20 Jul 2011

Report highlights gap between resource-rich countries and neighbours

8:44 pm on 20 July 2011

A growing gap between resource-rich countries in the Pacific and those without natural resources has been highlighted in the latest economic report from the Asian Development Bank.

The report projects growth of around 9 percent in Papua New Guinea and Timor-Leste, while most other Pacific economies are forecast to experience GDP growth rates of under 2 percent in the next two years.

Lead author of the report, Christopher Edmonds, says countries with natural resource exports particulary in energy resources, timber, and minerals, have strong growth rates, as opposed to those who don't.

He says there's no magic remedy.

"The age-old recommendations regarding creating a favourable environment for investment, making sure your markets are as competitive as possible to encourage entrepreneurs in those countries to move ahead so it's sort of the hard work, not glamorous work of just good policy reform and creating a good business environment."

Christopher Edmonds says high natural resource based growth also brings its own problems.