History of Papua New Guinea

International Monetary Fund Pressurises Papua New Guinea

From: Chris Warren (cwarren@peg.apc.org)

The International Monetary Fund or IMF has dug its teeth into another Third World country. But this time its Papua New Guinea, which is coming close to bankruptcy as it has public debts equal to around 120% of its GDP. The normal PNG budget in November was postponed and will now be brought down in March this year.

Western bankers are offering loans but only under strict conditions. These conditions include abolishing local employment initiatives, cutting the public sector, and abolishing price support for farmers. Western bankers are also demanding that Papua New Guinea develop a forestry industry and vary education health and infrastructure spending.

In order to escape from such controls the Papua New Guinea is investigating the possibility of selling off assets such as oil reserves, shares in gold mines and in copper mines.

Australian capitalists have opposed plans to open the Papua New Guinea economy to Asia especially in forestry and mining industries which have traditionally been dominated by Australians.