Port Moresby Chamber of Commerce and Industry PO Box 1764, Port Moresby 6th Floor, Monian Tower, Douglas St. Port Moresby, Papua New Guinea Ph: +675 3213077 or +675 3213254 Fax: +675 321 3251 Email: info@pomcci.org.pg website:www.pomcci.org.pg

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Post Courier, Weekend Edition Fri-Sun 21-23rd December, 2001
Liquor edict attacked
SEVERE cuts to liquor trading hours for the holiday season were attacked yesterday by the Port Moresby Chamber of Commerce and Industry. The restrictions mean that revelry relying on the flow of alcohol in clubs and hotels will be curtailed from 8 at night for the period from this Sunday to January 3. Chamber president David Conn yesterday said the concern over uncontrolled drinking was shared by his group, but the proposed restrictions would only benefit illegal traders and “black markets’’. The Liquor Licencing Commission announced this week it would restrict trading hours because of widespread worries over crime committed under the influence of alcohol. Mr Conn said there had been no consultation from Licencing Commissioner Wilson Thompson and the late announcement would cause “considerable inconvenience’’ to his members. “Does the commissioner really believe closing the bars at 8pm will force everyone home to their families,’’ he said. “This is more likely to force those who wish to continue drinking out on to the streets and into illegal outlets in risky areas instead of safe, secure, legal premises.’’ Such illegal trading was the real source of alcohol-related problems in society. It was the legal, high-profile traders who lived by the law and provided secure and healthy facilities for drinkers who would bear the brunt of the measures. Illegal traders would flourish and continue their activities untouched by the authorities, Mr Conn predicted. “This is another poor decision from an office already demeaned by previous ‘ill-advised’ requests to legal liquor traders,’’ he said. “We recognise the spirit in which these restrictions were considered but the implementation is in our opinion extremely faulty.’’ Prohibition had not worked in other societies and would probably not work in PNG, he said. “We will urge the commissioner to reconsider relaxation of hours for legal traders over this period, as well as checking the legal basis as it relates to individual provincial licensing powers,’’ Mr Conn said.

CANBERRA: Papua New Guinea is teetering on the brink of economic and social collapse, with a third of its population poverty-stricken and resources fast running out, a new report warns. A study by Australia’s aid agency AusAID yesterday said PNG was facing an economic crisis, with living standards and basic services in decline as jobs evaporated and the population continued to boom. “The infrastructure is deteriorating and effective government support is uncommon,” the Enclaves or Equity report said. “The crisis has built up over a long period. The need for effective intervention is now pressing.” AusAID said the situation was particularly dire in rural areas, where over 80 per cent of PNG’s 5.1 million people lived. Those people suffered from poor access to transport, communications and investment, exacerbated by widespread lawlessness and governance problems. But with the country’s economy heavily based on agriculture and the mining sector, a crisis in the regions hit the entire nation, the report said. AusAID warned without immediate intervention, PNG would face economic catastrophe in 10 to 15 years. “The longer the delay in addressing the rural crisis and the enclave and equity issues it encapsulates, the greater the damage that will be inflicted on the urban and indeed national economics,” the report said. PNG’s shaky economy was targeted by an IMF/World Bank austerity package in March 2000. At the same time, Prime Minister Mekere Morauta introduced an extensive program of economic reforms to address the country’s economic difficulties. Overseas donors poured around US$365 million into the economy to finance structural reforms, repay domestic debt and rebuild foreign exchange reserves. And in June and December 2000, Australia made two loans of $US80 million and $US30 million to PNG to help with economic reform. AusAID said the PNG government had barely had time to do anything other than cope with a series of political crises and try and manage the crumbling economy. But the agency said Mr Morauta’s government needed to immediately come up with an effective package to improve rural livelihoods and make better use of financial, natural and human resources. It also called for donors to take a greater role in helping PNG over its crisis.

THE business community has generally described the government’s 2002 K6.786 billion six-month budget as an optimistic one. The Port Moresby Chamber of Commerce and Industry said in its newsletter last night that overall, the 2002 Budget “can be considered at best an optimistic one’’. The Chamber said there are “no major surprises for business but quite a few sweeteners for the lower income earner and potential voter’’. The abolition of the K89 million for the District Development Grant and the focus on infrastructure were some of the issues that were contained in the submission from the industry advisory group — which represented the private sector — presented to the Government. PricewaterhouseCoopers’ senior managing partner and long-time commentator John Leahy said that generally, business would welcome the abolition of the district development grants, the continuation of maintaining the budget deficit at 2 per cent, allocation of infrastructure, the increased funding and the anticipated improvements at the Department of Labour and Employment, and the Internal Revenue Commission. Meanwhile, the Port Moresby Chamber of Commerce said the main thing for them was the absence of new tax measures. “The main message for us is that there will be no new taxes (but IRC function and powers will be strengthened to collect existing taxes),” they said.  “There are tax breaks for the mining sector with a reduced mining levy (a mere K25 million foregone but scheduled to disappear over four years).  “Hard to see this will have the sector overjoyed and hardly likely to bring the investors rushing back. A little, too late perhaps?), reduced export taxes (approximately 14 per cent) on plantation logs for the forest sector, as well as an increase of the tax threshold by K500 to K6000 (this equates to a break of just under K2 per fortnight) for 25 per cent of the working population and a promise of free education for primary and secondary students.’’ The chamber said Sir Mekere has declared his key emphasis in 2002 will be implementation of the Budget. “Given the lethargy in the public service and the havoc reaped by years of political interference this will be a tall task indeed  “Basically, domestic and global constraints have left the government little room to maneuver but major issues have been addressed and minor concessions given where possible.  “Given that this budget is delivered seven months out from a national election, we should be pleased that apart from the ‘free education’ policy, it has remained remarkably restrained.” The Government is projecting a GDP growth of 1.2 per cent, an inflation rate of 8.3 per cent, an interest rate of 10 per cent, a gold price of $US285 a ounce and an oil price of $US23.50 a barrel. This is against a background of GDP declines this year, expected to be minus 3.3 per cent, revised downwards from the 2001 Budget forecast for growth of 3.1 per cent. The Government said the solid contraction reflects deteriorating economic activity in the construction, wholesale and retail trade and transport and communication sectors, attributed to high interest rates, poor infrastructure, crime and lower exchange rates. It said it also reflects the decline in the mining and petroleum sector, intensified by the delays in the PNG to Queensland gas project.

