http://www.thenational.com.pg/110106/column4.htm

BUILDING BLOCKS by Frank Senge Kolma

PNG needs a rethink of its goals

PNG High Commissioner to Malaysia Peter Maginde is watching a young nation racing towards achieving developed country status by 2020 with awe and anger.
Awe because Malaysia has been recording annual growth of between 6% and 10% for the last decade.
Anger because he sees a nation so very much like his own, only poorer in terms of natural resources, but doing oh, so very well.
His own Papua New Guinea lacks so far behind that the United Nations Development Program has dropped its status from middle income country to poor nation and has placed it 139 out of about 170 countries.
Today, Malaysia is a net exporter of manufactured goods. Manufacturing comes in second, after tourism, as the biggest foreign exchange earner for that country.
Yet, not so long ago, Malaysia depended on only two primary industries – tin and rubber. It added petroleum and palm oil along the way.
Conversely, PNG attained independence with a fully fledged copper mine on Bougianville and within two decades, had added five gold mines and oil. It was already a big exporter of copra, cocoa, coffee and rubber. Its forestry and marine reserves were and are tremendous.
Both countries had been subjugated under the colonial boot of the British and in the case of PNG – Germany and Australia as well.
Both had suffered the unsettling effects of two world wars.
Both are tropical countries with similar resources and share pretty much the same hot humid climate and the ravages of monsoon rains.
So what is the magic that drove the one so far ahead into double digit growth, wealth and soaring living conditions for its citizens, and drove the other backwards into abject poverty, deprivation and social degradation?
It isn’t magic – that is the first thing that we must be sure of.
It is having a vision and planning and working doggedly to achieve that vision.
Malaysia, at about the time PNG attained Independence, set a goal that by the year 2020 – now just 14 years away – it would achieve developed nation status.
It set a goal that it would move from a primary industry and agricultural based economy into a manufacturing and services based economy.
Such planning did not preclude or abandon agriculture. It has held on to and developed its agricultural base. It is today the world’s largest producer of palm oil. It is adding value by moving into downstream processing of the crop and by churning out other by-products such as bio-diesel and fertiliser.
And Malaysia planned to achieve its goals in a series of achievable and doable strategies. Malaysia is today into its 9th five-year plan. That is 45 years of continuous planning.
PNG has not had a planning apparatus that has lasted five years since Independence. It started off in 1977 with the National Planning Office and the National Public Expenditure Plan and ended up 31 years later with Planning and Implementation Department and the Medium Term Development Strategy. There were about as many different strategies and plans in between as there have been changes of governments.
Another difference is that Malaysia had political stability. PNG did not.
Malaysia had Dr Mahathir Mohamad from 1981 to 2003.
PNG had Somare, Chan, Wingti, Namaliu, Wingti, Chan, Skate, Morauta and back to Somare. Only one Government – the current one – has served a full five-year term of Parliament.
Each new prime minister brought his own set of workers, policies, plans and strategies and trashed the efforts of the previous regime. There was no continuity for more than three years.
Malaysia enjoyed the luxury of one prime minister, one plan, stability and predictability for more than two decades.
PNG has lurched from social discontent and crime from year to year and it gets worse each passing year.
Part of this has had to do with the kind of democratic government each country chose to practice.
After a particularly nasty racial conflict in 1969, Malaysia decided to control its people and their lives by delegating certain activities of the State to the three main races in Malaysia.
To the predominant and native Malays went jobs in the civil service. To the Chinese went business and to the Indians went intellectual and service oriented industries.
Although this division was not exclusive or compulsory, it appealed to the natural inclinations of the different races.
To keep the lid on boiling discontent of the more populous Malays, huge concessions were also made in land, property and businesses as well.
A rigid lid was kept on the people’s movement. A national ID system was introduced.
Crime was dealt with severely. Drugs and guns fetched the death penalty and this was strictly enforced by the judiciary.
Criminals turned up dead with a short statement from police saying they were shot dead while trying to escape or in shoot outs. Nobody questioned this.
Malaysia had opted for guided democracy.
PNG, on the other hand, opted for a form of democracy that would make the first world cringe. It applied freedom in the truest meaning of the word.
It is not bad, this type of freedom, but it was applied on the wrong population. A population that is 85% illiterate needs guidance, not a free hand. It needs to be shown the ropes, not given the rope to hang itself with.
Malaysia is now
loosening up and moving towards freer flow of its people, giving ground on control and guidance as its population becomes more educated and more able to look after itself.
PNG perhaps needs to do a rethink on the basis of the problems besieging it.






