PNGBLOGS

by JACKSON PUNDU Kumul Consolidated Holdings (KCH) has become a safe haven for thieves and robbers, both Papua New Guineans and foreigners. Unfortunately some leaders are allowing this to happen and are nurturing it, to be blunt. They know millions of Kina floats around KCH and they want to get in there and have a slice of it. This is squandering what is rightfully our people's money and assets. If you have noticed, there have been countless restructures in the recent past, all in the name of better alignment and efficiency but these are hog-washed tactics to cover up hidden selfish motives. KCH's recent changes to include Kumul Communications with its expanded vertical structure is nothing more than an attempt to wrestle the state telecommunication entities ( Telikom, Bmobile and DataCo ) out of the hands of the Government into private hands. This is the big picture at play, directly under the watchful eye of the Prime Minister Peter O'Neill. They

by MICHAEL J. PASSINGAN State Enterprises Minister William Duma is the beneficiary of the K50 million paid for the land at Manu Manu earmarked as the new home of the Defence Force’s Lancron Naval Base. The money was paid in an illegal deal arranged by Kumul Consolidated Holdings late last year. The Prime Minister, Peter O’Neill, and the chairman of Kumul Holdings, Paul Nerau, are currently engaged in a desperate cover-up of the deal and a shifting of the blame to senior Kumul Holdings staff. Minister Duma verbally instructed Kumul Holdings to undertake the illegal transaction, with a company called Kurkuramb Estates Ltd. Investigations have revealed the Minister Duma is personally linked to Kurkuramb Estates. At the time of the deal, Kurkuramb Estates address was Section 30 Allotment 6 Granville Port Moresby, according to IPA records. Its Post Office Box number was given as PO Box 556 Port Moresby. Mr Duma’s residential address is Section 30 Allotment 6 Granville Port Mor

by PAUL FLANAGAN The Bank of PNG, the legislatively independent central bank for the country, lost significant credibility in its recent justification for why PNG has joined the bottom 2 per cent of countries in refusing to release the standard IMF Article IV report on countries (see here ).  It remains the only country in the East Asia and Pacific not to release an IMF Article IV report undertaken in 2016. BPNG provided six “critical issues” for refusing to release the report.  However, on closer examination, there was only one critical issue (fake GDP numbers used by the PNG Treasury).  And that should be the responsibility for the PNG Treasurer to release a statement on why the PNG was suppressing an independent assessment  by the IMF of the PNG economy. What is the O’Neill government trying to hide on its management of the PNG economy? International investors will easily through see this statement. PNG’s economic standing and credibility has received a severe down

NIUGINI OUTLOOK  UPNG especially was screaming in December that they had no money left to run the university. It was well known that months ago the PNG government had promised a sizeable amount of money to University of Papua New Guinea, PNG University of Technology and University of Goroka to pay for damages and other expenses that were incurred and not budgeted for by the universities as a result of the 2016 student boycott. The declaration that this money would be given to the universities before classes resumed again last September was supposedly told to university heads by Chief Minister Isaac Lupari in private, and in public by Peter O'Neill and other government officials. It was clearly stated in August 2016 and run on EM-TV news that the following amounts would be paid: UPNG: K12 million   Unitech: K43 million UOG: K8 million In the case of Unitech, this money was essential, being that 4 buildings were burned to the ground in late June 2016, including the all-impo

NATIONAL BUDGET SPOOKS PRIVATE BUSINESS AND INVESTMENT IN PNG   by WILSON TALAG Economist Paul Flanagan's recent remarks that appeared in PNG Blogs and elsewhere highlight 8 key areas of what looks to be looming financial disaster.  Mr Flanagan's enlightening report is the basis for this discussion and why the performance of each one of the key areas has started to  spook business and investors.  The seriousness of PNG’s current financial situation is becoming very clear.   A little over a week ago the government came very close to failing to come up with the year end public servant pay.  This near disaster occurred despite supplementary budgets designed to avoid such unexpected money shortages.   Another red flag flying high and warning that behind the scenes, PNG's finances are rapidly deteriorating under the O'Neill government. The 8 key areas of concern are (1) Government lies over the actual size and growth of the PNG economy, (2) Discrepancies  ove

by PAUL FLANAGAN PNG’s government must be embarrassed by the International Monetary Fund’s (IMF) assessment of its economic performance. In an extraordinary step, and the first time in PNG’s 41 year history of Independence, the PNG government has refused to release the IMF’s 2016 summary of the PNG economy. 98% of countries agreed to release this information in 2015 – so the PNG government has moved to the bottom 2% of governments when it comes to economic transparency. In the IMF’s final press release (see here) before Christmas (generally seen as a good time to bury bad news), the International Monetary Fund indicated that “The [PNG] authorities need more time to consider the publication of the staff report and the related press release.” This appears to be polite IMF diplomatic speak for the PNG government not wanting to release the information. The IMF mission visited in mid-2016. An early draft asking for PNG government comments would have been provided about two months ago

by PAUL FLANAGAN In an article for the ANU’s Development Policy Centre eighteen months ago (see here) , I congratulated PNG’s central bank (BPNG) for its very constructive stance in stopping its effective printing of money to fund the government’s budget deficit. I noted how this reflected positively on the independence of BPNG, an independence built into its charter by Sir Mekere Morauta (PNG’s former Prime Minister) and Sir Wilson Kamit (PNG’s central bank governor from 1999 to 2009) in response to PNG’s last major economic crisis in the late 1990s. Unfortunately, this independent role appears to have been reversed from the start of this year. Based on the latest Quarterly Economic Bulletin released on 18 November 2016 and its accompanying tables (esp Table 2-3 for BPNG’s assets sheet see here ) PNG appears to have returned to a very slippery slope of effectively printing money by back-stopping auctions in government securities – a practice initially warned about in September 2

PNGBLOGS WHO IS RESPONSIBLE, LUPARI, THE CHINESE, OR WHO? IF PNGBLOGS GOES BLACK ON PNG COMPUTER SCREENS NEXT WEEK, WE WILL KNOW WHY - IT WILL BE THE RE-CREATION OF A P AUL PARAKA BANANA REPUBLIC STYLE THREAT THAT FINALLY WORKED: In 2010, Paul Paraka, the number one corrupt lawyer in the country according to the Commission of Inquiry into Department of Finance fake payment scams, did something that even today goes down as one of the most banana republic kinds of reactions ever seen in PNG. Here's what happened. When the government Commission of Inquiry on massive theft totally hundreds of millions of kina submitted their report in Parliament, Paraka immediately obtained a court injunction to make it illegal for any Papua New Guinean to read or be in possession of the report and learn about the allegations against him and 18 other lawyers. Included amongst the accused is current Chief Minister Isaac Lupari, alleged to have stolen more than K2.7 million. Paraka's strateg