PAPUA New Guinea is keen on reducing its foreign debt levels and is focused on shifting from its reliance on loans to grants to finance its annual budget, says Treasurer Ian Ling-Stuckey.
He made the statement during a meeting with Millenium Challenge Corporation Chief Executive Officer Alison Albright in Washington recently.
“MCC can provide PNG with hundreds of millions of US dollars in grants (over a billion kina), but only after going through a stringent pre-qualification process,” Ling-Stuckey said.
There was then a follow-up meeting with members of Albright’s team, including MCC managing director Daniel Bĺarnes, on the details of accessing the programme.
“This is all part of the innovative Marape-Rosso Targeted Grants Strategy (TGS), where we are seeking to move from loans to more and more grants to support PNG’s own economic reform programme,” said Ling-Stuckey.
“The MCC pre-qualification process is a demanding one.
“Currently, PNG is a long way from qualifying.
“It will take several years to improve on enough indicators to get access to the potentially large grants available.
“If we do qualify for a “compact” programme, there will be a PNG committee formed to administer the grants under MCC guidelines.
He said projects will be based on an assessment of how best to support PNG’s economic growth. Ling-Stuckey said any funded projects must go through a rigorous cost-benefit analysis and competitive international procurement will be required.
He said although this was tough, all elements of good governance were incorporated.
“While it may be several years away, it is important to understand the options and start the journey now,” Ling-Stuckey said.
“Development is a long and hard process for better jobs and incomes. “Partners such as MCC could assist.
“PNG also wants to move more towards grants and away from loans.
“This is especially the case as we start repaying our debt from 2027 when our budget is planned to return to a surplus.”
