REPEATING HISTORY
NOT THE FIRST TIME OUR ECONOMY HAS BEEN GRAVELY MISMANAGED BY PRIME MINISTERS
Young people have no idea how much better (or worse) things used to be in the past. We live in a nation where too little of our history is written down, hardly ever in a form where it can be retrieved and read years later. That makes it easy for our leaders to repeat the same mistakes over and over again. They fall into the same traps, make the same mistakes, and the rest of us don't realise it could have all been avoided. That's the stupidity of always looking forward and never looking back. Also not knowing our own history makes it very hard to become enraged when our leaders' idiot decisions costs the country millions, even billions. We never knew it was avoidable!
Amazingly, certain politicians who created our biggest disasters in the past still hang on long past their use by date. They successfully escape their past by reinventing themselves in a new image. Julius Chan has been one of the most successful image changers. Here's a man who almost outdid Peter O'Neill when he was PM in finding totally unethical ways to make money on the side. Here's the man who paid white mercenaries from Africa K100 million (a lot of money at the time) to come to Bougainville to gun down our own people in cold blood all to re-open a stupid mine. Yet today we have this same evil man, Julius Chan, proclaiming himself to be the champion of local rights and the enemy of greedy mining interests. Anyone who remembers the 1990s probably wants to vomit.
Paias Wingti's reinvention of himself also makes one want to choke in disgust. Wingti was the one that effectively destroyed what had been wise macroeconomic policy that had been in place since independence. In those days, the bureaucrats made the decisions and the politicians had relatively little power in putting any stupid ideas into practice. PNG's wise macroeconomic policy resulted in the kina becoming strong, which made the costs of imports pretty cheap. Enough so that high quality Australian goods were affordable to those who were in the cash economy at the time.
DISASTER FREE THIS AND THAT GOVERNMENT SUBSIDIES: Wingti was the one who began the destruction of this well built system. At the worst possible time, he began the same kind of stupid nonsustainable handout government programmes (always designed to attract votes at election time) that Peter O'Neill is now doing. In Wingti's case, the handouts were FREE EDUCATION and AGRICULTURAL CROP SUBSIDIES. Handouts are not investments but create dependencies and a sluggish population. When you tell parents and farmers they don't have to invest a thing in what should be one of the most important things in their lives, they get lazy and the systems that support them don't get the best kind of support in return.
None of this is how you create real development. Even worse, Wingti started his free this and that policy right when Panguna mine had been shut down on Bougainville and the PNG government lost more than a fifth of its annual budget overnight.
Did Wingti make prudent fiscal management his top priority? Of course not. Our misplaced respect for pollies make them so bigheaded that they become delusional. They think they're world experts when they're not (look at the way Don Polye pretends himself to be an economics expert today. Deputy PM Chris Haiveta, who at least had a degree in economics, also developed an outsized ego, ultimately becoming part of the famous Chan-Haiveta-Ijape clown team who the PNG people ran out of parliament in 1997 in PNG's only real people power revolution.
Back to Wingti. Wingti didn't do what a wise man would have done, which would be to address the sudden income shortfall by greatly cutting government expenditures. Instead he kept spending which meant that he also had to start borrowing to fund his overexpenditures. He happily took on large World Bank loans, getting PNG badly into debt to the tune of about K8 billion. That was a lot of money at the time that one kina was worth well over one US dollar.
1991 DISASTER SOUTH PACIFIC GAMES OVEREXPENDITURE: Sir Rabbie Namaliu, a well intentioned and honest Prime Minister (probably the only truly honest PM we've ever had) took over from Wingti in 1988 (Wingti grabbed back power again in 1992) foolishly continued the overexpenditures by building the infrastructure, including Sir John Guise Stadium, for the 1991 South Pacific Games.
OPENING THE FLOOD OF MONEY LEAVING PNG: Wingti and Chan became clown twins during the 1990's who presided over the kina's slide. The high national debt couldn't be pulled down and Chan allowed money wealth to flow out of the country by removing currency export controls. Chan and Wingti used Chan's private knowledge of government information on when the kina would have to be devalued to unethically profit by sending their money out of the country just before devaluation (this is only 1 of a number of Julius Chan corruptions when he was PM).
ROCK AND ROLL MANAGEMENT OF THE KINA UNTIL IT HIT BOTTOM IN 1999: Bill Skate inherited a disaster economy from Chan and managed to mismanage it further by the continued political inability to take harsh measures, unpopular to the people. Our PNG currency hit rock bottom, with the kina worth only around 25 US cents. That slide caused a massive increase in the cost of most goods and services in PNG which the average Papua New Guinean could not afford.
The impoverishment process caused by the financial mismanagement of Wingti, Chan and Skate is real. People suffered as a result of their stupidity but each of them got richer yet in the process. The kina has never recovered from their mismanagement. Consider that the kina topped out in the early 1980s being worth more than $1.50 in US dollars. It bottomed out at 25 US cents. It never has reached more than about 50 US cents when Peter O'Neill won the 2012 election and now it is only about 36 US cents and still in decline.
Urban people suffered the most as the kina collapsed as they were the most dependent on rice and other imports whose price skyrocketed. The tragedy of the current Peter O'Neill mismanagement of the national wealth will less be what happens to the kina and do our national wealth, and more due to our inability to learn from the past and start putting intensive public pressure as necessary to hold our leaders accountable and force them to start doing what is right instead of doing whatever brings them personal power and personal wealth.
