Dispute affects investors: Bank

Business

THE World Bank says ongoing dispute on the Porgera gold mine in Enga may affect investor confidence.
In its East Asia and Pacific Economic Update released yesterday, the bank said the Covid-19 was one of the issues which could have lasting impacts on the country’s economy.
“The main risks include the possibility that the Covid-19 pandemic lingers and has a lasting economic impact on the economy,” it said.
“In addition, ongoing disputes around the Porgera mine may affect investor confidence and, therefore, should be treated carefully.”
It said updated projections for 2020 suggested that the economy would contract 3.3 per cent in 2020.
“International and domestic movement restrictions have weakened external and domestic demand and suppressed commodity prices, except for gold,” it said.
“Disputes with international investors over the ongoing and new resource projects are also contributing to lower growth in 2020.”
It said the Covid-19 had also affected the country’s “already complicated fiscal picture and would lead to a higher debt-to-GDP ratio”.
“Before the Covid-19, the Government was planning the fiscal deficit at 5 per cent of GDP in 2020, which was higher than in the previous years due to substantial budget arrears accumulated by the Government,” it said.
“The Covid-19 impacts will lead to a higher fiscal deficit, estimated at 8.1 percent of revised GDP, and a higher debt-to-GDP ratio, estimated to exceed 48 per cent of revised GDP in 2020.
“To contain public debt from growing further, the Government will need to resume its fiscal consolidation efforts in the post-Covid-19 period, by focusing more on mobilising domestic revenue and improving efficiency of public spending.”
It said the Central Bank was expected to continue its accommodative monetary policy over the near term with potential normalisation to follow subject to inflationary pressure and economic growth.
“However, the Central Bank should address structural deficiencies within the financial sector to ensure these policies have the desired impacts,” it said.
“Policies such as reducing excess liquidity, enabling healthy competition, enhancing the effectiveness of money markets and improving the investment climate in the financial sector should complement the monetary stimulus package.”

3 comments

  • Another pressure is coming from the world Bank to open the Pogera mine. Is BNL the only mining company in the world? I am sure there are other genuine companies that operate mines in the world and who are waiting to partner with PNG. I can construe from BNL’s refusal to corporate that there is something sinister about them that PNG doesn’t know. Now PMJM has stepped on their toe and they don’t like it. I don’t like that mine thing and I am ready to farm my land and eat of it.

  • PNG faces negative consequence of Structural Adjustment Programs introduced by World Bank. At the pretext of COVID-19, World Bank now raise the volume on the campaign for Investor Confidence in the resource sector. PNG is no more gullible. We know what’s in the play. PNG has started a mission and that is to Take Back PNG – Take Back The Resources. Whose interest is World Bank representing? Foreign entities have robbed the natural resources to the extent of leaving PNG on or over the poverty line. Advice and outlook provided by World Bank, Chamber of Mines and Petroleum, etc. adds up to no where near on PNG’s haste to take back PNG. PNG knows which entity comes from where and which institution is backing what industry players. PNG is no longer in position to take any more hogwash from the World Bank; keep it to yourself and advise your own country.

  • Very reason why we should stop this covid19 nonsense and focus on rebuilding the economy and take back PNG!
    Covid19 has always been a ploy to get us to our knees so we open up to structural adjustments and more loans. Inap nao na let us get on with our lives, covid19 is here to stay, let’s move on.
    On Porgera concerns – Barrick is not the only mining company in the world. I guess 30yrs should be enough time to make some money and move on. Leave us in peace, we want to do it our way.

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