In brief: Bank of Papua New Guinea governor not worried by kina’s fall and other stories

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Bank of Papua New Guinea governor unfazed by kina fall, O’Neill welcomes Chinese investment, Morauta says deportation indicates climate of fear, and other local and regional stories.

The Bank of Papua New Guinea Governor, Loi Bakani, has assured Papua New Guineans that they should not be worried about the value of the falling kina. The central bank has intervened with US$984 million in the ten months to October to assist the foreign exchange market, reducing foreign reserves from US$4 billion to US$3 billion over that period.

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Prime Minister Peter O’Neill has welcomed Chinese investment in oil and gas projects in PNG. He told the China-Pacific Island Countries forum in Guangzhou City, China last Friday, that the country received substantial concessional loan funding from China for major development projects and was ready to welcome interests by Chinese investors in PNG.

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China’s announcement that it will make A$1 billion available for infrastructure aid in the Pacific could create competition among traditional donors, according to the Director of the Melanesia Program at the Lowy Institute, Jenny Hayward-Jones. She also says there is likely to be more accountability—‘certainly more transparency than we have seen in the past’—on China’s part.

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PNG Trade Minister Richard Maru has launched what he calls a draft ‘bible’ to develop small and medium sized enterprises (SMEs). Maru said a draft plan on developing SMEs is now available for comment, and that creating 500,000 SMEs was the only answer to all the country’s economic and social problems.

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Next Tuesday, the PNG Treasurer Don Polye will hand down a deficit budget for 2014 focused on economic growth and developing infrastructure for the 2015 Pacific Games, official sources say.
 PM O’Neill said the deficit budget would be between 5% and 6% of Gross Domestic Product. He said he may raise the national debt level to around 35% of GDP. The Budget will be tabled in parliament on Tuesday, 19 November.

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Former Prime Minister, Sir Mekere Morauta, has criticised the deportation of Mark Davis, who was in charge of communications for the PNG Sustainable Development Program (PNGSDP). In a blog, Sir Mekere said there was a climate of fear in PNG. ‘Ministers are afraid to speak their minds, fearing they will lose their job. Provincial Governors are afraid to speak their minds, fearing their province will be starved of funds,’ he wrote.  Australian Foreign Minister Julie Bishop has also questioned Davis’ deportation. PNG’s Foreign Minister Rimbink Pato claimed Davis had breached the conditions of his work permit, by issuing media statements on behalf of the PNGSDP.

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Corruption has taken root in every society of the country and greater awareness about the Independent Commission Against Corruption bill (ICAC) is needed, according to the Acting Director of the National Research Institute, Dr Charles Yala. The ICAC bill is due to go before parliament this week.

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Speculation is rife over the future of the PNG government’s convertible debt deal involving the LNG project. Abu Dhabi billionaire Sheik Mansour bin Zayed Al Nahyan owns International Petroleum Investment Co (IPIC), the company which loaned A$1.6 billion (K3.63 billion) to the PNG Government in 2008 to fund its share in the LNG project.

The Government secured this loan by putting up its 14.7% shares in Oil Search Ltd for the cash, but the government could buy back the shares before the loan matures next March.

The National reports a number of investment banks have outlined to the government a range of financing proposals for a buy back. Bloomberg reports a number of global players want to invest in PNG and are actively seeking the buy the debt.

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Tourism officials on Bougainville are latching onto the success of the movie Mr Pip with the imminent launch of a new website they hope will help the island get back on its feet. Meanwhile, the NZ Film Commission reports Mr Pip took more than NZ$ 1 million (K2.1 million) up until early November.

Meanwhile, the Australian Strategic Policy Institute is warning peace in Bougainville will collapse if the Australian Government doesn’t lead a new development effort.

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Five professional Papua New Guinean businesswomen have launched the PNG Women’s Chamber of Commerce and Industry. Chamber president Linda Sincha Paru said the association aims to empower female business owners by giving them the skill, connections and guidance on how to succeed.

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The Fiji Commerce and Employers Federation has labelled the 2014 National Budget as ‘clever, responsible and comprehensive’. CEO Nesbitt Hazelman said the reduction in corporate tax to 10 per cent for businesses ‘who list on the SPSE [South Pacific Stock Exchange] and the zero rated tax incentive toward small businesses with annual turnover of less than F$500,000 reaffirms the government’s commitment to assisting private sector development’.

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Finally, the dean of the University of Papua New Guinea’s law school says polygamy is a tradition that should remain an option in modern societies. Professor John Luluaki told Radio New Zealand International that polygamy serves a purpose.

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