PNGBLOGS

by PAUL FLANAGAN   The PNG Government released its Mid-Year Economic and Fiscal Outlook ( MYEFO ) on Monday – the update on the 2015 budget. The estimated budget deficit for 2015 blows out from an already high budgeted 4.4% of GDP to 9.4%. This would be the highest in PNG’s history. Public debt levels are expected to skyrocket from the earlier estimate of 27.8% of GDP to 41.3%. In Australia, such a rapid change in the estimated fiscal position would go well beyond being termed “a budget crisis”. PNG’s official figures are much worse than at the time of PNG’s last economic crisis at the end of the 1990s (see graph below). PNG expenditure and revenues as a share of GDP – with updated figures from 2015 MYEFO Note: The gap between the lines indicates the size of the government deficit or surplus. Both lines exclude grants (aid). The drivers for the rapid deterioration in PNG’s fiscal situation are the fall in international commodity prices, a growth slow down as well

ONECOUNTRY The problems of LNG Landowners are long time in the making, not just of this LNG Project. The attitude of government in not conducting social mapping and sitting down with its own citizens and determining land boundaries, trupela landowners, exact nature of and bundle of rights applying to various groups in respect of project areas and pipeline corridor, is not new. In the past it has been just shoving matters down the throats of people. The Kutubu and the Gobe Projects are clear examples. In respect of the Gobe project, the government instead of resorting to social mapping prior to granting Development license, it bulldozed it and forced the people to camp in Port Moresby fighting over who owns what. They never had a chance to negotiate their equity or royalty rights. It then locked up their meager royalties and forced the people to enter into serious debt living in the corridors of court houses trying to determine who owns what- something the government should have done as

ONECOUNTRY The problems of LNG Landowners are long time in the making, not just of this LNG Project. The attitude of government in not conducting social mapping and sitting down with its own citizens and determining land boundaries, trupela landowners, exact nature of and bundle of rights applying to various groups in respect of project areas and pipeline corridor, is not new. In the past it has been just shoving matters down the throats of people. The Kutubu and the Gobe Projects are clear examples. In respect of the Gobe project, the government instead of resorting to social mapping prior to granting Development license, it bulldozed it and forced the people to camp in Port Moresby fighting over who owns what. They never had a chance to negotiate their equity or royalty rights. It then locked up their meager royalties and forced the people to enter into serious debt living in the corridors of court houses trying to determine who owns what- something the government shoul

OP.ED PAPUA New Guinea is ill-prepared for the impact of LNG. Up to now, the project has been thought of as something that might happen and that, if it did, it would impact the financial and economic sectors of the country and little else. Such thoughts are drawn from the shallow pool of ignorance and PNG pays a hefty price for ignorance. Ill-prepared, both as a government and as a people, the full benefits of any resource project have overflown PNG entirely, leaving it to flounder in their wake and fighting over pet fodder such as royalties and taxes while the prized steak in substantial control and ownership and, in major spin-off contracts, have been left in the control of the multi-national conglomerates. Bougainville, Ok Tedi, Misima, Kainantu and Kutubu oil have come and go. There is absolutely nothing to show for them. The reason is simply ignorance. Ignorance and a rather peculiar reluctance to learn from past lessons. That especial, if tragic, trait of PNG’s persists today and

OP.ED PAPUA New Guinea is ill-prepared for the impact of LNG. Up to now, the project has been thought of as something that might happen and that, if it did, it would impact the financial and economic sectors of the country and little else. Such thoughts are drawn from the shallow pool of ignorance and PNG pays a hefty price for ignorance. Ill-prepared, both as a government and as a people, the full benefits of any resource project have overflown PNG entirely, leaving it to flounder in their wake and fighting over pet fodder such as royalties and taxes while the prized steak in substantial control and ownership and, in major spin-off contracts, have been left in the control of the multi-national conglomerates. Bougainville, Ok Tedi, Misima, Kainantu and Kutubu oil have come and go. There is absolutely nothing to show for them. The reason is simply ignorance. Ignorance and a rather peculiar reluctance to learn from past lessons. That especial, if tragic, trait of PNG’s persists today

OP/ED A young cocoa grower in Morobe stopped the Chief Secretary, Manasupe Zurenuoc, not too long ago at the Lae Hotel International for a five-minute door-stop lecture. The farmer, whose name we do not know, wanted to know why the government was paying MoA, UBSA, LBBSA, BDG and a host of other “free” money when the first gas has yet to be sold. He wanted to know if those like himself in the agriculture sector, which has sustained the economic lifeline of this country for longer than this country has been independent, could have access to similar free money. He said people in the agricultural sector work hard from sun up to sun down for every morsel of grain or kilogram that is produced which takes many months before anything is paid to them. And, then, it is kina for kilogram and nothing more. We remember this young man’s enquiry with some feeling as we see the mad charade that surrounds the liquefied natural gas like some bad smell that will not go away. The latest was the mob action

OP/ED A young cocoa grower in Morobe stopped the Chief Secretary, Manasupe Zurenuoc, not too long ago at the Lae Hotel International for a five-minute door-stop lecture. The farmer, whose name we do not know, wanted to know why the government was paying MoA, UBSA, LBBSA, BDG and a host of other “free” money when the first gas has yet to be sold. He wanted to know if those like himself in the agriculture sector, which has sustained the economic lifeline of this country for longer than this country has been independent, could have access to similar free money. He said people in the agricultural sector work hard from sun up to sun down for every morsel of grain or kilogram that is produced which takes many months before anything is paid to them. And, then, it is kina for kilogram and nothing more. We remember this young man’s enquiry with some feeling as we see the mad charade that surrounds the liquefied natural gas like some bad smell that will not go away. The latest was the mob act

