LNG and Agriculture Workshop -31st March-1st April 2011

Impact of the LNG Project on Agriculture and Managing Resource Wealth

Impact of the LNG Project on Agriculture and Managing Resource Wealth

Paul BarkerInstitute of National Affairs

Presentation Format

• Background to PNG economy• Past commodity Booms – mining and agricultural• Background to LNG and Hydrocarbons • Potential from LNG Development• Risks to the agriculture sector• Achieving Sustainable Economic development with LNG

Presentation Format

• Background to PNG economy• Past commodity Booms – mining and agricultural• Background to LNG and Hydrocarbons • Potential from LNG Development• Risks to the agriculture sector• Achieving Sustainable Economic development with LNG

Background to PNG economy• At this stage PNG is still a relatively poor, largely agricultural and rural based, society; (with a per capital GDP around K3,500 or US$1,300 per head) – lower middle-income, but increasingly skewed wealth distribution•149 out of 179 in the UNDP Human Development Index of countries•The lowest level of MDGs in the Pacific region and very low by world standards, and unlikely to achieve any target by 2015• agricultural contribution to GDP still substantial (30-40%), and plays essential role in providing broad-based income and livelihoods to the majority of the population (directly and indirectly, with many involved with transport, processing etc)•until 1984 largely agricultural exports, then overtaken by minerals and from 1992 joined also by oil – largely gold, copper and oil. These are relatively enclave activities, in terms of providing limited employment •Minerals and oil have provided revenue backbone to the State (directly and indirectly) – of late largely from 2 aging mines (Ok Tedi and Porgera), joined now by Lihir•PNG has a relatively small manufacturing sector; PNG exports largely primary products (from renewable and non-renewable sources), but some processed; it imports most manufactured inputs (capital equipment and consumer products, and some staple foods –notably rice and flour)•It has a positive balance of trade, negative services account, but normally negative financial and capital accounts (2006-9 positive bal of payments)

Background to PNG economy• At this stage PNG is still a relatively poor, largely agricultural and rural based, society; (with a per capital GDP around K3,500 or US$1,300 per head) – lower middle-income, but increasingly skewed wealth distribution•149 out of 179 in the UNDP Human Development Index of countries•The lowest level of MDGs in the Pacific region and very low by world standards, and unlikely to achieve any target by 2015• agricultural contribution to GDP still substantial (30-40%), and plays essential role in providing broad-based income and livelihoods to the majority of the population (directly and indirectly, with many involved with transport, processing etc)•until 1984 largely agricultural exports, then overtaken by minerals and from 1992 joined also by oil – largely gold, copper and oil. These are relatively enclave activities, in terms of providing limited employment •Minerals and oil have provided revenue backbone to the State (directly and indirectly) – of late largely from 2 aging mines (Ok Tedi and Porgera), joined now by Lihir•PNG has a relatively small manufacturing sector; PNG exports largely primary products (from renewable and non-renewable sources), but some processed; it imports most manufactured inputs (capital equipment and consumer products, and some staple foods –notably rice and flour)•It has a positive balance of trade, negative services account, but normally negative financial and capital accounts (2006-9 positive bal of payments)

Boom and Bust• PNG and some regions long experienced commodity boom and bust as formal economy dependent directly and indirectly upon a few primary production exports•Fortunately, to date, economy has had some diversity, with several major agricultural export crops, and several major extractive industries, gold, copper and oil, plus logging and fishing (meant to be sustainable, if not in practice)•Usually prices moving separately, but periods all swing together•Agriculture has largely been the backbone for household income, and past background of stabilisation•Mining since the mid-80s the backbone of exports and revenue•Gold, copper and oil – have been level-pegging for export value, although gold largely the major export, especially in recent years, but no industry has been predominant•The scale of LNG development, potentially with GDP equivalent to entire agriculture sector or more, and becoming by far the dominant export earner and revenue provider in future, poses risks of ‘one horse town’ and greater exposure to external market forces unless firm counter measures taken

Boom and Bust• PNG and some regions long experienced commodity boom and bust as formal economy dependent directly and indirectly upon a few primary production exports•Fortunately, to date, economy has had some diversity, with several major agricultural export crops, and several major extractive industries, gold, copper and oil, plus logging and fishing (meant to be sustainable, if not in practice)•Usually prices moving separately, but periods all swing together•Agriculture has largely been the backbone for household income, and past background of stabilisation•Mining since the mid-80s the backbone of exports and revenue•Gold, copper and oil – have been level-pegging for export value, although gold largely the major export, especially in recent years, but no industry has been predominant•The scale of LNG development, potentially with GDP equivalent to entire agriculture sector or more, and becoming by far the dominant export earner and revenue provider in future, poses risks of ‘one horse town’ and greater exposure to external market forces unless firm counter measures taken

Sluggish Economy• Despite the swings and troughs in export prices, revenue and industry earnings, albeit

stabilised at times by different mechanisms, the PNG economy has largely been sluggish over decades

• High commodity prices in agriculture have not been reflected in new investment and sustained increases in output, except in some crops (e.g. oil palm)

• Various impediments to business, esp. agriculture, micro- and SMEs, which tend to undermine viability and inclination to produce more (and prefer target incomes): law and order, poor and costly transport and communications and marketing infrastructure/services, strong exchange rate (for long periods – for export crops/import substitution), limited education and technical/business skills, in some cases land issues, lack of power/utilities, credit, effective research/extension

• Government the main bottleneck, failing to perform core functions, uncoordinated, uneven budget support, widely corrupt or failing to link funds/needs/human resources, retaining unreformed and unaccountable institutions, including SOEs which impose bottlenecks

• Oil palm industry (and some other agro-nuclear operations) have sidestepped some of these constraints, with relative efficient organisation by a few major players, performing also some of the functions of Govt

• Breaking old ICT monopoly from 2007 has opened many opportunities, but it has long way to go; other para-statal monopolies need to go too

• Need to address natural and Govt deficiencies to enhance opportunities , but esp in face of rapid growth of an dominant enclave (boom) industry/sector (as with LNG)

Sluggish Economy• Despite the swings and troughs in export prices, revenue and industry earnings, albeit

stabilised at times by different mechanisms, the PNG economy has largely been sluggish over decades

• High commodity prices in agriculture have not been reflected in new investment and sustained increases in output, except in some crops (e.g. oil palm)

