by Bethanie Harriman – EM TV News, Lae
Lae Chamber of Commerce President, Alan McLay, has spoken out on behalf of Lae businesses affected by the lack of foreign currency circulating in the economy.
McLay has pointed out that the problem will cause more manufacturing companies to lay off workers, or even close their doors, if the foreign currency problem isn’t addressed by the national government in the not too distant future.
“Some companies are doing it tough, they are laying off workers, but really some of them are looking whether they can keep going,” says McLay.
The lack of available foreign currency is starting to take its toll, with business declaring that action needs to be taken immediately.
McLay has urged the national government to take action before manufacturing companies based in Lae are forced into laying off workers or closing their operations.
“They can’t afford to lose manufacturers, they can’t afford to stop all the imported goods,” says McLay.
While there is confidence in the national government’s ability to manage the foreign reserves crisis amongst Lae businesses, something needs to be done quickly with many companies already operating on credit.
“They have established a relationship with their suppliers because of their on-time payment in the past, so overseas suppliers have let them extend the terms of repayment, but you can’t do that overtime,” McLay says.
Last month KK Kingston CEO, Michael Kingston, pleaded with the national government to fix the problem.
“It’s nearly impossible because you can’t get the money to pay your suppliers,” said Kingston.
The Lae Chamber of Commerce’s main concern is for manufacturing companies like KK Kingston, which started in the early 70s. These businesses are producing goods here in Papua New Guinea, and providing employment.
The national government approach thus far in regard to dealing with the foreign currency issue occurred in March, through the central bank having discussions with the International Financial Corporation and the World Bank for a temporary facility of US$250 million to deal with the backlog of foreign currency.
Various think tanks both here and abroad have been very optimistic about the national government dealing with the foreign currency issue.
They say the government can adjust national budgets, and fiscal policies in order to deal with the potential crisis.