Speech
by the
Rt Hon Sir Mekere Morauta, KCMG MP, Minister for Public Enterprises
at
the launch of RURAL POVERTY IN REMOTE PAPUA NEW GUINEA: A
CASE STUDY OF OBURA-WONENARA DISTRICT
May
I extend a special welcome to representatives of CARE International PNG and the
Australian National University’s Development Policy Centre, which are the two
organisations responsible for the report that is being launched today.
I
thank them for their interest in and contribution to Papua New Guinea.
The
report does not paint a pretty picture.
It
shows life in rural and remote Papua New Guinea as it really is:
·
Malnutrition
·
Unsafe
drinking water
·
Poor health and consequently low life
expectancy
·
Very little education
·
Unsatisfactory
shelter and clothing
·
Little
access to income-earning opportunities
·
Unavailability
of services beyond the most basic level
The
point I want to make is that life in these places does not have to be this way.
We
have had ample opportunity since 1975 to improve our way of life, yet apart
from the first few years of Independence we have not done so.
In
the last eight years the country has enjoyed massive flows of revenue from oil,
copper and gold projects, but virtually none of it has been translated into
services and benefits for rural people.
I
call this “the PNG paradox” – rich in resources, but poor in services.
Plenty
of money, but little to show for it.
For
nine years we had one government, so-called political stability, at a time of
unprecedented revenue flows to the Government.
What
did the money and political stability bring to the people or rural PNG?
Clearly, something is missing.
What is the missing link between money,
political stability and poverty and lack of services?
We have to find an answer to this
question.
Otherwise, the enormous additional
wealth expected from PNG LNG will only aggravate the paradox.
It
is clear that the way we are managing resources is not producing positive results.
Doing
things the way we have always done them has failed the nation, and the result
is social indicators that are among the worst in the world.
What
is stopping us change our way of managing our resources?
One
of the reasons is that we are frightened of reform.
We
are scared of change.
My
view is that what we should really be afraid of is the status quo.
The
CARE-ANU report provides us with some detailed statistics about the poor
quality of life in many areas of Papua New Guinea.
As
we have heard it focussed on the 262 families living in the Yelia Local
Government Area of Obura-Wonenara, but its facts speak for many, many other
places across the nation.
I
won’t repeat the key findings of the survey.
I
will only add that I know many families from this part of the country, and I
also know that for them, nothing much has changed since independence.
That
is why we need reform.
Reform
is urgent.
It
is not always popular because it changes the status quo and may deprive those
benefitting from the status quo; it carries risks because it introduces an
element of the unknown.
So
reform is always a challenge, but when structured properly can make a big
difference.
As
Minister for Public Enterprises, I am responsible for a number of State-Owned
Enterprises.
I intend to reform them so that they are more
responsive to community needs, to make them operate in a more sustainable
manner so that they are not a constant drain on the public purse, and so that
price rises are contained.
People
seem to forget that these SOEs do not belong to the Government of the day; they
do not exist to glorify our image, or to fly our flag.
These
enterprises are owned by the people of Papua New Guinea to provide services for
their welfare – transport, power, water, telecommunications.
The
question then to ask is WHY is it that they are not providing extensive,
reliable, affordable and decent quality services?
Under
public ownership, these service providers have proved incapable.
So
is the choice between ownership and services?
Take
an example. Air Niugini flies to 17 ports throughout the country, just 17 in a
country where air transport is the only form of communication and transport for
millions of people.
It
is not able to extend services to more areas without a capital injection of
hundreds of millions of kina and then, ongoing subsidies.
What
is the solution?
How
do we change Air Niugini to be well capitalised, profitable and able to extend
services to rural areas without government financial support?
Difficult
to see how, if under government ownership.
IPBC has completed strategic reviews of
all SOEs to get a snapshot of their state of health so that we can take
appropriate action.
It
is clear that there is room for significant improvement in different areas
across all SOEs.
Most
have long-term structural issues that need to be dealt with and a few have
serious immediate problems.
All
are chronically under-capitalised and are fatally dependent on the public
purse.
Most
are poorly managed and lack commercial discipline.
My
intention is to make them all operate with sound governance and to meet minimum
service standards in a commercially sustainable manner.
SOEs
must stop running to the Government every year begging for more money.
Every
possible toea of Government money should be going into essential services such
as health, education, infrastructure and law and order.
Essential
services which the people of Yelia LLG, and all the people of PNG need.
The
O’Neill-Namah Government has also agreed to set up an Infrastructure Authority
within the Sovereign Wealth Fund.
The
authority will be charged with maintaining and expanding our national
infrastructure. Nothing could be more important for people in remote
communities such as Yelia than well-maintained roads.
These
are the reforms that will help improve the daily lives of the people of Yelia
LLG and others like them.
Things
will not change overnight, but a start is being made, and that is in stark
contrast to what has gone on before.
One
essential for reform is an open mind.
Recently
there have been all sorts of noisy but pointless debates about what sort of
“ism” we should follow in reforming our State-Owned Enterprises.
Capitalism?
Socialism? Marxist-Leninism? Liberalism?
This
is all irrelevant humbug, mostly from vested interests, rent-seekers, and
people who simply like to push their own political barrow.
Remember
the opposition to two of my reforms – the rescue of National Provident Fund
from financial collapse caused by political interference, and the decision to
merge PNGBC with Bank South Pacific.
NPF
was on the brink of failure when I became Prime Minister in 1999.
Members
stood to lose every toea they had – their life savings.
Today
Nasfund, as NPF is now known, is a strong independent and highly successful
superannuation fund.
Today it has almost 130,000 members, and
made an after-tax profit last year of K295 million.
From 2001 to 2010 its assets grew from
K268 million to K2.2 billion – a growth of 830% over the period.
Sensible,
responsible and effective reform has transformed Nasfund, and in the process
assured the retirement future of 130,000 Papua New Guineans who were faced with
financial ruin.
It
is a similar story with banking reform.
In
1999, the so-called “people’s bank”, PNGBC, was bankrupt because it had been
robbed by politicians and their cronies, and mismanaged in its dying years.
My
decision to merge it with BSP has been a similar success.
The
new people’s bank, BSP, is still 90 per cent-plus-owned by Papua New Guineans.
It
is clearly the biggest and best bank in the Pacific Islands.
It
is highly profitable, and made an operating profit after tax of $276 million
last year.
It
has opened more branches and employs 38% more people today than the two banks
did in 1999.
So
as a bank, BSP is highly successful.
But
it does not operate in all rural areas and it is still Government’s job to find
ways of extending financial and banking services to rural people.
There
are ways of doing it, but again involve reform.
It
is time we stopped thinking in tired old ways and introduce new recipes for
successful national development.
That
is the only way to help the people of Yelia LLG in a sustainable way over the
long term.
I
am pleased that CARE is implementing a community-based project to help the
people of Yelia, and that further surveys are planned.
I
welcome this monitoring, and I am confident that, if we stick with reforms, we
will start to see progress in Yelia, and throughout PNG.
Mekere
Morauta KCMG MP
Minister for Public Enterprises
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