Contents

List of Tables

List of Figures

Abbreviations and Acronyms

Preface

Acknowledgments

Map of Papua New Guinea

1 Introduction

1.1 Purpose and Scope of the Study

1.2 Statement of the Problem

1.3 Organisation of the Study

2 Resources Boom and Macroeconomic Adjustment: A Survey

2.1 Introduction

2.2 An Overview of Booming Sector Economics

2.3 The Core Model of ‘Dutch Disease’

2.4 Limitations and Extensions of the Core Dutch Disease Model

2.5 The Theory of Construction Boom

2.6 Summary and Conclusion

3 An Overview of the Papua New Guinea Economy

3.1 Introduction

3.2 Political Background

3.3 Economic Performance

3.4 Structure of the Economy

3.5 Labour Market

3.6 Public Sector

3.7 Financial Sector

3.8 Foreign Trade

3.9 Macroeconomic Policies

3.10 Summary and Conclusion

4 Determinants of Real Exchange Rate in Papua New Guinea

4.1 Introduction

4.2 Concept of Real Exchange Rate

4.3 Real Exchange Rate Indices

4.4 Theoretical Framework

4.5 Empirical Model

4.6 Variable Definition and Measurement

4.7 Econometric Procedure

4.8 Results

4.9 Summary and Conclusion

5 Determinants of Sectoral Output, Savings and Investment in Papua New Guinea

5.1 Introduction

5.2 Determinants of Sectoral Output

5.3 The Empirical Model

5.4 Results

5.5 Investment and Saving Behaviour in Papua New Guinea

5.6 Summary and Conclusion

6 Impact of Major Resources Booms in Papua New Guinea

6.1 Introduction

6.2 The Major Resources Booms: 1971–77

6.3 Policy Response

6.4 Effects of Resources Booms: 1972–78

6.5 Changes in Sectoral Composition

6.6 Resources Boom in the Early 1990s

6.7 Policy Response

6.8 Effects of Resources Boom: 1991–94

6.9 Changes in Sectoral Composition

6.10 Investment and Savings

6.11 Summary and Conclusion

7 A Comparative Study of Resources Booms in Papua New Guinea, Indonesia and Nigeria

7.1 Introduction

7.2 Mineral and Oil Booms in PNG, Indonesia and Nigeria: 1972–82

7.3 Policy Responses: Indonesia and Nigeria

7.4 Comparative Studies of Resources Booms

7.5 Summary and Conclusion

8 Conclusion

8.1 Introduction

8.2 Summary of Findings

8.3 Lessons from the PNG Experience

8.4 Qualifications and Suggestions for Further Research

Statistical Appendix: Supplementary Statistical Tables, Notes and Basic Data

Appendix to Chapter 3

Table A3.1 Social development indicators

Table A3.2 Growth rate of real GDP and inflation in Papua New Guinea, 1970–95

Table A3.3 Government revenues and expenditures, 1971–2000 (current prices, kina million)

Table A3.4 Minerals and agricultural exports of PNG, 1971-2000 (current prices, US dollar million)

Table A3.5 Minerals and agricultural exports of PNG, 1971–2000 (current prices, kina million)

Table A3.6 Total labour force and wage employment in PNG, 1968–95 (persons)

Table A3.7 Foreign aid to PNG, 1970–94 (current prices, US dollar million)

Appendix to Chapter 4

Table A4.1 Nominal and real exchange rate indices, 1970–94

Table A4.2 Test for unit roots

Appendix to Chapter 5

Table A5.1 Test for unit roots

Appendix to Chapter 6

Table A6.1 Central government revenues and expenditures, 1971–77 (kina million)

Appendix to Chapter 7

Table A7.1 Index of government consumption and domestic absorption in PNG, Indonesia and Nigeria, 1970–84

Bibliography

Index