Treasurer Ian Ling Stuckey - "The former prime minister Peter O'Neill has left PNG with an illegal debt legacy"

IAN LING-STUCKEY MP
| Minister for Treasury | Extracts

PORT MORESBY - Papua New Guinea’s budget deficit had climbed to K4,636 million – the legacy of former prime minister Peter O’Neill.

Budget deficits add to public debt. This means the O’Neill regime’s policies were going to add another K4,636 million to public debt in 2019. PNG’s public debt was therefore going to increase to an extraordinary K33,045 million.

David Kitchnoge - "PNG does have options and we need to go into negotiations knowing what they are"

DAVID KITCHNOGE

PORT MORESBY - The fact that the International Monetary Fund admitted its failure in its assistance to Greece showed it was willing to learn from its mistakes and avoid the pitfalls in similar cases.

The key is always that, whatever solution Papua New Guinea adopts to get our economy going again, would be a negotiated outcome with multilateral financial institutions like IMF.

Adam Smith did not envisage a world dominated by huge, impersonal corporations but understood the economic and social dangers they posed

CHRIS OVERLAND

ADELAIDE - Like Phil Fitzpatrick (‘Is moral capitalism even possible?’), I have been thinking about whether capitalism can ever be conducted in a moral and ethical way.

And like him, I can remember another time and place where the absence of great corporations meant capitalism worked along the lines foreseen by Adam Smith when he wrote ‘Wealth of Nations’.

JEFFREY FEBI

LUFA - There's disagreement about whether Papua New Guinea is rich or impoverished.

Many people, including leaders like Grand Chief Sir Michael Somare and current prime minister James Marape, support the view that we are in fact rich.

Many others, including myself, differ. We believe Papua New Guinea is a poor nation.

Cultivating kaukau in the highlands - there are 1,000 varieties of sweet potato in PNG alone

PHIL FITZPATRICK

TUMBY BAY - According to the UN’s Food and Agriculture Organisation, the sweet potato is the world’s seventh most important crop in terms of the weight of food produced.

Sweet potato was first domesticated in the Americas more than 5,000 years ago but didn’t reach Papua New Guinea until about 500 years ago.

When it did it created major shifts in settlement patterns and accelerated population growth.

Leonard Roka on the shore at Kangu - looking across to the Solomons triggers thoughts of the small friends who helped Bougainville achieve its post-crisis peace

LEONARD FONG ROKA

PANGUNA - The population of Bougainville is around 300,000 so, when looking at other small Pacific island states and their standard of living, the province’s development does not need a mine operating at the scale we knew at Panguna before the Bougainville conflict.

All of us know that the Papua New Guinea government does not clothe us, it does not feed us and it does not protect us.

Inside the John Roka school, but "the able population tilts each day not to education but towards where it smells the money in the burrows"

LEONARD FONG ROKA

PANGUNA – No, I’m not lost from my PNG Attitude family; just accumulating more energy living in the midst of the corporate-mining-politics ridden Panguna mountains trying to educate my young people in a little early childhood institution.

It’s known locally as the John Roka Memorial School and was established by my siblings in honour of our West New Britain father, John Roka, killed by the Bougainville Revolutionary Army in that terrible civil war.

Paul Kastas & his wheelbarrow load of yakait seedlings - just 10 kina each

DANIEL KUMBON

PORT MORESBY – Just recently I was proud to see Paul Kastas at Waikele Market in Port Moresby.

I knew him because many years ago he used to sell Enga Nius for us on the streets of Wabag. We lived in the same location at Aipus in Wabag town.

Now, here at a market in Moresby, he was selling something very important in Enga society - yakait (also known as tokak) seedlings.

Ian Ling-Stuckey - "Poor national budgets have distorted development planning and service delivery"

KEITH JACKSON

PORT MORESBY – Papua New Guinea’s treasurer, Ian Ling-Stuckey, has said the O’Neill government’s mismanagement of the economy has crippled the nation’s cash flows.

“There is some bad news coming but this government has already commenced work on solutions,” Mr Ling-Stuckey said in a media release.

Prized big pig in the main street of Tari (Albert Tagua)

SIMON DAVIDSON
| An entry in the Crocodile Prize

SONOMA – The highlands province of Hela is host to a multi-billion dollar liquefied natural gas project. But operating alongside the wonders of modern technology is a culture full of rich tradition and custom.

Hela functions on the patrilineal system, where the man owns everything: the land, the pigs and he is the heir of the father’s riches, knowledge of the sacred rites and traditional history.

