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A colleague pointed out that FSM is listed as Micronesia in the WEO database (why did I miss that?). Anyway, doing the same calculations on national currency GDP - increase of 16.8%, converted into real terms to allow for CPI average inflation - 14.6% - and then population loss of 3.1%, FSM/Micronesia ends up at -1.3%. This is considerably lower than the +1.2% in the article - so FSM joins Solomon Islands and Tonga doing considerable worse with a different methodology. As Nik suggests, at best, there is indeed a need for important caveats when making comparisons. There are huge challenges as highlighted by the article - PNG has had a major revision in its population estimates. Hopefully, the current census will shed some light on the actual population. Worth remembering that in 2018, PNG's National Statistics Office did a recalculation of PNG's GDP. For 2006, this led a to a 50% increase in measured GDP in 2006. As an economic historian, just makes analysis of economic performance through time difficult.
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International comparisons of economic performance through time are difficult. This article appropriately focuses on Timor-Leste's non-oil economy performance. The same logic can also be applied to PNG's non-resource economy, as once again, the resource sector is primarily foreign-owned with the primary impacts coming through resource revenues, which are captured in non-resource GDP anyway. The Purchasing Power Parity calculations are also vexed, especially for economies with large resource sectors. My preference when trying to measure changes in living standards is to look at real disposable household incomes - my interpretation of the outcomes of the 2009 Stiglitz-Sen-Fitoussi “Report by the Commission on the Measurement of Economic Performance and Social Progress.” For PNG, this is best done by taking nominal growth in non-resource GDP, discounting by the Consumer Price Index, and dividing by population growth. Over this four-year period, PNG's non-resource economy grew by 39.8%, inflation grew by 18%, and population assumed to grow by 11.6% (using the 2020 IMF base and growing by 3% a year). The overall result was an improvement in living standards in PNG of 6.2% over this period - an average of 1.5%. When using the same methodology for other countries above (although I could not see FSM in the WEO database I downloaded), the average annual rates were as follows: Palau -6.4%, Solomon Islands -4.4%, Timor-Leste -3.8% (based on the article, and as local currency GDP was used, this is probably non-oil), Vanuatu -3.8%, Samoa -3.3%, Tonga -2.3%, Tuvalu -1.5%, Fiji -0.3%, Kiribati +1.4%, PNG +1.5%, Nauru +1.7% and RMI +1.7%. Some quite significant variations, with Solomon Islands and Tonga doing considerably worse, and PNG and RMI doing considerably better. I repeat the opening sentence.
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Well done Sharon and Stephen. This is lazy from the IMF and we have seen this repeatedly - even their own AIV reports for most countries in the Pacific are now flawed and that has deep implications for economic analysis and policy in the region. Just one example of how this permeates - in your own blog, you continue to repeat the nonsense about tourism being a major economic factor for countries like Vanuatu and Samoa - absolute nonsense. The economic facts have never shown this. The actual GDP rates for these countries are out now and again show an overly pessimistic analysis from the IMF during this period - despite many revisions throughout the period -which are then parroted by the WB and ADB and subsequently filter through to all of the reports of the development partners. So, well done on calling it out - but will it have any impact on institutions like PFTAC - it remains to be seen but the Pacific needs better service in terms of economic analysis, now more than ever and the IMF's need to be held to account for their poor economic coverage of the region.
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Great insights from the survey. It was stated that the PAS Vanuatu "closes a data gap" in the country, though I don't see references in the write up on specific indicators reported from the survey that inform national policy objectives or even SDGs for that matter. Where was the national demand for this survey, given that a national partner is not listed, and in what ways were ni-Vanuatu engaged in deciding what information was to be collected?
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I'm interested but how would I get registered
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I am currently in PNG, how can I apply for this?
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Power theft, blackout (the sudden stop of electricity supply without being informed), fluctuation etc are the long term issues as we all know. When will those issues come to an end?
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Thank you, Australia Government, I deeply think that this opportunity is a great opportunity for me and my family
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Thanks Stephen. I'm reminded of a useful insight from Roderick Beaton's Greece: Biography of a Modern Nation - "If you cannot trust anyone to whom you are not related either by blood or by marriage, then you can rely on them only if you can bind them to you by an equivalent obligations. ...those who honour their obligations are the most respected members of the community. ...its a self maintaining system....on the one side it entails giving of gifts and other other bestowal of patronage. In the context of modern, democratic and accountable institutions, this pre-modern system has become known as 'corruption'. In the absence of these institutions, or where they remain weak and underdeveloped, it is a mechanism for survival"
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I think from the third sentence in the second paragraph nails it. Clear and simple. What we call governance others might call culture and in a place like Papua New Guinea that’s a gulf way too wide to bridge. Only in a parallel universe far away is there a PNG public service supported by an elected legislature that shares our ideas of governance and equity. Our government can continue to throw money at the system it bequeathed in 1975, but I doubt it will make an iota of difference in the end. What happens at the level of executive government or a government department should be none of our business. If we continue to push for different outcomes our relationship with our closest neighbour will fracture completely and other actors with a different world view will step in. In this paradigm economic and human capital development is always local and has to be driven from the bottom, not the top. If you think economic empowerment at the lower tiers of society is important for greater resilience and a better life, then work with those who have community support and are already successfully doing this. If you want to support human capital development, support the entities that work on this at community level and have the undoubted respect of the communities they serve. Only then will those that have continually missed out on the fruits of “development” be in a position to demand the changes from within that we have failed to achieve from without. Since that might sound like interference in an independent state, set up a mechanism to buy fresh food produced at community level for sale in the Australian market and support it to grow into an economic platform to empower 10 or is it 15 million people who currently have little agency or prospect of same over the lives they lead. You may wish to continue to glad hand the big men that sit in parliament and on the boards. But know the power they enjoy comes from you – not their own people. They are without exception the creation of your system. You the policy planners have the means to change that.
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