The curse of the ‘Tiger Economy’

PNG’s economy has been growing at an average 8% per year for a decade – supported mostly by increased demand for raw materials and their high market prices. The immediate future appears certain to experience further growth albeit at a forecasted slightly lower growth level until 2014.

Of late some commentators have found it fitting to brand the PNG economy a ‘tiger economy’; once a brand that the PNG nation could only wish for. And many citizens might have smiled and of course bragged a bit about how we’ve grown and how good future prospects seem.

PNG has to a certain degree, succeeded in changing perceptions and now appears to be romancing (apart from traditional partners) new big players in the Asia-Pacific region. How long this continues on for is anyone’s guess, but one thing’s for certain: there’s virtually almost nothing tangible on the ground to show for as evidence for a decade of economic growth. So the question that begs to be answered is: Is PNG really a tiger economy?

The phrase ‘tiger economy’ is used to define any economy that has continually experienced economic growth through its trade and industry sectors and as well as improvements in living standards of a country’s citizens.

PNG has experienced economic growth but has growth been experienced in other sectors such as education, health, infrastructure and manufacturing – the very sectors that enables her citizens to improve their living standards? Isn’t the elementary reason for a country seeking economic growth the ‘improvement of living standards and prosperity’ for its citizens? How could PNG be a tiger economy when its citizens are still living on the edges?

This branding (tiger economy) may invoke images of improving education and health services, a burgeoning manufacturing (downstream processing) sector, and etc. These aren’t happening in PNG and we have succeeded in fooling people outside and even ourselves. It is highly likely PNG citizens will have developed illusions as to true state of the economy thus allowing the government and its thinkers to take a bit more laidback approach towards fixing PNG’s many problems.

PNG hasn’t reached that stage yet, although it has achieved sustained economic growth for a decade, to be called a tiger economy. Some other name, maybe, ‘pussycat economy’ might fit well.

Remember the Asian economic meltdown; where the Asian tiger economies were brought to their knees. They however, were able to quickly bounce back, due partly to their solid manufacturing, education and health sectors which they’ve developed during happier days.

If PNG is to experience a meltdown or slowing down due to downturn in demand for our raw materials, huge dept-servicing expenses and an inequitable distribution of wealth; what sector is there to aid PNG’s speedy recovery?

PNG needs to first build, re-build and strengthen its appalling self.