CHRIS OVERLAND

ADELAIDE - The sanctions imposed upon Iran by the USA are causing a huge amount of damage to that country’s economy.

The people of Iran, as distinct from the ruling regime, are suffering a great deal as a consequence.

What surprised me was that an apparently quite closed and tightly controlled economy like Iran’s was so susceptible to the influence of the US government’s edicts.

 Ian Ling-Stuckey - "The PNG  economy has been struggling and bleeding. Budget prospects for 2019 are extremely difficult. There is bad news coming"

NEWS DESK | Radio New Zealand | Edited

PORT MORESBY - Papua New Guinea is in an "increasingly fragile fiscal position" and an "economic hole", according to PNG's new Treasury Minister Ian Ling-Stuckey.

The precarious situation was revealed by a check of the government's finances by treasury and economic officials.

Children on an oil palm estate - life in camps with no schools and their birthright disappearing

NEWS DESK | Sarawak Report | Edited extract

SARAWAK, MALAYSIA - Dayak landowners of Sarawak will take no pleasure, but experience little surprise, in hearing how the people of Papua New Guinea have been ill-treated by logging and oil palm plantation conglomerates based in East Malaysia.

These are companies who first robbed Sarawakians of their land rights before extending operations into virtually all the remaining timber reserves on the planet.

John Gilmour - Scottish-born Australian former judge and expert in commercial law will join Sir Salamo Injia in UBS-Oil Search inquiry

JONATHAN BARRETT | Reuters

SYDNEY - Papua New Guinea will start preliminary hearings on Thursday 19 September into the terms of a K2.8 billion loan from Swiss bank UBS used for an ill-fated government investment in the gas sector, the inquiry’s chairman said on Monday.

The timetable and terms of reference, released for the first time, also include a focus on how the UBS loan used to buy a government stake in PNG-focused energy firm Oil Search was obtained, whether it resembled previous loans, and whether the government broke its own rules in taking out the loan.

Chairman Salamo Injia, a former chief justice, said in a statement that retired Australian judge John Gilmour would also join the inquiry as a second commissioner.

“The appointments of [an] overseas commissioner and counsel were necessary given the international dimensions of the UBS transactions,” Salamo said.

Western District's upriver port on the Fly River at Kiunga - what happens when the copper, gold and silver run out?

CLEMENT KAUPA

PORT MORESBY – On the first Thursday in June, soon after Oil Search chief executive Peter Botten addressed the 244th Sydney Mining Club forum over luncheon in Australia, a mother and her two sons drowned in the remote South Fly District of Papua New Guinea’s Western Province.

The tragedy which took the lives of the mother and her child and an infant occurred after a boat they were travelling in with relatives capsized in rough waters at the mouth of the Karu River. They left behind the father, a Port Moresby-based police officer, and three older siblings.

The family travelling in the ill-fated boat was on its way to the village of Sepe on the West Kiwai coast, escorting for burial the body of a deceased police officer from Port Moresby.

David Osikore (second right) briefs colleagues on the Wafi gold deposit near Lae (Mike Porter)

KEITH JACKSON

PORT MORESBY – Bougainville Copper Limited (BCL) has announced the appointment of David Osikore to the company’s board of directors.

Osikore, 57, was born in Buin and has spent 30 years in the exploration and mining industries in Papua New Guinea and Australia.

His career began with the PNG Department of Mines and has since traversed roles ranging from exploration geologist to managing director. He is currently also on the board of Pacific Niugini Minerals PNG.

Osikore nominates his involvement with the prefeasibility study associated with PNG’s Hidden Valley and Hamata gold projects among his career highlights.

BCL chairman Sir Mel Togolo said Osikore was well-respected and brought invaluable industry experience and a keen local perspective to the board.

“We are delighted that David has agreed to join given his breadth of experience, technical expertise and the industry knowledge he has garnered having worked for three decades in PNG, Bougainville and abroad on various gold, silver and copper mining projects,” Togolo said.

Stephen Howes - Will yesterday's joint ministerial forum reveal detail of required economic reform in PNG?

STEPHEN HOWES | DevPolicy Blog

CANBERRA - Media reporting of Papua New Guinea’s efforts to access foreign loans to finance the government’s budget has been far from accurate or complete.

But the efforts themselves are real. And they pose significant challenges for both the country’s suitors, China and Australia, and most importantly for PNG itself.

