Saturday, May 05, 2012

PNG 2012 budget to be affected by global demand for commodities


By MALUM NALU

Papua New Guinea’s budget revenue forecast in 2012 and the medium term is expected to be affected by global demand for primary commodities, according to Bank of PNG’s quarterly economic bulletin.
Governor LoiBakani said global demand for primary commodities was expected to decline in 2012 and in the medium term, in response to a weak global demand and improvement in supply conditions.
“However, oil price is expected to remain elevated as a result of supply constraints associated with the geopolitical tensions in the Middle East and North Africa,” he said.
“This is likely to affect PNG’s budget revenue forecast in 2012 and the medium term. 
“As of March 23, 2012, the prices of gold fell to US$1,654.10 per ounce after a high of US$1,718.28 at the beginning of the month, while the price of oil continues to remain volatile and traded at US$105 per barrel.
“The International Monetary Fund (IMF) projects inflation in the advanced economies and some of the emerging economies to ease further towards the end of 2012 as a result of the low global demand and expectations for low inflation.
“According to the FAO Food Price Index (FFPI), international food prices have started to pick up again to an average point of 215.3 in February 2012, after dropping to its lowest level of 210.8 points in December 2011.”
 Bakani said inflationary pressures in the domestic economy would come mainly from domestic demand pressures associated with high inflows and spin-off activities relating to the construction of the LNG project and increased government spending.
“The upside risks to domestic inflation will stem from: the volatility in import prices; a fall in prices of export commodities; depreciation of the kina exchange rate; and higher than budgeted government expenditure,” he said.
“The government must be disciplined in its spending, particularly during the national election period, to keep within the 2012 budget.”

Friday, May 04, 2012

East New Britain's ailing cocoa industry gets a new lease on life


By ABIGAIL APINA

East New Britain’s ailing cocoa industry – which has lost millions of kina because of the dreaded cocoa pod borer (CPB) - has received a shot in the arm with the establishment of a K2.8 million project for rehabilitation work, The National reports.
 The PNG Cocoa Coconut Institute (PNGCCI) has reported that in East New Britain alone, cocoa production had dropped from 20, 227 tonnes to 8,000 tonnes per year between 2004-2005 and 2009-2010,  representing a drop in monetary value from K141.6 million to K56 million over the period.
 NGIP Agmark signed an agreement with PNG Sustainable Development Program (PNGSDP) and PNG Cocoa Coconut Institute (PNGCCI) last Friday to work together cocoa rehabilitation in East New Britain.
 PNGSDP is providing K2.8 million and will manage finances while Agmark will implement the project. 
 PNGCCI will provide technical advisory services to the project and provide lead in the household survey, monitor and evaluate the project.
 The project includes establishment of farmer training and dormitory facilities, and facilitates training of farmers on industry best agronomic practices of growing and managing cocoa trees for maximum production.
 It is understood that the training facility will be constructed at Tokiala, one of Agmark’s plantation in ENB.
 Nurseries and bud wood gardens will also be established in various project sites where they will be easily accessible by the farmers.
 The project will establish nurseries at strategic locations to supply 234, 591 cocoa seedlings equivalent to 282 hectares of new cocoa plantings to 1, 172 households.
 Each household will receive 200 seedlings for planting and these households will be from Kadaulung, Sikut, Warongoi, Toma, Bitagalip, Tokiala and inland Baining.
 The agreement states that production and productivity in the cocoa industry has declined significantly over the last 10 years due to age and senility of current of current cocoa plantings, incursion of the cocoa pod borer (CPB) and farmers not having access to good planting materials.
 It highlighted that since CPB was first detected in the province in 2006, it has become a significant economic pest with drastic decline in cocoa production as infestation levels over the economic threshold limit of 50-60 percent.
 The impact of CPB on individual farmers and the provincial economy was devastating as smallholders were now switching away from cocoa farming to other subsistence activities.
According to an overview of the project, the combined impacts of these factors have devastated the industry.
 It said 97% of cocoa production came from smallholders and over 76% of households rely on cocoa for incomes.
 It said impact on rural livelihood was particularly severe with a significant flow on effects on health, education services and general business as people’s main source of income declined.
 The K2.8 million project is expected to make a substantial contribution to the rehabilitation of smallholder cocoa production in East New Britain and other cocoa-producing areas.
 The project will end on March 2015.