‘No politics in business’ call
Post-Courier, Thursday 15th November, 2001

BUSINESSES in the country cannot afford to pay for wrong politically motivated decisions anymore, says the vice president of the Port Moresby Chamber of Commerce David Murray. Mr Murray said last week there is always an argument business has a role to play and should therefore bear some costs. “I do not believe any business person would seek to disown a fair cost for decisions where they have a role to play in the decision,’’ Mr Murray said at the fifth National Provident Fund employment seminar. “It is a regrettable situation that business usually ends up bearing the cost when politically motivated decisions go off course. “Regrettably, however, business often ends up wearing the costs of decisions where they do or did not have input.’’ Mr Murray cited the recent financial fiasco at the NPF as a classic example, where the employers were asked to pay a 2 per cent levy to help the fund’s recovery efforts. “The 2 per cent levy imposed on employers has been costly and represents an impost, which business can ill afford at this time or indeed any other time,’’ Mr Murray said. “In an environment where job creation is crucial to PNG’s development, we should all seek to minimise employment related charges, not add to them. “Business understands that funding was required to correct the financial status of the NPF. The point I make is that the wider implications of financial mismanagement should be noted. The problem was not fixed when the levy was imposed, other ones were created.’’ The 2 per cent employer levy was imposed as part of the Government’s rescue package for the NPF, which averted a 50 per cent writedown of members’ accounts. Mr Murray said that the historical concept of convincing or enforcing superannuation funds or similar schemes to invest in projects in Papua New Guinea because they are in the national interest is to be avoided. “The concept of the national interest varies between political groups and it is the view of business that politics and business investment do not mix,’’ Mr Murray said. “Politics must stay out of the investment of superannuation funds and all investments should be directed by good, sound investment advice.’’
 

Focus on super

parties involved in the new Superannuation Act must play their role to ensure its successful implementation, says the deputy president of the Port Moresby Chamber of Commerce and Industry. David Murray said last week these stakeholders include employees, employers, business houses, governments and those that are charged with controlling the industry. “This is an essential outcome for the superannuation task force,’’ Mr Murray said at the recent National Provident Fund employers seminar. “Whatever structure is finally established, it will be critical to ensure that all parties, employers, employees, governments, business houses and those that are charged with the potential controls within the superannuation industry all serve their part,’’ Mr Murray said. “Many have been found to be lacking in the past and we must ensure, I think, in all cases that the mindset is changed to ensure a successful superannuation industry in the future.’’ Mr Murray also spoke at length about the Act, raising points both for and against it.  “Looking ahead for the future control of the superannuation industry, I note that the task force will focus their attention in promoting the concept of savings for retirement rather than utilising savings funds through superannuation schemes for other more immediate needs such as housing and school fees,” he said. “It is suggested that such areas can be dealt with from separate savings schemes or capital sources.  “However, the actual issue of dealing with savings in Papua New Guinea is going to take a significant mindset alteration. The concept of long-term saving is not common in PNG. “It is not uncommon for staff to have savings and borrowings against those savings in the same organisation.’’  Mr Murray said to expect the population at large to make contributions to a superannuation fund where access will not be available until retirement is going to take “a significant education program’’. He said that as employers, they are concerned that the lack of access to NPF funds and superannuation funds may lead to staff demands for school fees and housing and if loans are not available, to increased wages. Mr Murray also touched on some of the areas in the new Act that were of concern to business.  He said the issue of retirement benefits payout is important because historically, most payouts have been in the form of lump sums rather than annuity schemes. “This has no doubt, given rise to family demands and wantok pressure to distribute these funds and the earner of the funds is not the person to receive most of the money,’’ Mr Murray said.

THE Government owes Telikom K12 million in unpaid telephones bills, managing director Sunil Andradi said yesterday. Mr Andradi said yesterday the Government has made a commitment to clear that debt by the end of the year and has already started making some payments. He told participants at the monthly Port Moresby Chamber of Commerce and Industry breakfast around K6 million of that amount is current on their 30-day credit notice. The K12 million is about 30 per cent of Telikom’s total debts. Mr Andradi also spoke about how the management has turned the company around from a loss-making outfit two years ago to a profitable operation. He likened these changes to a very sick person, saying when he took office two years ago, Telikom was in the intensive care unit but then it was transferred to Ward 8 and was subsequently discharged and was now recovering at home. Mr Andradi said one of the major contributing factors to the losses was the high level of expenditure and the low level of income. He said that another factor was the depreciation of the kina, which has really hit Telikom’s bottom line. Mr Andradi said that the kina exchange rate fluctuations were hurting Telikom because all its revenue is in kina while its expenses were in US dollars, suffering K15 million in foreign exchange losses. He was appointed Telikom managing director in April last year after numerous changes at both the board and management level. Mr Andradi said when he took over, Telikom was operating on an overdraft facility of K18 million, and employees were not being paid because there was no money to pay them, and international creditors had not been paid for three years. “In 2001, we have turned things around and Telikom is now a profitable organisation, generating cash revenue,’’ Mr Andradi said. He also spoke extensively about the changes that they have undertaken to improve customer service but at the same time appealed to the public to respect Telikom property. Mr Andradi made special mention of solar panels that have continuously been stolen from various repeater stations. He said, so far, Telikom has lost 740 solar panels through theft and vandalism, which would cost K2 million to replace.
 
 

Post-Courier Weekend Edition Fri-Sun  02nd-05th November, 2001
 Itemised phone billing coming

DISCONNECTION of telephone because of non-payment of bills may be a thing of the past when Telikom introduces the new pre-paid phone card system. Telikom managing director Sunil Andradi said yesterday that Telikom would soon be introducing these new products on the market, where customers would buy the cards and make calls from any telephone. He said customers would be able to ring Telikom, and then type in their person identification numbers (PIN) which would be given to them when they purchase the cards. They will be required to punch in the number they want to call and then Telikom would advise them on how many credits they had left. Many people in PNG should soon be getting itemised telephone bills, that is, a break-up of the telephone numbers that are called from a particular telephone, how long the conversations lasted and the cost.
 
 

                    PORT Moresby's powerful business community has raised serious
                    concerns over the latest road projects in the city, allegedly being done
                    without proper tenders during "these extremely hard financial times". The
                    President of the Port Moresby Chamber of Commerce and Industry,
                    David Conn said the latest executive meeting had resolved to take on the
                    National Capital District Commission and demand answers and
                    justification for the road works. "At the monthly executive meeting the
                    continuing concern of the chamber, and we hope the community, was
                    raised on the priorities being applied on major road works," the chamber
                    said. "We fail to see the need, in these extremely hard financial times ...
                    for the work started at the Islander roundabout, the preparations for work
                    on Bava Street, the roundabout at the market area at East Boroko,
                    Healey Parade/Ela Beach and the proposed work to connect through
                    Scratchley Road to Badili," said the PMCCI report. "It is our information
                    that many of these roads were sealed within the last 2-3 years and that
                    traffic flows hardly justify four-lane roads. Can someone in authority
                    please tell us what the reasoning behind this work is? "The chamber
                    wrote to NCDC on 5/9/2001 raising specific questions in regard to these
                    projects which we feel should be public knowledge, but to date has
                    received no response. "In light of the negative reaction, the POMCCI
                    executive further resolved to step up the campaign of protest on these
                    projects, the lack of transparency and the tender procedures being
                    followed. "This could, in the words of George W Bush, 'be a long and
                    protracted affair and we seek all members' support'. This is not a
                    campaign by the chamber against any individuals or particular
                    companies. "We feel strongly that proper procedures of public
                    advertisement and comment, approvals and tendering should be
                    transparent and always be in the interest of the whole community.
                    "Proper procedures will, in the long run, be conducive to securing
                    business for all companies," said the PMCCI statement. The statement
                    has also been published on the chamber's website.
 