As reported in official PNG documents, PNG has been trying to obtain a loan from China since last year. The government is seeking K1 billion from China’s National Development Bank.

In principle agreement was reached at APEC last year, but the deal is still not yet done. The sticking points are the interest rate, and that China normally lends for projects, whereas PNG wants the money not be earmarked.

It needs the loan to pay salary bills and interest. Given the length of time the negotiations have taken, it is not clear when or indeed if China will come to PNG’s aid.

It’s not that China never provides non-earmarked budget support, but it is certainly the exception rather than the rule. Given the difficulties PNG is experiencing in obtaining K1 billion from China, talk of China refinancing PNG’s K27 billion of government debt is fanciful.

Logaweng telecommunications tower

ISO YAWI

LAE - It all started with a phone call from my superior the Thursday before last during a critical peak in my work at Nadzab airport.

“You’re assigned on a technical mission to do a site survey at Finschhafen tomorrow,” my superior said.

“You and Robert Waninara will be representing Bmobile and other state-owned ICT entities will be sending their reps with the media team.”

The mission was assigned by Papua New Guinea’s communications minister and MP for Finschaffen, Rainbo Paita.

I felt excited and a bit nervous as it would be my first experience of this kind. So I completed my work at Nadzab and got myself ready for Finschaffen.

I had only heard stories of this historic town. When Johann Flierl came to PNG in 1886 as the first Lutheran missionary, he set foot at Simbai at the mouth of Mape River (Bubui) in the Finschhaffen area.

Our telecommunications tower is located on Logaweng hill looking down on Gagidu station near where the Logaweng Lutheran Seminary was established in 1907.

James Marape - unsure about the benefits locals will see from a multi-billion-dollar LNG project

NEWS DESK | AFP

SYDNEY - Oil Search has accused Papua New Guinea of backtracking on a deal to build a new liquefied natural gas project and set a 31 August deadline to resolve the dispute.

Oil Search is working in partnership with France's Total and US-based ExxonMobil on the US$13 billion site that would roughly double Papua New Guinea's exports of LNG.

The deal was signed in April, but since coming to office in May PNG's prime minister James Marape has raised concerns that locals will not receive enough benefit from the project.

"While initially indicating that the government had decided, in principle, to stand behind the agreement, more recently it has signalled its desire to renegotiate some of the agreed terms," Oil Search said.

James Marape and Annette Sete

ANNETTE SETE | My Land, My Country

LAE - Papua New Guineans in the creative industries will never win against cheap Chinese copies unless and until the Papua New Guinea government tightens up on some of the laws safeguarding our businesses.

Chinese imitations of local designs and fake or counterfeit products will continue to flood our markets.

This past week my total of Chinese copies reached eight. Six of those we attempted to fight against, but high legal costs meant we can’t afford to do it all.

I read with interest and frustration as Papua New Guineans call for protection of our rights.

LISA MURRAY, ANGUS GRIGG & JONATHAN SHAPIRO | Australian Financial Review | Extracts

SYDNEY - Papua New Guinea's new government has appointed a former chief justice and an anti-corruption crusader to lead a three-month inquiry into the UBS loan affair, which is expected to renew focus on the investment bank's role in the controversial deal.

Prime Minister James Marape announced on Friday the inquiry would investigate whether any laws were broken when the Sydney office of UBS lent $1.2 billion to the PNG government in 2014 to buy a 10% stake in ASX-listed Oil Search.

The commission of inquiry will also look into whether there was any corruption or impropriety.

PNG PM James Marape says there are many questions that need to be answered.

Former chief justice Sir Salamo Injia has been appointed commissioner and Sam Koim, who headed the disbanded Taskforce Sweep that looked into allegations of corruption involving former prime minister Peter O'Neill, was announced as counsel assisting.

MARK GODFREY | Seafood Source

SAN DIEGO - USA - A Chinese fishing firm is edging towards a deal to allow it access to the waters off Papua New Guinea with six large fishing vessels.

The fleet is set to sail after a team of eight officials from PNG visited the company at its home port in Zhejiang Province.

The officials inspected safety and tracking devices aboard six vessels of the Wenzhou Da Zhou Distant Water Fishing Co.

They were accompanied by company executives and officials from local government in Dontou County, near the city of Wenzhou, a major export-focused manufacturing hub.

Entering PNG would represent the “most cherished wish” of his company, Wenzhou Da Zhou general manager Yang Jin Ying told the press after the inspections.

