Abel: Forex issues better

THE country’s foreign exchange problems have improved gradually and should recover better when some major resource projects such as the Papuan LNG and Wafi Golpu come on stream.
Former Treasurer Charles Abel, pictured, who is now Finance Minister, said the country could go into agriculture and process and export products to raise revenue and improve forex issues.
Bank of PNG quarterly news magazine said foreign reserves had increased from K1.7 billion to K2 billion but that does not mean issues were completely resolved, rather improved.
“That is why we want some of these foreign investments to start,” Abel said.
“So, ideally around July and August, the Papua LNG through some of the lead from Front Engineering Design contracts and with some investments coming in and, of course, leading into the final investment decision later on this year, and projects like Wafi Golpu, which will be a US$6 billion (K20bil) construction project on top of the Papuan LNG project which is a US$13 billion (K43bil) construction project – if we think back of what happened during the construction phase of the PNG LNG project – there was a massive boost in the smaller economy when you have a massive in the economy.”
“There are all sorts of sub-contractors, a lot of employment to Papua New Guineans, hotel accommodation, travelling and all these contributed to the increase in forex.
“So we need some of these stimulus to increase the forex because it is taking time to do import replacement.
“For example, using our gas to generate power for example, not importing diesel and oil when we have it here, bring our tuna industry on shore, creating downstream industries on share instead of exporting round logs and, of course, investment into agriculture, rice and stock feed production, into diary industry, poultry and cattle productions the country.”
Abel said there was a need to invest in tourism and other sectors as well.
He said one major stimulant to growth was to go heavily into downstream processing and that would improve forex issues and also improve our economy.
Abel said in the Papuan LNG, there was a provision that the company was supposed to retain US$250 million (K894mil)on shore at any one time to help us with the foreign exchange situation.
“As we go into other projects like the P’nyang project, we can improve more, and the Papuan is an improvement on the PNG LNG project,” Abel said.