THE organisers of the inaugural Hiri Moale business seminar yesterday heralded the event as a
major success.
The seminar, a joint effort of the National Capital District Commission, the Port Moresby
Chamber of Commerce and Industry and the Investment Promotion Authority, attracted a
record number of participants.
They included Prime Minister Sir Mekere Morauta, Acting city manager Bernard Kipit,
diplomats, prominent members of the business community and the general public.
POMCCI president David Conn summed it up by describing the seminar “as a super effort’’.
Topics covered during the seminar covered a wide range of issues.
Several companies participated in a display, outlining businesses in the National Capital District.
 

Wednesday 12th September, 2001
(Post Courier)
Commerce a budget priority
THE development budget for 2002 will consume 37 per cent of the total budget, Prime Minister
Sir Mekere Morauta said yesterday.
He assured the business community that the development budget would not receive less than 37
per cent of the budget.
Sir Mekere said this when responding to questions about the conditions of many of the roads in
the country.
Finance secretary Vele Iamo indicated during the recent National Development Forum that the
Government’s priority areas of health, infrastructure, law and order and education would receive
the same level or increased funding in the budget.
Mr Iamo had said that all other departments were expected to get the same or reduced amounts
compared to this year’s budget.
Sir Mekere said while appropriating funding was one thing, implementing the programmes was
another thing. He said the Government had also seriously taken the recommendations of the
development forum.

Businesses want help
Wednesday 12th September, 2001
(The National)

THE Government should seriously support small and medium-sized entrepreneurs in the National
Capital District, says Moresby South MP Lady Carol Kidu.
In a paper presented at the Hiri Moale business seminar yesterday on her behalf, Lady Kidu
said SMEs would be a potential and practical application in NCD.
She said SMEs ranged from the micro-enterprise of individual street vendors to the less common
cottage industries often based in family enterprise — a lot of them involved in retail business in
the informal sector.
“SMEs in this city must diversify to include processing of raw products to produce value-added
products and better use of waste products,” she said.
“Although this is a fairly insignificant area of enterprise in terms of its contributions to the
economy, it is of major significance to the future of NCD.
“ It is far more than a business issue — it is a human rights issue about sustainable development
for disadvantaged families and communities.”
Lady Kidu said SMEs had the potential to change the image of NCD from a city of increasing
poverty, lawlessness and crime to a vibrant entrepreneurial city reflecting the wide cultural
diversity of our nation in the Melanesian melting pot of its capital city.
“NCD’s population growth combines the natural growth rate with population increase from rural
to urban drift. The city authorities are faced with population expansion greater than its capacity
to provide services and infrastructure.
“An increasing proportion of the population are non-rate payers and it is urgent to reverse this
process by re-establishing planned low-cost housing developments in urban areas as well as
focusing heavily on rural development at the national level to discourage rural urban drift,” she
said.
 

City services put under pressure
Wednesday 12th September, 2001
(The National)

THE high population growth in the National Capital District is placing a heavy demand on
services that are provided by authorities in the city, says Acting City Manager Bernard Kipit.
The total population for the NCD as released by the National Statistical Office recently is
estimated at 253,669 — comprising 138,000 male and 114,000 females.
This, Mr Kipit said means that the NCD alone accounts for almost 5 per cent of the overall
population.
He said the recent census figures show that the NCD population has been growing at an annual
rate of 2.6 per cent. The national growth rate is 3.1 per cent.
Mr Kipit said the NCDC expects the city’s population to rise to 531,000 by the year 2015.
“The urban development and services plan of NCD made future population growth scenarios,
estimated an increase of 2.7 times the 1990 population to reach 531,000 by the year 2015,’’ Mr
Kipit said.
“NCD’s population always had and always will seek more and more efficient means of
converting resources, energy and manpower into useful products and services.
“The high growth rate of population in NCD has placed heavy demand on services provided by
authorities responsible for such services.”
One major problem confronting the city way in direct relation to the population growth is
accommodating these people.
“There are 13,860 or 51 per cent of total households that needs low cost houses in NCD,” Mr
Kipit said.
“These households own some 7216 dwelling as at this point in time, creating a shortfall of 6644
units in NCD for low cost housing On the other hand, high cost housing totals 3598 existing at
present, with a shortfall of 9830 units.
“In total, there are 27,338 householder living in some 12,314 dwelling, sharing an aggregate
shortfall of 15,024 units.
“Given the population growth rate of 2.6 per cent, housing demands is increasing at about 710
units per annum.’’
Mr Kipit said that assuming an average cost of K20,000 per unit, there will be a market of K300
million for the shortfall alone and increasing at 2.6 per cent per annum.
“This is another business opportunity that I will recommend that prospective businessman would
do well to look into as much as possible as the National Housing Corporation and other
government agency alone cannot adequately address this problem, as shown by the continuing
decline in household dwelling through all these years.’’
Mr Kipit also told the seminar that the ratio on vehicles to the city’s population was inadequate.
“The existing passenger vehicle of 9687 serves 19.8 per cent of (the) population or 50,000
people,’’ he said. “The remaining 80 per cent or 203,000 people need public transport, an
equivalent to 1291 shortfall of buses.”
He said the quality the transport system did not deliver to expectations.
“There is a lack of centrally co-ordinated agency monitoring and supervising the operational
process of transportation, resulting in substantial loss on production outcome that has a negative
impact on NCD and the national economy,’’ Mr Kipit said.
 

NCD an opportunity: Kipit
Wednesday 12th September, 2001
(The National)

PORT Moresby can be a thriving and promising investment destination if planned and managed
properly, says Acting City Manager Bernard Kipit.
Mr Kipit told the inaugural Hiri Moale Business seminar in Port Moresby yesterday that this
could be achieved through joint efforts between the City Hall, the National Government and the
private sector.
He said that in the recent past Port Moresby has not portrayed a good and positive image of
itself and the country as a whole, adding 60 per cent of the negative image of PNG was
contributed by Port Moresby alone.
“It is my vision to make Port Moresby a place where everyone, regardless of wealth, gender,
age, race or religion is able to participate, productively and positively in the opportunities Port
Moresby can offer,” Mr Kipit said.
He said that a conducive social and economic environment could be developed successfully
through;
* ACHIEVING political stability between City Hall and Waigani;
* SETTING links with all spheres of government to achieve better co-operation;
* ENHANCED technical co-operate among all spheres of government;
* JOINTLY designed and enhanced investment policies and;
* DESIGN and implementation of effective social policies and programs to absorb those
investment policies.
Mr Kipit said that the NCDC together with the Investment Promotion Authority and the Port
Moresby Chamber of Commerce and Industry were partners in many of the business incentives.
Mr Kipit also said that plans are now underway to set up a Port Moresby Tourist Bureau, with
the guidance and support of TPA.
He said the pool for investment with many opportunities in manufacturing, investment in
large-scale agriculture production projects, transport, housing, tourism, hotels and restaurants.
 

