THERE is a sense of dynamism within the PNG economy. Bank of Papua New Guinea has forecast growth this year which will hit around 7%, making it the best year in over a decade.
Much of this dynamism is coming from the private sector.
Even SP Brewery is banking on solid economic growth with its K90 million investments at breweries in Port Moresby and Lae.
Virtually every company worth its salt is doing the same, from big listed companies such as Lihir Gold, Ok Tedi, BSP, New Britain Palm Oil, Steamships Trading and Ramu Sugar to much smaller supermarket groups and other entrepreneurs.
A range of other companies, including some newcomers to the scene, are starting a variety of commercial and residential projects that will also create many hundreds of jobs, especially in the national capital.
Meantime, The Happy Gardener is giving Port Moresby a face lift and employing many young people in creative work that will inculcate in them a good work ethic.
Mineral exploration companies opened up their cheque books earlier, commencing from around 2003, even before the commodity price boom brought windfall revenues to the Government.
But after so many years of neglect and backsliding, it is not surprising that many people in rural areas, particularly in the more remote places, have yet to feel the benefits of a growing economy.
Just in the past week, this newspaper reported that a village just 100km from Port Moresby had finally received piped water, ending the long trip that many people had to make to a nearby river for their daily needs. This is a situation repeated in many parts of the country.
What about the school kids, who have to trek for two to three hours to get to school and to do the same to get home everyday? Or the smallholder who cannot get his coffee bags to the market or only does so at an exorbitant cost?
But most of the time – except when outsourcing occurs and public/private partnerships are implemented – the dynamism of the private sector does not directly impact on provision of public services.
This is not totally true because in PNG many larger companies that operate in rural areas and smaller urban centres end up providing such services to the people in their neighbourhood even though this is really not their role.
It is for this reason that we look to governments at the national, regional and district levels to effectively spend budget allocations available to them.
It is also why economists remain concerned about issues such as whether the bureaucracy is too large, consuming too large a proportion of the national budget and leaving too little for provision of public services for the population at large.
Besides issues of efficiency and productivity, there is also the question of how much is lost due to corruption.
For the last two years the total Government budget has been in excess of K7 billion a year, which, on the basis of a total of about six million people, works out to an estimated K1,400 annually for every man, woman and child in this country.
This is more than double what the government of the day had at its disposal only four years ago.
So it is an entirely legitimate question to ask if Government services in the intervening period has shown a 100% improvement? Well, if that is too ambitious an expectation and we take away the inflationary impacts, could there have been a 70% improvement?
I raise these issues to bring up, once again, the question of recent supplementary budgets that totalled K3.8 billion.
Hopefully, with the Government machinery that is already in place, administrative and bureaucratic costs will be minimised.
Unfortunately, we do not spend enough on our research establishments and such qualitative work is rarely done by outsiders so we may never have a clear answer to this question.
Technocrats and bureaucrats, just like many of their counterparts in the private sector, love the notion of empire-building even though many such edifices rarely pass the test of time.
One of the best ways in which the public can have confidence that funds from the supplementary budgets are well utilised, is if the system allows for a great deal of transparency.
This requires that rules and regulations are followed so that major jobs are tendered out and successful tenderers receive public recognition and the actual work is eventually carried out, as is the case with the super-highway being built in Waigani.
Between the first K400 million supplementary budget in November 2005 and the fourth K1.64 billion budget in October 2007, about K860 million had been spent by the end of last year.
This money was basically spent in 2006 and 2007. To take out some random examples, we find that an additional K215.5 million – on top of previous commitments – had gone to the transport sector, particularly for roads.
Given the lack of publicity about the calling and awarding of tenders, one has to wonder whether these projects really took place. Put another way, is the Highlands Highway in that much better shape because an additional K70 million was spent on it over the last two years?
According to the 2008 budget, in that same period, K70 million was spent to rehabilitate the nation’s hospitals. If that was the case, shouldn’t we have read in the newspapers – or heard on the radio – that various hospitals around have received a facelift?
This spending suggests a level of new dynamism within the public sector, which has not been readily apparent.