Papua New Guinea’s Prime Minister James Marape has asked China to refinance the country’s entire $7.8 billion debt.
He also called on China to enter into free trading arrangements with Pacific island nations, even as competition for influence in the region intensifies between Beijing and Washington.
Marape said in a statement issued out of Port Moresby that the requests were raised during a recent meeting with the Chinese Ambassador to Papua New Guinea, Xue Bing.
The prime minister said his government was in talks with a number of parties, not just China, to line up the best deal to refinance its debt, adding the earlier release was sent out without his consent.
“We are in discussion with many of our bilateral partners to access very low cost concession finance to give us some breathing space, and this includes our discussions with the World Bank, ADB and some other possible non-traditional partners,” Marape said.
PNG, a country rich in natural gas, crude oil, gold and copper, among other commodities, has fallen into large budget deficits in recent years.
The government said in a fiscal update earlier this year “cash became tight” due in part to delays over a proposed $300 million budget loan from China.
The island nation’s total public debt accounts for just over 30 per cent of its annual gross domestic product, according to a mid-year budget document, though it does not provide regular updates on how much of that is owed to China.