• Various impediments to business, esp. agriculture, micro- and SMEs, which tend to undermine viability and inclination to produce more (and prefer target incomes): law and order, poor and costly transport and communications and marketing infrastructure/services, strong exchange rate (for long periods – for export crops/import substitution), limited education and technical/business skills, in some cases land issues, lack of power/utilities, credit, effective research/extension

• Government the main bottleneck, failing to perform core functions, uncoordinated, uneven budget support, widely corrupt or failing to link funds/needs/human resources, retaining unreformed and unaccountable institutions, including SOEs which impose bottlenecks

• Oil palm industry (and some other agro-nuclear operations) have sidestepped some of these constraints, with relative efficient organisation by a few major players, performing also some of the functions of Govt

• Breaking old ICT monopoly from 2007 has opened many opportunities, but it has long way to go; other para-statal monopolies need to go too

• Need to address natural and Govt deficiencies to enhance opportunities , but esp in face of rapid growth of an dominant enclave (boom) industry/sector (as with LNG)

Recent Economic Experience• boom in minerals but also agricultural commodity prices from about 2006-8; •PNG relatively shielded from GFC and GEC in 2008-9 by continued strength of gold and some other commodities (e.g. cocoa) whilst other PNG export commodities did not fall so far and some recovered promptly, like copper and some have since risen to new heights, including coffee, rubber etc.•Driven by strength of demand esp. for raw materials, by strong growing economies of E & S Asia (i.e. China and India), plus some shortfalls in supply, combined with perceptions and speculation•Savings from ‘windfall’ revenue, provided some fiscal support/stabilisation in 2009/2010 and beyond and good deposits for the financial sector •Relatively low exposure of the PNG financial sector to GFC•The boom and minimal fiscal restraint increased inflationary pressure (at 10.7% in 2008, 7% 2009 and est. at 6% for 2010 and 8% for 2011, although probably higher if current basket of commodities used for CPI adjusted)• public debt down to 27% of GDP

Recent Economic Experience• boom in minerals but also agricultural commodity prices from about 2006-8; •PNG relatively shielded from GFC and GEC in 2008-9 by continued strength of gold and some other commodities (e.g. cocoa) whilst other PNG export commodities did not fall so far and some recovered promptly, like copper and some have since risen to new heights, including coffee, rubber etc.•Driven by strength of demand esp. for raw materials, by strong growing economies of E & S Asia (i.e. China and India), plus some shortfalls in supply, combined with perceptions and speculation•Savings from ‘windfall’ revenue, provided some fiscal support/stabilisation in 2009/2010 and beyond and good deposits for the financial sector •Relatively low exposure of the PNG financial sector to GFC•The boom and minimal fiscal restraint increased inflationary pressure (at 10.7% in 2008, 7% 2009 and est. at 6% for 2010 and 8% for 2011, although probably higher if current basket of commodities used for CPI adjusted)• public debt down to 27% of GDP

Hydrocarbons in PNG

•PNG oil exploration since 1920s• oil production from 1992•Production has been in steady decline, since its peak in 1993•PNG recognised as gas rich rather than oil rich country, but quantities uncertain and previously gas market dependent upon gas pipelines, restricting access for PNG to the major markets •Gas prices formerly not open and tied to oil, but linked in Australia to (cheap) coal prices•growing global demand, especially for cleaner energy (than coal and oil) and advances in LNG technology have opened up gas to global market, through LNG; gas prices more transparent and linked to overall oil/energy prices, although gas prices remain well below oil, as relatively large supplies and new fields entering production

Hydrocarbons in PNG

•PNG oil exploration since 1920s• oil production from 1992•Production has been in steady decline, since its peak in 1993•PNG recognised as gas rich rather than oil rich country, but quantities uncertain and previously gas market dependent upon gas pipelines, restricting access for PNG to the major markets •Gas prices formerly not open and tied to oil, but linked in Australia to (cheap) coal prices•growing global demand, especially for cleaner energy (than coal and oil) and advances in LNG technology have opened up gas to global market, through LNG; gas prices more transparent and linked to overall oil/energy prices, although gas prices remain well below oil, as relatively large supplies and new fields entering production

LNG in PNG

•Rapid shift from pipeline to Queensland to LNG project, with strong drive from Govt (esp. MA) and minors (OSL) but accepted by Exxon and the financial (incl US Govt/EFIC support) and consumer markets -didn’t give much time for preparation (e.g. for needed skills, like welders etc)•Onshore and offshore exploration (for oil and gas) has led to other prospective fields, such as InterOil’s (notably Antelope), to Talisman’s onshore fields in Western Province and offshore •Talk of these being developed as entirely separate operations, but with the huge cost (and logistics) of LNG infrastructure, the logic would be to share some infrastructure, and increase returns to investors and the State

LNG in PNG

•Rapid shift from pipeline to Queensland to LNG project, with strong drive from Govt (esp. MA) and minors (OSL) but accepted by Exxon and the financial (incl US Govt/EFIC support) and consumer markets -didn’t give much time for preparation (e.g. for needed skills, like welders etc)•Onshore and offshore exploration (for oil and gas) has led to other prospective fields, such as InterOil’s (notably Antelope), to Talisman’s onshore fields in Western Province and offshore •Talk of these being developed as entirely separate operations, but with the huge cost (and logistics) of LNG infrastructure, the logic would be to share some infrastructure, and increase returns to investors and the State

Sustainability of Hydrocarbons:

•Coal and oil formed in large quantities widely around the world from forests and marine microorganisms – oil around 300 millions year ago. – their extraction globally or locally cannot be sustainable – at some point alternative energy sources (and revenue sources) required •Peak oil – debate on whether now or later, but in any case finite supply and getting harder and more expensive to access (hence deep sea drilling, costly to extract and environmentally unsound shale oil etc) –boost to other energy sources: renewables, biofuel and Nuclear, each with other pros-cons (as highlighted in Japan lately). LNG price has fallen as large global supply, but prospects strong•Gas produces less GHG, but still limited in global and local supply •The PNG LNG (Hides- Kutubu) fields expected to have 30 year life of production, other fields could extend that life (unless extracted simultaneously)•No need to extract all PNG’s hydrocarbons (or minerals) immediately , when in the ground it is stored or ‘on deposit’ for future use, and once extracted it can be instantly consumed and/or partially banked •Some argue for rapid drawdown of finite natural resources and investment of proceeds and others for stabilisation in part in the ground (esp. if unable to utilise proceeds wisely); other economies have exhausted their resources