Investor aid promised
Wednesday 12th September, 2001
(The National)

THE National Capital District encourages new investment in the manufacturing industry.
It will facilitate and work to help those companies willing to set up downstream processing
investment in the capital, National Capital District chairman Jamie Maxtone Graham said
yesterday.
Addressing the NCDC’s Business Seminar in Port Moresby yesterday, he said Central Province
also stood by to support the NCDC on helping investors move into manufacturing in the city.
He told the seminar there was ample land in the province for approved investors and a huge
workforce.
“Investment here is vitally needed to stimulate the economy and create employment,” Mr
Maxtone-Graham said.
“Due to urban migration from all other provinces in PNG, Port Moresby has one of the largest
population growth rates, percentage wise in the world today.
“We also have one of the world’s highest unemployment rates — we have an estimated
unemployment rate of 60 per cent — there is no welfare safety net, no dole or unemployment
benefits. The city had a huge and willing workforce to take advantage of,” he said.
 

 Unemployment rate in Port Moresby at 60 per cent
Wednesday 12th September, 2001
(The National)

 By LUCY KAPI
 Port Moresby has an estimated unemployment rate of over 60 per cent
 with no welfare safety net and no dole or unemployment benefits,
 chairman of the National Capital District Commission (NCDC)
 management advisory committee, Jamie Maxtone-Graham said
 yesterday.
 It is because of this figure that that PNG is a country with one of the
 highest unemployment rates in the world, he said in his opening speech
 at the one-day NCD Business Seminar held in conjunction with the Hiri
 Moale Festival this weekend.
 "When statisticians speak about unemployment in countries such as
 America and Australia, they talk of an eight per cent unemployment rate
 as extremely high, and a 12 per cent unemployment rate as disastrous,"
 Mr Maxtone-Graham said, drawing comparison with the estimated 60 per
 cent unemployed in Port Moresby.
 He said many people only survive through the traditional system of family
 relations and "wantoks", which means those people who do have jobs
 support their unemployed relations and friends financially.
 Acknowledging the well-established informal sector, Mr Maxtone-Graham
 noted that many young children owe the food they eat, and the
 opportunity for education to a mother or relative who sits in the hot sun all
 day by the roadside or at a market place selling betelnuts, fruits or
 vegetables and cigarettes.
 In a way, he said "this means to a potential investor, that we have a huge
 willing work force available - a workforce which is willing to work long
 hours, in hard jobs, for salaries which by international comparison, are
 extremely competitive".
 He said the NCDC welcomes sincere investors and is willing to facilitate
 the setting up of businesses, especially those in high employment
 areas.
 However, Mr Maxtone-Graham said, the NCD has in the past seen too
 many businesses simply engaging in retailing, wholesaling and fast food,
 selling mostly imported products. These companies produce little real
 value-added output which benefits the people of Port Moresby.
 "What we need is genuine companies, with expertise and financial
 resources to manufacture goods, especially down stream processing,
 and to enter into primary production areas.
 "We need manufacturers of tools, cooking and eating utensils, clothing,
 cooking oil, shoes, ice cream, chocolate and sweets, furniture. We need
 dairy farms, aquaculture projects and small goods producers," Mr
 Maxtone-Graham said.
 He noted that the Central provincial government has indicated its
 willingness to support the endeavours of approved investors with its
 ample land and an even larger workforce than the national capital, which
 the province surrounds.
 Referring to the development of tourist attractions in the city, Mr
 Maxtone-Graham said the NCDC and Central provincial government will
 seriously consider any sound proposals to revive the NCDC's Sea Park,
 which closed down years ago, and other islands- or bush-based
 eco-tourism projects.
 "When serious investors are identified, and facilities are in place, the
 NCDC and Central Province are prepared to launch a major public
 relations and advertising campaign to attract the visitors to make the
 ventures profitable," Mr Maxtone-Graham said.

 Monetary, fiscal stability a must for investments: Maue
Wednesday 12th September, 2001
(The National)

 Price and budgetary stability is necessary for a conducive investment
 climate, said Secretary for Department of Trade and Industry, Michael
 Maue yesterday.
 "Monetary and fiscal stability remove the most important of all obstacles
 to growth," Mr Maue said when presenting his paper, "Overview of Key
 Government Economic Policies", at the one-day National Capital District
 Business Seminar.
 Based on the central bank's semi-annual monetary policy statement and
 the Government's progressive implementation of the 2001 fiscal
 framework, Mr Maue explained that these policy instruments are
 constantly being realigned.
 Monetary policies contribute to the country's economic growth through
 the maintenance of macroeconomic conditions which are conducive to
 investment, he said.
 This contributes to optimism that is passed on to the people in the form
 of lower interest rates for borrowings from banking and financial
 institutions.
 "It has to be noted however, that while monetary policy is one of a
 number of economic tools that can be used to promote financial stability
 and contribute to economic growth, it has limited potential by itself to
 increase economic growth or employment over the long term," Mr Maue
 said.
 As such, to achieve sustainable growth in the medium- to long- term, the
 Government has to adopt other macroeconomic policies.
 This includes putting up transparent procedures and guidelines to
 facilitate a smooth inflow of foreign direct investment through its various
 agencies.
 "These include registration, employment permits and visa requirements,
 land issues, environment concerns, statutory requirements such as land
 and building board, trading licenses and so forth," Mr Maue said.
 Some investment promotion factors need time to be put in place and
 therefore requires both the Government and the private sector to hold
 regular dialogues to work out how to ensure and cushion the growth of
 the private sector, he said.

 POMCCI committed to promoting business: Conn
Wednesday 12th September, 2001
(The National)

 The Port Moresby Chamber of Commerce and Industry (POMCCI) will
 continue to promote business activities in the nation's capital as it is the
 centre for business and bureaucracy with good growth prospects over the
 next 10 to 15 years.
 POMCCI's president, David Conn, said this when urging members of the
 business community to clearly express their views on issues like the
 National Government's structural adjustment program.
 This is because these policies have an impact on the operations of
 existing companies as well as on the amount of investment entering
 PNG, he said in his presentation at the National Capital District Business
 Seminar yesterday at the Crowne Plaza in Port Moresby.
 Mr Conn said the business community was looking forward to a reduction
 in the cost of finance and of doing business in PNG.
 "The exchange rate has remained reasonably stable and we look forward
 to a continued decrease in interest rates and inflation," he said.
 He said industry has been adversely affected by the cost burdens caused
 by "crumbling infrastructure everywhere" and planned increases of 44 per
 cent in electricity costs and other charges.
 "Businesses can adapt to reasonable price hikes and if it can properly
 budget and plan for them, it can often negate the need for passing on the
 total increase to the consumer," Mr Conn said.
 The chamber currently has 123 large, medium and small companies
 affiliated to it.

