Papua New Guinea is not 'investor-friendly'

Papua New Guinea is not “investor-friendly” and continues to have significant barriers to the functioning of a free market, according to the reputable Bertelsmann Transformation Index 2008.

Last year, the BTI compared the performance of 125 countries aspiring to achieve full democracy and a market economy, and PNG fared very poorly in its report card, which is now freely available on the internet (http://www.bertelsmann-transformation-index.de/).

The BTI is a global ranking of transition processes in which the state of democracy and market economic systems as well as the quality of political management in 125 transformation and developing countries are evaluated.

The BTI is a joint project of the Bertelsmann Stiftung and the Centre for Applied Policy Research at Munich University in Germany.

“On paper, the institutional ‘hardware’ for a competitive market-based economy is mostly in place,” it said.

“Papua New Guinea has made some progress in restructuring its financial sector, including making the central bank more independent and establishing an independent commission on competition modeled on Australia’s Competition and Consumer Commission.

“In practice, there are significant barriers to the functioning of a free market.

“High establishment costs, breakdowns in law and order, the high cost of banking, bureaucratic red tape and political corruption remain major barriers to market entry.

“Despite its public pronouncements, the country is not foreign investor-friendly.

“A maze of regulations and paperwork must be navigated before a foreign enterprise can start operations in Papua New Guinea.

“The Investment Promotions Authority (IPA), supposedly a ‘one stop’ centre for foreign businessmen, is often sarcastically referred to as the ‘Investment Prevention Authority’.

“The persistence of corrupt political leaders, combined with an incompetent and corrupt bureaucracy, often means that only businesses willing to pay ‘facilitation money’ can win a significant advantage over competitors.

“Commissions of inquiry have found numerous instances of public contracts being awarded to companies or individuals who have bribed officials.

“Large and well-established companies have a significant advantage over newcomers.

“In recent years, the trend is for major companies to buy their smaller competitors and create an even stronger market position.

“Among top businessmen, there is a lot of direct and indirect cross-ownership of businesses.

“Inadequate corporate governance is the norm rather than the exception.”

 

Things fall apart in Papua New Guinea since 1975

Papua New Guinea has declined in almost all indicators since 1975, according to the reputable Bertelsmann Transformation Index 2008.

Last year, the BTI compared the performance of 125 countries aspiring to achieve full democracy and a market economy, and PNG fared very poorly in its report card, which is now freely available on the internet (http://www.bertelsmann-transformation-index.de/).

The BTI is a global ranking of transition processes in which the state of democracy and market economic systems as well as the quality of political management in 125 transformation and developing countries are evaluated.

The BTI is a joint project of the Bertelsmann Stiftung and the Centre for Applied Policy Research at Munich University in Germany.

The BTI noted that throughout the period of review, PNG made some progress in its political and economic transformation toward a more liberal democracy and market based economy, however, all these may come undone by these “deeply-rooted problems”.

“Positive developments include continuity in government leadership, economic recovery, sound economic policies, stability in the exchange rate, an increase in reserves, peace on Bougainville and some elements of stability in political parties,” BTI says.

“The country faces some deeply-rooted problems, however, that may impede the transformation process.

“The level of socioeconomic development is low.

“Per capita income is now actually lower than it was at the time of independence.

“The rule of law is still weak, corruption persists at the highest levels and there are continuing tensions between tribal groups.

“Ethnic or regional bias, gender discrimination, gridlock in politics, a deepening gap in income equality, and polarisation between the political leadership and the general populace do not allow for a sufficient degree of consensus-building or for institutional efficiency in the democratic system.

“The level of difficulty in governing a country like Papua New Guinea cannot be underestimated.

“Politicians are self-serving, and almost every socioeconomic indicator has declined since independence in 1975.

“Poor governance, endemic corruption, the lack of infrastructure, a small and unstable economy, aid dependency, low levels of education, ethnic conflicts and economic recession have all taken their toll on the country.

“The situation has become so bad that in recent years the country has been reported to be on ‘the brink of collapse’ and has regularly been referred to as a ‘failed state’.”

The BTI said that for PNG’s strategic outlook, although the country had some measure of political stability and had achieved economic growth, these gains were fragile and could easily be reversed.

“All key institutions, such as the parliament, the political executive, the bureaucracy and the private sector, are weak,” it added.

“In the dimension of democratic transformation, five major issues remain: political stability, corruption, electoral campaign reform, gender issues, and law and order.

“These issues have been discussed again and again, and all past reform programmes have either faltered or failed miserably.

“While there is political consensus between the elite and civil society to deal with these five major issues, the mechanisms to implement reforms are either too weak or are hijacked by vested interests.

“On the social front, the government must seriously tackle the problems of HIV/AIDS and income inequality.

“The HIV/AIDS epidemic has the potential to follow the African pattern, where the most-productive segment of the population is being wiped out.

“In major coffee plantations in the highlands, many of the workers are HIV-positive.

“HIV/AIDS is the now the leading cause of death at Port Moresby General Hospital.”

 

Sunset on a plane ride between Goroka and Port Moresby

I took these stunning sunset pictures on an Air Niugini Dash 8 flight between Goroka and Port Moresby last Wednesday, September 30.

Papua New Guinea report: almost every indicator in decline

Last year, the reputable Bertelsmann Transformation Index compared the performance of 125 countries aspiring to achieve full democracy and a market economy.

Here's a summary of PNG's report card, which you can read for yourself by following this link.

