Prime Minister James Marape has ended his first official visit to Lae promising a report on the state of the economy and debt levels by the 24th of June
He indicated it will be may be an uncomfortable picture that shows high debt levels and lack of investment in key development areas.
“I have, in the meantime, stopped all borrowings until assessments are completed. If we need to borrow in the future, it needs to serve and expand the economy.”
James Marape’s first official visit to Lae was for multiple reasons. On the political front, He was here to celebrate the Pangu Party’s anniversary – the party which is now the largest coalition partner in this new government.
His visit was also important as he announced a shift in policy and future spending by recognizing Lae as an important hub for economic development. That, however, was the previous political rhetoric while billions of kina were pumped into Port Moresby.
James Marape has been careful to focus on economic solutions and, while he acknowledged, that debt levels are high, he was also careful not to put an official government figure to it.
“Where we invested the money (from borrowings) is also the question we will also be looking at.”
Official estimates place PNG’s debt at around 30 billion kina. That is what Treasury said in 2018. What has also created concern is the amount that Papua New Guinea owes the Chinese Government through various economic and financial arrangements.
While the government has to push forward with positive economic policies, solving some of the debt problem won’t be easy in two years.
The public service wage bill is a K160 million per fortnight totaling up to K8 billion a year. Tuition Fee Free funding has never come on time. It is against that backdrop that this government is looking to reduce debt and grow the economy.
James Marape spoke to a packed audience at the Sir Ignatius Kilage stadium highlighting one of the solutions that will need a shift in both the political and economic mindsets. Instead of looking at Governors as political adversaries or allies, the provinces have to be viewed as micro economies.
Each of those micro economies and need the infrastructure to support them. That means more investment in the provinces, minus the political power play as well as a recognition that Port Moreby’s money comes from the rest of Papua New Guinea.