     Port Moresby is the first and sometimes only impression of Papua
New Guinea the rest of the world gets.But Port Moresby is so
estranged from the rest of the country that perhaps it is time to
move the city somewhere else.  JOHN HIGHFIELD:

There's a saying that you should never judge a country by its capital
city, and as Richard Dinnen's letter from Port Moresby proves, that's
certainly the case in Papua New Guinea.

RICHARD DINNEN: Frank Sinatra once sang of New York as the city that
never sleeps.  And if Ol' Blue Eyes had ever been moved to sing of
Port Moresby he might've called it the city that never works.

It moves in such a curious and surreal fashion that I often wonder if
the plane that brought me here two and half years ago got lost and
accidentally landed in a Monty Python sketch.

At the side door of Parliament House today I saw a beautifully
crafted sign urging me to please look after the Parliament by putting
my rubbish in the bin provided. There is no bin.  Perhaps there
never was, but the sign remains with a small pile of cigarette butts
and other detritus carefully camouflaged in the flowerbed behind it.

Driving in Port Moresby is a study in casual anarchy.  Slow vehicles
use left lane, proclaims the sign on the steep climb over the Pora
Parena Hill [phonetic]. Not surprisingly, the slow vehicles are all
in the right lane, some of them running out of steam and beginning to
roll backwards.

The rev-heads meanwhile roar up the slow lane going very fast indeed,
which in Tok Pisin is known as give him 60, but it is hard to give
him sixty in Moresby these days thanks to an awful plague of road
works which proceed without warning signs or crash barriers.

Just battered old oil drums scattered around as road blocks but not
necessarily in the right places.  It's all too easy to finish up
driving into a recently excavated trench.

At one point I come upon a sign announcing a detour, turned upside
down so its painted arrow actually points in the direction one should
detour to.  But the accompanying word, now upside down and backwards
delivers the deliciously ambiguous message, rooted.

Like all capitals, Moresby is home to a bureaucracy.  We see its
members getting about but rarely do we see the result of their
activity.  They are present and absent in the same moment.  It's much
like Major Major, the character in the novel Catch 22, that one could
only go and see when he was out.

A telling episode.  The ABC's trusty work car was recently stolen,
and to comply with the law I had to obtain a police crime report.
This required me to get to the town police station to obtain the
reference number, and then travel without a car or reliable public
transport, eight kilometres to another station to pay the fee and
then travel seven kilometres to get another police station to get the
treasured document.

When I asked the senior officer why all this could not be done in one
place, he smiled and said, that would never work.

One of the strangest things about Port Moresby, and it's something of
a metaphor for the town, is that it's not connected by road to
anywhere else in the country.  Unless you can afford to fly, and most
can't, then you can't get anywhere from here.

It's a city totally disconnected from the rest of the country, and
that sense of dislocation is part of the town's identity.  People
from all over Papua New Guinea live here, but it's not their place.

For the vast majority of its citizens, Papua New Guineans and
ex-pats, Port Moresby is where our feet are, but our hearts and souls
are somewhere else.  So nobody seems to care all that much if the
town works or what impression it gives to the rest of the country, or
to the rest of the world.

But we do not wake in fright and ask ourselves, why are we here?
Instead we ask, why is Moresby here?  Maybe it's time to move it
somewhere else.

7/08/01 12:45:42 | The World Today
 

Small-time business people like street vendors from around the country will have an opportunity to conduct their business in a safer
regulated environment if a new proposal comes through. The proposal by Robert Aisi, of Fiocco Posman Aisi Lawyers,
seeks to protect the rights of the vendor from harassment. Speaking during the closing of a workshop funded by the Asian
Development Bank yesterday, Mr Aisi said he was looking at setting up a legal framework that would enable vendors to learn
about their rights and responsibilities.
The base of this proposal includes the setting up of a trust fund to assist the Office of the Public Prosecutor to represent vendors who are victims of law-enforcement agencies.
Other groups to assist in making this proposal work would include non-governmental organisations, churches, and the private sector.
The workshop was held to review constraints to development in the informal sector and to encourage its growth.
President of the Port Moresby Chamber of Commerce David Conn said the proposal has the support of the business community
but he hoped that the trust fund is short-lived because the issue of harassment is to do with people’s behaviour.
He said once people changed their behaviour there would not be any need for such a trust fund and the vendors — some of whom
rely wholly on their sales to survive — can operate without being harassed.
Participants in the workshop came from a wide section of society including the private sector, government institutions,
non-government organisations, educational institutions, women, youth groups and others.
 
 

The man at the centre of the crisis is the PNG Prime Minister Sir Mekere Morauta.

COMPERE: Well the man at the centre of this crisis is the Prime Minister of Papua New Guinea, Sir Mekere Morauta. When I spoke to him on the phone from Port Moresby a short while ago he was sounding as tired as you might expect after days and nights of constant crisis.

Sir Mekere Morauta lets begin with the question of the police and the shootings. Do you personally believe the police account that they didn't, that they're not responsible for the three fatal shootings?

MEKERE MORAUTA: Mark at this stage the situation is very unclear and I prefer that we don't dwell on those issues and, you know, because I'm urging the nation to look forward and avoid incidents like that in future, particularly when national issues are being addressed.

COMPERE: But how can you look forward when the feeling on the street is so clearly bitter and angry about what has happened in the very recent past?

MEKERE MORAUTA: Well actually the place of the protest had, had been vacated and what happened later on appears to be burning down of a, of business houses and private houses and the police, and it slowly became really [inaudible], it really became criminal acts and I think, I suppose police had to intervene. And what actually happened I not very clear.

Tomorrow I shall be announcing the establishment of a commission of inquiry.

COMPERE: Yes I understand the police Minister Jimson Sauk has already announced that there will be an investigation. But how independent will the investigation be?

MEKERE MORAUTA: Mine is a commission of inquiry and it will be chaired by, I hope, one of the judges, one of our important senior judges.

COMPERE: So your hope would be to remove it from the hurly burly of the street fighting and allow people a little time for pause at least?

MEKERE MORAUTA: Exactly yes. It's very tense and, you know, we've lost two university, three university students. It's a, it's a terrible thing to have happened.

COMPERE: To what extent are you yourself as Prime Minister able to get out into Port Moresby? What have you actually seen with your own eyes?

MEKERE MORAUTA: I, I have driven around a little bit and I am having people coming to me all the time. It seems to be okay but still very tense.

COMPERE: Is it fair to say that what led up to this can be sheeted home at the very least through a failure of communication on your part? That you haven't, you may have been able to convince the World Bank and the IMF, but you haven't been able to convince the people of the need for reform?

MEKERE MORAUTA: I have been doing it for two years and I think, I think, again I don't really want to go into this, because nobody really knows, but there's a feeling that, that it is more than that, you know, just a, there was some forces behind.

COMPERE: Can you tell me anything more about what you mean by that?

MEKERE MORAUTA: I don't really want to go into that because I'd rather that, that a more systematic investigation.

COMPERE: There have been allegations that other politicians have been deliberately stirring things up. Is that what you're referring to?

