IMF’s contribution in PNG’s economy important

The International Monetary Fund (IMF) role in achieving sustainable growth and prosperity for all of its 190 member countries by fostering global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world is crucial.
In PNG the IMF’s office opened after 25 years.

The IMF Resident Representative in PNG Sohrab Rafiq said IFM is rolling out financing programs under 38-month Extended Credit Facility [ECF] and Extended Fund Facility [EFF] Arrangements for Papua New Guinea.

He has emphasized on why this financing program exists and how it's hopefully going to benefit the country.

“We have a three-year program. A review takes place every six months, and conditional on the review being completed on time, the money is disbursed.

“So the IMF financing program is about a billion US dollars. Now, it's not just our money. When you have an IMF program, you tend to have finance crowding a lot of other financing from the World Bank, from the ADB, from other bilateral sources.

“And a lot of that is on very concessional terms. Now, two reviews of the IMF program have been completed. There will be a third review starting at the end of September,” Mr. Rafiq said.

This review is important as it helps protect the vulnerable and foster inclusive growth, with a focus maintained on strengthening debt sustainability, alleviating FX shortages, and enhancing governance and anti-corruption frameworks.

Meanwhile Deputy Managing Director, and Acting Chair of IFM Bo Li, stated that the satisfactory program performance recorded over the second review period of the ECF/EFF arrangements continues to attest to the authorities’ strong commitment to reforms.

“The government is staying the course on its fiscal consolidation strategy, as the deficit was more than halved over the past three years.

“The central bank has successfully shifted to a crawl-like exchange rate arrangement, starting a gradual return to greater exchange rate flexibility and Kina convertibility; and its governance has been strengthened through the appointment of a permanent Governor and of a full Board.

“The operationalization of the Independent Commission Against Corruption [ICAC] is underway.

“The authorities should now build on these achievements and sustain their reform efforts towards more resilient, inclusive and sustainable growth.

“To address debt vulnerabilities, fiscal consolidation should continue, while creating fiscal space to meet development and climate adaptation needs and devising contingency plans to anticipate the possible materialization of fiscal risks, including from natural disasters.

“Accelerating the implementation of the Medium-Term Revenue Strategy will help to durably mobilize domestic revenue, while enhancements in public expenditure management will contribute to more efficient spending,”

Mr. Li added that the Central Bank is encouraged to persist in bringing the Kina closer to its market-clearing rate, while keeping inflation in check through appropriate monetary tightening, and to continue modernizing its monetary policy operations, in line with its sequenced roadmap of reforms.

He said providing appropriate resources and ensuring effective access to information will be critical for the Independent Commission Against Corruption to become fully operational,” Li said.