This beautiful country of ours is so blessed with everything, yet we are stagnant. If we are not careful, everything will be taken from us soon. When will the government hear the cries of the people and do something about it?

My goodness!!! Wake up PNG before we slip further down the gutter!!!!

well, kolma has done well in comparing PNG to malaysia in all geophysical and economic aspects. However the most fundamental flaw is the comparing of the engine room for developement and that is the people. Basically, we have 700 different language!! that is like earth within an earth...tough going, we will take twice the time as malaysia...be positive and don't sound too negative.

PNG definitely needs a rethink of its goals. Malaysia has only tin, rubber, palm oil and they have been adding to the list as time goes by.
I do not think the 700 languages is the barrier here. We all understand tok pisin and english, for those that can understand and speak it. What we need is a true/influential leader who will lead by example. Someone who has PNG's interests at heart. That will be the person that might rearrange the country's goals so we can see progress.

em tru...malaysia has tin, copra etc and also according to my understand, Malaysian New Economic Policy(NEP) was a catalyst for change. That meant foreigners owning business must be taken over by Nationals, it was a controversial policy i might add. Before the NEP, 1.5% of the economy was run by malaysians, the rest was the chinese minority. NEP was aim to erradicate this poverty. Unless our government enforce the "reserved only" business policy..i.e resturants, supermarkets, farmings, oil, gas etc.etc.. we may find a widening poverty gap.

Kolwan, could not agree more.

Enforce the `reserved only bussiness` which is meant to be held by PNGeans with an IRON FIST!

Em tasol!

PNG leaders are too timid, lack courage, determination and vision for PNG. All they think about is how fat their bank accounts are!

A wealthy nation is made of wealthy citizens. Make the people wealthy and the nation will be wealthy.

Mi tokim upla...mipla tok oil, gold na copper stap tasol no ken ting olsem PNG em rich...NOGAT yah...WE ARE POOR!! Why? Because our people are not wealthy. GDP and exchange rate are just numbers. They not do not translate to improved life style for ordinary PNGeans.

If PNG wants to become a wealthy nation, we must translate the macro-economic improvements to the micro-level.

that is true, but law and order is priority...hagen case must not be a norm!

A weath of resourses,
but the deals that have been entered into mean, that the country is getting no benefit from them.

Take Higlands Gold (HIG) for instance. A company I know in some depth. There have been forward sale contracts entered into for so many ounces of gold a year. (A futures contract in effect) This contract is for less than $500.00 per ounce. Now, the amount of gold to be supplied is more than the mine produces. Therefore gold has to be bought on the open market, ($600.00+ an ounce) to make up the amount that it is contracted to supply. Thus it is running at a loss.

Whoever signed this deal, ought to be boiled in oil. This is actually how you have a resourse, and yet lose money developing it. Add to this "tax- holidays" for the first years of the project, and other concessions. Is it any wonder the country is not prospering. Also, neither are the shareholders, such as myself. The people prospering, are the people to whom this cheap gold is being sold, at prices often $200.00 an ounce below market price. I would be interested to find out who they are.

This could be an example of corruption, or if not, then monumental incompetence. The minister for Mining and Resourses surely has some questions to answer. By the way. The production from HIG is tied up thus, for the next ten years or more. So, it will be many years before anyone in PNG gets any benefit from this resourse.

OK. There are jobs. So the community is getting some benefit. But if Ramu Nickel is an example, (it is part of HIG) many of these jobs are going to overseas workers.

I would like to know, how many other projects are as screwed up as this one.

Regards......Ralph.

Ralf,

I totally agree, many natural resources have been mismanaged from the very begining. The most recent one Ramu Nickle mine. The old one BCL..and in the recent past Ok Tedi...you described it very well as screwups and I agree 200%...OK TEDI Mining Ltd (OTML) managing director Keith Faulkner says PNG needs to brace itself at local and national level for the "big impact" the 2013 closure of the Ok Tedi mine will have on PNG economy....and it dawned on me, 2013 is only 7years away and I was thinking...the average rainforest regrows in 15 years provided the topsoil is back...so according me..Faulkner and his colleague better start replanting ASAP!...

