Marape commits to helping business

PRIME Minister James Marape was in Brisbane this week to open the 37th Australia-PNG Business Forum.
Marape commits to helping business Marape commits to helping business Marape commits to helping business Marape commits to helping business Marape commits to helping business

James Marape opening the conference in Brisbane this week

Staff Reporter

This is an edited version of what he told delegates at the event:
 
I can't speak much on Australian policies, but one such policy has been Australian government's intervention to assist PNG with both direct Budget Support and soft lending for key infrastructure, which has assisted my government's expansionary economic policies knowing very well that in tough economic times, when private capital is low, Government must spend to maintain economic stimulus and liquidity.
 
In case you did not see it, that is why Bank South Pacific declared their highest profit in 2021, posting over a billion Kina, in a year when Porgera Mining was still closed, Wafi-Golpu had not started yet and both Papua LNG and P'nyang LNG constructions had not started yet.
 
This shows that the use of our government's fiscal policies and effective operationalisation of our Budgets plans have kept our PNG economy functional. To put numbers to our government spending, our combined 2019, 2020 and 2021 budgets saw aggregate government expenditures to the value of K56 billion.
 
This kept our small, but growing economy, lubricated with liquidity supplied from Government expenditures like Connect PNG, arrears and debt settlements, service improvement funds transferred to districts and provinces, record funding to health and education, paying our public services in time including clearing back log of retirement funds are just some transactions that enabled financial life in our economy.
 
And growing our economy we did, even without our new resource projects being developed or in production. When I took office in 2019, our national economy in 2018 was sized at K83 billion, and three years on our government's fiscal policies and programmes - working in partnership with Bank of PNG's monetary policies - actually grew our PNG economy. When my hard-working Treasurer Ian Ling-Stuckey delivered our 2022 budget last November, he forecast our economy to be at K101 billion this year, but in March this year, the World Bank mentioned that PNG economy would be K109 billion in 2022.
 
This indicates that the PNG economy continues to grow and looking retrospectively from 1975 as a K4.7 billion economy to a K79.4 billion economy in 2018 and continues to grow. And when we took over in 2019, we grew it further by using expansionary fiscal policies in which our deficit financing assisted in growing the economy in these tough times.
 
My point here is that we as a nation have come a long way. Yes, we have struggled along the way but in the big picture, we have a growing economy as the above macro statistics indicate. So not all is bad, gloom and doom for PNG.
 
And in the last three years, despite our economy's exposure to global economic and health shocks, but we performed much better than most developing nations.
 
Our inflation averaged under 5.5%. Our foreign reserves in Central Bank are the highest-ever since 1975 at K10 billion-plus, surpassing the recent past O'Neill government's eight-year average of around K5 billion threshold. We are on a fiscal consolidation pathway and our debt is still sustainable. Our macro-economic fundamentals remain strong.
 
And our budget and fiscal management is running congruent to reforms we are doing with International Monetary Fund and World Bank, and all bilateral partners like Australia and Japan. All of these have become sources of cheap US dollar denominated concessional borrowings, with five-year grace periods charging under 2% interest rates for much longer terms up to 20 years. These credible lenders have come on board because we restored credibility in our Treasury Department.
 
We have survived the last three hard years, just like we have survived the last 46 years as a country, and we will live on. That has always been the case with my country, living with challenges but growing bigger every year, since the K4.7 billion economy of 1975 to now over K100 billion.
 
And lest we all forget where we came from, in 1975 when we gained independence from Australia, our mother country, infrastructure was non-existent in over 90% of rural PNG, our population was least educated, our Human Development Indexes were amongst the weakest on earth. We are the most-linguistically and culturally diverse nation on earth, yet, we have lived United as one people, one nation and one country 46 years on, going 47 years old.
 
Today, in the face of 2022 general election, come what may, I assure you all that PNG will live on with or without me.
 
We have survived economic turbulence, law-and-order issues, changes of government, natural calamities and many others, thus, we will be bigger, better and stronger into the future. As a matter of assurance to all of you who have business interests in PNG, at this juncture, I want to say ‘thank you' to all the business community of our country.
 
I want to assure you all further that despite our diversity of cultures, opinions, politics, etc, our strong Christian and democratic values have kept our country functional to date and we will remain a robust democracy going into the future.
 
At this juncture, let me pay my respects to the independence and functionality of my country's Judiciary as a complement to the robustness of PNG's economy. Our judiciary is an assurance that we have the rule of law as the guide to business, commerce and living in PNG.
 
