A simulation model for long-term policy formation in Papua New Guinea
Abstract
This study presents a dynamic model of the economy of Papua New
Guinea, constructed to assist in the formulation of policies for future
development. The government of Papua New Guinea has stated a set of
development objectives which emphasises its concern for a greater
participation of the population in the process of economic development.
Accordingly, the model presented deals with the interactions between
changes in the characteristics of the population and the structure of the
economy in the course of development. The model is designed specifically
for Papua New Guinea and takes into account the special features of its
population and economy. Progress towards the achievement of the
government's objectives will necessarily take several decades; so the
model takes the form of a computer simulation program to generate longterm
projections of economic and demographic changes. The model,
constructed on the basis of the limited data that is currently available,
uses a modular structure which will facilitate subsequent revisions
that will be required as additional information becomes available.
The use of the model is illustrated by generating a number of
long-term projections of the population and the economy under alternative
assumptions about government policies and exogenous variables. The
concept of a long-term strategy is developed as a consistent, connected
sequence of decisions which lead towards the desired long-term
objectives. Examples of such strategies are presented, which show how the
model can be used to assist the government in choosing from alternative
combinations by comparing their effects on a number of important economic
and demographic variables. The examples have been chosen to indicate
how a wider range of options is possible when the task of planning is
viewed from the long-term perspective. It is hoped that the model will
provide decision-makers in Papua New Guinea with a useful tool for the
formulation and evaluation of strategies to guide the future of their
nation.