Think tank to Govt: Ensure firms bring onshore forex earnings

THE Government has been urged to make it mandatory for big resource companies to bring onshore foreign exchange earnings and not park them in offshore foreign currency accounts.
The PNG National Research Institute (NRI) said it would address the foreign exchange shortage.
It was one of the six recommendations released by a “think tank” last week providing an analysis of progression of the national budget from 2019 to 2020.
Authored by NRI director Dr Osborne Sanida, the paper highlighted that “the paradox of foreign exchange shortages required a change in mindset and strategy”.
“For the current most favoured companies that keep offshore foreign currency accounts, the Government should negotiate deals with them to require that after servicing offshore loan commitments, the balances/surpluses be brought into the PNG economy, rather than keeping them in offshore foreign currency accounts,” Sanida said.
“Given the nature of land ownership in PNG and governance structure, every resource that has been exported is owned by the people, either directly or through the State.
“Hence every deal between the Government and resource developers must have the welfare of the people at the centre, if real development outcomes for the people are to be realised.”
Other recommended areas of intervention include:

• Taking effective control of the personnel emolument blowouts because the continuation of such suggests a loss of control of the deficit;
• Ensuring stability in the capital budget to grow the economy;
• Promoting job creation and broad-based economic growth to broaden the tax base and increase government revenue;
• Making the resources sector work better in terms of its contribution to government revenue and translating these revenues to grow the non-resource sector for sustainable economic growth and human development;
• Addressing the debt burden issue by promoting broad-based economic growth and increasing the government’s share of revenues from economic growth; and,
• promoting SME development for exporting and import-substitution.