PNG needs principled leaders to guide us to a better state
The real people of Papua New Guinea

Papua New Guinea backtracks on China debt refinancing

CONTRIBUTOR | Asia Times / AFP

SYDNEY - Papua New Guinea prime minister James Marape has backtracked on an announcement saying he had asked China to refinance the country’s $8 billion debt, insisting the statement was released without his knowledge.

A statement from his office on Tuesday said Marape had asked China’s ambassador for help in refinancing the country’s K27 billion public debt during a meeting in Port Moresby.

But on Wednesday afternoon, Marape’s office released a new statement saying it was “false” that he was “going one way to China” to tackle the country’s debt.

He said PNG was primarily discussing trade with China while examining debt options with undisclosed “non-traditional partners.”

“We are in discussion with many of our bilateral partners to access very low cost concession finance to give us some breathing space,” Marape said in the statement.

“This includes our discussions with (the) World Bank, ADB (Asian Development Bank) and some other possible non-traditional partners.”

Cash-strapped PNG’s public debt stands at about 33% of GDP, with interest repayments at 15% of the government’s annual expenditure.

Marape, who took office less than three months ago, said he intended “to refinance bad and expensive loans secured by the previous government” but would not add any “reckless” burden to the country’s economy.

“I have put a stop to more borrowings and loans until we are satisfied that the project cost-benefit analysis establishes a return on the loans we might secure,” he said.

Marape has vowed to combat endemic corruption at home and rebalance the country’s relationships with allies and multinational companies mining PNG’s rich mineral resources.

Beijing has been strengthening ties with PNG and other Pacific nations by boosting engagement and offering loans for infrastructure in the region.

That has raised concerns in Australia and the United States, which are now competing with Beijing to maintain their Pacific influence in the face of China’s rise.

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)