Papua New Guinea’s Marape signals ‘honest and transparent’ repair

Papua New Guinea’s Prime Minister, James Marape, has outlined his government’s goals for 2021, including building up infrastructure, undertaking ‘Budget repair’ and exploring ways to invest in domestic businesses.

Weeks after surviving a bid to push him out of Papua New Guinea’s top job, Prime Minister Marape said in a statement that there will be an effort to clean up government accounts in order to be ‘honest and transparent’ about PNG’s national debts. This measure is considered to be necessary in order to win the confidence of ‘credible’ lenders, including Export Finance Australia, World Bank, Asian Development Bank (ADB), International Monetary Fund and Exim Bank of China.

‘We picked up interest-free, or very low interest loans of under three per cent, from this pool of credible lenders to help our Budgets,’ Marape said. ‘We successfully used our two Budgets to date (2019’s K17.8 billion and 2020’s K18 billion expenditures) to balance the needs of supporting the economy and jobs while also starting the process of fiscal consolidation, which is vital for getting our budget deficits down and starting to lower our debt-to-GDP ratio.’

‘Cabinet has already approved zones for each province with investments of over US$20 million [K71 million].’

Marape said his government will continue to examine possible amendments to Mining and Petroleum legislation, and take a more assertive than previous governments approach to negotiations over resources projects – which was seen last year during the negotiations over the Wafi-Golpu project and the Porgera mine. He also flagged changes in the forestry and fisheries sectors, including increasing export levies to encourage downstream processing.

There will be an effort to create Special Economic Zones (SEZs) to attract foreign investment. ‘Cabinet has already approved zones for each province with investments of over US$20 million [K71 million],’ he said.

Government expenditures

Oro Province Governor, Gary Juffa. Credit: Gary Juffa via Facebook

Marape emphasised the role that government expenditures play in supporting jobs. ‘This includes the 60,000 jobs for teachers and all the work that flows from our SIP (services improvement) programs in funding local contractors.’

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He said the emphasis with expenditure would be more on supporting development in PNG rather than paying public sector wages. ‘Oro Governor Gary Juffa will set out ways to cut public service waste shortly,’ he said.

PNG business groups have argued that if the government paid its outstanding debts this would be an effective way to stimulate the economy. Marape indicated this would be a priority saying the aim would be to settle over K1 billion of previous bad debts and ‘outstanding arrears to service providers like road contractors, [and contractors in the] 2015 Pacific Games and APEC 2018 bills.’ He added, however, that the ‘nearly K2 billion Credit Suisse debt’ loan incurred during the tenure of Peter O’Neill has to be ‘continually’ re-financed.

Marape also pointed to providing low-cost loan facilities, through commercial banks, for MSMEs and providing freight subsidies for market access for rural produce.

Infrastructure

Nadzab Airport. Credit: NAC

Marape outlined a number of infrastructure initiatives. ‘Our Connect PNG policies-based Budget allocations saw funding of over 100 national, regional, provincial and district roads, airports, wharves, jetties, power lines and ICT initiatives.

These include:

• Road improvements at Tabubil-Telefomin; Lae-Finschafen-Kabwum-Sialum-Rai Coast; Kundiawa-Karamui; Goilala Highway; Gulf-Southern Highlands; Bulolo-Menyama-Kerema (Trans Island Highway); Mt Hagen-Ramu-Madang; East-West New Britain Highway; Manus Highway; Mendi-Kutubu; Komo-Koroba; Kainantu-Okapa; major island ring roads like Buka, Kiriwina, Esa’ala, Siassi, Karkar and New Hanover, North Bougainville to South Bougainville Highway; Hawain Bridge and East-West Sepik Highway; Madang-North Coast-Bogia; Kerema-Ihu road; Kiunga-Nomad; Magi and Hiritano Highway upgrades and extensions;
  Kokoda Highway; Namatanai Southern road, and major city and town roads including Lae, Kokopo, Madang, Goroka, Wewak, Lorengau and Daru.
• Rural jetty and major wharf programs for Vanimo, Lorengau, Kikori, Kimbe and Oro Bay.
• Continuing the ADB’s Civil Aviation Development Investment Program (CADIP) for airports and small airstrips.
• Launching the Lae-Nadzab International Airport construction.
• Stepping up higher voltage 132kva lines from Mt Hagen to Lae to complement the Mt Hagen to Hides line that is presently running. Fibre optic cables will be run on the new back of the lines.

Bougainville affairs

Marape said his government acknowledges ‘Bougainville as a Special Region and not as a Provincial Government,’ adding that efforts will be made to find a ‘full political settlement’ after the island’s population in 2019 registered in a referendum its unanimous support for political autonomy. He said discussions with provincial governments in PNG about possible autonomy are not like the Bougainville situation.