Isaac Lupari said this will benefit the generations to come, and deliver tangible outcomes for Papua New Guineans.
Mr Lupari said the challenge for governments is to get the debt balance right.
“In the short term, there are times where governments need to borrow to sustain services. But this can never be a long-term measure, as the example of Zimbabwe and others has shown.
“The debt mix must be carefully balanced and weighted towards investment in productive assets that allow our economy to grow.
“Today in Papua New Guinea we are at a crossroad.
“The COVID 19 crisis is not going to go away. The global economic consequences will endure for decades to come.
“The challenge that we face is that we must be strategic in how we leverage debt,” he said.
With crisis also comes opportunity, and by investing in critical economic and social infrastructure we can stimulate the economy and set our nation on a path towards long-term growth and prosperity.
He said, “Alternatively, we can continue on a path of ever-increasing debt with little by way of return. The reality is that such an approach will only keep the lights on for so long, and over time, Papua New Guinea’s position in the region and the world will erode.”
Lupari clarified that in 2016, under the then O’Neill-led Government, the debt stood at K21.4 billion.
“Over the course of the next two years, that increased by K3.6 billion, or 14.2% to K25.6 billion,” he said.
Much of that debt was invested in critical public infrastructure – roads, ports, hospitals and schools – the legacy of which remains today.
He said, “Since 2018, public debt has increased by a startling 31.6% (K11.8 billion) to now stand at K37.4 billion in a space of 2 years.”
The former Chief Secretary further stated that the Government has continued to borrow heavily through domestic and external sources throughout the COVID 19 crisis1.
“This is not necessarily bad, if that debt is used to invest in productive assets.
“If we borrow money to build a school, we can educate more young people. As education standards increase, we build a stronger and more capable labour force.
“This is turn helps us build our economy and the institutions of State. The same applies to building new roads,” he said.
He stressed that these are the economic corridors that not only help sustain our economy, but which bring much needed prosperity to our rural and remote communities.
He added, “As individual wealth begins to grow, the economic wealth and capacity of the state increases.”