such competition will only result in price increases, increase in imported inputs, including materials, equipment and labour, and misallocation of the limited resources resulting in losses to the nation. therefore, my recommendation is that during the lng construction period the government should refrain from undertaking major infrastructure projects. undertaking major infrastructure projects by the government will only compete with the limited resources in equipment and manpower in the areas of earth moving, building and construction, as well as other industries that are and will be fully utilized for the lng project construction. the government should instead do work in the areas of, maintenance, upgrading and some instances complement work done by the developer of the lng project. the government should commence planning its infrastructure implementation and be ready to implement them, as and when the lng project scales down its construction operations and the highly skilled labour trained by the developer, equipment and materials, become available and can be utilized, for other infrastructure developments. during the construction phase of the lng project, the government should concentrate its efforts on areas that do not compete with the lng developer on resources, which are the social sectors of education, including the up - skilling of the workforce through vocational and on the job training, health and law and order. it is clear that the expansion of the services in these areas will require investment in classrooms, aid posts, police stations and housing for teachers, health workers and police personnel. the recommendation is not to refrain from all work in the area of building and construction, but to limit them to the bare minimum necessary to maintain the existing infrastructure and complement it with the most needed additions. once the lng project construction winds down, the opportunity to move the skilled labour trained by it, and the resources becoming available, to major infrastructure and building and construction projects should be planned. this means that the government must have a clearly designed plan, including detailed implementation plans and programs for it. iii. combating “ dutch disease ” the second important micro level proposed initiative is to invest in the agriculture sector and social infrastructure. in many presentations of the problems that the development of the lng project might create, the subject of the “ dutch disease ” which involves the pricing out of the traditional export sectors is raised. one of the most efficient ways to counteract it is, by investing and developing a competitive traditional export industry. papua new guinea is bis central bankers ’ speeches blessed with very fertile land, abundant water resources, and available labour force, and has the potential to develop a competitive

loi m bakani : save today for a better tomorrow address by mr loi m bakani, acting governor of the bank of papua new guinea, at the pacific regional conference on microsavings, port moresby, 28 - 29 june 2005. * * * welcome minister for inter - government relations – hon. sir peter barter, mp., minister for community development – dame carol kidu, mp., representatives from adb and ausaid, other development partner representatives, senior government officials, representatives from the banking and finance sectors, overseas guests and participants to the conference. i am very pleased to welcome you all to this conference, and for our overseas guests and participants, a special welcome to papua new guinea ( png ). i hope that during the few days of the conference, you will not only learn about microfinance but also learn much about png itself and the opportunities that it presents. it is also pleasing to see that the invited international guest speakers and the distinguished participants have accepted png ’ s invitation to this year ’ s conference, entitled – pacific regional conference on microsavings. the bank and the png - adb microfinance project team have planned this conference as part of the on - going initiatives to promote the microfinance industy in png and the pacific region. i am confident that the participants are looking forward to the two ( 2 ) days of the conference and the information and knowledge gained during this conference will add value in their efforts to develop their microfinance institutions in their respective countries. message of the conference the theme of the conference is - “ save today for a better tomorrow ”. this theme befits this conference as the year 2005 is the international year of microcredit as proclaimed by the united nations general assembly to recognise microcredit as a means to alleviate poverty and create employment. it is timely. as the conference unfolds in the next two days, many of us attending this conference would attempt to understand the theme from our own perspectives with respect to microfinance developments. perhaps we should try and understand the theme from the viewpoints of the ‘ grass roots ’ or the bulk in the informal and semi - formal sectors. there is a saying that the poor do save. the problem is that they need financial institutions, delivery mechanisms, systems and hands - on education and training to be able to understand why and how to save. in png however, traditional settings and arrangements of