Cautious approval for PNG

economy

Westpac finds abundant promise but advises careful management of the PNG economy. By Robin Bromby

RECENT MINERAL discoveries in Papua New Guinea show the pountry has abundant economic potential but that national and provincial Governments must take great care m their management of the economy, This was the cautious prognosis from Westpac Bank PNG Ltd, published in its 1988 annual report. But the re-

sponsibility for realising this potential

does not fall only on governments, the report said. The private sector also must make significant contributions.

Westpac PNG recorded an after tax profit ol K 4.400 million, up 14 per cent in the previous year. Lne return on shareholders’ funds was 21.3 per cent, compared with 16.8 per cent in

the previous year.

The bank found PNG’s more favourable trade figures were due largely to a significant increase in gold and copper receipts. A trade surplus of Kl 3 / million was recorded in the first half of 1988, compared with a K 3 million deficit for the same period in 1987. Cocoa prices sank to their lowest point in six years, and coffee receipts also droppea. It was mainly increased mining activity, the report says, that pushed imports to record levels.

But Westpac found fault with re

vised lending guidelines, announced

by the Government early in 1988, which required commercial banks to focus on wholly or predominantly

Westpac regional head John Stone: Papua New Guinea has ‘abundant economic potential’.