This is one major cause of PNG's success as a democratic nation of free enterprise, trade, commerce and our capitalist economy.
 
This tenet of our democracy will never be forfeited by my generation as well as my children's generation. And today. I give you my commitment that democratic ideals including free speech, free capitalistic environment and independent Judiciary, will be entrenched as PNG's national character.
 
That is why PNG remains a good place for doing business. Yes, I must admit we have our fair share of problems, but we leaders of today are being responsible and are working to fix those weaknesses and deficiencies.
 
For instance, my government passed the Independent Commission Against Corruption (ICAC), the Whistleblowers Act and the Undisclosed Wealth Bill to assist the fight against corruption in our endeavour to build a stronger law-abiding economy.
 
My country will only stand to grow into the future guided by a robust democracy and our Christian characteristics.
 
If we have come over the last 46 years from a K5 billion economy to a K100 billion-plus economy, irrespective of what outsiders and naysayers have been saying, I can assure you investors present in PNG and those wanting to take up business space or addresses in PNG that our economy will go pass K200 billion by the turn of this decade, if not earlier.
 
If one LNG project construction and production can double the size of our economy from 2011 to 2018, think about what the other projects will do to my country Papua New Guinea?
 
The following projects are in the pipeline:
 
We are working with Barrick and landowners to reopen Porgera this year. We have already signed an agreement with ExxonMobil to sequence P'nyang LNG construction after Papua LNG construction is complete around 2028, which will see eight consecutive years of construction dollar inflows from 2023 to 2032, or thereabouts.This will give PNG a four-train LNG production capacity up to the year 2060. The mega gold and copper Wafi-Golpu project is almost near project negotiations. We also have the smaller gas and mining fields that are being worked on as we speak. These will all tilt the economic pendulum past the K200 billion mark within this decade.
 
If, in the last three hard years, my government grew the economy by K20 billion-plus, I foresee the next eight years as years of growth for PNG's economy.
 
In fact, my hard-working Treasurer Hon. Ian Ling-Stuckey has forecast a 13-year money plan that sees our National Budget reaching surplus status in 2027, and we stand ready to retire all our debts by 2034. This money plan does not include economic impacts from P'nyang LNG and the soon-to-be-concluded Wafi-Golpu Mining Project.
 
PNG is the place to invest in. To attract and lock in investments, we are opening up Special Economic Zones that offer incentives like free trade, tax holidays and other concessional investments.
 
My generation of leaders is aware of opportunities in trade for the benefit of our 10-million people in our APEC, ASEAN and Pacific neighbours. The world close to PNG in the Asia-Pacific region needs food, energy and other finished products from our forests, land and seas.
 
We want to value-add to our resources, so we are looking for partners in agriculture, fisheries, forestry, oil, gas and mining. Downstream processing is the way to go so that we can export finished products, rather than continue to sell raw products.
 
I call on this august business forum to keep on investing in PNG or come and pick up a business address in PNG. As a vote-of-confidence in PNG's economy, we saw recently Australian companies invest big in PNG, the likes of Telstra which acquired Digicel and Fortesque Future Industries
 
The merger of Santos and Oil Search was a pivotal moment in potentially forging closer ties between Australia and PNG, by creation of a leading oil, gas and energy company. Although it was sad to see a PNG company such as Oil Search go, we have our very own Kumul Petroleum for future of the oil and gas industries in PNG and my hope is that Santos follows through on the national interest expectations. We look forward to Santos and Kumul Petroleum doing an equity selldown transaction and this will create a strong relationship between the two companies.
 
But I give you all my government's commitment that we will strive to eliminate impediments to business and make it easier to operate businesses in PNG.
 
The government's commitment to business environment includes:
 
• Expediting ease of business registration;
 
• Mordernising tax regimes, including giving incentives to priority businesses in Special Economic Zones, with specific focus on downstream processing of our resources;
 
• Mordernising our infrastructure using our Connect PNG Policy, linking roads to seaports and airports;
 
• Provision of cheap power and telecommunications;
 
• Effective law-and-order environment to be built in over the next five years;
 
• Functional and effective judiciary;
 
• Effective immigration and border systems; and
 
• An effective financial sector from Central Bank, commercial banks and stock exchange to ensure free flow of capital to assist business growth. This includes Government entrenching low-cost borrowings and citizen and business loans.
 
All the above, plus others, will continue as our country continues to show resilience and our economy keeps on growing.

 

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