PNG economic management slammed by former leader

8:01 am on 30 October 2015

A former Papua New Guinea prime minister, Sir Mekere Morauta, says the government needs to take urgent action to avoid an economic storm.

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Sir Mekere Morauta Photo: RNZI / Koroi Hawkins

Sir Mekere, who is also an economist and has headed both Treasury and the Bank of Papua New Guinea, says the nation cannot continue on its present course.

He says Prime Minister Peter O'Neill has had plenty of warning from his own expert advisers in Treasury and from eminent foreign institutions and observers.

Sir Mekere says good senior people in Treasury have been side-lined or sacked, or removed from the country if they are foreigners.

He says the Prime Minister has ignored all advice.

Sir Mekere says the latest developments are downgrades from Standard and Poors and a fall in the country's business environment ranking made by the World Bank.

He says unless the economic and regulatory environment is not fixed quickly, the cost of borrowing from banks will increase, interest rates on savings and investments will fall, and bank fees and charges will rise.

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