PNGBLOGS

DOMINIC MELLOR The $3.5 billion national budget for 2011 is the largest ever for PNG, with record levels of development funding allocated to education, health and infrastructure. The government expects to generate sufficient revenues to ensure a balanced budget. If well implemented, a robust budget that prioritizes social development is positive for PNG. There are, however risks in the economic assumptions underlying the budget framework. In particular, large discrepancies in revenue forecasts contained in the Medium-Term Development Plan (MTDP) 2011-2015 and the national budget may create funding expectations that will test fiscal discipline.Also, the government’s historic tendency to vastly under-forecast mineral revenues is potentially diverting resources away from under-funded social sector recurrent expenditure towards discretionary capital spending in supplementary budgets. Medium term settings The construction phase of the PNG liquefied natural

AARON BATTEN Optimism continues to run high about PNG’s development prospects. The last eight years have seen sustained growth across the PNG economy – the first time since independence. It is also the first time that real per capita incomes have begun to increase after a 30 year period of stagnation. Formal sector employment across all industries is now at record levels. Much of this success is attributed to high international commodity prices which have fuelled rapid output and revenue growth. But the growth also reflects increasing output from a variety of sectors and has taken place across a number of regions. Success has not been siloed. Sustained growth has also continued throughout the global financial crisis and despite natural declines in output from maturing mining activities. The biggest cause of optimism in the PNG economy is the upcoming LNG gas project which comes online in 2014. At its peak, the project is expected to increase real GDP by 25 per cent. In 2010 revenues a

AARON BATTEN Optimism continues to run high about PNG’s development prospects. The last eight years have seen sustained growth across the PNG economy – the first time since independence. It is also the first time that real per capita incomes have begun to increase after a 30 year period of stagnation. Formal sector employment across all industries is now at record levels. Much of this success is attributed to high international commodity prices which have fuelled rapid output and revenue growth. But the growth also reflects increasing output from a variety of sectors and has taken place across a number of regions. Success has not been siloed. Sustained growth has also continued throughout the global financial crisis and despite natural declines in output from maturing mining activities. The biggest cause of optimism in the PNG economy is the upcoming LNG gas project which comes online in 2014. At its peak, the project is expected to increase real GDP by 25 per cent. In 2010 revenu

HAMISH MCDONALD, Sydney Morning Herald POLITICIANS often count on the public having a short memory span, but a record was set this week by Papua New Guinea's Prime Minister, Sir Michael Somare. The ''Grand Chief'', as the independence-transition leader is honoured, returned to office explaining he had been away on holiday to use up his accrued leave. This struck a lot of his countrymen as odd, because when he left work five weeks earlier, they distinctly remember him saying he was standing aside to face a tribunal that would decide if he had violated leadership rules. Some unkind reporters dug out the press release from his office which said Somare said would ''now voluntarily step aside and allow the Deputy Prime Minister, Sam Abal, to assume full function and responsibility of the Office of the Prime Minister while he attends to clearing his name''. Somare has been referred to a leadership tribunal to face charges that he didn't submit statemen

HAMISH MCDONALD, Sydney Morning Herald POLITICIANS often count on the public having a short memory span, but a record was set this week by Papua New Guinea's Prime Minister, Sir Michael Somare. The ''Grand Chief'', as the independence-transition leader is honoured, returned to office explaining he had been away on holiday to use up his accrued leave. This struck a lot of his countrymen as odd, because when he left work five weeks earlier, they distinctly remember him saying he was standing aside to face a tribunal that would decide if he had violated leadership rules. Some unkind reporters dug out the press release from his office which said Somare said would ''now voluntarily step aside and allow the Deputy Prime Minister, Sam Abal, to assume full function and responsibility of the Office of the Prime Minister while he attends to clearing his name''. Somare has been referred to a leadership tribunal to face charges that he didn't submit s

THE NATIONAL KEY aid donors, partnering the government in infrastructure development, are threatening to re-direct their aid programme unless the national government moves swiftly to restore integrity and transparency in its tender procurement and financial accountability systems and processes.  Sources within the donor community revealed last night that AusAID was not particularly keen to continue with the current manner of engagement with the government after a three-year major road maintenance contract under its transport sector service improvement programme (TSSIP), which would have started in 2009, fell through due to political heavy-handedness and interference.  The project involved the resealing and maintenance of a part of the Highlands Highway between Lae in Morobe and Goroka in the Eastern Highlands. Reports said in 2009, AusAID’s “no objection letter” recommended a K53 million bid by Shorncliffe, a well established and reputable road sealing company in PNG, to

THE NATIONAL KEY aid donors, partnering the government in infrastructure development, are threatening to re-direct their aid programme unless the national government moves swiftly to restore integrity and transparency in its tender procurement and financial accountability systems and processes.  Sources within the donor community revealed last night that AusAID was not particularly keen to continue with the current manner of engagement with the government after a three-year major road maintenance contract under its transport sector service improvement programme (TSSIP), which would have started in 2009, fell through due to political heavy-handedness and interference.  The project involved the resealing and maintenance of a part of the Highlands Highway between Lae in Morobe and Goroka in the Eastern Highlands. Reports said in 2009, AusAID’s “no objection letter” recommended a K53 million bid by Shorncliffe, a well established and reputable road sealing company in PNG,

