ROWAN CALLICK | The Australian | Extracts
PAPUA New Guinea is in an unusual space. It has a Prime Minister, Peter O’Neill, who is in effect a chief executive.
If he opposes a plan, it won’t happen. If he backs it, based on his performance so far, there’s a good chance it will get over the line.
When he took over four years ago, PNG was languishing in the depths of the UN’s human development index, and in 2014 it was still just 157th out of 187 countries.
Improvements are starting to be seen now, especially in the priority areas of health, schooling and infrastructure.
But the list of priorities is almost endless, such has been the comparative neglect over decades, not excepting those of Australian stewardship.
So it was intriguing to see O’Neill, after delivering his own speech, staying on attentively on Tuesday of an ANZ-run Port Moresby conference on “powering PNG into the Asian century”…..
O’Neill used his speech on Tuesday to a powerful business audience to try to calm concerns about midyear economic data released last week by the Treasury.
He said that the data that spread most alarm, about government debt and the budget deficit, was based on a worst-case scenario in which “we took no action”.
The government, he said, had taken on loans that were concessional and domestic. “Enough liquidity remains in the system for government to borrow without crowding out the private sector.”
No PNG government had defaulted on a loan, and his wasn’t going to be the first, he said, with nonpriority spending being cut and revenues increased.
“We are confident we will end the year in a much better position,” he said.
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Meanwhile, PNG opposition leader Don Polye claims the government is insolvent and is already cutting funds to key sectors of the economy including education, health, the electoral commission and other government agencies.
Mr Polye said foreign reserves have slumped by two-thirds and the 21% projected GDP growth for 2015 looks like being slashed to 11%.