InterOil sets first quarter 2012 conference call date

InterOil Corporation (POMSoX: IOC), today announced that it will release financial and operating results for the first quarter of 2012 before the market opens for trading on Monday, May 14, 2012 with full text of the news release and accompanying financials available on the company’s website at
www.interoil.com.
 A conference call will be held on Monday, May 14, 2012, at 7:30 a.m. Central (8:30 a.m. Eastern) to discuss the financial and operating results, as well as the company’s outlook.
The conference call can be heard through a live audio web cast on the company’s website at
www.interoil.com or accessed by dialing (612) 288-0337.
A replay of the broadcast will be available soon afterwards on the website.

Welcome to Goroka market

MALUM NALU
Goroka Market is one of the markets in PNG that is known for its high quality fresh fruit and vegetables.
Visitors to Goroka, as well as local residents, fill the market every day to buy locally-grown fresh fruit and vegetables.
Air travelers, especially, make it a point to buy Goroka fruit and vegetables before their fly departs from nearby Goroka Airport.
Market bags, made by innovative local craftsmen from empty rice and flour sacks, are readily available.
After travelers do their marketing, they can then get a craftsman to quickly sew up the bags before they are air freighted.
Enjoy these images that I took last Sunday, April 29:
























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A Goroka and Eastern Highlands Bob Cleland has never left

By MALUM NALU

Coming back to Goroka and Eastern Highlands province last Saturday was for legendary kiap (patrol officer) Bob Cleland, like arriving at a place he’d never quite left.

Bob Cleland being presented an Eastern Highlands flag by outgoing provincial administrator Munare Uyassi last Saturday.-Pictures@MALUM NALU
Cleland was feted like royalty the moment he stepped onto the tarmac in Goroka – the Land of Eternal Spring – on which he first set foot on 59 years ago in 1953.
Asaro mudmen and other Eastern Highlands dancers welcomed him back to Goroka, and he was greeted by senior provincial government officials including outgoing provincial administrator MunareUyassi, as blind children from the Mt Sion School for the Blind outside Goroka sang that famous and movingGoroka anthem “Welcome to Goroka”.

National Gaming Control Board CEO Edward Mike Jondi, Cleland's partner Elizabeth Green, Cleland and Uyassi listen to the welcome song
As “Welcome to Goroka, the land of Nokondi, from Daulo Pass across to Kassam Pass…” reverberated through the perennial springtime climate, one could almost feel the majestic mountains surrounding Goroka rise in salute to this great man.
The irony is that he helped to build roads over both the Daulo and Kassam passes.
Cleland, now aged 81, was clearly overwhelmed by the welcome.
After lunch at the Bird of Paradise Hotel, we took a drive along the Highlands Highway to the summit of Daulo Pass, which Cleland supervised building of as a 22-year-old kiapin 1953.
All along the way, from Goroka through the great Asaro Valley and the ascent to Daulo Pass, he pointed out places of interest and recalled memories of another day from more than 50 years ago.
At the summit of Daulo Pass, he checked out old landmarks, pointed out landmark sections of the road, and gazed down at the magnificent panorama of the Asaro Valley.

