A letter to the editor in The National advised that the debt level of Papua New Guinea is quite massive - far more than the debt to China.
As a long term expatriate and friend of Papua New Guinea, I worry about the debts that the Government is racking up with China. Let us hope that the debts do not get out of hand and promote the Chinese seizure of collateral.
This country has had Chinese companies build a massive network of roads in Port Moresby. A power station is being built in the highlands. The Government may be counting on export income to enable the loans to be serviced.
What if the Chinese place an embargo on PNG exports and block the payment of debts? Then they seize PNG collateral in harbours, ports, power stations, airports and roads.
The arrangement for fishery in Daru is a worry. The dragon will never leave and spend down time in the Gulf of Carpentaria. Is prawning still a key industry in the gulf?
PNG is wise not to put all their loan eggs into the one basket. There has been a recent loan from Japan, loans from the Asian Development Bank and Australia. Wise moves.
The fact of life is that Chinese business is very hard nosed and money hungry whether from Chinese banks or trade stores in Papua New Guinea.
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