Sustainability of Hydrocarbons:

•Coal and oil formed in large quantities widely around the world from forests and marine microorganisms – oil around 300 millions year ago. – their extraction globally or locally cannot be sustainable – at some point alternative energy sources (and revenue sources) required •Peak oil – debate on whether now or later, but in any case finite supply and getting harder and more expensive to access (hence deep sea drilling, costly to extract and environmentally unsound shale oil etc) –boost to other energy sources: renewables, biofuel and Nuclear, each with other pros-cons (as highlighted in Japan lately). LNG price has fallen as large global supply, but prospects strong•Gas produces less GHG, but still limited in global and local supply •The PNG LNG (Hides- Kutubu) fields expected to have 30 year life of production, other fields could extend that life (unless extracted simultaneously)•No need to extract all PNG’s hydrocarbons (or minerals) immediately , when in the ground it is stored or ‘on deposit’ for future use, and once extracted it can be instantly consumed and/or partially banked •Some argue for rapid drawdown of finite natural resources and investment of proceeds and others for stabilisation in part in the ground (esp. if unable to utilise proceeds wisely); other economies have exhausted their resources

Sustainability for an economy like PNG

• creating an enabling environment for a dynamic and diversified economy in which Papua New Guineans can secure long term livelihoods;(which will be largely outside the mineral/hydrocarbon sector, including beyond the life of the current generation of mines etc…notably in agriculture, services, manufacturing, construction etc), by:• targeting public expenditure more prudently and investing particularly in physical and human capital (i.e. roads and other infrastructure & utilities, education and training, improved health prevention and treatment)• undertaking real right sizing of the public sector • addressing impediments to business, including smallholder agriculture and micro-enterprises (notably law and order, corruption, inefficiency and undue red-tape – including in Lands Dept etc)• ensuring stable macro-economic conditions , notably with low inflation and restraint on the currency appreciation

Sustainability for an economy like PNG

• creating an enabling environment for a dynamic and diversified economy in which Papua New Guineans can secure long term livelihoods;(which will be largely outside the mineral/hydrocarbon sector, including beyond the life of the current generation of mines etc…notably in agriculture, services, manufacturing, construction etc), by:• targeting public expenditure more prudently and investing particularly in physical and human capital (i.e. roads and other infrastructure & utilities, education and training, improved health prevention and treatment)• undertaking real right sizing of the public sector • addressing impediments to business, including smallholder agriculture and micro-enterprises (notably law and order, corruption, inefficiency and undue red-tape – including in Lands Dept etc)• ensuring stable macro-economic conditions , notably with low inflation and restraint on the currency appreciation

Opportunities and Hazards from LNG

• PNG LNG alone has the potential to increase PNG’s GDP by 1/3-1/2 immediately upon production (not as much as ACIL-Tasman estimated) then declining in relation to growing economy, but lower impact on GNI (10%)• LNG (and other mineral developments – but especially LNG as it’s scale is so much greater) provides the opportunity for overdue investment in infrastructure and HRD, which public funds and donor funds couldn’t achieve to date – with adequate focus on addressing PNG’s low HDI and MDGs it could provide broad-based benefits given the right mechanisms• it also provides the opportunity for long term investment in diversified business activities (a bit like PNGSDP only larger)•But the hazards are large, and could readily shipwreck the rest of the economy

Opportunities and Hazards from LNG

• PNG LNG alone has the potential to increase PNG’s GDP by 1/3-1/2 immediately upon production (not as much as ACIL-Tasman estimated) then declining in relation to growing economy, but lower impact on GNI (10%)• LNG (and other mineral developments – but especially LNG as it’s scale is so much greater) provides the opportunity for overdue investment in infrastructure and HRD, which public funds and donor funds couldn’t achieve to date – with adequate focus on addressing PNG’s low HDI and MDGs it could provide broad-based benefits given the right mechanisms• it also provides the opportunity for long term investment in diversified business activities (a bit like PNGSDP only larger)•But the hazards are large, and could readily shipwreck the rest of the economy

Dutch Disease/Resource Curse• PNG economy has shown features of Dutch disease before, nationally and provincially, esp

in early-mid 1990s, and esp in resource rich/boom Provinces like Western, SHP• Characteristics of Dutch Disease: -boom industry, normally in extractive industry, esp oil,

undermining prospects of non-boom/more marginal trading and non-trading industries, notably in manufacturing and agriculture (and maybe also public sector)

• May undermine governance, encourage corruption etc.• Maybe long term structural shift, but maybe short-lived boom, having long term negative

impact, • More diversified economies will extensive skilled workforce more adaptable and les likely

to be impacted so severely, but Dutch disease can cause loss of diversity• Maybe in two phases or types:

• 1st phase/type, suck up skills from other sectors, directly and into new service industries (and associated inflated wages/rentals etc), which maybe of short term duration, but undermine existing long term industries, maybe for good

• 2nd phase/type, major currency inflows into economy/revenue to State, which cannot be readily absorbed and having major inflationary effects and appreciation of currency, undermining viability and prospects of other export/import replacement industries, notably in manufacturing and agriculture (possibly tourism etc);

Even larger economies like Australia experiencing two phase or dual economies, with stagnant traditional industries,; the question is whether the boom industries are sustainable and can replace existing ones, and whether they can provide the levels of employment etc., esp. as they’re likely to be volatile (in PNG LNG is particularly unable to provide alternative employment/income earning opportunities

Dutch Disease/Resource Curse• PNG economy has shown features of Dutch disease before, nationally and provincially, esp

in early-mid 1990s, and esp in resource rich/boom Provinces like Western, SHP• Characteristics of Dutch Disease: -boom industry, normally in extractive industry, esp oil,

undermining prospects of non-boom/more marginal trading and non-trading industries, notably in manufacturing and agriculture (and maybe also public sector)

• May undermine governance, encourage corruption etc.• Maybe long term structural shift, but maybe short-lived boom, having long term negative

impact, • More diversified economies will extensive skilled workforce more adaptable and les likely

to be impacted so severely, but Dutch disease can cause loss of diversity• Maybe in two phases or types:

