Bougainville’S Copper

Bolsters Png’S Credit

From GUS SMALES in Port Moresby

The World Bank has given Papua New Guinea a high international credit rating provided the copper island of Bougain ville doesn’t secede.

If Bougainville breaks away, as it has threatened several times, the whole picture could change because of PNG’s heavy dependence on the mining revenue. This, in turn, could lead to the running down of the entire PNG economy as it is at present constituted.

A statement on the World Bank’s finan cial survey of PNG was tabled in the National Parliament in Port Moresby in June by Finance Minister Mr Chan.

He made two main points arising from the results of the survey. They were that: • PNG has been given a clean bill of health in its creditworthiness, and no longer will have to rely on Australian guarantees when raising overseas loans. • The bank has endorsed the government’s policies in hard currency strategy, financial control, financial management, and in political and financial responsibility.

The bank’s full report had not been received, when Mr Chan spoke, but its in terim judgment was contained in a formal letter to the government.

Tabling his statement in parliament, Mr Chan made no reference to any specific comments on Bougainville by the World

Bank. But outside the House he confirmed that the interim report contained reference to PNG’s heavy reliance on the Bougain ville mining revenue to maintain the pre sent status of the economy.

He would not elaborate, but said he hoped to receive the detailed final report soon, and would make it available to parliament.

Mr Chan’s lengthy statement to

parliament concentrated on optimistic

aspects of the economy, particularly the ability to end all current reliance on Australian guarantees when raising overseas loans.

In practice, Australia has been a ready partner to any guarantee arrange ment but the mere fact of needing a

guarantee was becoming increasingly

irksome to the newly-independenl PNG.

This led to an invitation to the World Bank to send a mission to PNG for an inter national and on-the-spot assessment of financial and credit capabilities.

Mr Chan told said the World Bank's en dorsement of his country’s financial management meant more than the mere ability to borrow from the bank itself. The result meant that all international agencies and institutions would recognise PNG as a responsible financial entity. This would be reflected in PNG’s financial relationships with the world.