PNG Heading for Recession
08 May 2020
| Business Advantage PNG | Edited extracts
PORT MORESBY – Economists are forecasting a recession in Papua New Guinea in 2020 as the country struggles to deal with the global crisis caused by the outbreak of the COVID-19 virus.
The ratings agency Standard & Poor’s has also downgraded the country’s debt.
A report by ANZ Bank predicts that the PNG economy will be in recession in 2020, contracting by 2.6%. It says government expenditure will increase to ‘an all-time high’ of K19.3 billion, while revenue will fall by K2.5 billion. “The PNG government will have a shortfall of K1 billion in petroleum taxes and dividends, which, in turn, is due to a collapse in oil prices,” the report said. “We believe another K1.5 billion of projected overall tax revenue won’t be realised due to a lacklustre economy.
“The shutdown of the Porgera gold mine while the operator, Barrick Niugini, pursues a legal challenge to the government’s decision not to extend its special mining lease, along with disruptions at the Kainantu gold mine due to landowner disputes, will impact revenue.
Porgera Gold Mine
Business Advantage PNG (Paul Barker)
PORT MORESBY – There will be repercussions from the Papua New Guinea government’s decision not to renew the special mining lease on the Porgera gold mine. The Porgera valley is a very complex place, with communities long vying for control. Anyone treading in it should do so lightly, with thorough consultation and knowledge of that situation and avoiding disruption.
Barrick and its predecessor, Placer Pacific, had their difficulties over the years, with criticisms on social and environmental grounds, most of which the company denied.
However, the company effectively became the authority and the provider of jobs and all government services in the valley, which had a small population when it started over 30 years back and is a burgeoning community now….
Whatever the merits of the PNG government takeover or transfer plans for the Porgera mine, they will require very considerable preparation, capital, staffing and logistics to put into effect, all of which will take time and effort, and resources, which are not in great supply right now….
The government’s aspiration for taking control of PNG resources and the economy is understandable, in terms of the major overseas (and some local) resource grabbing over forests, land, marine resources, and even small businesses and jobs over recent years, and in the face of the major disappointment over the surprisingly low revenue from the extractive sector by the mid-2010s, when the government envisaged major revenue flows and planned major public expenditure….
It seems critical that a lot more dialogue is needed and an amicable outcome that does not jeopardise the limited harmony in the Porgera Valley, does not disrupt operations, employment of revenue unduly in 2020 and which does not further undermine shaky investor confidence in PNG.
Transparency to examine bias in PNG press
The question that has been asked by the public is; to what extent is there a bias in the media on governance issues, and more importantly, will it matter in the next major national event, e.g., the current Covid-19 emergency or the 2022 general elections?
To address this question, TIPNG looked at media trends on how the daily newspapers in PNG report on governance.
In PNG, most people rely more on print media than social media for their daily dose of current affairs and information. For this reason, understanding local print media story choices and general trends is important.
While PNG has enjoyed a relatively free media this has been under threat in recent years.
For instance, the 2020 Reporters Without Borders (RSF) world press freedom index assessed PNG to have a press whose independence is ‘endangered’, with a corresponding drop of eight places in rank since last year. Interestingly one of the reasons cited by RSF for the diminished ranking is that “Journalists nonetheless continue to be dependent on the concerns of those who own their media.”
The threats to PNG’s media freedom are most obvious when it comes to major national events that require objective reporting in the public interest.
Recent instances where the ability of the media to report have been hampered by other interests (often political) include the 2017 national election, the 2018 APEC leaders’ summit, the 2019 political transition and the 2020 Covid-19 public spending issue. Journalists in PNG are further disadvantaged by the lack of Right to Information (RTI) legislation to enable them to obtain public documents from the State. In the absence of a RTI law in PNG the media outlets are further beholden to political interests as sources of information – which further erodes public trust in news outlets.
Multi-drug resistant TB (MDRTB)
Facebook 15 May. Jimmy Drekore
20th March PNG Reported First Covid-19 Imported Case
22nd March I stated MDRTB was more lethal than COVID-19
11th May Six Mile Clinic alone recorded 291 confirmed TB cases (last 4 months).
IF we are not vigilant it will lead to MDRTB and that PNG you can embrace yourself.
Marape Government Fails to tackle Corruption
20 May 2020
James Marape was elected as prime minister on the back of a growing wave of discontent about political corruption and the misuse of public funds – and the initial signs from the new government were promising.
The parliamentary Public Accounts Committee emerged from the shadows to hold televised hearings into the procurement of medicines and medical supplies in Health Department secretary Kase was quietly removed.
A high-powered commission of inquiry was appointed to investigate the disastrous UBS loan scandal. Vocal corruption critic Bryan Kramer was appointed police minister and ex-Task Force Sweep boss Sam Koim took command at the Internal Revenue Commission.