• 1st phase/type, suck up skills from other sectors, directly and into new service industries (and associated inflated wages/rentals etc), which maybe of short term duration, but undermine existing long term industries, maybe for good

• 2nd phase/type, major currency inflows into economy/revenue to State, which cannot be readily absorbed and having major inflationary effects and appreciation of currency, undermining viability and prospects of other export/import replacement industries, notably in manufacturing and agriculture (possibly tourism etc);

Even larger economies like Australia experiencing two phase or dual economies, with stagnant traditional industries,; the question is whether the boom industries are sustainable and can replace existing ones, and whether they can provide the levels of employment etc., esp. as they’re likely to be volatile (in PNG LNG is particularly unable to provide alternative employment/income earning opportunities

Hazards•shorter term during construction phase• skills shortages etc undermining other industries already occurring -agriculture, manufacturing and even mining, and key government functions (e.g. engineers)• continued bottlenecks (ports etc) could undermine LNG itself (fail deadlines)• budgetary squeeze with growing public expenditure (landowner ‘Benefit sharing’ and growing national commitments ) and loss of fiscal restraint, prior to increased revenue (as highlighted in 2009, when much of ‘windfall’ revenue drawn down), esp. prior to 2012 Elections, but so far commodity price recovery has allowed extra expenditure (as with 2010 Supplementary Budget and larger 2011 Budget)•Other inflationary pressures (e.g. property /rents etc)• Longer Term during production (from 2014) and once tax receipts (from approx 2016 but rising over next 10 years as debts paid off)• macroeconomic pressures with currency appreciation and inflation from heavy dependence upon growing major commodity revenue undermining viability of other primary and secondary industries and services, which provide or could provide basis for income earning and employment growth • increased corruption (and conflict) and loss of fiscal restraint, poor planning and accountability, undermining commitment to investment in infrastructure and core services • the main benefits from LNG to Govt and some Provinces, and a few landowner groups; if Govt fails to perform (directly of indirectly – including through contracting out) the PNG won’t see the benefits from LNG percolate into the PNG community and other industries.

Hazards•shorter term during construction phase• skills shortages etc undermining other industries already occurring -agriculture, manufacturing and even mining, and key government functions (e.g. engineers)• continued bottlenecks (ports etc) could undermine LNG itself (fail deadlines)• budgetary squeeze with growing public expenditure (landowner ‘Benefit sharing’ and growing national commitments ) and loss of fiscal restraint, prior to increased revenue (as highlighted in 2009, when much of ‘windfall’ revenue drawn down), esp. prior to 2012 Elections, but so far commodity price recovery has allowed extra expenditure (as with 2010 Supplementary Budget and larger 2011 Budget)•Other inflationary pressures (e.g. property /rents etc)• Longer Term during production (from 2014) and once tax receipts (from approx 2016 but rising over next 10 years as debts paid off)• macroeconomic pressures with currency appreciation and inflation from heavy dependence upon growing major commodity revenue undermining viability of other primary and secondary industries and services, which provide or could provide basis for income earning and employment growth • increased corruption (and conflict) and loss of fiscal restraint, poor planning and accountability, undermining commitment to investment in infrastructure and core services • the main benefits from LNG to Govt and some Provinces, and a few landowner groups; if Govt fails to perform (directly of indirectly – including through contracting out) the PNG won’t see the benefits from LNG percolate into the PNG community and other industries.

Agriculture Features• Subsistence and cash-crop subsistence mix• Small formal & more capital intensive sector (notably oil palm)• Not internationally competitive with places like Indonesia/Vietnam –

except if producing quality/niche product• Major handicaps raise cost of delivery to market, and lower returns to

producers – L & o, transport & infrastructure, exchange rate over many years, limited research and extension, govt initiatives ineffective or hijacked/corrupt (green rev/NADP etc), education/busjness-skils devltland issues & now SABLs of 5.2 mill ha. which undermine real investment by landowners and real developers (clientism), poor Govtplanning/coordination and handicaps to private sector or international support

• Many good initiatives to strengthen production/marketing chains but inadequate support (agro-nucleus enterprises, SSSPP, Bris Kanda etc)

Agriculture Features• Subsistence and cash-crop subsistence mix• Small formal & more capital intensive sector (notably oil palm)• Not internationally competitive with places like Indonesia/Vietnam –

except if producing quality/niche product• Major handicaps raise cost of delivery to market, and lower returns to

producers – L & o, transport & infrastructure, exchange rate over many years, limited research and extension, govt initiatives ineffective or hijacked/corrupt (green rev/NADP etc), education/busjness-skils devltland issues & now SABLs of 5.2 mill ha. which undermine real investment by landowners and real developers (clientism), poor Govtplanning/coordination and handicaps to private sector or international support

• Many good initiatives to strengthen production/marketing chains but inadequate support (agro-nucleus enterprises, SSSPP, Bris Kanda etc)

Potential Solutions to ensure Longer Term broad based economic development and benefits

Shorter term• cut bottlenecks on other businesses and households: including, staff infilling, training, tackle corruption and wastage upfront including Lands, financial inclusion•Sensible planning (improved MTDP) and expenditure, and avoid incurring debt•infrastructure restoration and maintenanceLonger Term• sanitise, stabilise and invest revenue (largely offshore, but a fund for strategic industries onshore), through Sovereign Wealth Fund(s), with clear guidelines and rules, transparently applied, (and reduce debt..why risky borrowings and save?) • ensure balance between sanitisation/future fund investment, and needed infrastructure and HR investment now: to restrain currency appreciation/inflationary pressures etc, whilst investing in domestic capital and welfare needs of the population now• continue drive for sound fiscal planning and management, public sector reform and right-sizing, and rationalisation of better coordination of Govt layers and entities•Investment in utilities and sustainable energy (beyond oil - hydro, solar etc)• review government functions and encourage private sector investment and service provision and competition in service provision – whilst focusing public sector resources and capacity on achieving its core activities effectively• genuine fight against corruption and community empowering and public sector oversight (including social auditing).

