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National Research Institute asks ‘where’s the LNG money?’


WHEN Papua New Guinea’s liquefied natural gas project was established, the PNG government promised a massive doubling of the nation’s GDP.

But since its first shipment of gas in April last year (the one hundredth shipment was in June), there has been no visible sign in PNG of the revenues from the project, forecast to be K400Million in 2015.

And at a media conference on Friday the PNG government’s think tank, the National Research Institute, asked the difficult question of where has the LNG revenue gone.

Dr Charles Yala (pictured), who was appointed Director of the Institute in June, said the PNG Treasury’s failure to be transparent about the nation’s underlying fiscal deficit and LNG revenues is impacting on the business and investment environment in PNG.

Dr Yala commented that, if the government continued to conceal data, it was likely that PNG would experience a similar situation as Greece.

He observed that so much emphasis had been placed on LNG in recent years that other sectors such of the economy, including agriculture, fisheries and tourism, had seen a fall in their revenues.

Meanwhile, contradicting the views of Australian economists, PNG prime minister Peter O’Neill has said the country’s economy is not in a crisis because borrowings remain below 50% of GDP.

“Everybody is getting paid, hospital services are still running, construction is continuing and the economy is still growing,” he said.

“We do not need to introduce a mini-budget because it will not solve any of these problems, as it is not a PNG problem, but a global one.”


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Busa Jeremiah Wenogo

It is interesting to note that there were delays in passing the Sovereign Wealth Fund Bill prior to the first shipment of LNG.

It was not until the recent Parliament sitting that the government managed to passed the Bill. If what NRI is raising is true then I wonder in between the time when the first shipment of the LNG to the overseas market took place and the passage of the SWF, what happened to those LNG revenues?

Did they go to repaying the UBS Loan and other external credits? Did they go into the budget to fund the government's key priority areas?

The people of PNG have the right to know to determine whether our government has been prudent and wise in its handling of the economy or not.

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