better strategies need to be in place to take the significant wealth generated by extractives industries and translate this into meaningful human development for citizens across the country.

“Over the past 40 years, the country has had over PGK 150 billion invested as a result of private corporations involved in the extractives sectors. Papua New Guinea has also experienced 14 years of consecutive economic growth – an achievement experienced by very few countries globally – but this financial growth is not clearly visible in terms of significant improvements in the wellbeing of all citizens,” Mr Trivedy said.

“Poverty levels in the country have stayed virtually the same as in 1996; health, education, literacy and other human development indicators remain stubbornly low,” he said.

“We are seeing what is known as a ‘paradox of plenty’– a situation where the country’s resource wealth is not translating into increased opportunities and capabilities for the majority of citizens,” he said.

Mr Trivedy notes that the paradox of plenty, also known as the resource curse, is especially apparent for the large majority in rural areas, and particularly for vulnerable and marginalized segments of society, including women, children, elderly, youth, people suffering from long-term illnesses, and those living with disabilities.

“It is the most vulnerable of our society who should be benefitting most from the resources boom, but instead there is a danger of them being left further and further behind.”

The report released last week, titled ‘From Wealth to Wellbeing: Translating Resource Revenue into Sustainable Human Development’ highlights policy options that Government and leaders in Papua New Guinea can consider to help improve the impact of extractive industries at national, provincial and local levels. The report outlines the importance of:

–         improving social and environmental management practices in areas affected by mining and exploration;

–         assisting companies involved in the extractives sector to invest more in promoting local businesses, skills training and supply chains in the areas where they operate;

–         establishing a national independent dispute resolution mechanism;

–         integrating corporate community development contributions with other resource flows such as DSIP funds;

–         improving public discussion and understanding of the role of the Sovereign Wealth Fund;

–         improving the provision of information and the collection of data on health, education and well-being of adults, children and communities – at local, provincial and national levels;

–         reviewing benefits sharing agreements between land owners and the state.

While the release of the National Human Development Report is a key milestone, Mr Trivedy says the next important step is discussions at all levels across the country.

“The policy options outlined in the National Human Development Report need to be discussed widely across Papua New Guinea; and if properly followed up with action at national, provincial and local levels, could help significantly boost the wellbeing of more people across the country. It would help Papua New Guinea to make faster progress towards its aspiration of being in the top 50 Human Development Index countries in the world by 2050.”

The National Human Development report can be downloaded from the United Nations Development Programme website: http://www.pg.undp.org

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