11 May 2004

PNG's opposition leader says the country's economy remains rotten

10:19 am on 11 May 2004

Papua New Guinea's most recent former Prime Minister and current Opposition leader, Sir Mekere Morauta, says the country's economy remains rotten.

PNG has recorded significant growth in the past year on the back of high world commodity prices for its exports of oil, gold, copra, cocoa, coffee and vanilla.

It's the first period of growth for several years and has led to a stronger currency, lower interest rates and higher foreign reserves.

Sir Mekere, who has offered to bring his party into the Government, says Sir Michael Somare's administration has also boosted the figures by sharply cutting its spending.

He says the Government claims the economy is buoyant but services such as police and health are being starved of vital funding.

"Essential services are just on the drip, the financial drip, and the next government is likely to overspend and that will also get it into trouble, so what I an saying is there is a balance - you can spend money but spend wisely on most important things and don't overspend."