LISA CORNISH | Devex | Extract

CANBERRA — The use of off-grid solar products has skyrocketed over the past five years in Papua New Guinea, with 60% of households now using solar lighting — up sharply from just 2% in 2012, according to a new report by the International Finance Corporation.

As a result, PNG now has one of the highest rates of use of off-grid solar lighting in the developing world, according to the report ‘Going the Distance: Off-Grid Lighting Market Dynamics in PNG’.

Part of this is due to the fact that 87% of the population — or 7.2 million people — are not connected to the electricity grid.

But the increased use of mobile technology has also played a major role. The report showed the transition happened at a time when mobile phone penetration was growing rapidly, but the means to charge phones was lagging.

CONTRIBUTOR | Asia Times / AFP

SYDNEY - Papua New Guinea prime minister James Marape has backtracked on an announcement saying he had asked China to refinance the country’s $8 billion debt, insisting the statement was released without his knowledge.

A statement from his office on Tuesday said Marape had asked China’s ambassador for help in refinancing the country’s K27 billion public debt during a meeting in Port Moresby.

But on Wednesday afternoon, Marape’s office released a new statement saying it was “false” that he was “going one way to China” to tackle the country’s debt.

He said PNG was primarily discussing trade with China while examining debt options with undisclosed “non-traditional partners.”

KATE LYONS | The Guardian | Extracts

SYDNEY - Papua New Guinea prime minister James Marape has dealt a blow to Australian diplomacy by asking China to refinance his country’s debt.

The request marks a “significant shift” in regional politics and PNG’s allegiances, according to Pacific experts.

Australia has traditionally been the largest aid donor and most important ally of PNG, but in recent years ties between China and PNG have strengthened.

PNG’s prime minister, James Marape, visited Australia two weeks ago at the invitation of his counterpart, Scott Morrison, in his first international visit since becoming the Pacific nation’s leader at the end of May.

CONTRIBUTOR | Asia Times

PORT MORESBY- Papua New Guinea has asked Beijing to refinance its K27 billion debt, in a request likely to rile Australia and the United States as they try to maintain their influence in the Pacific in the face of a rising China.

Beijing has been strengthening ties with PNG and other Pacific nations by increasing engagement and offering loans for infrastructure, prompting both the US and Australia to launch their own charm offensives in the region to keep traditional allies on side.

Less than two weeks after traveling to Australia on his first trip abroad as leader, PNG prime minister James Marape announced on Tuesday that he had asked China’s ambassador for help in refinancing the country’s K27billion public debt during a meeting in Port Moresby.

“He stated that a formal letter would be forwarded to the ambassador to convey to Beijing on this request,” Marape’s office said in a statement.

NEWS DESK | PNG Today | Edited

PORT MORESBY - Papua New Guinea’s prime minister James Marape has requested that China enter a free trade arrangement (FTA) with PNG and Pacific Island countries to boost the economy of the region.

Marape made these request at a meeting with the Chinese ambassador to PNG, Xue Bing, saying he was mindful that a similar arrangement with Australia and New Zealand was under review to ensure it seeks tangible outcomes.

The meeting agenda included PNG refinancing its K27 billion debt with China, the upcoming Third China-Pacific Islands economic cooperation forum to be held in Samoa in October, and forthcoming Pacific Islands Forum meetings to be held in Tuvalu this month.

“I also suggested for Chinese investment in the Agriculture and Fisheries sector, and in particularly establishing down streaming processing plants for products in forestry, fisheries, mining and petroleum, and general food production and supply in PNG,” Marape said.

Bing raised concerns with forum hosted by Tuvalu which has diplomatic relations with Taiwan and urged PNG to support China to allow it to speak at the forum meeting at which China wants to deliver a statement on strengthening relations in the region.

Marape maintains that all nations are sovereign states and that each forum member is entitled to decide on who its external partners are.

He said PNG’s One China Policy has always been the cornerstone of relations with China. Given this and favourable relations with China, PNG will support China on regional issues of mutual importance.

Bing briefed Marape on China’s investments in PNG and said they were much less compared with PNG’s other development partners. China’s two major projects are Ramu Nickel and the Porgera gold mine.

The two men also exchanged views on global food security and discussed entering an agricultural cooperation arrangement to supply PNG organic food and vegetables to the Chinese market and entering an agreement for Chinese Investors to build fisheries processing plants in PNG.

