Govt will not be reckless: Marape

PRIME Minister James Marape says the Government will not be reckless to add burden to the country to refinance the US$11.8 billion (K27 billion) debt from the previous government led by Peter O’Neill.
Marape rubbished foreign media reports which stated that the Government would seek China’s help to refinance the debt.
The Australian reported that PNG had asked China to refinance its entire Government debt of (K27 billion) in an unprecedented move that could give Beijing a huge leverage over Australia, PNG’s nearest neighbour.
Lowy Institute’s Pacific programme director, Jonathan Pryke told The Australian that if the deal went through, “it would be of huge benefit to the cash-strapped government,” consolidating short-term and expensive loans and helping to alleviate foreign exchange pressures.
But Marape in a statement described such news reports as “fake news”.
“So it is misreporting and false that I am going one way to China with request for K27 billion loan,” he said.
“We’d rather discuss trade with them then continual or further loan.
“No more unnecessary loans except to refinance our expensive loans and for key enabling economic infrastructures in regional economies.
Marape clarified that the Government was in discussion with bilateral partners to access very low cost concession finance in what he described as: “To give us some breathing space and this includes our discussions with World Bank, ADB (Asian Development Bank) and some other possible non-traditional partners.
“Our relationship in the world is just not about China or the West, including Australia.
“We have a country to run and our national interest will take precedence with numbers, rates, and statistics influencing my Government’s decisions, including the best terms for loan refinancing if need be.
“But at the moment, we, as whole of Government, have not approved this pathway yet, and someone has run ahead to the media without my consent or knowledge.”
Marape said he had asked Treasurer Sam Basil to get his department to do a profiling on all current loans to ascertain their performance to the economy.
“I have put stop to more borrowings and loans until we are satisfied that the project cost benefit analysis establishes return on the loans that we might secure. For instance, I have put stop to a loan volume of about K1billion on few non-significant projects of the last government, including a Port Moresby-based water supply project to be sourced from China Exim (bank).”
“We will not go down the easy path of resorting to loans but working strategically to invest in growing the economy through policy and legislations that embrace incentives and structural reforms as ways of anchoring our country for positive rebound.
This also will include cutting away wastage in our budgets.”
Reuters reported that the request to Beijing coincided with aggressive warnings from the US defence secretary Mark Esper, who said on Sunday that China was using “predatory economics” to destabilise the Indo-Pacific.