MEKERE MORAUTA: There are stories going around like, you know, and others as well, and I, at this stage it's, you know, it's not for me to say. I'd rather that the, that this matter be investigated with other rumours.

COMPERE: But do you not see the root cause of this as anger and fear about privatisation and land registration?

MEKERE MORAUTA: There is no land registration, never.

COMPERE: Why do people think that there is? Why is there such a widespread belief and fear about it?

MEKERE MORAUTA: I don't know, I mean, I, this is the question I am asking, I mean I, there's no government decision nothing. Who drummed up this and used it, I don't really know and privatisation I've been talking about it for two years.

And if, you know, we all know, you know, that government businesses here are seeds of corruption, inefficiency, and what's government's priorities - hospitals, schools, law and order, roads, you know, instead of putting money into banks where the services can easily be provided and are being provided by private banks. These are very obvious issues.

Again distorted, deliberately or not, I'm not sure.

COMPERE: You sound, you sound like a frustrated man. You sound as though you have been trying to get these things across but you have failed to get these things across.

MEKERE MORAUTA: I don't know when I have failed. I think, I think it's more than that. I think people are using this, you know I haven't failed at all, I mean, I think people, other people have views and other forces are using but knowing the potential attractiveness of it as a public issue, populist issue.

COMPERE: You have in your time in office been trying to create a more stable parliamentary and democratic system in Papua New Guinea. How dangerous is the situation now for stability and democracy?

MEKERE MORAUTA: Well the constitutional amendments which enshrined the integrity of political parties, that's, that's through so the foundation is there for, for some political stability.

My biggest problem is the economic stability, and, and we are long way away from laying the foundation for stable growth and stable development.

COMPERE: How much longer do you need? I mean do you think that you're going to get the time that you do need?

MEKERE MORAUTA: The seeds are sown, really, given maybe another year, year-and-half, two years.

COMPERE: And in the mean time you have to get through the next couple of days. Can you do that? Do you think that this is going to calm down, go away?

MEKERE MORAUTA: Difficult situation to, to predict, but the outward signs are that, that the calm is being observed, you know, the place is calm and people are going normally and, but it's difficult to tell.

COMPERE: Difficult to tell indeed. Papua New Guinea's Prime Minister Sir Mekere Morauta, and a few minutes after I recorded that interview with him our correspondent Richard Dinnen rang to tell us that there was fresh shooting on the streets of Port Moresby.
 

Economic damage
The Post Courier, Thursday 28th June, 2001

BUSINESS houses in the National Capital District stand to lose millions as a result of the current protests, says the Chamber of Commerce and Industry. While several businesses were directly hit through damages to property, others suffered as a result of loss of business. Other activities that are likely to be affected are the marketing efforts for the PNG Gas project and the roadshow conducted by partners in the Ramu project to secure a third party for their project. Businesses that had their properties damaged were Big Rooster, Steamships Trading, Shell and Mobil. The gas project is in the process of very sensitive negotiations as it tries to secure customers in light of stiff competition from the Timor Sea gas project. Officials on the gas project offered no comments when contacted on how the unrest may affect their marketing efforts. Port Moresby Chamber of Commerce and Industry president David Conn said while it was too early for its members to assess the actual loses and damages in monetary terms, it was expected to run into the millions. Steamships managing director John Dunlop said it was still too early to assess the total loss to their business but they expect the damages to their Gerehu properties to be around K100,000. Apart from damages to the Associated Distributors shops at Gerehu, their Kwikshop outlet at the Erima Mobil Service station was broken into during the protests on Tuesday. Mr Dunlop said yesterday that three of their shops were operating yesterday and while goods were selling very fast, especially rice and tinned meat, they were concerned about how to get new supplies from the warehouses in Gerehu. Most businesses were closed on Tuesday and yesterday, those that were open had fewer staff than normal unless they organised pick-ups. Many shops were opened yesterday but there were long lines as people waited to get into shops. Most of the banks opened yesterday morning but several were closed after a couple of hours. There was not much of an impact on the PNG stocks on the Australian Stock Exchange. Trading was normal at Port Moresby Stock Exchange.
 
 

  By ESTHER HARO
FORTY-ONE people were bestowed Silver Jubilee commemorative medals yesterday for services rendered to the commerce and industry sector and for contributing to the country's progress. The Government nominated the recipients. Among the recipients were Chevron Niugini executive Dr Moseley Moramoro, president of the PNG Chamber of Commerce and Industry Michael Mayberry, managing director of Loloata Island Resort Dik Knight, and The National's executive editor Ian Boden were among the recipients. Journalist Ruth Waram was the only female recipient. The presentation took place at the ToRobert Centre with speeches from the Governor General, Sir Silas Atopare, Mr Mayberry, president of the Port Moresby Chamber of Commerce and Industry, David Conn and Acting City Manager Bernard Kipit. Sir Silas congratulated the recipients saying their role in shaping the country needed the highest recognition. He said the PNG Chamber of Commerce needed to be honoured for its dedication and contribution to the country. Mr Kipit said Port Moresby had progressed because of the support of a vibrant commerce and industry sector. "It is because of you all that commerce and industry has thrived in the city in the last 25 years," he said. "Your contribution to our city cannot be denied as a major contributing factor to the new developments the city is now enjoying. Mr Mayberry said it was time to reflect on how far the country had progressed, where it was heading and to look at the unfairness and abuses of systems. "We should be looking at ways of addressing these issues so that the country could go forward," he said. "PNG has great wealth and potential but we need hard effort from everyone."

 A GENERAL election is not due in Papua New  Guinea for another 12 months but you would  not know it if you were living in Port Moresby.  Political parties and intending candidates have  already started campaigning, and, more  importantly, raising funds and forming  alliances. Under a new law passed last November, PNG's  notorious ''yo-yo'' politicians are supposed to  have been reined in by legislation called the  Integrity of Political Parties and Candidates  Bill. This legislation is unique in the world in that it  tries to regulate the behaviour of individual  politicians by forcing them to vote according  to the wishes of their political parties on such  issues as the election of a prime minister, the  Budget and votes of no confidence.    If they fail to follow the wishes of their political  parties, procedures are in place for their  automatic sacking. In PNG, politicians fear only two things: losing  their seats and retribution from God, and in  that order. But none of the current and aspiring crop of  politicians seem fazed by the new legislation.  Many believe that it is so full of loopholes that  it will be a nightmare trying to implement it. Senior politicians such as Sir Michael Somare  and the Speaker of the National Parliament,  Bernard Narokobi, have publicly said that the  law will not stop the ''yo-yo'' politicians. With people having lost faith in the Integrity  Bill, the political game in Port Moresby  continues to be the various ''strategy  meetings'' held in homes of senior politicians. These meetings, which are ostensibly for  dealing with the nuts and bolds of the coming  campaign and for preparing various election  strategies, are all being conducted against the  background of an increasingly fractured polity.  In the past month alone, two new political  parties have appeared on the scene.