Potential Solutions to ensure Longer Term broad based economic development and benefits

Shorter term• cut bottlenecks on other businesses and households: including, staff infilling, training, tackle corruption and wastage upfront including Lands, financial inclusion•Sensible planning (improved MTDP) and expenditure, and avoid incurring debt•infrastructure restoration and maintenanceLonger Term• sanitise, stabilise and invest revenue (largely offshore, but a fund for strategic industries onshore), through Sovereign Wealth Fund(s), with clear guidelines and rules, transparently applied, (and reduce debt..why risky borrowings and save?) • ensure balance between sanitisation/future fund investment, and needed infrastructure and HR investment now: to restrain currency appreciation/inflationary pressures etc, whilst investing in domestic capital and welfare needs of the population now• continue drive for sound fiscal planning and management, public sector reform and right-sizing, and rationalisation of better coordination of Govt layers and entities•Investment in utilities and sustainable energy (beyond oil - hydro, solar etc)• review government functions and encourage private sector investment and service provision and competition in service provision – whilst focusing public sector resources and capacity on achieving its core activities effectively• genuine fight against corruption and community empowering and public sector oversight (including social auditing).

PNGs Mixed Track Record

• with stabilisation and fund investment (agricultural funds, MRSF, windfall funds -2009 etc, superannuation funds, etc – but some positive experiences this decade) – so SWF only of value if achieves highest standards e.g. under ‘Santiago’ principles etc•Commitments to plans/strategies –e.g. on maintenance•Some plans need great improvement to be realistic (need good information for planning recurrent and development expenditure, but inaccuracy and unrealistic plans• but forces dragging in different to directions: those concentrating only on LNG and narrow wealth creation and many players aware and focussing on the issues and challenges (incl. Treasury, BPNG, but also some Ministers and many in the wider public)• PNG – down the Nigerian, Equatorial Guinea track or the Botswana , even Norwegian track..No countries are alike ;

PNGs Mixed Track Record

• with stabilisation and fund investment (agricultural funds, MRSF, windfall funds -2009 etc, superannuation funds, etc – but some positive experiences this decade) – so SWF only of value if achieves highest standards e.g. under ‘Santiago’ principles etc•Commitments to plans/strategies –e.g. on maintenance•Some plans need great improvement to be realistic (need good information for planning recurrent and development expenditure, but inaccuracy and unrealistic plans• but forces dragging in different to directions: those concentrating only on LNG and narrow wealth creation and many players aware and focussing on the issues and challenges (incl. Treasury, BPNG, but also some Ministers and many in the wider public)• PNG – down the Nigerian, Equatorial Guinea track or the Botswana , even Norwegian track..No countries are alike ;

Scenario

• No countries are identical, and measures need to be adapted to local needs and conditions; but there are accumulated global lessons and experience of what to do and what not to do for PNG;•Go down the Nigerian, Equatorial Guinea , Nauru track -undermining existing or prospective diversified economy and employment, with major social – even environmental damage and skewed income ?•or the Botswana (where agric also undermined and then imbalanced by livestock bias) , even Norwegian/ Alaskan/ Albertan track?• need to address shorter term needs and issues, but have clear eye on the long term, and wider interest economic and social interests.

Scenario

• No countries are identical, and measures need to be adapted to local needs and conditions; but there are accumulated global lessons and experience of what to do and what not to do for PNG;•Go down the Nigerian, Equatorial Guinea , Nauru track -undermining existing or prospective diversified economy and employment, with major social – even environmental damage and skewed income ?•or the Botswana (where agric also undermined and then imbalanced by livestock bias) , even Norwegian/ Alaskan/ Albertan track?• need to address shorter term needs and issues, but have clear eye on the long term, and wider interest economic and social interests.

15

20

25

perc

enta

ge r

ate

GDP Real Growth Rates, Total and Non-Mining 2002-2015 (actual 2008-June 2010, thereafter Budget projections and revised Treasury projections and

World Bank estimates)

Total GDP (2011 Budg)

-5

0

5

10

perc

enta

ge r

ate

year

Total Non-Mining (2011 Budg)

Total GDP (WB - Oct 10)

10

20

30

40

Perc

enta

ge g

row

th -

or d

eclin

e-(p

er a

nnum

)

Growth Rates (GDP) by Sector (Treasury est. and forecasts 2003-2015)

Total GDP (2011 Budg)

Agric/forest/fish

oil/gas

Mining/Quarrying

Construction

-40

-30

-20

-10

0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Perc

enta

ge g

row

th -

or d

eclin

e-(p

er a

nnum

)

Construction

Manufacturing

Commmunity/social etc

Wholesale/retail

Total Non-Mining (2011 Budg)

25.00

30.00

35.00

40.00

45.00

50.00

Perc

enta

ge

% of Total Exports - by Value 2001-2010 (BPNG) -note that 2010 is extrapolated from 6 months data, which distorts, particularly seasonal crops

Copper

Gold

Crude Oil

-

5.00

10.00

15.00

20.00

25.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Perc

enta

ge

Total Agriculture (excl. forestry/fisheries)

Total forest products

Marine Products

40.00

60.00

80.00

100.00

120.00

Perc

enta

ge

Percentage of Total Exports - by Value

2005 2006

2007 2008

-

20.00

40.00

2009 2010

4,000.0

5,000.0

6,000.0

7,000.0

mill

ion

kina

Exports -Value FOB (mil kina) 1999-June 2010 (6 months x2) (BPNG)

Total Agriculture (excl. forestry/fisheries)

Total forest products

Marine Products

-

1,000.0

2,000.0

3,000.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

mill

ion

kina

year

Crude Oil

Gold

Copper

10.0%

15.0%

20.0%

perc

enta

ge c

hang

e

Employment Trends to 2nd Qtr 2010 (BPNG)

Total Non-Mineral

-5.0%

0.0%

5.0%

10.0%

2002 2003 2004 2005 2006 2007 2008 2009 q3 2009 q4 2010 q1 2010 q2

perc

enta

ge c

hang

e

Year

Total Non-Mineral

Mineral

Total

100

120

140

160

180

200

Formal Sector Employment Growth 2001-2010 Qtr2 (BPNG figures)

Agric/for/fish

Retail

Wholesale

Manufacture

Building/construction

0

20

40

60

80

100

2001

2002

2003

2004

2005

2006

2007

2008

Q1

Q2

Q3

Q4

2009

Q1

Q2

Q3 Q4

2010

Q1

Q2

Mar

ch 2

002

= 10

0

Year

Building/construction

Transport

Financial/business

Total Non-Mineral

Mineral

25.0

30.0

35.0

40.0

45.0

perc

enta

ge

Percentage of GDP by Economic Activity (source:NSO and Treasury forecast)

