FORMER Papua New Guinea prime minister and senior statesman, Sir Julius Chan, is suggesting an economic recovery strategy to be implemented by the State immediately to combat the impacts of Covid-19. As far as he is concerned, the 81-year-old says there is no analysis from the national government on the economic impacts of Covid-19.
He says the current government needs to provide dependable information on the economic crisis provoked by Covid-19, thus, it must immediately provide a focus on expenditures and the level of debt the country has as well. He said with facts indicating that 80 per cent of the country’s total value of exports come from oil, gas, gold and copper and 20 per cent from agriculture, including forestry and fisheries, the government needs to immediately analyse and strategise a rescue plan.
He explained that exporting oil and gas following the Covid-19 pandemic will not benefit the economy due to the global price drop, therefore, another commodity must take lead with total revenue generation and suggested gold. “Oil and gas together account for 38.5 per cent of the total export earnings and that is roughly about K9 billion in exports, but what is going to happen to the level of these exports as a result of Covid-19?” he said. “With Covid-19 in the world today, big cities of the world like New York, Beijing and London are seen with no vehicles or less vehicles on the roads. “Vehicles are the big users of oil and gas and if the vehicles are not running than the price for oil and gas drops, so LNG is not doing much better. “The international prices of oil has gone from US$70 a barrel in January to US$42 this month, a drop of more than 40 per cent, so the World Bank focus is that the price of oil will be between US$30 and US$35 for the next two years at least. “Our largest export commodity today with Covid-19 in place is gold because it acts very differently and doesn’t play the same game as the other commodities,” Sir Julius said.
Post Courier/Pacific Mining Watch
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