The six billion kina question
By Graeme Smith To Treasury's consternation, during the course of the PNG election campaign Peter O'Neill announced he was negotiating a soft loan with China Exim Bank. It is worth in the region of K6 billion ($2.7 billion), with the potential for up to K10 billion to be drawn upon. It dwarfs the 2006 Soft Loan Facility of $375 million made to the Pacific as a whole. Pro-opposition blogs have denounced the loan as 'sinister' and suggested that Treasury will be bypassed altogether. In the absence of any concrete details of the loan, which is currently being finalised, PNG's lively blogosphere has filled the vacuum. A thoughtful anonymous post on Keith Jackson's blog rightly points to the effect the loan will have on the ever appreciating exchange rate, which is set to face enormous upward pressure when Exxon Mobil's LNG project comes online. Perhaps the greatest concern is that the loan appears to be fragmenting (even before it is agreed) into