Agric/forest/fish

Oil and Gas extraction

Mining/quarrying

Construction

Manufacturing

-

5.0

10.0

15.0

20.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

perc

enta

ge

Community/Social

Wholesale/Retail

25,000.0

30,000.0

35,000.0

40,000.0

45,000.0

50,000.0

mill

ion

kina

GDP at current and constant prices 2009 - 2015 (NSO & Treasury forecast)

Total GDP nominal

Agric, forest, fish

Oil and gas

Mining and quarrying

-

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

mill

ion

kina

Construction

Total GDP (real)

Wholesale & Retail

Total GDP Real

Direct and Indirect Impact of LNG – Chart from Chapter 11 of 2011 Budget (Treasury)

Direct and Indirect Effect on Nominal GNI – Chart from Chapter 11 of 2011 Budget

Impact on Current Account Balance – Chart from Chapter 11, 2011 Budget (Treasury)

Estimated Revenue and its Distribution within PNG – Chart from Ch 11, 2011 Budget

300.0

400.0

500.0

600.0

'000

ton

nes

(or

othe

r m

easu

re)

Commodity Exports - Quantity, 1999-June 2010, doubled for crude annual output - underestimating season crops ('000 tonnes or specified) (BPNG)

Coffee

Cocoa

Copra

Coconut Oil

Palm Oil

Rubber

-

100.0

200.0

300.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

'000

ton

nes

(or

othe

r m

easu

re)

year (2010 - 6 months data)

Tea

Logs ('0,000 m3)

Marine Prods

Crude Oil ('000 Barrels)

Copper

Gold (tonnes)

1,500.0

2,000.0

2,500.0

Export Price Index (1994=100)

Coffee

Cocoa

Copra

Coconut Oil

Palm Oil

Logs

-

500.0

1,000.0

Logs

Non-mineral

Crude Oil

Gold

Copper

Mineral

Total Index

800

1000

1200

1400

Palm Oil Price USD per tonne 1981-Jan 2011

0

200

400

600

Feb-

81

Oct

-81

Jun-

82

Feb-

83

Oct

-83

Jun-

84

Feb-

85

Oct

-85

Jun-

86

Feb-

87

Oct

-87

Jun-

88

Feb-

89

Oct

-89

Jun-

90

Feb-

91

Oct

-91

Jun-

92

Feb-

93

Oct

-93

Jun-

94

Feb-

95

Oct

-95

Jun-

96

Feb-

97

Oct

-97

Jun-

98

Feb-

99

Oct

-99

Jun-

00

Feb-

01

Oct

-01

Jun-

02

Feb-

03

Oct

-03

Jun-

04

Feb-

05

Oct

-05

Jun-

06

Feb-

07

Oct

-07

Jun-

08

Feb-

09

Oct

-09

Jun-

10

200.00

250.00

300.00

350.00

US

cts/

lb

International Coffee Prices (US Cts/lb) 1998-Feb 2011

ICO Composite Price

0.00

50.00

100.00

150.00

1998

2005

US

cts/

lb

Year and month

Other Mild Arabicas - weighted ave

Robusta weighted ave

2000

2500

3000

3500

4000

US

Dol

lars

per

Ton

ne

International Cocoa Price - daily price (ICCO)Jan 2002-Mar 1st 2011

0

500

1000

1500

2000

Year and month

250

300

Rubber - Monthly Price - No 1 smoked FOB Malaysia USD/lb (1985-Jan 2011)

0

50

100

150

200

Nov

-85

Jun-

86

Jan-

87

Aug

-87

Mar

-88

Oct

-88

May

-89

Dec

-89

Jul-9

0

Feb-

91

Sep-

91

Apr

-92

Nov

-92

Jun-

93

Jan-

94

Aug

-94

Mar

-95

Oct

-95

May

-96

Dec

-96

Jul-9

7

Feb-

98

Sep-

98

Apr

-99

Nov

-99

Jun-

00

Jan-

01

Aug

-01

Mar

-02

Oct

-02

May

-03

Dec

-03

Jul-0

4

Feb-

05

Sep-

05

Apr

-06

Nov

-06

Jun-

07

Jan-

08

Aug

-08

Mar

-09

Oct

-09

May

-10

Dec

-10

White Sugar US Dollar (FT)

1000

2000

3000

4000

Balance of Payments 2005-2010 proj (source BPNG and Treasury)

-4000

-3000

-2000

-1000

0

1000

2005 2006 2007 2008 2009 2010 6mthsX2

current a/c capital & financial a/c overall bal

8

10

12

14

16

18M

onth

s

Months of Import Cover (Treasury)

Total import cover (months)

0

2

4

6

8

2002 2003 2004 2005 2006 2007 2008 2009 2010 to June

Forecast 2010

Mon

ths

Total import cover (months)

Non-mineral import cover (mths)

0.8

1

1.2

1.4

1.6

USD

and

AU

DKina Exchange Rates (against US$ and AU$)

AS

0

0.2

0.4

0.6

Year

US$

5,000.0

6,000.0

7,000.0

8,000.0

9,000.0

PNG

Kin

a, m

illio

ns

Public and Private Debt and Foreign Equity (kina, mill)

Public Debt total

domestic public debt

foreign public debt

-

1,000.0

2,000.0

3,000.0

4,000.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 to June

PNG

Kin

a, m

illio

ns

foreign public debt

Private (external) Debt

Foreign Equity holdings

50.0

60.0

70.0

80.0

90.0

perc

enta

geDebt to GDP % (Treasury and BPNG - 2011 est - Treasury 2011 Budget)

Foreign equity to GDP %

Public debt to GDP %

External public debt to GDP %

-

10.0

20.0

30.0

40.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 to June

Forecast 2010

perc

enta

ge

External public debt to GDP %

Total external debt to GDP (public and private)

public debt % of GDP

Foreign Debt as % of Total

20

25

perc

enta

ge

Consumer Price Index % Changes 1993-2012 - Headline and Underlying (NSO and BPNG forecast and Treasury figures in 2011 Budget)

-5

0

5

10

15

perc

enta

ge

year

Headline

Underlying

Budget 2011 (Treasury)

15

20

25

30

% p

er a

nnum

Interest Rates 1992-2010 (2nd Qtr) (source BPNG)

