PNGBLOGS

by HOPE PNG The sale of Oil Search shares by UBS resulted in it recovering part of its principal from the US$1.2 billion (K3 billion) loaned to PNG Government to purchase the shares initially. Of that K3 billion loaned to PNG Government, UBS only recovered K2.22 billion from that sale. Simple math dictates that UBS made a loss of K780 million on the principal amount loaned. • The first shipment of PNG LNG was made in the last week of March 2014 (source: PNG Business Advantage) • PNG LNG proceeds were held in a UBS bank account as collateral in Singapore. • The State offloaded (by directing UBS) the Oil Search shares and made a loss of US$250 million (or K780 as stated by Wapu Sonk). • The actual loss would be well over K1.8 billion when calculating collar costs, commissions to advisors and all other costs associated with the UBS loan. • O’Neill claimed Government made a net gain of K100 million from that sale. • The only logical conclusion one can draw is that UBS dippe

by PAUL FLANAGAN The press release from the latest mission of the world’s International Monetary Fund (IMF) – see here – highlights the difficult road ahead for PNG in dealing with recent years of bad luck and economic mismanagement. Challenges On the fiscal front, the IMF considers that the government will fail in the Supplementary Budget to bring the 2017 budget deficit back to the target of 2.5% of GDP. Rather, it estimates the deficit will be “a little over 3%” – so a gap of some K370 million relative to the 100-day target. The goal to reduce the debt to GDP ratio back to the legislated level of 30% as part of the 2017 Supplementary Budget is also recognized as infeasible. Instead, the suggestion is a medium-term objective of moving to a balanced budget by 2020 (and GDP growth will work to reduce the ratio). So the first two targets in new Treasurer Abel’s 100-day plan are likely to fail. Expected growth is also wound back from the 2.7% estimate in 2017 down to 2.4%.

by  IVAN KEAS CPA Introduction PNG is a growing economy in market and business and it’s not limited in its investment capacity. It is open and wide that can efficiently allocate and distribute investment resource within its system. The West Minister Government and the Indigenous values have resembled this attributable development trait that complements the structure to adapt well with relative ease and it’s been appreciated as an integrated enabling cross-cutting culture that posses commercial and economic respect. The values have held the tenets of our democracy and loyalty to our heritage that affirms Human to be a distinguishable creature. We hold this truth as it stood the test of time in our Constitution. Papua New Guineas do not have any problem with its People, System, and Economy. She is young, cute, virgin, wealthy, rich, energetic, adventurous and attractive because of its beauty and its people. Notably, PNG Economy is an interdependent economy and majorly generates

PRESS RELEASE by  Rt. Hon SIR MEKERE MORAUTA MP Former Prime Minister and Member for Moresby North-West Sir Mekere Morauta said today that at last some members of the PNC Government have admitted that the Papua New Guinea economy is in difficulty.  Sir Mekere referred to the media statement by Deputy Prime Minister and Caretaker Treasurer Charles Abel, who said that the focus of the government in its first 100 Days would be on “economic recovery”. Sir Mekere noted that this was an interesting admission and use of words by Mr Abel, because the Prime Minister has consistently refused to recognise that the economy is in recession, and has mismanaged public finances in such a way that has allowed the recession to intensify. “My advice to Mr Abel is that before he launches into any “recovery” measures, he needs to repair the budget and reform his Prime Minister and curb his extravagant and uncontrolled spending and borrowing,” Sir Mekere said. “The non-mining sector, on which the

by PAUL FLANAGAN Summary PNG politicians are failing their people. Their poor policies have led to dramatic declines in economic well-being – an extraordinary fall of over one-third since 1980. This is revealed by applying new numbers from the PNG National Statistics Office (NSO) and International Monetary Fund to PNG’s economic history. From 2012 to 2017, under the O’Neill government, average economic well-being for the people of PNG has declined by 2.8%. This reverses positive economic gains of 8.4% from 2000 to 2012. PNG is returning to the poor economic performance it experienced during the 1980s and especially the 1990s – lost decades for development. This is a shame. From 1980 to 2017, economic well-being in PNG per citizen declined by an extraordinary 40.4 %. This is a development failure. In contrast, the resource sector has grown strongly.  It is now 48.1% larger per capita than in 1980. The resource sector boomed by 62% during the 1990s when the no

by PETER J RICKETS April is proving to be the most disastrous month in the history of Australia’s relationship with Papua New Guinea, with yet another crisis in Malcolm Turnbull’s concentration camp on Manus Island, to the north of the PNG mainland. At a time when the West is struggling to win the hearts and minds of Papua New Guinea in the face of a concerted Chinese diplomatic effort to do the same, Manus has once again blown up in Australia’s face. This week’s riot during which PNG Defence Force personnel fired approximately 100 rounds from military weapons into the refugee compound has created even more animosity towards Turnbull’s Australia. The compound is supposed to be officially closed, but still houses hundreds of refugees, with Turnbull and his Immigration Minister washing their hands of any responsibility for it and its occupants. Infuriated by the continuing Turnbull-Dutton deceptions and their attempts to slither away from Australia’s responsibilities, Papua New Gui

Former Prime Minister Sir Mekere Morauta said reported attempts by the Prime Minister to secretly sell valuable public assets to foreign interests, if true, are a sign of his desperation for cash to save his sinking ship. “Ad hoc decision-making like this, not as part of a comprehensive package of rescue measures, will make the nation’s problems worse and reduce the options for properly considered reconstruction in the future.” “We are virtually in the caretaker government period, at which point no significant decisions should be made, especially decisions that rob shareholders and landowners of their rights and the general public of their assets.” Sir Mekere said he had been given reliable information on three asset sales that are allegedly being negotiated behind closed doors – of the State’s 67% share in Ok Tedi Mining Ltd, the State’s 20% share in the Star Mountains Plaza hotel and 100% of APEC Haus. These sales involve very valuable assets, and the risk of selling them