A new report has highlighted concerns of debts belonging tPNG’s State-Owned Enterprises or SOE’s.
It was reported thatthe SOE’s absorbed significant amounts in direct government transfers, while generating less profitoand even less dividend to treasury.
The report saidthe country’s SOEs act as a drag on economic growth.
The latest Oxford Business Group economic report saidthe Asian Development Bank has been critical oPNG’s debt-laden state-owned enterprises or SOEs, which include electricity, insurance, airline, telecoms and energy providers.
Last year ADBereported thatthe country’s SOEs absorbed an estimated K700m in direct government transfers duringthe financial years 2002 to 2009. Against that,the SOE’s generated a net profit of K500m… of which only K23m was paid tothe treasury inthe form of a dividend.
The ADBeReport said that by absorbing large amounts of scarce capital on whichthe SOEs provide very low returns, SOEs act as a drag on economic growth.
ADBesaidthe amount given to SOEs, crowds outthe private sector, and diverts public funds that could therwise be invested in high-yielding social sectors like health and education.
However,the government’seems willing to embrace reform of this system. The ADBestudy was commissioned bytheIndependent Public Business Corporation or (IPBe), which managesthe SOEs, and Ben Micah,the public enterprises minister, has endorsed its findings.
It is expected that improvingthe performance ofthese monolit’s ofthe pastowill helPNG’secure its economic future.
Delly Begu, National EMTV News