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Papua New Guinea

Massive $100B for Pacific nations

Papua New Guinea is keen to work with other Pacific Island states that also face the challenges of dealing with Covid-19 on top of climate change to ensure the region can benefit from global funds.

The international community is offering a massive new trust fund worth $US100 billion to offset the economic impacts of the pandemic on developing Pacific countries.

Treasurer Ian Ling-Stuckey said the financial impact has been “devastating”, but the government’s plan was to grow back “greener and more resilient”.

“Fortunately, the rest of the world, along with the PNG government, knows there is a global problem and is trying to find constructive solutions,” he said.

Ling-Stuckey held recent talks with Robert Kaproth, the deputy assistant secretary of the United States Treasury, over “strong support” for creating a $US100 billion fund.

The International Monetary Fund (IMF) plans to issue statutory drawing rights assets that are fully exchangeable foreign currency like the US dollar.

IMF Pacific trust fund
The IMF board of governors will have to approve the proposed new trust fund for Pacific developing nations. Picture: Stephen Jaffe/IMF

They are distributed to all countries in line with their shares in the IMF.

The distribution ensured many rich nations received substantial new assets.

Led by the G7 nations, the pay-off is that other nations will consider utilising the assets to support developing countries.

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Ling-Stuckey said PNG was interested in the possible creation of a new “resilience and sustainability trust” based on new international assets.

“This new global fund will be in addition to the benefits received directly by PNG of these new SDR allocations,” he said.

“PNG’s share was worth nearly K1.2 billion – these funds will be a valuable contribution in funding the budget, which means supporting the government’s expenditures in areas such as education, health, policing and justice, and infrastructure.

“The ongoing international response to the worst global economic crisis in a century is very welcome.

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