Bing invited Marape to China to “consolidate” agreement on key issues including air services, tourism, mining, petroleum, electricity, roads, ports, education, the Chinese language curriculum to be introduced in schools, and encouraging business investment from China.

Marape said all business investors and other officials traveling to PNG would be facilitated by the PNG Embassy in Beijing so meetings with senior government officials and ministers are properly coordinated.

TOM WESTBROOK | Reuters

SYDNEY - Papua New Guinea has signalled it will back a previously agreed multibillion dollar liquefied natural gas (LNG) deal involving Australia's Oil Search, although it said that some terms still need negotiating.

The deal, for a project called Papua LNG, was agreed in April. However it was put up for review after the prime minister who signed it was ousted in a parliamentary vote in May, following a political crisis caused by discontent over the distribution of resource riches.

Oil Search CEO Peter Botten said the company was "encouraged" by the PNG petroleum minister's statement.

Papua LNG, which is a joint venture between French oil major Total, Exxon Mobil Corp and Oil Search, is part of a $A19 billion project to develop gas fields off PNG's shores and double the country's exports of LNG.

CALUM RUTTER | Public Finance International

LONDON, UK - Papua New Guinea should look to agriculture to strengthen growth as the economy recovers from a series of external shocks, the World Bank has said.

Structural transformation was needed in the country to bring about the inclusive and sustainable development that would enable its economy to become more resilient, the bank suggested in a report.

Real GDP growth in Papua New Guinea dropped gradually from 13.5% in 2014 to -0.5% in 2018.

During this time there was a commodity price shock, a particularly warm El Niño climate cycle and a 7.5-magnitude earthquake that hampered the economy, the World Bank pointed out in the report, released on Friday last week.

MERVYN PIESSE | Global Food and Water Crises Research Program | Future Directions International

NEDLANDS, WA - Papua New Guinea is a predominantly rural society that relies on subsistence agriculture.

Its prime minister, James Marape, has stated that he wants to diversify the economy, away from its dependence on oil and gas and increase the export of agricultural goods.

While agriculture is a significant part of the PNG economy, its agricultural exports are almost entirely limited to coffee, palm oil and copra.

Although it is possible that PNG will be able to expand the supply of those commodities, the development of other food products, such as rice or other cereals, will likely be difficult.

James Marape - Papua New Guinea only wants 'serious investors' 

GREGORY AVIRA | FM100

PORT MORESBY - People who intend to set up business in Papua New Guinea must be serious and meet set requirements.

Prime minister James Marape says one of these is that an intending business must open a bank account in PNG with a minimum K10 million deposit.

“Investors must have serious money – a minimum of K10 million to be deposited in a facility with the Central Bank to show you are serious,” said Marape.

The prime minister says he made clear during his recent visit to Australia that this will be PNG’s investment approach.

Marape saids he remains confident in continued reciprocated business investment with Australia.

He thanked the 5,000 plus existing Australian businesses which continue to invest in PNG.

The police mobile squad's effectiveness is argued to have been compromised by LNG camp security duties

DAVE EKINS

RICHMOND, TAS - Prior to the commencement of the Papua New Guinea liquefied natural gas (PNG LNG) project, the Police Mobile Squad was an extremely feared entity in the Southern Highlands and later Hela Province.

Their Royal Papua New Guinea Constabulary’s mobile squad had a modus operandi that at times was brutal – including rape, destruction of crops and livestock and burning of houses.

However, they did stop the fighting and brought most of the criminals to heel.

The very threat of their deployment made clans think twice about fighting and payback. Not only would compensation have to be paid between warring clans, but the mobile squad’s collateral damage usually had to be compensated for as well by the fight ‘owners’.

Early in the construction phase of PNG LNG there was a fight going on adjacent to one of the camps and some of the combatants jumped the perimeter fence when they saw a couple of people from another clan working in the camp.

SCOTT WAIDE | My Land, My Country

LAE –Real estate companies don’t want to reduce their prices.  It’s an ugly fact of life in Papua New Guinea.

If you ask real estate companies if there should be regulations, they will tell you something to the effect that it is a ‘self-regulating’ industry and that government should not interfere with that ‘self regulation.’

As long as there is demand, real estate companies have no problem keeping the prices high.

The prices are out of reach for ordinary Papua New Guineans and still expensive for others who may be sharing rental costs with their partners or other family members.

In housing, you need economies  of scale.  That is where the National Housing Corporation comes in.