OP/ED The 11th Mining and Petroleum Conference in Sydney, Australia kicked off yesterday. And in a packed room, PNG’s Oil Search Limited, a major partner in the LNG project, shocked the experts and government officials including ministers from both countries that it has spent a whopping K11.931 billion in oil benefits between 1992 and 2009. And that is nothing on the ground to show for this money, the company says. That is the verdict from oil industry supremo Dr Peter Botten of Oil Search Limited who said there was “no significant appropriate improvements in living standards” had occurred to Papua New Guineans from billions of kina received by landowners, provincial governments and the national government as resource benefits over the last 17 years. Today we are told some 200 people have died from cholera in Western Province. Apart from Cholera, TB, Malaria, HIV/AIDS, Cancer and many other diseases are killing our people. The National Department of Health has admitted that our health

OP/ED The 11th Mining and Petroleum Conference in Sydney, Australia kicked off yesterday. And in a packed room, PNG’s Oil Search Limited, a major partner in the LNG project, shocked the experts and government officials including ministers from both countries that it has spent a whopping K11.931 billion in oil benefits between 1992 and 2009. And that is nothing on the ground to show for this money, the company says. That is the verdict from oil industry supremo Dr Peter Botten of Oil Search Limited who said there was “no significant appropriate improvements in living standards” had occurred to Papua New Guineans from billions of kina received by landowners, provincial governments and the national government as resource benefits over the last 17 years. Today we are told some 200 people have died from cholera in Western Province. Apart from Cholera, TB, Malaria, HIV/AIDS, Cancer and many other diseases are killing our people. The National Department of Health has admitted that our heal

ABC Pacific Beat Papua New Guinea's former Prime Minister, Sir Rabbie Namaliu, has called on the Australian government to put more aid money into training and education to help PNG cope with the enormous brain drain being created by PNG's resources boom. In the PNG budget delivered last week, Treasury and Finance Minister, Peter O'Neill announced big increases in spending on education and health. Sir Rabbie Namaliu says these were made possible by the increasing revenue going to the government from the resources boom, but he says that is not enough to deal with the scale of the problem. The former Prime Minister, now chairman of Kina Asset Management, says money currently being paid to high-cost Australia aid advisors would be better spent on training Papua New Guineans. In Port Moresby today, Papua New Guinea's parliamentarians are debating the budget as Sir Rabbie Namaliu explains. Presenter: Pacific Economic and Business reporter, Jemima Garrett Speaker: Former PNG P

ABC Pacific Beat Papua New Guinea's former Prime Minister, Sir Rabbie Namaliu, has called on the Australian government to put more aid money into training and education to help PNG cope with the enormous brain drain being created by PNG's resources boom. In the PNG budget delivered last week, Treasury and Finance Minister, Peter O'Neill announced big increases in spending on education and health. Sir Rabbie Namaliu says these were made possible by the increasing revenue going to the government from the resources boom, but he says that is not enough to deal with the scale of the problem. The former Prime Minister, now chairman of Kina Asset Management, says money currently being paid to high-cost Australia aid advisors would be better spent on training Papua New Guineans. In Port Moresby today, Papua New Guinea's parliamentarians are debating the budget as Sir Rabbie Namaliu explains. Presenter: Pacific Economic and Business reporter, Jemima Garrett Speaker: Form

JUSTIN ROHRLICH Reports have emerged that ExxonMobil ( XOM ) will begin drilling for natural gas in Papua New Guinea. The company’s operations are expected to bring $30 billion -- more than double its current GDP -- over 30 years, but many are wondering if Papua New Guinea, named one of the world’s most corrupt countries by Transparency International, will be able to avoid the so-called “Resource Curse.” The Resource Curse is the paradox that occurs when a country finds itself sitting atop vast riches in the form of minerals, precious metals, and so forth, but finds itself pushed deeper into poverty and societal disrepair. According to the Christian Science Monitor , Juan Pablo Pérez Alfonso, one time Venezuelan oil minister, likened oil to “the devil’s excrement”. Sheikh Ahmed Yamani, his Saudi Arabian counterpart, reportedly once said, “I wish we had found water.” Case in point: According to The New York Times , the chief of Kili, a local Papua New Guinea town, received $

JUSTIN ROHRLICH Reports have emerged that ExxonMobil ( XOM ) will begin drilling for natural gas in Papua New Guinea. The company’s operations are expected to bring $30 billion -- more than double its current GDP -- over 30 years, but many are wondering if Papua New Guinea, named one of the world’s most corrupt countries by Transparency International, will be able to avoid the so-called “Resource Curse.” The Resource Curse is the paradox that occurs when a country finds itself sitting atop vast riches in the form of minerals, precious metals, and so forth, but finds itself pushed deeper into poverty and societal disrepair. According to the Christian Science Monitor , Juan Pablo Pérez Alfonso, one time Venezuelan oil minister, likened oil to “the devil’s excrement”. Sheikh Ahmed Yamani, his Saudi Arabian counterpart, reportedly once said, “I wish we had found water.” Case in point: According to The New York Times , the chief of Kili, a local Papua New Guinea town,