182 day T Bills

0

5

10

year

Commercial bank weighted ave (deposits)

Commercial bank weighted ave (loans)

Generally Accepted Principlesand Practices (GAPP)—SantiagoPrinciplesIn furtherance of the “Objective andPurpose,” the IWG members either haveimplemented or intend to implement thefollowing principles and practices, on avoluntary basis, each of which is subject to homecountry laws, regulations, requirements andobligations. This paragraph is an integral partof the GAPP.GAPP 1. PrincipleThe legal framework for the SWF should besound and support its effective operation andthe achievement of its stated objective(s).GAPP 1.1. Subprinciple. The legal frameworkfor the SWF should ensure legal soundness ofthe SWF and its transactions.GAPP 1.2. Subprinciple. The key features of theSWF’s legal basis and structure, as well as thelegal relationship between the SWF and otherstate bodies, should be publicly disclosed.GAPP 2. PrincipleThe policy purpose of the SWF should be

clearly defined and publicly disclosed.GAPP 3. PrincipleWhere the SWF’s activities have significantdirect domestic macroeconomic implications,those activities should be closely coordinatedwith the domestic fiscal and monetaryauthorities, so as to ensure consistency withthe overall macroeconomic policies.GAPP 4. PrincipleThere should be clear and publicly disclosedpolicies, rules, procedures, or arrangements inrelation to the SWF’s general approach tofunding, withdrawal, and spending operations.GAPP 4.1. Subprinciple. The source of SWFfunding should be publicly disclosed.GAPP 4.2. Subprinciple. The general approachto withdrawals from the SWF and spendingon behalf of the government should bepublicly disclosed.GAPP 5. PrincipleThe relevant statistical data pertaining to theSWF should be reported on a timely basis tothe owner, or as otherwise required, forinclusion where appropriate inmacroeconomic data sets.GAPP 6. PrincipleThe governance framework for the SWFshould be sound and establish a clear andeffective division of roles and responsibilitiesin order to facilitate accountability andoperational independence in themanagement of the SWF to pursue itsobjectives.GAPP 7. PrincipleThe owner should set the objectives of theSWF, appoint the members of its governingbody(ies) in accordance with clearly definedprocedures, and exercise oversight over

theSWF’s operations.GAPP 8. PrincipleThe governing body(ies) should act in the bestinterests of the SWF, and have a clearmandate and adequate authority andcompetency to carry out its functions.GAPP 9. PrincipleThe operational management of the SWFshould implement the SWF’s strategies in an independent manner and in accordance withclearly defined responsibilities.GAPP 10. PrincipleThe accountability framework for the SWF’soperations should be clearly defined in therelevant legislation, charter, other constitutivedocuments, or management agreement.GAPP 11. PrincipleAn annual report and accompanying financialstatements on the SWF’s operations andperformance should be prepared in a timelyfashion and in accordance with recognizedinternational or national accounting standardsin a consistent manner.GAPP 12. PrincipleThe SWF’s operations and financialstatements should be audited annually inaccordance with recognized international ornational auditing standards in a consistentmanner.GAPP 13. PrincipleProfessional and ethical standards should beclearly defined and made known to themembers of the SWF’s governing body(ies),management, and staff.GAPP 14. PrincipleDealing with third parties for the purpose of

Generally Accepted Principlesand Practices (GAPP)—SantiagoPrinciplesIn furtherance of the “Objective andPurpose,” the IWG members either haveimplemented or intend to implement thefollowing principles and practices, on avoluntary basis, each of which is subject to homecountry laws, regulations, requirements andobligations. This paragraph is an integral partof the GAPP.GAPP 1. PrincipleThe legal framework for the SWF should besound and support its effective operation andthe achievement of its stated objective(s).GAPP 1.1. Subprinciple. The legal frameworkfor the SWF should ensure legal soundness ofthe SWF and its transactions.GAPP 1.2. Subprinciple. The key features of theSWF’s legal basis and structure, as well as thelegal relationship between the SWF and otherstate bodies, should be publicly disclosed.GAPP 2. PrincipleThe policy purpose of the SWF should be

clearly defined and publicly disclosed.GAPP 3. PrincipleWhere the SWF’s activities have significantdirect domestic macroeconomic implications,those activities should be closely coordinatedwith the domestic fiscal and monetaryauthorities, so as to ensure consistency withthe overall macroeconomic policies.GAPP 4. PrincipleThere should be clear and publicly disclosedpolicies, rules, procedures, or arrangements inrelation to the SWF’s general approach tofunding, withdrawal, and spending operations.GAPP 4.1. Subprinciple. The source of SWFfunding should be publicly disclosed.GAPP 4.2. Subprinciple. The general approachto withdrawals from the SWF and spendingon behalf of the government should bepublicly disclosed.GAPP 5. PrincipleThe relevant statistical data pertaining to theSWF should be reported on a timely basis tothe owner, or as otherwise required, forinclusion where appropriate inmacroeconomic data sets.GAPP 6. PrincipleThe governance framework for the SWFshould be sound and establish a clear andeffective division of roles and responsibilitiesin order to facilitate accountability andoperational independence in themanagement of the SWF to pursue itsobjectives.GAPP 7. PrincipleThe owner should set the objectives of theSWF, appoint the members of its governingbody(ies) in accordance with clearly definedprocedures, and exercise oversight over

theSWF’s operations.GAPP 8. PrincipleThe governing body(ies) should act in the bestinterests of the SWF, and have a clearmandate and adequate authority andcompetency to carry out its functions.GAPP 9. PrincipleThe operational management of the SWFshould implement the SWF’s strategies in an independent manner and in accordance withclearly defined responsibilities.GAPP 10. PrincipleThe accountability framework for the SWF’soperations should be clearly defined in therelevant legislation, charter, other constitutivedocuments, or management agreement.GAPP 11. PrincipleAn annual report and accompanying financialstatements on the SWF’s operations andperformance should be prepared in a timelyfashion and in accordance with recognizedinternational or national accounting standardsin a consistent manner.GAPP 12. PrincipleThe SWF’s operations and financialstatements should be audited annually inaccordance with recognized international ornational auditing standards in a consistentmanner.GAPP 13. PrincipleProfessional and ethical standards should beclearly defined and made known to themembers of the SWF’s governing body(ies),management, and staff.GAPP 14. PrincipleDealing with third parties for the purpose of