Phil Fitzpatrick - "Generation after generation have stayed in the towns until it has become impossible to escape"

PHIL FITZPATRICK

TUMBY BAY - It’s estimated that about 80% of the people in Papua New Guinea are subsistence farmers.

A subsistence farmer is by definition someone who only produces enough to satisfy their basic or primary needs.

It is unclear who actually made the above estimate and what definition of subsistence they used.

As economic anthropologists have shown there is no such thing as a true subsistence economy because in every type of economic system there is nearly always surplus production.

In PNG’s old days this surplus was used in ritual or prestige consumption, communal use or for exchange.

In modern PNG the surplus has become part of what is known as the informal economy, much of it in the hands of women.

NEWS DESK | Reuters | Edited extracts

MELBOURNE - Papua New Guinea’s new prime minister James Marape has used Oil Search Ltd’s 90th birthday to press the country’s biggest company and its oil major partners to pay more tax.

His comments come as Oil Search and partners Exxon Mobil Corp and Total SA face delays on a $13 billion plan to double liquefied natural gas exports from Papua New Guinea and the new Marape government seeks to win more revenue from resource projects.

Oil Search has long prided itself on the work it does in PNG communities, including funding health care and literacy programs, but Marape said that was not the company’s job.

Kerenga Kua - wants to create fairness for both resource investors and Papua New Guineans

LISA MURRAY & ANGUS GRIGG | The Australian Financial Review

SYDNEY - Papua New Guinea's new government will make a decision within weeks on whether to amend a multibillion-dollar gas agreement involving Oil Search, according to the country's Petroleum Minister Kerenga Kua.

In his first interview with the foreign media since being appointed to the key ministry last month, Mr Kua said the government's internal review of the Papua LNG agreement –a project that is being led by France's Total and also involves ExxonMobil – will be completed within two to three weeks.

Uncertainty about the project has been weighing on the Oil Search share price, which has fallen almost 15% since late April, when former prime minister Peter O'Neill came under mounting pressure to step down.

His replacement, James Marape, and Mr Kua had both been critical of the Papua LNG project leading up to the change of government. Together with the PNG LNG Project, it forms part of a K47 billion liquefied natural gas expansion in the Pacific nation.

Mr Kua told The Australian Financial Review the internal inquiry into the Papua LNG project was focusing on two areas.

Community leaders sign an agreement giving up their rights to claim compensation from Ok Tedi Mining

MARTYN NAMORONG | Namorong Report

PORT MORESBY - Treasurer Sam Basil’s recent economic update has highlighted serious cash flow issues for the Papua New Guinea government as it struggles to deliver the 2019 budget.

As Basil himself highlighted, the collection of corporate income tax, goods and services tax and departmental fees are all below target.

Prime minister James Marape recognises the dire predicament his government faces and so it was unsurprising that his first overseas trip was to Singapore to meet with the Board of the PNG Sustainable Development Program (PNGSDP).

PNGSDP is an independent entity, a status clarified by a recent ruling by the courts in Singapore.

Sir Mekere Morauta - "This year's PNG budget is way off mark, bordering on useless”

KEITH JACKSON

PORT MORESBY – Sir Mekere Morauta has said “very loud alarm bells” should be ringing in the Papua New Guinea government’s ears after the treasurer Charles Abel and finance minister gave widely variant versions of the country’s revenue shortfall so far this year.

Treasurer Sam Basil had said the government was “slightly behind on revenue” after the first five months, at K974 million – or 19% - less than budgeted, while a few days later finance minister Charles Abel said revenue was down by K2 billion.

“Who is right?” Sir Mekere asked, adding, “And whether the revenue shortfall is K974 million or K2 billion, neither figure is ‘slight’.”

Speaking in parliament this week, the former prime minister said the shortfall indicated that the budget was “way off mark, bordering on useless”.

He said the economy was stuck “in a recessionary gear” with GST and corporate, mining and petroleum taxes all down.

Chris Overland - "Politicians are generally crap at making business decisions; PNG has lost money it should never have lost"

CHRIS OVERLAND

ADELAIDE – The UBS bank of Switzerland has pointed out that the multi-billion kina loan to the Papua New Guinea government to buy Oil Search shares was made according to relevant laws and in conformance with normal business and banking practice.

To the best of my knowledge, no-one is accusing UBS of acting unlawfully (at least, not yet).

The real point at issue here is that UBS essentially facilitated a K4 billion bet by the O'Neill government that the price of oil and gas and hence the value of its investment, would go up not down.

