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PORT MORESBY, Papua New Guinea (November 23, 1999 – The National)---Prime Minister Sir Mekere Morauta, on his way back from the Commonwealth Heads of Government Meeting (CHOGM) in South Africa, met PNG students studying in Australia and gave them a briefing on his government's efforts to put the economy back on its feet.

After giving the highlights of his government's restructuring program to the Kumul Association in Brisbane on Friday he told the students to stay interested and involved.

He said when Parliament resumes in 10 days, his "Balanced Budget 2000" would be presented.

"It is a budget that will increase the share of expenditure for development and basic services. It will also be a balanced budget. But that alone is not sufficient," Sir Mekere said.

He said education and health would be given priority together with infrastructure maintenance, primary industries, law and order and revenue raising.

He said a reduction of the government's excessive debt to the Central Bank must occur to rebuild sufficient foreign exchange reserves to underpin a stable exchange rate.

"To pay for that, it will be essential to sell all significant government owned commercial enterprises," he said.

Sir Mekere said within three years, the privatization process would end the huge drain on public resources by the government's so-called commercial enterprises.

"These are activities which should be able to operate profitably in a competitive and genuinely commercial environment," he said.

He said all proceeds from privatization would be used to retire debt and repay the external support we need right now to stabilize the macro-economic situation.

"Privatization is hard to get right. We need to set up sensible sectional policies and to restructure some enterprises before they are ready for sale. I have appointed Sir Henry ToRobert, our founding governor of the Central Bank for this purpose."

Sir Mekere said the Government is making changes that are neither small nor ad hoc.

"We are not fiddling around the edge. We are not just fine-tuning," he said. "Our aim is to systematically restructure the national economic and political landscape," he said.

"In the past few years, we have seen the collapse of the systems that had served us well in the first 20 years of independence.

"But the systems need the right environment to work effectively. My government will create new economic and political conditions for PNG to function," he said.

Sir Mekere said the government in its first 100 days succeeded in rebuilding relationships with the international community and PNG's development partners.

"We can now proceed with comprehensive economic reforms," he said.

He said the World Bank and the IMF have supported the reform program with a US$ 300 million structural adjustment program together with an additional US$ 200 million extraordinary assistance from the Friends of PNG.

Sir Mekere said the Government had initiated a bill for organic law on the integrity of political parties and the integrity of candidates, which was designed to create a system that encourages open, fair and honest government with the best interest of the people at heart.

"You, members of the Kumul Society, who form the future elite of PNG, should not think that you are immune from all this, simply because you are well educated or better off financially. No one can escape the consequences of this tragedy," he said.

The Prime Minister said if the trend continues down the path of national self-destruction, "you will return to a country that cannot offer you a meaningful future, no opportunity for gainful employment in your career of choice, no opportunity for a decent satisfying life for yourself, no opportunities for your children.

"In recent years, there have been an army of carpetbaggers, both home-bred and foreigners who have creamed off, or tried to cream off fortunes from public funds, or from exploiting our rich natural resources for their own short term gain.

"The economic component of the strategy that my government has developed to end the reign of chaos began with the Supplementary Budget," he said.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

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