ECONOMIST Paul Flanagan has told Radio New Zealand International that Papua New Guinea’s new government needs to consider a substantial devaluation of the kina.
Mr Flanagan, director of the firm PNG Economics, was commenting on treasurer Charles Abel’s plan to begin addressing the country’s serious economic woes during the government’s first 100 days in office.
He said PNG needed to end its substantial reliance on oil, gas and minerals and also focus on developing sectors such as agriculture.
Mr Flanagan told RNZI that one of the first steps to encourage this should be a substantial currency devaluation which would lower the price of PNG commodities on the export market and make them more competitive.
"It is always a world of hard choices given how far PNG has gone down this slippery economic slope, but there are mechanisms to pick things up again,” Mr Flanagan said.
“One of the best and easiest of those is to make the exchange rate more competitive, allowing PNG to really enter into the Asia Pacific century."
Meanwhile the PNG National Broadcasting Corporation reports that all members of parliament have been asked to submit five-year development plans.
National Planning secretary Haukava Harry said her department will assist MPs develop plans for their electorates.