Meanwhile, the legislation to establish an Independent Commission Against Corruption was dusted off and brought back to parliament.
But the initial wave of optimism that the Marape government would decisively tackle the chronic corruption that is undermining service delivery and impoverishing the nation has been dashed in the face of overwhelming evidence that in Papua New Guinea it is business as usual.
Government minister William Duma, who managed to walk away from the Manumanu land scandal without facing charges despite the weight of the evidence, seems just as immune from any sanction over the Horizon Oil scandal.
The Australian chief executive of the oil company has been terminated after the board described his position as ‘untenable’ but Duma has not even been made to step aside while Australian and local police investigate.
Meanwhile 38 of the 40 Maseratis which sell for around $140,000 each in Australia are still sitting idle in a warehouse in Port Moresby. Yet the Minister responsible for the purchase, Justin Tkatchenko, who falsely claimed firstly that the cars were being imported at no cost to PNG and then were ‘selling like hot cakes’ has not answered for misleading statements or the waste of upwards of K20 million.
To make matters worse, while some APEC vehicles are sitting idle, the government is again spending millions of kina on hire cars to help with the COVID-19 response.
Nowhere is the lack of accountability more apparent than at the very heart of the prime minister’s own department……
While some people may point to the current COVID-19 crisis and state of emergency as having stalled progress on the ICAC and the UBS commission of inquiry, the truth is things were moving at a glacially slow speed even before the pandemic. In the last 10 months, despite a smattering of arrests and charges, there has not been one prosecution of a high profile leader for corruption or misappropriation and not one minister has been forced to resign or even temporarily step aside.
Group calls for lowering of flag
THE Catholic Professionals Society of PNG has called for the LGBTQ (lesbian gay bisexual transgender queer) flag to be lowered, saying that it was a threat to the country’s moral standing as a Christian nation. The society’s president Paul Harricknen said PNG was founded on the preamble of a Christian foundation and local tradition. “We have nothing against the LGBTQ community, our forum here today (yesterday) is about foreign governments pursuing their interest in our country,” he said. “It’s about the flag been raised, such an action makes a statement and we are against that statement because marriage is a union between a man and a woman.” “We call on our leaders of Government, civil service, churches and people to be vigilant against any blind reception of advices and terms and conditions from foreign aid givers and funding donors which are aimed at eroding and destroying our founding values, beliefs, faith and morality.
“We have a duty to safeguard these values, beliefs and principles for the present and future generations. We hope the Government can take heed of this issue. If PNG is to pursue the dream of becoming the richest black Christian nation, then issues of moral values and principles, beliefs and faith must be vigilantly safeguarded.”
Harricknen said they were not trying to incite any hate or violence against the community but only wanted the flag to be lowered.
Be vigilant: Doc
THE daily increase of the coronavirus cases in West Papua is a great threat to Papua New Guinea, says the State of Emergency (SOE) deputy controller and acting Health secretary Dr Paison Dakulala. The Papua region of Indonesia has seen an increase of 65 new cases, bringing a total of 686 confirmed cases.
Dr Dakulala said this week that the alarming increase meant that PNG was still in the danger zone and people should not be complacent.
In the Western Pacific region, countries worth noting are: Indonesia – 22,271 (1,372 deaths); West Papua – 130 (2 deaths); Papua – 556 (8 deaths); Singapore – 31,616 (23 deaths); Australia – 7,114 (102 deaths); Fiji – 18 (no deaths) and New Zealand – 1,504 (21 deaths)
For PNG citizens and residents stranded abroad, the Government is working to bring them back and this includes the 127 in Fiji.
PM presents over K1.8mil to bushfire victims
PRIME Minister James Marape presented a cheque for more than K1.8 million to the Australian government on Thursday to help those affected by bushfires earlier this year. The funds were raised through the PNG Hearts for Australia Fire Appeal 2020 by the PNG Government, business houses and individuals. In conveying PNG’s sympathies for those affected by the bushfires, Marape said it was not the amount that mattered but the goodness and kind gesture of our hearts. “We owe it to each other as neighbours, friends and wantoks,” Marape said told Australian High Commission Jonathan Philp. He said PNG’s relations with Australia was not by choice but by “our geographical location and dates back many centuries”.