 First, former minister Peter Yama launched the  People's Labour Party in his home base of  Madang. This was followed quickly by the the  PNG Labour Party, launched by the PNG Trade  Union Congress.    Another group has resuscitated the previously  moribund PNG Country Party.

 ALL THREE parties appear to be united by their  desire to deny Sir Mekere Morauta a second  term and to put a halt to the privatisation of  state-owned enterprises. If this were not  confusing enough, the ''yo-yo'' politicians have  continued to add to the instability.    The ruling party, the People's Democratic  Party, (PDM) announced that several MPs had  defected to join their ranks, bringing their  numbers to about 75 MPs, more than the 60  required to form government. The Advance  PNG Party, led by a former deputy prime  minister, John Pundari, dissolved itself and  joined PDM pressure was put on Pangu Parti to  do the same, but the MPs refused. The big loser in this process has been the  National Alliance Party founded by Sir Michael  Somare, PNG's first prime minister. Not only  was NA unceremoniously kicked out of  government, one of its most senior minister  quit the party, declare himself independent,  and then announced he was continuing on as a  minister in the Morauta Government. NA came out fighting and declared ''war'' on  PDM, but most observers will tell you that NA  is running on empty, for now at least. However, only a fool would rule out NA making  a comeback the Somare name has a  recognition factor in PNG rivalling that of  Coca-Cola or South Pacific Lager.

 And lastly, Sir Julius Chan, the PM who was  forced out in 1997 as a result of the Sandline  crisis, is making a comeback. His People's  Progress Party (PPP) has officially severed ties  with the PDM and announced that Sir J (as he  is fondly called in PNG) is back as interim PPP  president.    Although Chan lost the 1997 election, he is still  regarded as a good campaign manager, and if  anyone can revive the PPP's political fortunes,  it is Sir J. In addition, Sir J's millions will come in handy  for the elections.    Elections in PNG are notoriously expensive,  with the ''cargo cult'' mentality prevalent in the  rural areas. No candidate has ever won a rural  seat without ''cargo'' for his voters. The one party that has kept a relatively low  profile in the past month has been the People's  National Congress, led by former prime minister  Bill Skate. Other than a few press statements  faxed to the local newspapers here, PNC has  not done anything at the grassroots.    Skate has just returned to PNG after spending  a few months in Brisbane recuperating from a  heart attack. Despite this, he is still popular in  the settlements and is widely expected to be  re-elected. He is also widely expected to form  a new political party given that the PNC has  run out of steam. Skate will not be the only one forming a new  political party. There are persistent rumours  that two factions in PDM will soon announce  the formation of new political parties. Some  ''big men'' who lost in 1997 are also planning to  establish new political parties. In summary, it's  party time in PNG.

Papua New Guinea Seeks Buyer for 51% Stake in Its Biggest Bank
2001-05-02 21:57 (New York)

 Hong Kong, May 3 (Bloomberg) -- For sale: A bank with a sizable loan portfolio, a large deposit base and an extensive network. There's just one hitch -- it's in a country known for army rebellions, mercenaries and separatist movements. The advertisement in the Asian Wall Street Journal is trying to lure foreign investors to Papua New Guinea, a former Australian colony which shares half an island with the Indonesian province of Irian Jaya. Buyers have until June 15 to bid for 51 percent of Papua New Guinea Banking Corp., the nation's largest bank. Final bids are due by the end of August. The sale is part of a plan the government of Prime Minister Mekere Morauta brokered with the World Bank and the International Monetary Fund in return for loans to help boost the Pacific nation's economy. ``If Mekere can privatize even one state-owned enterprise, it will be his biggest prize since coming to power,'' said James Chin, head of political science department at the University of Papua New Guinea. Morauta, who took power in 1999, inherited a country rife with violence, separatism and political turmoil. Last month, he was forced into hiding after about 100 low-rank soldiers stole weapons to protest against the influence of the World Bank. The resource-rich nation, which has more than 700 local languages -- some confined to single valleys in this mountainous country -- has been ruled by a series of unstable coalitions. No government since independence in 1973 has lasted a full five-year term, and four have been voted out by no-confidence motions.

    Hired Guns

 Four years and two governments ago, the then-prime minister was voted out during an inquiry into a contract with foreign mercenaries to quell a rebellion on Bougainville, a copper-rich island 800 miles northeast of the capital Port Moresby. That rebellion continues. Meantime, economic pressure mounted as the country's currency, the kina, lost 40 percent of its value in the past three years. Morauta's government initiated talks with the IMF and World Bank to tackle the country's economic woes. It pledged to improve governance, transparency and efficiency in the public sector and to sell state assets. It's selling 49 percent of Air Nugini -- though that's been delayed indefinitely -- and now Papua New Guinea Banking Corp. is on the block. The bank, with 20 branches, 55 automatic teller machines and about 2,000 employees, accounts for 40 percent of the nation's banking assets, according to the information prepared by KPMG International, which is managing the sale.

    New Management

 It lost 30 million kina ($10.2 million) last year compared with a profit of 5.4 million kina the year before. So far this year, the bank is making a profit, said David McDougall, a director at KPMG in Australia. The bank has 1.2 billion kina in deposits and loans of about 550 million kina. It's under new management. The central bank fired the board last year due to ``prudential deficiencies,'' news-service Asia Pulse said, though Chief Executive Aho Baliki stayed on. ``It's expected that the bank will be sold to a reputable financial institution of international standing,'' said Graham Barrett, spokesman for the World Bank in Australia. ``No domestic investors are likely to meet the expected criteria.'' Buyers could include Westpac Banking Corp., Australia New Zealand Banking Group or Malayan Banking Bhd., which all have businesses in the country. Westpac earlier this year spent A$20 million doubling its stakes in banks in Samoa and Tonga to boost its presence in the Pacific. Its bank in Papua New Guinea is the country's oldest and has 18 percent of the country's banking assets. Westpac spokesman David Lording declined comment on whether the bank would be interested in bidding. ``We haven't seen or examined the official documentation,'' he said. ANZ spokesman Paul Edwards also declined comment. Still, there's some ways to go. The sale ``will be a major step,'' Chin of the University of Papua New Guinea said. ``The problem is, nobody here believes that it will happen.''

