Economy. Papua New Guinea press review

The two-week session of the National Parliament of Papua New Guinea (PNG), which began on 2 June 2020, continues.

PNG Parliament passed the amendment to the Mineral Resources Development Company (Privatisation) Act 1996, which seeks to restructure the entity. The Bill, presented by Prime Minister of Papua New Guinea Hon. James Marape was to recognize the incorporation of the Mineral Resources Development Company Ltd (MRDC) as an entity that together with its subsidiaries holds on trust interest in petroleum, mining and unconventional hydrocarbons projects for beneficiaries. According to Prime Minister, the new legislation set out clearly the roles and responsibilities of MRDC, including demarcating between the trustee and the Government. «These proposed amendments are necessary for MRDC to comply with the Company’s Act and Security Conditions Act and protect the interest of landowners’ provincial government from future political influence. […] Our people must play an active role in the development of our natural resources that God has blessed us with» – Mr. Marape said. The MRDC was set up in 1975 to manage the State’s participating interest in resource projects in the country. The State’s interest included interests assigned to landowners and provincial governments. [1]

Papua New Guinea has secured an interest-free K1.2 billion (US$363,6 million) loan from the International Monetary Fund. As PNG Prime Minister Hon. James Marape said, it is a «strong vote of confidence in the Government from the international community». Mr. Marape was delighted that Treasurer of Papua New Guinea Ian Ling-Stuckey had secured the financing agreement: «I want to congratulate Treasurer Ian Ling-Stuckey for working tirelessly to repair the country’s budget. […] He [Ling-Stuckey] has put a stop to reckless borrowings for poorly-conceived capital projects that mostly benefited foreign firms and SOE [state owned enterprises]» – Mr. Marape said. The K1.2 billion loan, provided by IMF, was secured on unprecedented terms of 0% interest rate over 10 years with a 5.5-year grace period and the first principal repayments to start in December 2025. [2]

The Treasurer of Papua New Guinea Ian Ling-Stuckey repeated that the loan from IMF was interest free with no conditions attached. However, former Prime Minister and Ialibu Pangia (Southern Highlands Province) MP Peter O’Neill told, «there are two conditions that are normally given by the IMF to member countries that are seeking this. […] One is quantitative, and the other is structural conditions». [3]

PNG Prime Minister Hon. James Marape officially launched the Coral Sea Cable in Port Moresby in the presence of Australian High Commissioner to PNG, His Excellency, Jon Philip, including other ministers.
Coral Sea Cable is a 4, 700 kilometers cable connecting Port Moresby in Papua New Guinea and Honiara in the Solomon Islands with Sydney and the rest of the world and is Australian’s Flagship investment in PNG’s Information and Communication Technology infrastructure. This massive project was jointly funded by the Australian Government with contribution from PNG Government and the Solomon Islands. The cable system was completed in December 2019 and brought into use on 18 February 2020. It is expected that the project would enhance economic growth in Papua New Guinea, create new opportunities and jobs, provide better conditions for e-commerce at local level, give access to better healthcare services and professional education, increase the level of education, etc. Mr. Marape says PNG DataCo had reduced wholesale internet pricing in January 2020 by about 40% to US$98 or K340 per Mbps per month and will continue to reduce its wholesale prices as the usage volumes increased at the back of bringing Coral Sea Cable into use. [4-7]

Morobe Governor Ginson Saonu has confirmed that negotiations for K17 billion (US$4,921 billion) Wafi-Golpu mining has commenced. Mr. Saonu said negotiations will also include effort to assist landowners to sort the registration of the incorporated land groups (ILGs) for benefit sharing. This follows the recent signing for a project in Port Moresby in Papua New Guinea in May. In addition, a memorandum of understanding was signed between Morobe Governor Mr. Saounu and the Mining Minister Johnson Tuke to allow due process. [8]

The Independent Consumer and Competition Commission (ICCC) hereby announces the new retail fuel prices for this month, which will take effect on 8 June 2020. These price increases are mainly attributed to the increase in oil prices last month. The oil price increase in May was mainly attributed to increasing oil demand following the easing of lockdown restrictions in some countries and output cuts by the Organization of Petroleum Exporting Countries (OPEC) which have decreased global oil supply. The increase in retail fuel prices is also attributed to the increase in international sea freight and the depreciation of the PNG kina against the US dollar during the month of May 2020. According to the ICCC’s calculations, retail fuel prices will increase right across the country. [9] [1]
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