Papua New Guinea's government is under fire for potentially jeopardizing a significant loan from the International Monetary Fund (IMF) due to unmet conditions. Peter O'Neill, Member of Parliament for Ialibu Pangia, echoed concerns raised by former Treasurer Ian Ling-Stuckey regarding the government's failure to fulfill key requirements. O'Neill expressed alarm at the country's "rapid economic regression" and the international community's perception of PNG as a "basket case economy." He highlighted Ling-Stuckey's disappointment over missed performance targets, which are crucial to accessing the K3 billion IMF loan. "The government claims it's not broke, yet can't pay its bills," O'Neill said, contrasting statements. "Meanwhile, Ling-Stuckey, now assisting the Prime Minister, warns that the IMF loan hinges on concrete reform actions." While acknowledging his reservations about substantial borrowing, O'Neill stressed the importance of adhering to agreed-upon terms to preserve PNG's reputation. He criticized the "progressive watering down" of the Bank of PNG's (BPNG) independence, citing the IMF's dissatisfaction with unqualified personnel filling critical roles.
O'Neill questioned the government's strategy, suggesting the IMF's unhappiness and potential loss of investor confidence due to weakened institutions like the BPNG are contributing factors hindering projects like the US$12 billion Papua LNG. He further pointed to delays in implementing the Independent Commission Against Corruption (ICAC), another key IMF requirement. O'Neill attributed the situation to the government's "all-talk-and-no-action" approach, which he believes the IMF has recognized. The establishment of a permanent IMF office in Port Moresby was seen by O'Neill as a worrying sign. "Nearly 50 years after independence, we are back under foreign control with the IMF managing PNG's economy," he stated. O'Neill outlined the typical IMF intervention sequence, where quotas (loans) serve as the initial defense, followed by support from the World Bank and Asian Development Bank (ADB). Bilateral loans and grants come into play if further assistance is needed. Also read Comments are closed.
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