The Pacific Rim country of Papua New Guinea is to receive economic help from the World Bank and the International Monetary Fund (IMF), the government announced recently in Port Moresby.
In a brief statement, acting prime minister Chris Haiveta said further talks would be held to finalize these support arrangements.
The development appears to indicate the Papua New Guinea government has backed down from its earlier stand of not seeking outside help with its current cash crisis, Agence France Presse reports.
In January, The Australian Financial Review, a business daily, reported that the IMF, World Bank and Australian government were preparing to offer a US$250-million rescue package with tough conditions.
The paper said Papua New Guinea was “drowning in public debt” of about US$4.6 billion, or 120% of gross domestic product.
But Prime Minister Julius Chan said internal solutions would be sought before seeking outside help.
Chan said the Papua New Guinea economy was buoyant, contrary to what critics of the government were saying, and that in spite of the country’s financial problems he was not going to “wave the white flag.”
The World Bank and IMF assisted the government of former prime minister Rabbie Namaliu in 1989 and 1990 when the economy was severely affected by the closure of the Bougainville copper mine by secessionist rebels.
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