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30 September 2018

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How can anyone congratulate a prime minister when we have cancer patients dying because the second hand machine we bought too many years ago and has not been used for three or four years or more in past 10.

How can anyone rejoice at the increase in TB in PNG.

How can anyone rejoice at the increase in HIV AIDS in PNG.

How can anyone rejoice at the daily revelations of corruption often of many millions in all branches of government.

How can anyone be pleased with a PM squatting in Waigani as aid posts close.


How can anyone think it's OK not to have maternal and child patrols to the rural poor.

How can anyone feel pleased with a PM who sees the demise of the coastal shipping so that villagers must risk their lives in expensive journeys in dinghies unfit for open seas journeys.

How can anyone congratulate a PM when you see the East West Sepik Highway bridge at Hawain River.

How can anyone see the filthy spewing out of mine waste into the Lai, Strickland, Fly Rivers.

How can anyone feel happy seeing the plume in the once pristine waters around Lihir as millions of cubic kilograms of poisonous waste is tipped just off Turtle Beach near the mine.

Oh, I know we'll plan for more waste into the oceans from Frieda, Ramu, Wafi-Golpu that'll make the coastal tribes happy that fish and shell fish their free protein will be decimated.

And for the huddled squatters around Moresby let’s make them happy with a tokfest aka APEC that will end up doing nothing and costing hundreds of millions.

"I have pronounced from on high and I am telling you - that'll make my people happy," said the PM.

I think that should be 'rob Paul to pay Peter (O'Neill) Harry.

Another Ponzi scheme unfolds as pirates rob Peter to pay Paul.

Begs the larger question who pays the piper when the chickens come home to roost?

Norway has similar resources and is rich, with a huge Sovereign Wealth Fund. Maybe PNG should eat some "humble pie", and ask Norway's government to assist.

Then they might actually retain ownership of their water, power, airports, ports, Telikom, shares in Oil Search, mining royalties etc rather than losing them to foreigners, which they WILL lose if this loan goes ahead. 8.3% plus any devaluation is impossible to repay, and retain PNG sovereignty.

"Where unearth?" asks worriers like Chris, as mining warriors stalk. Interest is an ether pervasively present yet its aromatics waft evasively wherever whenever whosome-ever electoral candidates collect.

What's the betting that this bond issue will revolve into O'Neill's personal
US $ imprest ac.

Before Gabriel cracks open the Moet and Chandon Ice Imperial, he might take a look at the facts.

Fact 1 is that the price of money for PNG (8.375% pa) is hugely higher than that for, say, Australia (around 2.8% pa over 15 years) and the USA (around 3.0% pa over 15 years).

Fact 2 is that the repayment per annum required for PNG's loan of US$3.8 Billion is approximately $US300 million pa or, at the current exchange rate, K975 million pa.

So, just where on earth is the PNG government anticipating getting the K975 million per annum just to pay the interest bill on its loan?

Unless it can use the money to achieve a return of more than 8.375% per annum it will be going backwards very fast.

My guess is that the lenders in this case expect not to be repaid in cash but in kind. An issuer of bonds who cannot pay interest due has a simple choice: repudiate the debt and go broke, with devastating consequences (see Argentina to understand what this means) or surrender assets to their creditors.

Given its track record and the likelihood of another major economic downturn occurring at some point in the not too distant future, I expect that the PNG government will be unable to repay its debts and so be obliged to surrender major assets in lieu of cash.

The net result will be that what the O'Neill government ultimately bequeaths to the nation will be a residual bankcard debt and not much else.

In this way, PNG will spiral into a new form of colonialism, where it becomes captive to foreign interests which control all of its major assets and most of its economy.

The only point at issue is probably whether those interests reside in Asia or elsewhere.

So much for independence then Gabriel.

Let me be the first to congratulate the government of Peter O'Neill in proving everyone wrong on the credibility of PNG as a country making its way into the international money market.

As PNG finds its footing the bond rates will fall. Right now let's give credit where credit is due. Once again, congratulations Peter Pare O'Neill.

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