Prime Minister Peter O’Neill has defended his 54 days-old government’s China Exim Bank loan initiative to rebuild the nation’s decaying economic and social services infrastructure.
Mr O’Neill plans to drive overhaul of the nation’s roads, seaports, airports, energy and communications infrastructure on the back of a K6 billion (US$2.7 billion) loan from China’s Export-Import (Exim) Bank.
And Mr O’Neill has defended the loan as necessary and “I don’t think the stress levels (public debt repayment obligations) and on the economy will not be that noticeable.”
The Prime Minister returned from China over a week ago with a China Exim Bank pledge in principle for the “soft” loan which will be formalised in the coming months.
PNG and China’s Exim Bank officials have begun working on the finer details of the loan.
Mr O’Neill spoke about his government’s infrastructure redevelopment plans in a media interview with the Australian Broadcasting Commission’s Pacific Beat and Radio Australia network yesterday.
He said PNG’s infrastructure is declining to a state where some infrastructures are not able to cope with the demands of our people and our economy.
“Many of these infrastructures, particularly the transport systems in the country need a massive overhauling and redevelopment program.
He said in doing so PNG is borrowing large sums of money. Adding that it (K6 billion) sounds large but the drawdowns will not be done in one single year.
“We will manage it prudently through our fiscal strategies that we have put in place and these projects are not going to be completed in one single cycle of a budget,” said Mr O’Neill.
He said the critics of this loan underestimate Papua New Guinea’s growth.
The Prime Minister concluded that our economy has been growing at an average of 8 per cent per annum over the last 10 years and we expect that growth to continue. Therefore, we expect our economy to double by 2014.