Bob Cleland points out the panorama of the Asaro Valley from Daulo Pass
The Goroka policemen who provided us escort couldn’t help but listen spellbound as Cleland told them about how he supervised the building of the stretch from Asaro Bridge through Daulo Pass and on to Watabung using local labour.
We planned to drive down further to Watabung, however, because of the death of a well-known local leader Kapo, had to put it off for another day.
Watabung has a special place in Cleland’s heart at it was here that he brought his young bride, Julie, in 1955, and where their first daughter Susan grew up after being born at the ‘European Hospital’ in Goroka in 1956.
His widely-acclaimed book, Big Road, first published in 2010, but not widely on sale yet in PNG, tells the story of the building of the Highlands Highway, particularly the Daulo stretch between Asaro and Watabung in Eastern Highlands in 1953, which he personally supervised as a 22-year-old kiap.

Big Road
The 'big road' today is the Highlands Highway running from the port of Lae and through the highlands provinces of PNG.
Big Road describes the initial construction by hand, in 1953 and 1954, of the Daulo section of the road, which runs over the 2,478m Daulo Pass and which gives access westward to the great Waghi Valley.
Cleland, before the Daulo Pass, helped the late Rupert Haviland built part of the road over the Kassam Pass.
The big road was neither designed nor built by engineers but bykiaps, with local villagers using only picks, shovels and thousands of hours of backbreaking labour.
Cleland was also involved in the first Goroka Show in 1956 and designed the Eastern Highlands provincial flag, in particular Nokondi – the fabled spirit who had one eye, one ear, one leg and one testicle.
That was why, in true Gorokaand Eastern Highlands style, he was given a hero's welcome last Saturday.
Later that evening, at the Bird of Paradise Hotel, Cleland was special guest at the launching of the 2012 Goroka Show, where his reminisces enthralled the spellbound audience.

Bob Cleland, who took part in the first Goroka Show in 1956, reminisces at the 2012 Goroka Show launch.
His relationship with Goroka and Eastern Highlands is more than special.
When Cleland arrived in the New Guinea Highlands in 1953, many tribes had just seen their first white man only 20 years before.
He was one of a team of young Australians charged with introducing a new form of justice to tribes that had previously settled disputes with spears, axes and arrows.
He was 22, fresh from university as a graduate engineer.
As a kiap, Cleland had a triple role of magistrate, policeman and administrator.
But he was not only a kiap, he was also the boss’s son.
His father Donald (later Sir Donald) Cleland, was administrator of Papua New Guinea for 15 years from 1951, so his trial by fire in New Guinea was particularly intense.
Right from the start, Cleland was charged with building some of the most-challenging sections of the ‘big road’, linking the Highlands with the coast.
In the early 1950s there was no way into or out of the Highlands except by plane or on foot.
Yet the region was densely populated, home to hundreds of thousands of villagers, and alluringly fertile.
A road connection had to be built, and it had to be constructed by hand – no bulldozers or diggers.
The Eastern Highlands district commissioner then was the legendary Ian Downs, from Scotland, who first came to PNG as a 21-year-old kiap.
He’d been posted to the Highlands only five years after Australian explorers Jim Taylor and Mick Leahy discovered that hundreds of thousands of people lived in extensive upland valleys amid what had always been assumed to be impenetrable mountains.
Running right throughout Cleland’s book itself is the ‘big road’ itself, the Highlands Highway that was carved out of mountains and mud with shovels, sweat and tenacity.
Big Road is a pioneering tale that paints a vivid picture of the majesty of the mountains and the mingling of two cultures.
Cleland served 23 years altogether in PNG from 1953-1976.
After Watabung, he was transferred to Kainantu for two years, attended the Australian School of Public Administration (ASOPA) in Sydney, and then served in Daru, Balimo, Lae, Kokopo, Chuave and then ended up in Goroka, where he was executive officer of the Eastern Highlands Area Authority (which became the Eastern Highlands provincial government in 1977) from 1975-1976,
The new authority needed a common seal, and when Cleland asked members what was something traditional covering the whole Eastern Highlands, they quickly decided on Nokondi.
That same image is at the centre of today’s Eastern Highlands provincial flag.
“Those 23 years were the best years of my life,” Cleland tells me.
“It was a very rewarding job.
“If you did a job properly, you could see the results.”