Faulkner should have also mention to brace for at ecological and economic disaster for thousands of people living along the stickland, oktedi and fly river...it was not long ago that contimanation by OTEDI became an international cause celebre, the indigenous peoples living along the Ok Tedi and Fly rivers sued the BHP and and was said to have received $28.6m in an out-of-court compensation settlement.

Today, although a limited dredging operation has been introduced, mine waste continues to pour into local rivers...whilst mines operations and its boost to the national economy scheduled to end in 2010....it is without a shadow of doubt that ecological impact will transcend generations. OTML acknowledges that more than 2,000 square kilometers of rain forest could be stunted. While BHP Billiton walked away from Ok Tedi in February 2002 with its 52 percent equity share in the mine was transferred to an offshore trust, set up on behalf of the Papua New Guinea people. The government gave BHP Billiton legal indemnity from responsibility for future mine-related damage to the Ok Tedi ecosystem, although the legality of this deal may be challenged in the country’s courts.

So what went wrong? The answers interplays of several factors, all related to GOVERNANCE. They include the linkage of the mine with nation-building and economic development in a newly independent country; the political marginalization of local communities and weakness of local government institutions; the government’s over-reliance on BHP for information about environmental costs and benefits; and the government’s conflicting role as both mine shareholder and regulator.

Regards..(Its not good to say cheers to this sad event)
kolwan

Iaa wantok,
you have raised another can of worms. Something I had not even mentioned in my previous posting. I try to limit myself to about 250 words or so a posting, or it becomes too tedious to read.

When people ask me about BCL, I always explain that it went on like a mad dog, in wrecking the environment. I always say that it got what it deserved. For the wrong reasons, but that is Karma. (What goes around comes around)

I have, many years ago, been involved with rehabilitating the vegetation on sand dunes, after sand-mining. I was involved in the engineering side of things of course, but I have some appreciation of the costs involved. That is why the mining companies act so carelessly, when dealing with uneducated, (in a western sense) villagers. The companies are only interested in their profits: Rehabilitation, tailings-dams, pollution------WHAT!!! "Just negotiate a compensation figure and we're outta here." From their point of view, PNG is the nearest third-world-country for them to exploit.

My conclusions: PNG definitely needs the revenue from these projects. PNG is not getting the full benefit of most of these projects, due to various reasons. ie. Committing future production at amazingly cheap prices, transfer pricing, offshore procesing of raw materials, and importing of labour. OK. You do need some expats in skilled positions. But. The old policy of training Nationals to fill those positions, should be revived. In fact I thought that was law.....At least it WAS government policy after independence.

Regards......Ralph.

@Ralph

Brother.....I am now caught in a very tight situation!!
I am in a position where I need to consider the people in the village and also consider development. What you have highlighted is very tru in regards to environmental degredation.
My village will see a mining company there in the next month or so!...at least the the exploration lisence has been granted, last month when I was home.

And from what we know.....there is something definately there!! How do I deal with this issue now? I'm the clan leader...the educated one also! My people want to benefit from the mining industry...how do I negotiate the best deal for them??

Just some of the questions to yah

naive

We are just not utilising out resources effectively. We may have everything but what counts is what we do with it. So far, so very little......an unacceptable performance from all leaders!!! my opionion

Going forward, We need a more effective system of governing. Representative Democracy I feel is not working for us. The Judiciary lack authority, effectiveness and initiative to act on its own to implement and drive the necessary laws that is supposed to not only punish those that break it but better still influence people to deter from acting against the laws.The Legisilature on the other hand is basically defunct (do not exist/just attend one parliament session and you will see). They are too busy playing party politics in the floor of parliament when they should be passing bills, laws, policies etc that would benefit the people. And lastly the Executive branch, is stinking with nepotism and corruption driven by the political greed to maintain in power.(just look back in history and calcualte what the ministerial turnover is like)we just had two in the last month.

