the expenditure will be on imported goods and services, paid from funds held off shore while, some of the goods and services will be purchased on shore, with funds to be brought in from off shore. the size of the project coupled with the very strong impact it will have on domestic economic activity will facilitate activity in the other sectors of the economy such as food production in agriculture, manufacturing, building and construction, and transportation. those who will act for the lng project will be paid by the developer converting foreign exchange into kina, which will have the effect of an appreciated kina. the increase in imports to accommodate increase in economic activity in other sectors will have the effect of a depreciated kina. these opposite effects could balance each other out and result in a stable kina exchange rate. but this will depend on the magnitude of flows from each side. even if the reserves might decline as a result of the imports by other sectors that are not for the project development, it will be marginal. the bank of papua new guinea has sufficient reserves to ensure that it has minimal impact on the exchange rate and through it on inflation. while it is expected that there will be very strong growth in economic activity during the construction phase, high demand for goods and service will have some inflationary effect. to ensure that there is economic growth while inflation is not too high, the government has to follow some clearly designed policies. the developer is constructing a huge infrastructure corridor from the southern highlands to port moresby. they will construct roads, a pipeline, bring in electricity, telecommunication, and meet social - community commitments in the villages where the corridor is passing through. the country's production capacity will be used far beyond its availability. the government is therefore advised not to undertake any major infrastructure development project during the construction years of the project and not increase its general expenditure. it should instead concentrate its efforts on maintaining and improving the existing infrastructure that deteriorated in some areas to an unusable state. the added advantage will be that all the resources of the government can be concentrated on the priority areas of education, health, conservation of the environment and law and order. in these three to four years the government should undertake a full detailed review of its development agenda. all sacred cows should be slaughtered. 4 / 7 bis - central bankers'speeches 1. it should re visit the decentralization of government responsibilities and review the organic law on provincial and local level governments to streamline channels of funding mechanism for rural areas ;

benny b m popoitai : opening speech - pacific financial intelligence community plenary opening speech by mr benny b m popoitai, acting governor of the bank of papua new guinea, at the pacific financial intelligence community ( pfic ) plenary, port moresby, 16 november 2022. * * * good morning ladies and gentlemen. it is an honour to open this pacific financial intelligence community plenary this morning and i would like to begin by welcoming our international visitors : the heads of the fius of our pacific island nations and the delegations from each of the countries represented here today. i would like to open this plenary in a manner that i hope may set the tone for the next two days and indeed provide a direction of sorts for the work that is to come over the coming months and years for this financial intelligence community. pfic was established out of the need to tackle common challenges faced in our region and the need to share information and collaborate. these similar challenges range from politics, economics and financial crime types, to name a few. our region, like much of the world, finds itself at time that appears may be a crucial juncture. the relative order and stability that much of the world has enjoyed in the time since the end of the second world war has been significantly challenged by recent events. the power tussles, tensions in various quarters of world and the resurgence of global inflation and the rising costs of energy and food, have all changed the way in which we view the world, in a very, very short space of time. the lesson i believe that all of us here in this room should take from the last few years is that resilience and trust must be built within our own pacific region, by us. we cannot rely on the us or europe to provide international stability in the way that we perhaps once thought. the stability and harmony in our region cannot be left to others outside of our region to decide. we must build resilience among our pacific countries in a deliberate and systematic way ; based on the common interests we share. we must act with urgency and we must place trust in each other - as individuals, as well as nations, to achieve this. a key feature of what confronts our region us is the blurring of geopolitics, organised crime and corruption in our region. this blurring presents problems that no single country on its own can successfully address. confronting these issues will require a level of cooperation that is, i