PNG’s Debt Crisis Deepens as IMF Orders Fiscal Reset, Says O’Neill
Papua New Guinea’s former Prime Minister Peter O’Neill has accused the Marape government of reckless borrowing and economic mismanagement, warning that the International Monetary Fund (IMF) is now demanding the country return its debt-to-GDP ratio to 2018 levels.
O’Neill said the IMF’s recent directive to reduce debt to around 35 percent of GDP—similar to what it was before James Marape took office—signaled that international confidence in the government’s economic handling had waned. “The IMF honeymoon is over,” he said, describing the situation as a consequence of excessive borrowing.
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| PNG’s Debt Crisis Deepens as IMF Orders Fiscal Reset, Says O’Neill |
He criticized the government’s attempt to blame past administrations for current woes, saying Marape had been in power long enough to take responsibility. “After fourteen years in leadership, including eight as Finance Minister, he cannot keep shifting blame,” O’Neill stated.
According to O’Neill, the government’s response has been to take control of state entities like KPHL and sell MVIL shares to create the National Banking Corporation, describing these moves as efforts to access funds after the IMF’s warning of “Nogat Moni, Nogat Loan.”
O’Neill said life was better for Papua New Guineans in 2019, despite a smaller GDP, because the government invested in infrastructure and services using domestic resources rather than foreign loans. “We didn’t auction off our sovereignty,” he added.
He said public debt had now reached K65 billion, with half of the country’s GDP tied to foreign creditors, while ordinary citizens struggled with high costs and reduced freedoms.
O’Neill warned that it could take up to two decades to restore economic stability, saying the government’s priorities were misplaced and ordinary Papua New Guineans were paying the price.
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