Canberra Times, 23 Apl 2001
Plans to privatise publicly owned enterprises have hit a snag, with buyers proving difficult to find, as JAMES CHIN reports from Port Moresby.
Papua New Guinea's hot political potato
 JAMES CHIN

THE PRIVATISATION game in Papua New Guinea is in full swing. Twenty-two months into its term, the Government of Sir Mekere Morouta has committed itself to selling off almost all the major state assets in order to balance the books and save PNG from economic disaster. The World Bank and IMF support this policy as they see it as the only way to eliminate the massive inefficiency, incompetence, blatant corruption and political interference in state-owned enterprises (SOEs).  Past governments and ministers have used these SOEs as personal cash-cows and places to appoint political cronies on outrageous salaries and benefits. Many chief executive officers of these SOEs are paid at least Kina500,000 (about $A300,000) annually (the average public servant earns about K300 a fortnight), and some CEOs have been the beneficiaries of housing loans for which they were not eligible or which were never repaid. The end result is that almost all the SOEs today are bankrupt or, at the very least, all technically insolvent. Top of the Government's priority list for sale are: Air Niugini, Electricity Commission, Post PNG, PNG Banking Corporation (PNGBC) and its associated companies, PNG Harbors Board, Telikom PNG, Investment Corporation and water and waste services. Events in the past month show just how difficult the privatisation process is, throwing into doubt the entire plan. Air Niugini was supposed to be the catalyst for privatisation: the Commission confidently announced in January that a preferred overseas bidder for 49 per cent of the national airline's share would be announced in March. March came and there was a delay. Just before Easter, the Privatisation Commission announced that the sale was "on hold" until further notice.  What happened? On the surface, Air Niugini looks like a good buy. It has many unused international routes and a virtual monopoly on key domestic routes. But a closer look at the books shows Air Niugini is loaded with huge debts and is losing millions on its international routes.  A potential buyer would not only have to deal with the debts but will have to inject millions to buy new planes and upgrade the old ones. On top of this, Air Niugini's militant unions have extracted a guarantee that no firing will take place for at least 18 months after a sale. Who would want to buy a bankrupt airline, deal with militant unions and not get full management control? One option to make Air Niugini more attractive to investors is to separate its international routes from its domestic operations. The domestic routes have no problem in turning a tidy profit.

 Bank sale the key

 Nobody in Port Moresby believes the spin by the Privatisation Commission that the sale did not proceed because of the "rapidly deteriorating international airline industry". The fact is no-one is willing to buy at the current terms. A far bigger problem may be the sale of PNGBC, potentially the most profitable entity, and hence politically the most sensitive. Bringing PNGBC to the point of sale is one of the conditions imposed by the World Bank for the release of badly needed loans to prop-up the Kina.  A long-running legal dispute between PNGBC and the Motor Vehicle Insurance Trust had prevented the Government from issuing a prospectus for PNGBC. Fortunately, the dispute was settled just before Easter. The Privatisation Commission wants bids for PNGBC now that Cabinet has endorsed its sale. This will ensure that multi-lateral loans will arrive to help bolster the Kina. The PNGBC is a hot political potato because whoever becomes the owner will end up as the de facto owner of almost all the big SOEs. Most SOEs run huge overdrafts with PNGBC just to keep their operations going, on top of the huge outstanding loans. In theory, PNGBC could take out an order to close any one of the SOEs. More importantly, all the major political players have taken out personal loans from PNGBC at one time or another. These loans were granted on political and not commercial criteria. Many of these politicians and their cronies have not repaid their loans, being either unwilling or unable, and will be vulnerable to pressures by the new owners of PNGBC. For months the speculation is that a consortium led by the former prime minister, Pias Wingti, will end up as the preferred bidder for PNGBC when it comes on the market. Wingti, whose People's Democratic Party (PDM) is the main power-broker behind the Morouta Government, is planning a big comeback next year after losing his Highlands seat in the 1997 elections. If Wingti gains control of PNGBC, it will be a major boost to the PDM party and his open quest to become PM again. In the final analysis, all the political manoeuvrings behind the privatisation game may amount to nothing.

 The current talk in Moresby is that the Privatisation Process is doomed. First, an election is due in mid-2002, and if the current government is replaced it is almost certain that the privatisation process will be halted or, at the very least, die a slow death. The other major political parties are keeping silent on the issue, knowing the unpopularity of the issue among voters. The PNG Trade Union Congress, the most vocal opponent of the sale of national assets, is in the final stages of establishing a political party to fight the 2002 elections. In the unlikely event it gains the balance of power, privatisation will grind to a complete halt.

 Dr Chin is Associate Dean of the School of Social Sciences at the University of PNG. Jchin@upng.ac.pg

Thursday 22nd February, 2001
Efforts impress Aussie expert

AUSTRALIAN team leader for the National HIV/AIDS support program Dr David Elkins is impressed with the National Government and the churches for their response and support towards the epidemic. Dr Elkins told business executives gathered during a HIV/AIDS program luncheon sponsored by the Chamber of Commerce in Port Moresby that he had never been impressed with a country until he got to PNG.
He said in all the countries that he had worked for, no major assistance by a government was given to any HIV/AIDS awareness program like that of this country. “I am very impressed with the PNG Government especially with their response towards the HIV/AIDS awareness project. Churches are also very involved and I’ve never seen that kind of tremendous help in other countries. We have an organised manner, in which the issue is dealt with, not like other countries,” he said. “Also in PNG, there are much clearer strategies in place
compared to the countries I’ve worked in.” In response to recent reports of Health Secretary Dr Puka Temu raising concerns over the incapacity of line agencies to implement the multi-million kina donor funded HIV/AIDS program, Dr Elkins said they expected that to happen, however, assured that would not deter the project to continue nor deter their assistance as that was how they operated. This was after AusAID had pumped in K100 million into the five-year HIV/AIDS project, the National Government committed K1.34 million, UNDP gave K500,000 and recently the European Union allocated K11.5million.

The World Bank and the Papua New Guinea Government yesterday reached a truce after the Government effectively expelled the bank's representative in Port Moresby.

The fallout from the disagreement includes the postponement of  the next meeting, co-ordinated by the bank, of international aid
donors - including Australia - that was to have taken place in Madang in two weeks. The bank has conceded the expulsion of its PNG co-ordinator,  former Queensland Treasury director Mr Dan Weise, who was accused of political interference. But he will continue to be a consultant to the bank's regional office in Sydney.

The intensity of the debate, and of the concern aroused in the business world, underlines how crucial PNG's relationship with the bank is to the recovery of the country's international credibility.

The World Bank's regional director, Mr Klaus Rohland, spent three days in Port Moresby last week in talks with senior officials and the Prime Minister, Sir Mekere Morauta. As Mr Rohland was  flying back to Sydney, the PNG Government said that the relationship with the bank was fully back on course, with PNG's concerns addressed and the bank endorsing the progress of its reform program.

The bank, however, believed this was at best a misreading, and issued a statement that "a number of important oustanding issues need to be resolved satisfactorily" before PNG received its next instalment of funds due under the structural adjustment program negotiated jointly with the International Monetary Fund. The Government responded to this statement, and the two institutions issued a new joint statement yesterday, that left open the status of the bank's future representation in Port Moresby, which PNG wanted upgraded.

Where the bank's statement of Friday said: "While progress has been made in the past year, the unfinished agenda remains great", yesterday's joint release stressed the "substantial progress made by the Morauta Government during the short period that it has been in office [20 months]".

But it noted that disbursement of further funds under the adjustment program awaited further progress. The relationship between bank and government is intact but bruised. The long-suffering PNG business community will be settling back nervously this week after yet another alarm, unexpectedly from a government in which it had expressed confidence. The weekend's outcome underlined the extent to which the institutions and countries dealing with PNG recognise the Morauta Government as representing the country's last hope.