Papua New Guinea Debt Crisis: PM Accused of Veering Between Australia and China
Papua New Guinea’s former Prime Minister Peter O’Neill has hit out at his successor, saying he was “taking PNG backwards” and condemning him for allegedly flip-flopping on asking Australia and China for assistance with PNG’s debt. Mr O’Neill’s attack on James Marape came after he was ousted from the government benches by Mr Marape on Tuesday. Mr Marape asked Mr O’Neill’s party to join the Opposition because of the party’s “negative influence” and due to its “attempts to undermine this government”, the latest instance of political tumult in the country. The former PM issued a statement condemning Mr Marape’s actions since he took office at the end of May, replacing Mr O’Neill as a leader, saying he was derailing all the hard work he had done in the past eight years.
“Apart from the attractive rhetoric, we have seen no solid policies and programs so far,” said Mr O’Neill in a statement reported by media in PNG.
Mr O’Neill singled out Marape’s handling of requests from Australia and China to assist with PNG’s debt, which sits at about 32.8 per cent of its gross domestic product. “The Prime Minister is reported courting the Australians, then the Chinese and the Australians again. This does not happen in today’s foreign relations,” he said. “Despite all the rhetoric about taking PNG back, we see no evidence of this happening beyond the words. With each action we seem to be taking PNG backwards.”
Confusion surrounds PNG’s debt strategy. Earlier this month, Mr Marape asked China to refinance its entire government debt of A$11.8bn (27bn kina, or US$7.95bn), according to a statement issued by his office and seen by the Guardian.
The next day, Mr Marape disputed the news, sending out a new statement saying that “we as whole of government have not approved this pathway yet, and someone has run ahead to the media without my consent or knowledge.”
“It has come to my knowledge that a purported press release from my office on request for China-based financing facilities to refinance heavy and expensive debts up to 27bn kina the O’Neill-led government has racked up,” said the second statement.
PNG seeks assistance
Mr Marape added that PNG would seek assistance from many partners, including the World Bank and “some other possible nontraditional partners”.
On Monday, ahead of a meeting with foreign minister Marise Payne, Mr Marape said he would like some of Australia’s existing A$600m a year (US$400m) aid budget for PNG to be sent straight to government coffers.
Australia refused the request, but said the government was open to helping PNG with its debt, but would not do so out of the existing aid programme.
Papua New Guinea Prime Minister James Marape.
Former Papua New Guinea Prime Minister Peter O’Neill.