At that time, I - and many other critics of the decision to buy shares in Oil Search using public funds - pointed out that the price of oil and gas was at historic highs and thus inflating the price of the shares being purchased to a level that did not reflect their underlying long term value.

We also pointed out that the downside risks of such a manifestly speculative investment in the volatile energy market were very high, so the likelihood of PNG losing a lot of money was also very high.

Now, six years later, the critics have been proved correct and PNG has lost money that it should never have lost.

Sarah Kuman is a partner with Allens Lawyers specialising in corporate and commercial advice and natural resources law

SARAH KUMAN | Allens

PORT MORESBY - James Marape's ascension to the Prime Ministership of Papua New Guinea brings potential changes to regulation of the resources industry.

We examine his new-look cabinet and some of the more recent ministerial comments regarding both region-specific projects and the resources industry more generally.

On 30 May 2019, James Marape became Papua New Guinea's new prime minister, following the departure of former prime minister Peter O'Neill.

Mr Marape has since foreshadowed potential changes to the regulation of resource projects in the medium term, while at the same time reassuring those with existing investments in the country.

Mr Marape was previously Mr O'Neill's minister for finance, but resigned in early April, triggering a series of defections which ultimately led to Mr O'Neill's resignation.

In resigning, Mr Marape cited policy differences with Mr O'Neill, including in respect of local business participation in resource projects and amendment to resource laws. His resignation came two days after execution of the project agreement for a significant new LNG project for the country.

BUSA JEREMIAH WENOGO | PNG Informal Economist

PORT MORESBY - If you are a motorist who regularly drives around Port Moresby city chances are you’ve come across a band of youths plying their specialised trades along Croton Street.

At first they may raise suspicion among drivers and passers-by because of the way they’re dressed and how they conduct themselves.

However more careful observation reveals these youths are on to something.

They provide an affordable alternative automotive service to struggling vehicle owners who can’t afford vehicle servicing by recognised automotive workshops like Ela Motors and Boroko Motors.

NEWS DESK | Finews.com | Edited

ZURICH - UBS Group AG, Switzerland's largest bank, has commented on the K4 billion loan granted to Papua New Guinea that contributed to political upheaval still resonating today.

The multinational investment bank and financial services company has a presence in all major financial centres has issued a brief statement outlining its view of the case.

Five years ago, UBS granted a loan worth US$1.2 billion (K4 billion) to PNG, which used the money to buy a stake in petroleum company Oil Search.

The deal went wrong as the oil price fell, forcing the PNG government to sell the shareholding at a loss.

HISAO KODACHI | Nikkei Asian Review writer

TOKYO -- Japan, the US and Australia have picked a liquefied natural gas project in Papua New Guinea as their first case for joint financing in the Indo-Pacific region, planning to lend over K3.4 billion, Nikkei has learned.

Three government-backed lenders -- Japan Bank for International Cooperation, the US Overseas Private Investment Corp and Australia's Export Finance and Insurance Corp -- issued a statement yesterday regarding their joint infrastructure efforts.

The three countries agreed in November to join hands in financing infrastructure projects in the Indo-Pacific to offer an alternative to China's Belt and Road initiative. The LNG project in Papua New Guinea marks the first project in this three-way cooperation.

Table: Richest black, Christian countries based on real GDP per capita

MAHOLOPA LAVEIL | Devpolicy Blog

CANBERRA - Papua New Guinea recently underwent a change in leadership, which saw the incumbent prime minister resign prior to a prime ministerial election on the floor of parliament.

James Marape was elected PNG’s eighth prime minister on 30 May 2019 with an overwhelming majority. Some 101 parliamentary members voted for Mr Marape, with seven voting for the other nominee, Sir Mekere Morauta.

That same evening Mr Marape addressed the country on one of its free-to-air television stations, EMTV, and later on social media. Amid thanking the former government and assuring the country it was in safe hands, Mr Marape announced that he aspired to make PNG the “richest black Christian nation on planet earth” within 10 years.

Paul Flanagan - PNG industry was 20% worse off in 2016 than if it had continued ‘business as usual’ growth prior to the LNG project

PAUL FLANAGAN | PNG Economics | Edited

Link here to the full version of Paul Flanagan’s latest article

CANBERRA – Last year Dr Luke Fletcher and I co-authored a report comparing the projected economic benefits of the PNG LNG project with its actual outcomes.

So, more than a year later, do the controversial conclusions of ‘Double or Nothing: The Broken Economic Promises of the PNG LNG Project’ still hold true?

