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Showing posts with the label Papua New Guinea

PNG FACES A TOUGH ROAD AHEAD

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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%.

KEY QUESTIONS FOR INVESTORS IN PNG

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by PAUL FLANAGAN Following are three key questions which potential investors should be seeking answers for at the PNG Investment Conference being held in Sydney on 7 and 8 September. First, what are my peers doing? While a good business investor will be open to finding a niche market with great potential, it is relevant to know what their investment peers are doing. There was a rather disingenuous Bloomberg article last week titled “Australia Would Rather Invest in Papua New Guinea Than in China” – see here. A more comprehensive set of figures, based on total Australian investment in these countries is shown in the graph below.   [Source: Australian Bureau of Statistics Catalogue 5320 Table 5 issued 10 May 2017.] Three key elements.  First, one should consider more than just direct investment.  This dominates the PNG picture but is a much, much smaller element than in China where investment options are much more diversified. Second, investments in Hong Kong are also rele

PNG’S 100 DAY PLAN – A SLOW KICKSTART WITH SOME POSITIVES

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by PAUL FLANAGAN PNG’s new Treasurer and DPM, Charles Abel, has released the promised 100 Day Economic Stimulus Plan (see  here ). Overall, there are some positives in the plan. But politics is already circumscribing necessary actions to get PNG back onto the right economic path. Starting with the positives, even having a 25 point plan is a useful statement that the new government recognises PNG’s economic challenges. The five elements of the plan are appropriate. There is a focus on raising revenues as well as fiscal discipline. Population policy is given priority.  The plan announces the suspension and review of some scary micro-economic policies in areas such as land, agriculture, bio-security and mining. Some politically brave action is foreshadowed to at least temporarily reduce politicians’ discretionary electorate spending (PSIPs and DSIPs). There seems a commitment to on-going sensible strategic budgetary and planning processes. There is no mention of the absurd “gold bu

PNG’S FIENDISH FISCAL FIGURES – A HISTORICAL PERSPECTIVE

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by PAUL FLANAGAN Using PNG’s updated GDP numbers, there are new insights into PNG’s economic history. In particular, they show how bad the last four years have been: PNG’s budget deficits over the last four years are the worst in PNG’s history. From 2012 to 2016, deficits have totaled an extraordinary 23.8% of GDP This is nearly three times higher than the next worst five-year period for spiraling deficits (8.7% from 1992 to 1996 with five-year periods based on parliamentary terms). These daunting deficit figures are the driver behind the explosion in public debt from 17.3% of GDP in 2011 to 35.5% in 2016. In the 1992 to 1996 period, debt started at much higher levels (28% of GDP) but still didn’t reach 2016 levels (34.4% in 1996 vs the current 35.5% level using 2016 FBO numbers and IMF figures on 2016 GDP). There are two drivers for these historically high budget deficits. First, the massive increase in expenditure in 2012 was the largest in PNG’s history – a

O'NEILL'S DEBTS WILL CRIPPLE THE NATION

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PNG BLOGS Prime Minister Peter O’Neill’s boast that he will increase national debt will burden all Papua New Guineans by committing future income to high interest payments, reducing the amount available for health, education and transport. “A primary cause of the woes Papua New Guinea is currently experiencing is Mr O’Neill’s gross mismanagement of the economy and public finances, including imprudent borrowing,” Sir Mekere said. “His stated intention to increase borrowing if he is re-elected will make matters much, much worse, and will prolong by many years any attempt to rescue the nation. “It is an example of his arrogant and uncaring attitude.” Sir Mekere pointed out that under the Fiscal Responsibility Act, the K22 billion public debt already incurred by Mr O’Neill has surpassed the legal limit by more than 5 percent above the permitted 30 percent of GDP. His plan to increase debt even further is simply irresponsible.  It should be prevented and it should be inves

PANGU TO SACK BAKANI AND FREEZE ALL ACCOUNTS UNDER HIM AND ASSOCIATES AT BPNG

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by SAM BASIL MP Since the O’Neil PNC government took office five years ago, their mismanagement of the economy has been acknowledged by myself, representing the Opposition, on countless occasions, from the illegal UBS loan and a substantial decrease in  foreign reserves, to the lack of education and health foresight bestowed on Papua New Guineans. The lack of teaching facilities and lack of medicine as well as the manipulation of economic information on the status of our economy, is enough to inform Papua New Guineans that the O’Neil PNC government hasn’t prioritised the welfare of PNG’s population and the economy. Certain public servants are also responsible for their negligence, in conforming to the ill will of the coalition government and one of these public servants is the Governor of the Bank Of PNG (BPNG), Loi Bakani. His recent outrageous comment that the economy shouldn’t be a topic of discussion during the election, can only reflect his guilty conscience when visible

NGE 2017 Article (II): THE LEGAL QUALIFICATIONS TO STAND FOR PUBLIC OFFICE

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by SAM KOIM As I have introduced, in this article, we will be exploring the legal qualifications on the right to stand for public office. Bear in mind that subject to these limited qualifications, the right to stand for public office is a constitutional right. Deduced from the Constitution, there are number of limitations/qualifications on the right to stand for public office. In order to stand for public office, the candidate must: 1. Be a PNG citizen (including naturalized citizen): ss. 50 and 103(3)(a). 2. Be aged 25 years or above: s 103 (1) 3. Have his/her name on the common roll: s 103(3)(a) 4. have been born in the electorate for which he intends to nominate or have resided in the electorate for a continuous period of two years immediately preceding his nomination or for a period of five years at any time: s 103(2) 5. pay a nomination fee of K1,000.00: s 103(2) 6. Of Full Capacity (not of unsound mind): s 103(3)(b) 7. Not under sentence of death or imprisonment for more t

A DESPERATE TURNBULL STANDS BY A WEAK DESPOT

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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

Timing of Australian Prime Minister’s visit is inappropriate

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PRESS RELEASE Former Prime Minister Sir Mekere Morauta said today the proposed visit to Papua New Guinea by Australian Prime Minister Malcolm Turnbull is hard to fathom at this time, on the eve of PNG’s national election. Mr Turnbull came to office in September 2015 – over eighteen months ago.  In all that time, he has visited many countries, all over the world.  He has not found time to visit Papua New Guinea, one of Australia’s most important neighbors.  Why come now?  What is so important now that cannot be dealt with by officials? “The two Prime Ministers met in Australia a few weeks ago,” Sir Mekere said.  “They have met countless times at APEC, Pacific Islands’ Forum Leaders’ meetings, UN meetings, and I am sure they talk on the phone from time to time.  What is so pressing now, when Papua New Guinea is suffering at the hands of this corrupt, incompetent, uncaring Government headed by Peter O’Neill?” “It is insensitive and interfering for Mr Turnbull to pay homage to Mr