The Six Billion Kina Answer


Author/s (editor/s):

Graeme Smith

Publication year:


Publication type:

Policy paper

At a recent Australian National University workshop, a speaker claimed that China's Export-Import (Exim) Bank had offered a 10 billion kina loan to Papua New Guinea (PNG), and that this had materialised in the form of a six billion kina loan to rebuild the Highlands Highway. In 2012, I wrote the Six Billion Kina Question, wondering what was likely to come of this loan. The story of this loan — which three years later is still a chimera — is the subject of this In Brief. The backstory reveals much about how infrastructure projects are developed in PNG and how Chinese aid is delivered in the Pacific. As PNG is now China's largest trading partner (MOFCOM 19/2/2015) in the Pacific (overtaking the Marshall Islands in 2014), it also has relevance for Australian companies that are in competition with Chinese contractors to win infrastructure projects in the Pacific. One Australian company had its own plan to rebuild and maintain the Highlands Highway; a proposal abandoned when the loan was announced.

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