The break-up of PNG - The real resource curse
SUSAN MERRELL Like a wet blanket amidst the excitement being generated by the resources boom in Papua New Guinea (PNG), Hillary Clinton during her visit to the Pacific last year gloomily warned of an unwanted potential consequence known as ‘the resources curse’. A well-documented phenomenon, it points to negative possible outcomes for a national economy that is heavily dependent on resources. It is what caused Sheik Ahmed Yamani, a minister from the oil-rich Saudi Arabian government, to lament: “All in all, I wish we had discovered water.” Negative consequences of the curse include inflation, revenue volatility and its effects on excessive (good time) borrowings, lack of diversification of the economy, the creation of circumstances conducive to corruption and a draining of human resources away from other areas into the more lucrative resources sector. And PNG is already experiencing some of the aforementioned negative socio-economic effects—like shortage of teachers—some having been