The State of Emergency Cannot Fix Years of Negligence — Michael Kabuni
Department of Pacific Affairs, In Brief 2020/15
Papua New Guinea (PNG) has registered eight positive COVID-19 cases across five different provinces since March 2020, though all have recovered. A two-week nationwide state of emergency (SOE) and lockdown to curtail the movement of people were initially declared on 23 March when the first case was reported. The SOE was extended for another two months when it expired, whilst the lockdown was lifted. The lockdown restricted travel between provinces and mandated a complete shutdown of non-essential services, whilst the SOE prevents international travel and travel to selected provinces. Despite these efforts against the spread of COVID-19, seven of the domestic cases were from local transmission. The cases of local transmission in Western Province — despite the restrictions on travel and the military deployed to monitor the borders — point to an ineffective monitoring of provincial borders, which was intended to restrict internal travel as well as travel between PNG and Indonesia, and highlight how a long-neglected health system could be put to the ultimate test during the pandemic.
This In Brief argues that PNG’s reliance on the SOE and lockdowns to contain COVID-19 is proving difficult due to years of government negligence that have led to both poor health infrastructure and limited police and military capabilities, including the ability to adequately police unauthorised movements across PNG’s borders.
DWU students, staff receive masks sewn by volunteers
STUDENTS and staff of Divine Word University (DWU) in Madang are beneficiaries of washable face masks sewn by a group of volunteers led by Sr Monika Steinberger. This was one of the measures DWU took to safeguard the university community from the coronavirus pandemic.
The project was supported by non-government organisation Bread for the World.
Sr Monika, who works as a counsellor at DWU, said the project began early last month and 3,400 masks were completed and distributed to students free while staff paid K3 for one. She said: “By May 11, all students received one mask each and we aim that by June 1 all students will be provided with a second one. “Thus, in case the virus reaches Madang at any time, students are prepared to wear the protective masks.
“A total of 400 masks have been sold to DWU staff and employees of Diwai Enterprise Ltd, the business of the university. “We hope to complete our project by June 5.” The masks are being made from household materials.
Precautionary measures are taken to ensure the materials are good enough to prevent the spread of the Covid-19 in lecture rooms, students’ mess and other public places on campus. “Bread for the World is covering the cost for the students’ masks.” The volunteers sewing the masks include DWU staff, female students, sisters from the Catholic Church and Catholics from the communities.
Who’s financing deforestation in Papua New Guinea? A new report follows the money.
By Rachel Ramirez on May 18, 2020
Papua New Guinea has one of the largest expanses of tropical rainforest on the planet. But in recent years the island nation just north of Australia has seen a surge in deforestation from logging and mining, which has threatened to release large stores of carbon into the atmosphere.
Deforestation has left behind patches of bare land across the country, and indigenous communities bear the brunt of the environmental consequences. Many are wary of companies that clear the land without providing something to the local community in return. So in 2017, when the Malaysian timber company Maxland secured a permit to clear rainforest on the country’s Manus Island, it promised to plant three to five million rubber trees and said it would benefit nearby communities through jobs, royalty payments, and improved infrastructure.
Critics say that Maxland is a wolf in sheep’s clothing. According to a new report released this month by the human rights and environmental watchdog Global Witness, Maxland has not planted a single rubber tree, despite being two years into its five-year contract. Instead, the report claims that the company has prioritized illegal logging and exporting the island’s valuable hardwood timber, raking in millions of dollars in the process…..
Can coronavirus bring positive change?
28 May 2020
https://www.pngattitude.com/2020/05/can-the-middle-class-reform-the-economy.html#more Philip Fitzpatrick
History tells us that more often than not the educated middle class are the change agents in society. This is why the Australian administration in Papua New Guinea was keen to establish an educated middle class prior to independence.
The theory goes that while the lower classes are busy concentrating on survival and the upper classes on protecting and increasing their wealth only the educated middle class has the inclination, wherewithal and time to think about social issues.
What is recognisable as the middle class actually contains two sub-sets, the educated and the aspirational. The former is largely made up of the caring professions, doctors, nurses, teachers, journalists and the like, while the latter is made up of business people. Aspirational thinkers among the middle class usually spend their days trying to climb up social ladders and tend not to be too concerned about social conditions except where they affect them directly.
It is unfortunate when the educated sub-set of the middle class becomes too comfortable and complacent because that makes change difficult. This has become blazingly obvious in places like Papua New Guinea. In Papua New Guinea the distinction between the educated and the economically aspirational disappeared very quickly. The result is a single hybrid middle class whose main interest is looking after its own interests….
An old French saying is “plus les choses changent, plus elles restent les mêmes” (the more things change the more they stay the same).
Right now, various governments across the world are grimly determined that things will indeed stay the same.
They are bending their will and resources to exactly this end: a return to normality.
Normality means a neo-liberal world in which the interests of the powerful and the wealthy take precedence over those of the poor, the weak and the helpless.
The relentless exploitation of the environment and people must be allowed to proceed at all costs, so as to fulfill the endlessly repeated mantra of “jobs n’ growth”.