The broad answer is ‘yes’ – indeed the report’s conclusions have been reinforced by recent economic data.

Fortunately, PNG’s new Marape-Steven government is seeking better terms for future projects.

It is too early to tell whether the new government will make the important and politically difficult policy changes required to reverse the ‘resource curse’ approaches of the O’Neill government.

Recent PNG National Statistics Office figures confirmed that the PNG Treasury was over-estimating the health of the PNG economy in 2016.

Martyn Namorong - "As I reflect on our leaders' messages, I look through the frame of Melanesian egalitarianism not western nationalism"

MARTYN NAMORONG

PORT MORESBY – Late last week Papua New Guinea heard great fiery statements from prime minister James Marape and Oro governor Gary Juffa about Taking Back PNG and owning our economy.

Both gentlemen seemed to signal the nation’s shift towards ‘resource nationalism’ — or at least that’s how western media has interpreted their Tok Pisin which was spoken in plain English.

Both parliamentarians reflected a public sentiment regarding economic independence that has lingered for decades amongst many Papua New Guineans.

As a left leaning writer and communicator, I found myself awkwardly worrying about how their words might affect foreign direct investment.

I mean, why should I worry about those foreign capitalists that have a history of exploiting my country?

But I also felt challenged as a Papua New Guinean writer to help my two compatriots communicate their message.

My perception of what was said is a call to Take Back PNG through our Papua New Guinean ways ( the fifth of our national goals) in order to achieve the third national goal and directive principle which calls for both political and economic independence.

Corney Alone - "Are our sons and daughters not fit to sit in the same lecture rooms of foreign direct investors' children to learn the fundamentals of business?”

CORNEY KOROKAN ALONE

PORT MORESBY – In an early statement, newly elected prime minister James Marape has pointedly emphasised a new policy orientation for small to medium sized enterprises (SME) whereby government contracts worth K10 million will be reserved for PNG-owned companies.

The discussion that follows is a contribution towards shaping that policy debate.

It is a fact that there are government subsidies and protectionism in all economies of the world.

The United States government grants subsidies and tax exemptions to most of their conglomerates in nearly every industry. This is done deliberately through the federal budget.

Australia is no exception, especially in its agri-industry sector. It has a Foreign Investment Review Board that plays the gatekeeping role, filtering what investment to allow and what to decline and operating in lock-step with Australia’s meticulous immigration and foreign visa policies.

The policies may have a different names and acronyms to deceive public perception, but when you flip the pages you’ll find the DNA of protectionism plastered all over the place.

James Marape being sworn in as new prime minister on Thursday (AFP/Vanessa Kerton)

NEWS DESK | AFP | Extract

PORT MORESBY - Former Papua New Guinea finance minister James Marape, elected as prime minister on Thursday, has immediately issued a nationalistic address that puts foreign resource companies on notice.

Marape threatened foreign logging companies and vowed to tweak resource laws that underpin a recently inked $13 billion gas deal with Total and ExxonMobil.

Hours after being elected, Marape told parliamentarians he does "not intend to chase away our investors" but insisted "our resource laws are outdated," a clear reference to the huge LNG project.

"Who says one conglomerate from outside will come and tell me I can change the law for my country?" he asked.

"I have every right to tweak and turn resource laws for my country," he said. "We will look into maximising gain from what God has given this country from all natural resources."

Analysts play down any threat that the PNG opposition will seek to renegotiate the LNG agreement if it took over from O'Neill government

TOM WESTBROOK & SONALI PAUL | Reuters

SYDNEY/MELBOURNE - Political turmoil in Papua New Guinea threatens to delay a $13 billion plan to double the country’s gas exports, sending shares in one of the project’s partners, Oil Search Ltd, down nearly 4% on Monday.

PNG prime minister Peter O’Neill said on Sunday he would resign after weeks of high-level defections from the ruling party. Sir Julius Chan, twice a former premier, would take over as the government’s leader, O’Neill said.

Political instability is not unusual in PNG and has not held back mining and energy investments in the resource-rich country, however protests over benefits failing to reach rural areas have dogged the government and project owners.

It was not clear whether Chan could command a majority in parliament when it resumes on Tuesday.

“We will not choose him. It’s a really bad choice,” opposition lawmaker Allan Bird told Reuters in a text message.

“We want a complete break from O’Neill (and) Chan is just a proxy for O’Neill,” he said.