IAN LING-STUCKEY MP | Edited extracts
KAVIENG - At a recent conference in Port Moresby, a striking statistic emerged. Economic academics from both the University of Papua New Guinea and the Australian National University said the non-resource sector of the PNG economy went backwards by 5.9% in 2015.
This extraordinary result confirmed what business people and the people of PNG have known for years – 2015 was a year of severe recession in PNG.
Yet the government continues to hide and delay official accounts from the National Statistics Office which would confirm the recession.
More honesty is needed from the government as a first step in addressing the economic problems facing PNG.
“Underestimating the severity of the economy’s contraction has contributed to an absence of an appropriate policy response to what can only be described as an urgent economic crisis,” states the 2018 UPNG-ANU economic survey.
Despite the 100 Day Plan and measures in the 2018 budget, the expert view is still that “there is an absence of an appropriate policy response”.
This is just the latest independent assessment of how serious things have become in our economy. And the lack of data makes it uncertain to know if there has been any recovery.
“Whether the economy has started to grow again since 2015 is unclear,” the UPNG/ANU survey stated.
The key economic challenge being talked about in PNG is the lack of foreign exchange – now by far the greatest concern to business.
This is a problem created by the government, and one that has seriously hurt PNG’s growth. The central bank continues to promise that improvement is just around the corner. But business has have been waiting too long.
We need to get a better understanding of exactly how our exchange rate is regulated. There should be a review of the central bank’s performance in managing the exchange rate and interest rates.
And the government needs to ‘daunim ol pastem’, eat some humble pie and be more open about domestic economic mismanagement rather than blaming outside forces.
An example of this failure to honestly acknowledge that the government can do more to fix its errors was the Treasurer’s presentation to parliament on 5 April. In his presentation, Treasurer Abel refused to acknowledge concerns raised by Moody’s when it moved PNG onto a negative watch. Instead, Abel just talked about how the outlook for PNG was very rosy.
Possibly because he failed to acknowledge the problems, another major credit ratings agency, S&P, downgraded PNG’s credit rating on 16 April. Two major ratings agencies moving PNG down in such a short time has never happened before in PNG’s history.
As we prepare to go into parliament again on Tuesday 17 July, PNG’s economic leaders must be more honest in acknowledging their mistakes to our people.
We need to be balanced when we talk about the economy. It is important that we do not talk it down, but we also just can’t hide from the truth behind ‘good’ stories.
PNG has a bright future, but it needs to acknowledge our problems, reach out for friendly foreign support, genuinely start living within our means, urgently review our foreign exchange policy and release more foreign exchange reserves.
We need to take some tough medicine and then rebuild our non-resource growth rate back above five percent again, the minimum we should be aiming at to start improving the jobs and income opportunities of our people.
Hon Ian Ling-Stuckey CMG is the shadow minister for treasury and finance