Taka Box Economist back with his mauswara

by PAUL L. KEBAIJA

The Treasurer of Papua New Guinea would like the nation to believe its credit rating has improved. It has not. Standard & Poor's rates PNG at B minus exactly where it has sat since April 2020, on Ian Ling-Stuckey's own watch. Moody's rates PNG at B2. What changed in June was the outlook: an agency's opinion about what might happen next. Every treasurer alive knows the difference between a rating and an outlook. To announce one as the other is not optimism. It is deception, dressed in a press release.

Peter O'Neill's statement this week is brutal, and it deserves to be, because the record it sits on is worse than the spin. When this government took office, S&P rated PNG at B. Within a year it was cut to B minus, and six years and one IMF programme later the Treasurer has never recovered the notch he lost. He now asks the country to applaud him for standing one step below where he started, six steps below investment grade, with every kina PNG borrows priced off that distrust.

And the agencies are not the only ones passing judgement. In February, the Financial Action Task Force placed Papua New Guinea on its grey list for the second time in a decade, a formal international finding that the country cannot police money laundering and illicit flows through its own financial system. Last time, PNG legislated its way off the list. This time the FATF demands proof the system actually works, which is precisely what eight years of hollowed-out institutions cannot supply. Grey-listing means every international bank now treats PNG money as suspect. So does the market. So should we.

Then, this month, the government set fire to its own export earnings. To please Beijing, it ordered Taiwan's representative office in Port Moresby closed, and Taipei answered by suspending spot LNG purchases worth roughly half a million tonnes, while pointedly reviewing the long-term contract that takes about a third of PNG's LNG exports. LNG is nearly half of what this country earns abroad. A government drowning in debt, begging the IMF for lifelines, chose this moment to provoke one of its biggest customers for a diplomatic pat on the head. That is not statecraft. That is economic self-harm.

Yet the largest scandal remains the missing report. The 2025 Final Budget Outcome, due under the Fiscal Responsibility Act by end of March, has simply not appeared. The 2023 report was late. The 2024 report was late. This one has vanished into August. A Treasurer in open breach of the fiscal law, issuing statements about fiscal credibility, has forfeited the right to be believed on either.

The Prime Minister's own words now close around him. He suspended more than seventy agency heads for late reports and called it non-discriminatory, no matter who you are, no matter your position. Very well. The FBO is the Treasurer's report card to the nation, four months overdue, stacked on a public misrepresentation of the country's credit standing. If a departmental head loses their career over a late report, what is the standard for a Treasurer? If the answer is nothing, the Year of Reset was theatre, a purge of small people to shield big ones.

Downgraded by the raters, grey-listed by the financial watchdogs, snubbed by its own gas customers, and hiding its books from its own Parliament. Papua New Guineans do not need New York to tell them how it is going; they read it at the checkout and the empty aid post shelf. Release the FBO. Correct the record. Until then, nothing Waigani says about the economy deserves credit in any sense of the word.