Increasing liquidity levels worry Central Bank

By MALUM NALU
The increasing level of liquidity is the main cause of concern to the Bank of PNG, according to its quarterly economic bulletin released yesterday (Thursday), The National reports.
Governor Loi Bakani said the main issue that the Central Bank was confronted with was the increasing level of liquidity in the banking system in recent years, caused by the foreign exchange reserve build-up related largely to dollar-denominated mineral tax earnings, high export earnings and inflows related to the PNG liquefied natural gas (LNG) project and other private foreign direct investments.


Bakani…concerned at increasing levels of liquidity.


“This is compounded by the fast drawdown of trust accounts held at the Central Bank,” he said. “Whilst the high liquidity levels do not appear to influence inflation via the credit channel despite strong economic growth, it is still a threat to price stability and soundness of the financial system.
Bakani was concerned that the Central Bank was incurring an increase in the cost of monetary policy management by issuing Central Bank Bills (CBBs) to sterilise some of the excess liquidity.
“Efforts made to transfer some of the trust account funds to the Central Bank and opening of all new trust accounts with the Bank of PNG have not been really successful as the government continues to hold high trust account balances with commercial banks,” he said.
“The kina continued to appreciate against most of the major currencies on the back of the strength of the US dollar as investors look to it as a safe asset in light of the Euro debt crisis and weak global economic conditions.
“The kina’s appreciation was supported by high foreign exchange inflows associated with the LNG project, mineral tax receipts, and high commodity export earnings.”
Bakani said up to April 20, 2012, the kina appreciated against the US dollar by 3.6% to 0.4836, and against the Australian dollar by 1.7% to 0.4670.
He said that while the kina appreciation was a positive development to curb inflation, it had the potential to adversely affect the export sector.
“In this regard, the Central Bank has been actively involved in the foreign exchange market to ensure stability in the movement of the kina exchange rate,” he said
Bakani said the level of gross foreign exchange reserves as at April 30, 2012 was K9,074.9(US$4,442.2) million, compared to K9,226.4 (US$4,340.1) million as at end of December 2011.
“The increase in the US dollar value is due to the latest payment of mineral tax for the government while the decline in the kina value reflects the appreciation of the kina against the US dollar,” he said.
Meanwhile, Bakani said inflationary pressures in the domestic economy would come mainly from domestic demand pressures associated with high inflows and spin-off activities relating to the construction of the LNG project and increased government spending.
“The upside risks to domestic inflation will stem from: the volatility in import prices; a fall in prices of export commodities; depreciation of the kina exchange rate; and higher than budgeted government expenditure,” he said.
Bakani cautioned the Government to be disciplined in its spending, particularly during the national election period, to keep within the 2012 budget.

Thursday, May 03, 2012

Street arts and crafts of Goroka

By MALUM NALU

One of the feature of Goroka is the street arts and crafts, ranging from paintings, bilums, bows and arrows, clay Asaro mudmen, everything.
Last Saturday afternoon, while in Goroka, I enjoyed all the street arts and crafts all the way from Bird of Paradise Hotel to outside the Eastern Highlands provincial government complex.
Here are some of the pictures I took:
A bilum explosion of colour in Goroka.

Bilums hung up for all to see.

Colours of Goroka.

An expatriate family admiring bilums on the streets of Goroka.

Bilums of Goroka.

Legendary former kiap (patrol officer) Bob Cleland (left) chatting with an expatriate against a coloutful backdrop of bilums.

I met these guys and gals outside the Bird of Paradise Hotel.

I love these guys and gals!

Outside the Bird of Paradise Hotel.

Outside the Bird of Paradise Hotel.

Art vendor outside the Bird of Paradise Hotel.



Craft of the Bird of Paradise Hotel.