Since the onset of the current crisis, policymakers around the world have been treading very carefully between the two requirements: facilitating financial de-leveraging on the one hand, while preventing a sharp contraction in economic activity on the other. This is a fine balancing act because de-leveraging and economic downturns can be trapped in an adverse feedback loop.
While it is too early to judge the outcome, we can point toward some improvements mainly in the formal structures. The Government has a Medium Term Development Strategy document 2005–2010, which has yet to be updated, a Medium Term Fiscal Strategy Document 2008–2012, enacted the Fiscal Responsibility Act 2006, and formulated the Development Strategic Plan 2010–2030, and the Papua New Guinea Vision 2050.