Economy. Papua New Guinea press review

Prime Minister of Papua New Guinea (PNG) Hon. James Marape says that travel restrictions are expected to be relaxed from next month (October), and the borders opened up to boost tourism and the economy in general. Most of the people visiting the country now are for business purposes only. According to Mr. Marape, the PNG economy had been adversely affected by the pandemic after the Government closed its borders and imposed strict travel restrictions in late March 2020. «[We] encountered one of the biggest challenges in our history, » PNG Prime Minister said. It should be emphasized that domestic travel restrictions have already been lifted allowing people to move around more and airlines have resumed flights to most airports around the country. However, restrictions on international travel have largely remained, with everyone arriving into Jackson airport required to observe a 14-day quarantine in Port Moresby. [1]

On the 16th of September 2020 on 45th PNG Independence Anniversary, Prime Minister Hon. James Marape and his delegation touched down on a sealed Tari airport runway for the first time (Hela Province), which is already being put into operation. Flights to Tari will resume while work on the terminal continued. Tari airport was opened in 1975 with an unsealed runway which was damaged during the 2018 earthquake. [2]

The National Parliament of Papua New Guinea passed the Superannuation General Provisions (Amendment) Bill 2020 which will enable the approval of PGK600 million by superfunds for members affected by the COVID-19 pandemic. Treasurer Ian Ling-Stuckey told that it was part of the Government’s PGK5.7 billion stimulus package to address some of the economic and social challenges associated with the COVID-19 pandemic. «The bill allows these workers to access voluntarily part of their contributions early to sustain their livelihoods in the challenging environment they have now found themselves in, » Mr. Ling-Stuckey said. Treasurer also blamed the 85% slump in the economy to the COVID-19 pandemic. At the same time, responsible expenditure cuts limited the growth in deficit and debt to under PGK2 billion. [3]

Mr. Ling-Stuckey also says about PGK2.5 billion in international financing is expected to reach the public coffers in December 2020. The Treasurer He told Parliament that «we are facing a major cash management challenge of cash arriving late but having to continue paying for our health, education and justice systems». Mr. Ling-Stuckey marked that his year PNG Government had to pay nearly PGK900 million to [the Swiss bank] Credit Suisse for a loan.

The mining industry is expected to dip by roughly PGK2.2 billion this year. Mr. Ling-Stuckey attributed this to the closure of the Porgera gold mine in Enga Province for eight months which would mean a PGK1.4 billion effect on GDP in the 2020 financial year. The Treasurer also mentioned the temporary closure of the Ok Tedi mine for six weeks because of the COVID-19 infections and a drop in Lihir gold production for geological reasons of PGK117 million.

COVID-19 pandemic also affected the non- resource parts of the PNG’s economy. «Agriculture GDP is down by over K1 billion. Tourism, accommodation and transport industries have suffered from the closure of the internal borders, this sector is down an estimated PGK0.85 billion, » Mr. Ling-Stuckey said. [4]

Meanwhile, one of the major PNG mining companies OK Tedi Mining Limited (OTML) resumes its gold-copper mining operations after a six-week closure due to the COVID-19 transmission in its area. The company estimates a loss in revenue of PGK411 million (US$120 million) over the six weeks. It also incurred US$10 million (PGK34.29 million) per week in operating cost. The mine was closed on the 6th of August 2020 for only 14 days, but it was extended because of a spike in COVID-19 cases. There are now 189 confirmed cases in the area – the second highest in the country after Port Moresby. Earlier OTML Chief Executive Officer and Managing Director Musje Werror said that the company was «well positioned to withstand the financial impact of the 14-day suspension» it estimated to be around PGK100 million. [5-7]

PNG Prime Minister Hon. James Marape is confident the country can grow into a PGK200 billion economy in the next 10 years when the five multi-billion-kina resource projects in the pipeline get off the ground. According to PNG Prime Minister, negotiations were ongoing on the P’nyang, Papua LNG, Porgera, Wafi-Golpu and Pasca projects. «These five projects have the potential to push our economy of PGK80 billion to possibly over PGK200 billion in the next 10 years […] I have encourage ExxonMobil, Oil Search, Newcrest, Harmony and Total to speak their minds [on] their rate of return on investment […] We will respect that […] We will work with you […] And if you feel that we are encroaching into your profit margin, you have the right to speak your mind […] We are all equal partners as far as business is concerned in our country, » Mr. Marape stated. [8]

In turn, Minister for Communication, Information and Technology Timothy Masiu said that in terms of overall planning according to the National Information and Communications Technology Act (2009), by 2030, the development strategic plan for technology would include «800 mobile subscribers for every 1,000 persons, 70% of the population to have access to or use the internet and all Papua New Guineans to have access to digital radio and television». Mr. Masiu also noted that he intended to introduce the Public Service Digital Transformation Bill (2020) in the next session of Parliament (the 10th of November 2020). [9]

Kumul Telikom Holdings Ltd (KTHL) group acting chairman Rueben Kautu says work is underway to complete the merging of Bmobile and Telikom into a single entity. Meanwhile, State Enterprises Minister Sasindran Muthuvel said in Parliament last week that it was a technical merger to have the two mobile networks merged into one, which needed a total of around PGK18 million to complete. The merger is expected to be completed by the end of this year. [10]

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