Business
It's Not All That Rosy In PNG
People struggling, despite what Govt says
Spotting a swollen face, Linda returned to her usual market place to sell her betelnuts and loose cigarettes. She was there the day before and the swelling on the face was the result of a beating she suffered at the hands of the police. She had to be physically removed after she ignored repeated warnings not to sell betelnuts and loose cigarettes at a busy sidewalk in Papua New Guinea's capital city, Port Moresby. Linda knows the sidewalk is not a city council designated market, but she also knows that it is a prime location where she is able to make enough money to support her extended family.
She lives in a shack nestled between the yards of a car sales company and a hardware store in Gordons, Port Moresby's busy industrial centre. It is a crowded little shanty, which she uses only to sleep at night and spends the entire day at the sidewalk market. Sometimes she sells throughout the night and catches up on little sleep she could afford on the sidewalk when her younger sister comes to relieve her. "I do not have a job. This is the only means where I can find little money to support myself in the city. Life is becoming very tough." Elsewhere in Port Moresby, there are hundreds and thousands like her, either selling betelnuts and loose cigarettes or involved in all kinds of money-making activities, both legal and illegal, to make ends meet in a city where life has become a struggle.
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Others who could not cope anymore resort to crime. They target the affluent few, most often to satisfy a need. But sometimes they do it to release their anger and frustration over a system that has failed them. Every day is a struggle. The cost of basic food items, clothes, and other daily essential items are beyond their reach. Those who own cars cannot afford to keep them on the road because of high fuel, spare part and traffic registration costs. Bank charges, hospital and school fees and other vital service fees have also skyrocketed. Those from other provinces have not returned home for years because they cannot afford the increasing airfares. For some in Port Moresby, going home is like travelling to Cairns or Brisbane in Australia. For others it is even cheaper to fly to Australia than to go home.
For those in the rural areas, the situation is much worse. Government institutions only exist by name. Health and education services have deteriorated and infrastructure like roads, bridges and wharves have wasted away as a result of many years of neglect.
Those most affected are those in areas once thriving with logging activities. The closure of many of these projects have sent people backward into lifestyles much tougher than what they had been living before the introduction of logging activities. "We boil our food with sea water because we cannot find salt anywhere. We use stones in place of soap to scrub our clothes," a timber landowner, Sangalua said. She comes from a remote part of the country's West New Britain province. It is an area where the closest decent store is days away by boat. The shipping service has since ceased with logging activities in 1999.
Unfortunately, the government continues to paint a rosy picture and that has been the concern for many Papua New Guineans. They believe that the real facts about the state of the economy have not been disseminated to the masses.
This is again been seen in the recently passed Kina 4.27 billion 2002 Budget.
When handing down the budget, Prime Minister Sir Mekere Morauta said interest rates have fallen by about 64 percent, spurred by the Government's programme of reduction of its debts to domestic financial institutions, reduced expenditure, reduced commercial borrowings and attack on inflation. He said in 1999, the interest rate on 182-day treasury bills reached over 28 percent. This rate is now 10.16 percent. "Inflation has also fallen by around 64 percent. The rate of inflation over the 12 months to last June was 7.9 percent. For the corresponding period the year before, it was 28 percent. "For two and a half years, the kina has traded in a stable range. Careful management has prevented the precipitous falls and volatility experienced between the middle of 1997 and the middle of 1999. Under my government, the kina has broadly held its value against important currencies such as the United States and Australian dollars and the Japanese yen," Morauta said. "This has not been easy, with the international economic environment now in a worse condition than at any time since our independence. A more stable kina has been a valuable support to economic and business stability through difficult times. "Reserves of foreign currency have increased more than four times. When my government took office, there was only $US89 million in the coffers. Foreign exchange reserves now stand at $US368.5 million." Morauta also said that the underlying assumptions of the budget are realistic. They are: real GDP growth of 1.2 percent, an inflation rate of 8.3 percent, an interest rate of 182-day Treasury Bills of 10 percent, a gold price of $US285 an ounce, and an oil price of $US23.50 a barrel. Some of the concerns by Papua New Guineans have been highlighted by the Opposition spokesperson on financial matters, Masket Iangalio in his reply to the budget.
Iangalio said public debt has risen from Kina 3 billion, when Morauta took office in 1999, to Kina 8 billion at present, with the Prime Minister failing to disclose that the domestic debt has also risen significantly.
He said the 2002 budget was completely reliant on privatisation proceeds to fund the fiscal deficit, and if these are not forthcoming, then domestic borrowing will be significant.
