Pruaitch warns State to address forex shortage

The National National

OPPOSITION Leader Patrick Pruaitch has urged the Government to address the foreign currency shortage, ensure fiscal consolidation and reduce government borrowing.
Pruaitch said economists at a recent forum at the Development Policy Centre of the Australian National University in Canberra said the lack of foreign currency was causing a big plunge in PNG imports.
Pruaitch said the economists warned that lack of access to foreign exchange had become the “number one issue for business” and if prolonged, could cause PNG to face another “lost decade” of economic growth, similar to what happened in the 1990s.
Pruaitch called on Treasurer Charles Abel to:

  • Institute an independent audit of export revenues of mining companies to ensure adherence to project agreements, which BPNG has thus far failed to do;
  • instruct Kumul Petroleum to shut its corruption-prone Singapore bank account and to repatriate all revenues to PNG following the ending of the K3 billion UBS loan facility that required LNG revenues to be deposited offshore; and,
  • Deposit proceeds of all Government foreign grants and loans, including those from Australia, China, the World Bank and Asian Development Bank, in PNG-based banks with payments made directly from these accounts.

“Foreign exchange shortages have sharply impacted on PNG imports and contributed to rising unemployment levels since 2013,” Pruaitch said.
“Because BPNG is failing to perform its constitutional role as an independent Government agency with responsibility for monetary policy, it is also contributing to rising inflation by printing money to fund the Government’s deficit budget.
“Rising inflation hurts the poorest people in our society, making everyday goods more expensive.”