Thursday, July 06, 2006


ALMOST no one would have been surprised by the news yesterday that PNG Treasurer Bart Philemon had been dumped from Cabinet, even though many in the business sector were hoping it would not happen. By Brian Gomez


Philemon had previously lost his finance portfolio and other recent changes in Prime Minister Sir Michael Somare's Cabinet signalled that the former was about to be sacked.

Some observers would suggest Philemon brought this fate on himself when he moved to challenge Somare's leadership at the recent pre-election convention of the ruling National Alliance Party.

Philemon was furious that meeting rules were changed to postpone the leadership issue until after next year's general election. He declared he was fed up with some policy directions and was considering setting up his own political party.

In those circumstances, Somare had little choice but to remove Philemon from Cabinet, replacing him with the capable and highly respected former Prime Minister Sir Rabbie Namaliu.

The erstwhile finance minister and treasurer became the highest-profile Cabinet minister after the Government declared its first budget surplus in about eight years and greatly reduced foreign debt.

Many observers, including reviewers from the International Monetary Fund, credited Philemon's economic management as the crucial factor for what some have described as the country's biggest turnaround in its economic fortunes.

PNG has a dismal economic record. Per capita incomes have halved in the 30 years since independence, according to the most recent IMF analysis.

Much of the decline occurred since the mid-1980s, with excessive government borrowing and spending a contributing factor.

PNG's national currency, the kina, plummeted to US19c in 2002 soon after the Somare Government assumed office. Philemon declared that, because of the excesses of the past, little could be done in the short term about this situation.

The kina had been in decline since it was floated in 1994. Many in the business sector in 2002 were canvassing the possibility the kina was on the verge of going into a virtual free-fall.

A supplementary budget in 2002 and windfall revenue from oil, gold and copper exports aided an economic turnaround.

The budget has now been in surplus for three years, the kina has been stable around US32c and the economy has been in positive territory after four successive years of decline.

Since independence, various governments have shown they have been very adept at dealing with crisis but there has been no tradition of building on successes that create a "virtuous cycle".

Many in the business sector would be concerned that things are going to change for the worse, as has happened in the past. This is certainly not a forgone conclusion.

But for clear signals on where government policy may be heading, analysts will have to wait for November, when the new team presents its 2007 budget.

But even an exemplary budget is no guarantee of better days ahead because PNG has been notorious for what falls through the cracks due to poor governance.

Clearly if things start to go badly wrong – the likely start of construction on the PNG Gas Project next year would provide a big fillip to the economy – this could be reflected in next year's national elections.

One interesting question that will be pondered is whether a big-spending Government can offset the historical tendency of PNG voters to deal harshly with government election candidates.

I personally think BP is the man to take the country into future. His type of leadership is a no non sense and no hangers-on type unlike other pollies. He is development oriented and not politics, whilst the NA is for family, regionilism, egoism - all politics etc. If Philemon forms his own political party then, I am sure many PNGeans will support him. I am sure he has the nation's interest at heart.

Somare can claim that the performance of the economy is due to team work, but Philemon is the man who set the strong discipline and tighter controls of spending that contributed to the 3% or so growth of the economy. I think we have had enough of Somare for 30 years and our livelihood is not improving. Lets try somebody new.

I believe the leadership make it conducive for people to perform. Bart didn't look after his own Ministry well, look what is happening to the Finance department at PAC...Just reveals the true colors of Bart. I think he was either ignorant of the corruption under his own nose or part of the corruption. I welcome the PMs quest to ask PM of Aus to appoint a Judge to handle an inquiry.

what do u mean -
"ask PM of Aus to appoint a Judge to handle an enquiry ? "

if you read the post: monday or tues, PM is considering asking Howard to appoint a Judge from Aus to head the inquiry into the finance department.

Pro_Somare, I beleive many of those problems in the finance department were prevalent long before Mr Philemon entered the picture, they have only been uncovered.
However, in the big picture, how long ago was it that the government had a surplus budget?
PNG needs more leaders of Philemon's calibre, those who are willing to put their money where their mouth is (so to speak).
Also, heard this on the grapevine that NA wanted one of their own to look after the 'purse' come election time as it will make spending it much more easier.

TSD, you absolutely correct, K6m embezzled, means this crook had being taking 100s, than 1,000s than 10,000s and 100,000s for the past years they had been working there. I suppose greed holim ol gud stret and they decided on 1,000,000 sinces they had gotten away with the 100,000s.

I'am now wondering how they managed that? you have any insights?

TSD, you absolutely correct, K6m embezzled, means this crook had being taking 100s, than 1,000s than 10,000s and 100,000s for the past years they had been working there. I suppose greed holim ol gud stret and they decided on 1,000,000 sinces they had gotten away with the 100,000s.

I'am now wondering how they managed that? you have any insights?