Papua New Guinea backtracks on China debt refinancing
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.