We need to make our leaders accountable. How do we that!! Federal system of governement. Each province to develop on its own resources meaning full economic and 50% political autonomy be brought back to the provinces. The reasons why we are moving forward so slowly is because our leaders are hiding behind the curtain of Waigaini........besides the above..pump more money into developing a more deciplined and effective millitary and police...

I agree to a certain degree with the view that maybe when the governing system do change, it might speed up development, reduce corruption etc. however, my view is that the change can't place too soon and maybe this is not the way forward in correcting our problems as a nation. Take the example of the Provincial Govt reforms, its not working at all, and giving autonomy to provinces is the wrong thing to do at this time or even in few years ahead.

My reasons to that oposition is as follows;
- autonomy for PNG provinces is not a solution certainly because of cultural diversity and regionalism, tribalism etc
- most provinces are not economically and politically ready to take on autonomy
- provincial and regional political boundaries are not properly drawn, what was done was on colonial masters interests, for example, SHP still considers itself as last Papua and some say its part of Highlands.

There are many issues that can be analysed before autonomy becomes an option to our governing sytem. What can be done now is to actively engage in decentralization of politcal power and resources from Waigani to Districts and LLGs and completely do away with the provincial government. The provincial government system is an impediment in itself to bringing development to districts where the bulk of the population live. The government has to also encourage capacity build (human, infrastructure, etc) at the districts to absorb the kind of political power and resources that will be decentralized to the districts.

There is more to do with correcting our government problems and one solution does not fit all and so one answer is not an answer to our problems. The issue is open to debate and disccussion.

cheers
ndru

Well if powers are increased in LLGs and Provincal governments developement will fail of internal auditors, ombudsman officers and accounting strenghts are not developed. This is the reason why there is failure at the provincal level.

Re: Too early to change the governing system.

It is always the wrong time to make changes. Change is painful.

When is the correct time?

Regards......Ralph.

If it is too early and painful to make changes in the governing system , why not do a little change one at a time, in that way the change will eventually come about and it will be less painful.

So to answer you qs Ralph, the correct time in my opinion is any time, as long as the government of the day wills it. Ok, the next qs would be "what if that government's term phases out?" Well, since that government has done well so far, there is no doubt, they might be given another five years and that is ample time to continue making the necessary changes. I am sure the people will continue to keep on voting for that government if they see that it is doing more for their benefit.

Right now, from the streets in Pom and around the country and in the media, people are tired of leaders that makes empty promises, they would like to see their leaders doing more for them, in terms of services to improve their livelihood so if a leader can do that for them, they will make sure he remain their leader.(this sums up what I said in the sceond paragraph)

Over to the floor

Personally, changing the government system is definitely a no option at this stage..Sir Mekere described it appropriately as the a "corruptable attitude problem" as systamic and a disease infecting government institution. The solution lies in the strenghtening of government institution...eg. courts, Auditor generals offices, public prosecutors, public accounts, National intelligence office, ombudsman, universities etc..

Changing the government system is just like changing the host, but the disease is still there..its likely to exacerbate on the problem. We need to look at through what mechanism the cure can be administed, eg Strenghtening EDUCATION systems. Strengthen the monetary check and balance mechanisim..ie..Public Accounts, Auditor Generals, Ombudsman..etc..revitalising the public prosecutors office..funding, more lawyers etc..and finally one important thing to do is empowering of Civil Societies..eg..PNG Law Society, PNG IEEE, PNG Society of Accountant etc..to monitor members and standardise code of conducts to deter white collar activities etc..

However, if change is required...I agree that it should be gradual.

Maybe Rishika is referring to an ideal situation where everyone thinks alike. I am just assuming that. But before any of that is achieved, is there anything at all that can be done about the CORRUPTION that has infected our leaders.
What happened to the Transparency International Campaign that was started by Sir Anthony Siaguru?
Who is in charge of that at the moment. I have not heard anything about TI so that is why I ask.

Mike Manning is the boss I think.

Any information on that?

Just checked their website http://www.transparencypng.org.pg/news.html, and it is out of date. Last update was july 16th, 2006. Ironic isn't, we don't know what is happening in "TRANSPARENCY PNG", sound like it is opaque. Talk about transparency..lol...
All have a great day!