Capital flight from Papua New Guinea

Abstract

This paper provides an updated assessment of capital flight from Papua New Guinea. It reviews methods of measuring capital flight and suggests that balance of payments data on capital flows give a more revealing picture than the residuals method used by most authors. A case study of the Lihir gold mining project, using recent data on equity flows, suggests that most apparent capital flight from Papua New Guinea is the result of the continuous depreciation of the kina since 1994.