Papua New Guinea: Selected Issues
2015; International Monetary Fund; Volume: 15; Issue: 319 Linguagem: Inglês
10.5089/9781513564357.002
ISSN2227-8907
Autores Tópico(s)Island Studies and Pacific Affairs
ResumoIntroduction 1.Recent research suggests strong positive linkages between financial sector development, access to financial services, and economic development outcomes.For example, evidence presented in the World Bank's 2014 Global Financial Development Report found that financial inclusion (FI)-typically defined as the proportion of individuals and firms that use financial services-is important for development and poverty reduction, and that the poor stand to benefit considerably from the use of basic payments, savings, and insurance services.Similarly, for firms, particularly small and newly-established enterprises, access to financial services is associated with stronger innovation, job creation, and growth performance.Other research also finds a strong positive relationship between financial inclusion and income equality.In this context, FI-supporting policies are becoming increasingly recognized as key pillars of sound, effective, and comprehensive strategies aimed at accelerating inclusive economic development. 2.This note provides an overview of financial access and inclusion indicators, related causal factors, and both current and possible reform priorities for PNG.Section B presents indicators of financial market depth, development, and access for PNG and compares PNG's performance against that of other countries in the region, at similar levels of development, and beyond.Section C provides an overview of country-specific challenges facing PNG related to FI that helps to explain its performance, as well as possible reform priorities in the near term, and discusses the government's current initiatives aimed at promoting financial sector development and inclusion and their preliminary results. B. Financial Sector Development and Access in PNG 3.While comparing favorably with low-income countries, PNG's financial sector is shallow relative to many other middle-income income countries in the region.While any assessment of financial sector development will depend on the selected metric, PNG's ratio of domestic private credit 2 to GDP of 35 percent in 2013-a common indicator of financial sector depth 3 -was well below the average for East Asia and Pacific developing countries (124 percent), Pacific Island Small States 4 (63 percent), other Middle Income Countries 5 (87 percent), and many 1 Prepared by Henry Mooney.2 Domestic private credit includes resources provided to the private sector by financial corporations, such as through loans, purchases of non-equity securities, trade credits, and other accounts receivable that establish a claim. 3See IMF, "Financial Sector Assessment-A Handbook," for a broad discussion of related concepts and measures. 4 The Pacific Island Small States grouping (Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Palau, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu) does not include PNG, and is provided as a comparator. 5 Middle-income economies are those in which 2014 GNI per capita was between US$1,046 and US$12,735 in 2014.PNG's per capita GNI (Atlas method) of US$2,020 falls towards the lower end of this category.©International Monetary Fund.Not for Redistribution
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