PAUL CLEARY The Australian WHEN Papua New Guinea's petroleum minister bought a Cairns McMansion in 2001, the deal was so ``quick and easy'' that the agent selling the property thought he was dealing with the wealthy owner of a coffee plantation. Despite buying in the depths of the global financial crisis, William Duma didn't aggressively negotiate for a better price. He paid $585,000 for the 330sq m, five-bedroom, two-bathroom home with water views after securing the services of a Cairns agent to do the deal. ``I was thinking, where did he get the money from? It was all too quick and easy,'' says real estate agent Shane Trimby, who sold the property. Duma was involved in a much more lucrative business than coffee. As petroleum minister in the government led by PNG's 74-year-old founding father Michael Somare, Duma is the country's oil supremo. At the time of the purchase he was negotiating with ExxonMobil's consortium to build a mammoth $US15 billion

PAUL CLEARY The Australian WHEN Papua New Guinea's petroleum minister bought a Cairns McMansion in 2001, the deal was so ``quick and easy'' that the agent selling the property thought he was dealing with the wealthy owner of a coffee plantation. Despite buying in the depths of the global financial crisis, William Duma didn't aggressively negotiate for a better price. He paid $585,000 for the 330sq m, five-bedroom, two-bathroom home with water views after securing the services of a Cairns agent to do the deal. ``I was thinking, where did he get the money from? It was all too quick and easy,'' says real estate agent Shane Trimby, who sold the property. Duma was involved in a much more lucrative business than coffee. As petroleum minister in the government led by PNG's 74-year-old founding father Michael Somare, Duma is the country's oil supremo. At the time of the purchase he was negotiating with ExxonMobil's consortium to build a mammoth $US15 bi

TAGALI HEADWATERS I truly support Ipa Mondoli in his words. ( http://www.pngblogs.com/2011/01/insights-on-agirus-politics.html )  You have just put it in a picture perfect way. Very sorry for the so called Landowners. No wonder why their Business Development Grants grants have been so delayed for so long and just released after all the required plants/equipment have been in place at the project sites. I just don't know what kinds of business spin offs these Landowners will invest their government gifts into. Stanis Talu, chairman of Gigira Development Corporation which is one of the existing and recognized Lancos have put straight in yesterdays (18/01/11) Post Courier and National that there are no business opportunities for them, effectively rendering the Government's Business Development Grants useless.They can't invest these Business Development Grants in sensible ways in this mega project for couple of reasons; There are no business opportunities in which they can inves

TAGALI HEADWATERS I truly support Ipa Mondoli in his words. ( http://www.pngblogs.com/2011/01/insights-on-agirus-politics.html )  You have just put it in a picture perfect way. Very sorry for the so called Landowners. No wonder why their Business Development Grants grants have been so delayed for so long and just released after all the required plants/equipment have been in place at the project sites. I just don't know what kinds of business spin offs these Landowners will invest their government gifts into. Stanis Talu, chairman of Gigira Development Corporation which is one of the existing and recognized Lancos have put straight in yesterdays (18/01/11) Post Courier and National that there are no business opportunities for them, effectively rendering the Government's Business Development Grants useless.They can't invest these Business Development Grants in sensible ways in this mega project for couple of reasons; There are no business opportunities in which they can

RADIO AUSTRALIA Papua New Guinea's government has deployed a joint security operation to destroy alleged free West Papua activist training camps along the PNG-Indonesia border. The government says illegal activities in Vanimo along its side of the border pose a national security threat to its sovereignty. The joint border security operation comes amid reports Indonesian soldiers have illegally crossed the border in pursuit of Free Papua Movement (OPM) rebels on PNG soil. The operation codenamed, ''Sunset Merona'' was approved and deployed last week. Police, defence, Correctional Services, Border and Customs officers are taking part in the operation. Commander Jerry Frank says the aim is to stop the largely unregulated movement of people and goods across the porous border. "[Things such as] money laundering, drugs and guns exchanges, human smuggling, items like pornographic materials," he said. He says authorities are particularly keen to prevent members of

RADIO AUSTRALIA Papua New Guinea's government has deployed a joint security operation to destroy alleged free West Papua activist training camps along the PNG-Indonesia border. The government says illegal activities in Vanimo along its side of the border pose a national security threat to its sovereignty. The joint border security operation comes amid reports Indonesian soldiers have illegally crossed the border in pursuit of Free Papua Movement (OPM) rebels on PNG soil. The operation codenamed, ''Sunset Merona'' was approved and deployed last week. Police, defence, Correctional Services, Border and Customs officers are taking part in the operation. Commander Jerry Frank says the aim is to stop the largely unregulated movement of people and goods across the porous border. "[Things such as] money laundering, drugs and guns exchanges, human smuggling, items like pornographic materials," he said. He says authorities are particularly keen to prevent mem

AAP Papua New Guinea's Prime Minister Sir Michael Somare, who stood down in December to face a leadership tribunal, has resumed office claiming he has simply been away on holidays. On December 13 last year Sir Michael issued a press statement explaining he would "voluntarily step aside" due to a pending leadership tribunal regarding allegations he failed to lodge financial returns. But on Monday evening Sir Michael's chief-of-staff Paul Bengo said in a statement the PM had resumed office after being on a break, with no mention of the  leadership tribunal. "After more than 40 years in office, Sir Michael has outstanding accrued leave. However he has taken a break of approximately five weeks leave. "This is to advise that upon advice from his lawyer Sir Michael today (Monday) resumed office. "Sir Michael took leave last year on December 10," Mr Bengo states. But Sir Michael's December 13 press release does not mention any holiday break and states