Throughout the period of review, Papua New Guinea made some progress in its political and economic transformation toward a more liberal democracy and market based economy…

Positive developments include continuity in government leadership, economic recovery, sound economic policies, stability in the exchange rate, an increase in reserves, peace on Bougainville and some elements of stability in political parties.

The country faces some deeply rooted problems, however, that may impede the transformation process. The level of socioeconomic development is low. Per capita income is now actually lower than it was at the time of independence…

The rule of law is still weak, corruption persists at the highest levels and there are continuing tensions between tribal groups.

Ethnic or regional bias, gender discrimination, gridlock in politics, a deepening gap in income equality, and polarisation between the political leadership and the general populace do not allow for a sufficient degree of consensus-building or for institutional efficiency in the democratic system.

The level of difficulty in governing a country like Papua New Guinea cannot be underestimated. Politicians are self-serving, and almost every socioeconomic indicator has declined since independence in 1975.

Poor governance, endemic corruption, the lack of infrastructure, a small and unstable economy, aid dependency, low levels of education, ethnic conflicts and economic recession have all taken their toll on the country.

The situation has become so bad that in recent years the country has been reported to be on "the brink of collapse" and has regularly been referred to as a failed state.

Strategic outlook

Although the country has some measure of political stability and has achieved economic growth, these gains are fragile and could easily be reversed. All key institutions, such as the parliament, the political executive, the bureaucracy and the private sector, are weak.

In the dimension of democratic transformation, five major issues remain: political stability, corruption, electoral campaign reform, gender issues, and law and order. These issues have been discussed again and again, and all past reform programs have either faltered or failed miserably.

While there is political consensus between the elite and civil society to deal with these five major issues, the mechanisms to implement reforms are either too weak or are hijacked by vested interests.

On the social front, the government must seriously tackle the problems of HIV/AIDS and income inequality. The HIV/AIDS epidemic has the potential to follow the African pattern, where the most productive segment of the population is being wiped out. In major coffee plantations in the highlands, many of the workers are HIV positive. HIV/AIDS is the now the leading cause of death at Port Moresby General Hospital.

More pictures of Goroka from the 1970s

Bicycle tin rims and dress in Goroka. Pictures by former Goroka resident BRIAN WILSON at www.ski-epic.com/.../goroka/index.html

Cooking scones at Goroka market

Display of tomatoes, corn, onions and pineapples

Dok kaikai man (do eats everybody) is written on the sign at the corner of the house

Flour at Goroka market

Goroka airport from lookout

Goroka from Minogere, a suburb of Goroka. Notice the airport runway to the left

Goroka highland meris with Christmas decor in 1971

Goroka market from entrance with two men circa 1971

Goroka market in 1971. Kaukau, corn, peanuts for sale

Goroka market kaukau and bananas

Goroka market loaded meris

Gumi race along the Asaro River when people would dress up in silly costumes and float down the river

Honda motorbikes in Steamships Hardware

Jumbo, the elephant from sydney zoo, performing tricks in Goroka in 1972

Local pikininis near Goroka High School

Local residences near Goroka High School. Note the outhouse in the centre of the picture

Locals at drinking fountain

More from the Goroka Saturday market

Pineapples, lemons, peanuts for sale

Saturday afternoon at West Goroka

Saturday at West Goroka

The road up and to the right led straight into the hospital

The under roof portion of the Saturday Goroka market

Unloading people from trucks at Goroka market

Walking to Goroka market on a Saturday

University of Goroka launches new innovative system

By KATE GUNN of University of Goroka

The University of Goroka last Thursday formally launched its new programme for the Steven Eka Library: Liberty (version) 4.
After a year of hard work leading up to its implementation, UOG has finally updated its library management system to utilise one of the best software systems in the world.
The Liberty 4 software, owned by Softlink Pacific (a New Zealand-based company), is a technologically-advanced library management software system.
Approximately 10,000 other libraries around the world also use the Liberty 4 management system.
The UOG is the second institution in PNG to possess the software, and the first to implement its use for the whole university.
Major features of the software include: a user-friendly system; a web-based system; 24 hour global access; records for all types of library sources; and links to other academic libraries.
The system was officially launched by the Vice Chancellor Dr Gairo Onagi, who stated that the introduction of Liberty 4 was a landmark for UOG.
He was very pleased that UOG had decided to “move on from the old to the new technological system”.
Mr Russell McGrath, consultant trainer from Softlink’s Australian office, was on hand at the launching to demonstrate to staff how they could use the system to search, borrow, or reserve a book.
Mr McGrath had been on campus for the week prior to the launching, training UOG library staff in the establishment and utilisation of the Liberty 4 system.
He stated that Liberty 4 was an “intuitive and innovative system” for the UOG’s library.
University of Goroka librarian Ms Leah Kalamoroh stated she was proud to take the lead to introduce the Liberty 4 system to UOG, and it was surely a way forward for the Library.
Staff and students were encouraged by the acting Pro Vice Chancellor Academic Dr Jeyaranthan, to embrace the new system and to use it to secure more resources for UOG students as they had the right to access the latest technology.

My kids in the park

Keith takes a leap of faith!

Moasing on the slide

Moasing and Gedi on the slide

Gedi on the slide

My little tyro Keith again!

Moasing

My princess!

I love this little fella!

I work long hours, seven days a week (I wish I were a Papua New Guinea public servant!), frequently travel around the country, so yesterday was a Godsend as I took my kids to the park at Gerehu Stage Two in Port Moresby.

Thoroughly enjoyable, and just what the doctor ordered, nothing better than some good old-fashioned father-chidren R & R.