ZCZC
BCN-04
PNG-CHINA-ECONOMY
PNG backtracks on China debt refinancing statement
SYDNEY, Aug 8, 2019 (BSS/AFP) – 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 the recently appointed PNG
leader had asked China’s ambassador for help in refinancing the country’s 27-
billion-kina 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 percent of GDP, with
interest repayments at 15 percent 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.
BSS/AFP/HR/1010