PNG Opposition Decries Government’s ‘Financial Mismanagement’

admin's picture

Deputy Leader says LNG projects won’t benefit country due to debt levels

By Jacob Pok

PORT MORESBY, Papua New Guinea (PNG Post-Courier, June 2, 2014) – The current and future LNG projects will not benefit PNG’s economy due to the Government’s financial mismanagement and high debt overspending, says Deputy Opposition Leader Sam Basil.

He said the Opposition was supportive of the first contractual obligations to the ExxonMobil-affiliated PNG LNG gas being exported to Asian markets, which is a historical milestone in this "new frontier" country.

"But the Opposition’s support stops there as the factual reality is that all the over committed government spending, in and outside of the 2014 Budget might not be repaid even though most of the revenue interest accruals from the loans accumulated by the O’Neill government," Mr Basil said.

He claimed that the Government’s financial mismanagement and high debt overspending is a reflection that PNG would not see positive signs to the first revenue streams from its resources.

[PIR editor’s note: As reported in the PNG Post-Courier, Basil’s comments came on the heels of Treasury Minister Patrick Pruaitch’s statement ‘that the nation’s revenue will grow by some K10 to 12 billion in a full calendar year. … "It has also been stated often enough, by the Prime Minister and others, that the economy next is anticipated to grow by a record 21%, making it one of the fastest growing economies in the world," Mr Pruaitch said.’]

"Apart from it being visibly experienced in our currency devaluation and signs of high inflation, it is further confirmed by the Bank of PNG who cautioned the government from raising expectations surrounding the windfall revenue which will flow into PNG’s economy from the export receipts because improvements into PNG’s economy will not materialise," Mr Basil said.

He said the government should reveal the truth to the people and should not "cover-up" as its actions would affect the ordinary people on the ground.

"What can’t be hidden is the fact that PNG will be further placed into a deficit meltdown when our future revenues are supposed to improve PNG’s economy rather than be diverted to paying high interest accruals on the large loans," Mr Basil said.

The Bulolo MP also claimed that PNG was on the verge of an economical meltdown likened to what had occurred in European countries because PNG could defaulted on major international loan deals like the UBS loan and the Exim bank loan.

"This is frightening when PNG’s debt to equity level ratio has now exceeded the 35 percent benchmark because of the government’s financial mismanagement of the economy, a benchmark needed to be adhered to if PNG was to move into a budget surplus, equitable inflation levels, improved appreciation of PNG’s currency and high employment figures that would see PNG economically strong and financially robust," Mr Basil said.

Rate this article: 
No votes yet

Add new comment