the SWF’s operational management should bebased on economic and financial grounds, andfollow clear rules and procedures.GAPP 15. PrincipleSWF operations and activities in hostcountries should be conducted in compliancewith all applicable regulatory and disclosurerequirements of the countries in which theyoperate.GAPP 16. PrincipleThe governance framework and objectives, aswell as the manner in which the SWF’smanagement is operationally independentfrom the owner, should be publicly disclosed.GAPP 17. PrincipleRelevant financial information regarding theSWF should be publicly disclosed todemonstrate its economic and financialorientation, so as to contribute to stability ininternational financial markets and enhancetrust in recipient countries.GAPP 18. PrincipleThe SWF’s investment policy should be clearand consistent with its defined objectives, risktolerance, and investment strategy, as set bythe owner or the governing body(ies), and bebased on sound portfolio managementprinciples.GAPP 18.1. Subprinciple. The investmentpolicy should guide the SWF’s financial riskexposures and the possible use of leverage.GAPP 18.2. Subprinciple. The investment

policy should address the extent to whichinternal and/or external investmentmanagers are used, the range of theiractivities and authority, and the process bywhich they are selected and their performancemonitored.GAPP 18.3. Subprinciple. A description of theinvestment policy of the SWF should bepublicly disclosed.GAPP 19. PrincipleThe SWF’s investment decisions should aimto maximize risk-adjusted financial returns ina manner consistent with its investmentpolicy, and based on economic and financialgrounds.GAPP 19.1. Subprinciple. If investmentdecisions are subject to other than economicand financial considerations, these should beclearly set out in the investment policy and bepublicly disclosed.GAPP 19.2. Subprinciple. The management ofan SWF’s assets should be consistent withwhat is generally accepted as sound assetmanagement principles.GAPP 20. PrincipleThe SWF should not seek or take advantageof privileged information or inappropriateinfluence by the broader government incompeting with private entities.SANTIAGO PRINCIPLES9GAPP 21. PrincipleSWFs view shareholder ownership rights as afundamental element of their equityinvestments’ value. If an SWF chooses to

exercise its ownership rights, it should do soin a manner that is consistent with itsinvestment policy and protects the financialvalue of its investments. The SWF shouldpublicly disclose its general approach tovoting securities of listed entities, includingthe key factors guiding its exercise ofownership rights.GAPP 22. PrincipleThe SWF should have a framework thatidentifies, assesses, and manages the risks ofits operations.GAPP 22.1. Subprinciple. The risk managementframework should include reliableinformation and timely reporting systems,which should enable the adequate monitoringand management of relevant risks withinacceptable parameters and levels, control andincentive mechanisms, codes of conduct,business continuity planning, and anindependent audit function.GAPP 22.2. Subprinciple. The generalapproach to the SWF’s risk managementframework should be publicly disclosed.GAPP 23. PrincipleThe assets and investment performance(absolute and relative to benchmarks, if any)of the SWF should be measured and reportedto the owner according to clearly definedprinciples or standards.GAPP 24. PrincipleA process of regular review of theimplementation of the GAPP should beengaged in by or on behalf of the SWF.

Source: IWG International Working Group of Sovereign Wealth Funds

the SWF’s operational management should bebased on economic and financial grounds, andfollow clear rules and procedures.GAPP 15. PrincipleSWF operations and activities in hostcountries should be conducted in compliancewith all applicable regulatory and disclosurerequirements of the countries in which theyoperate.GAPP 16. PrincipleThe governance framework and objectives, aswell as the manner in which the SWF’smanagement is operationally independentfrom the owner, should be publicly disclosed.GAPP 17. PrincipleRelevant financial information regarding theSWF should be publicly disclosed todemonstrate its economic and financialorientation, so as to contribute to stability ininternational financial markets and enhancetrust in recipient countries.GAPP 18. PrincipleThe SWF’s investment policy should be clearand consistent with its defined objectives, risktolerance, and investment strategy, as set bythe owner or the governing body(ies), and bebased on sound portfolio managementprinciples.GAPP 18.1. Subprinciple. The investmentpolicy should guide the SWF’s financial riskexposures and the possible use of leverage.GAPP 18.2. Subprinciple. The investment

policy should address the extent to whichinternal and/or external investmentmanagers are used, the range of theiractivities and authority, and the process bywhich they are selected and their performancemonitored.GAPP 18.3. Subprinciple. A description of theinvestment policy of the SWF should bepublicly disclosed.GAPP 19. PrincipleThe SWF’s investment decisions should aimto maximize risk-adjusted financial returns ina manner consistent with its investmentpolicy, and based on economic and financialgrounds.GAPP 19.1. Subprinciple. If investmentdecisions are subject to other than economicand financial considerations, these should beclearly set out in the investment policy and bepublicly disclosed.GAPP 19.2. Subprinciple. The management ofan SWF’s assets should be consistent withwhat is generally accepted as sound assetmanagement principles.GAPP 20. PrincipleThe SWF should not seek or take advantageof privileged information or inappropriateinfluence by the broader government incompeting with private entities.SANTIAGO PRINCIPLES9GAPP 21. PrincipleSWFs view shareholder ownership rights as afundamental element of their equityinvestments’ value. If an SWF chooses to

exercise its ownership rights, it should do soin a manner that is consistent with itsinvestment policy and protects the financialvalue of its investments. The SWF shouldpublicly disclose its general approach tovoting securities of listed entities, includingthe key factors guiding its exercise ofownership rights.GAPP 22. PrincipleThe SWF should have a framework thatidentifies, assesses, and manages the risks ofits operations.GAPP 22.1. Subprinciple. The risk managementframework should include reliableinformation and timely reporting systems,which should enable the adequate monitoringand management of relevant risks withinacceptable parameters and levels, control andincentive mechanisms, codes of conduct,business continuity planning, and anindependent audit function.GAPP 22.2. Subprinciple. The generalapproach to the SWF’s risk managementframework should be publicly disclosed.GAPP 23. PrincipleThe assets and investment performance(absolute and relative to benchmarks, if any)of the SWF should be measured and reportedto the owner according to clearly definedprinciples or standards.GAPP 24. PrincipleA process of regular review of theimplementation of the GAPP should beengaged in by or on behalf of the SWF.

Source: IWG International Working Group of Sovereign Wealth Funds

THE END

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