| Business |
Many challenges for new government
With polling ending at the end of the
week, this seems to be a good time to turn to the challenges
facing the new government that will be formed in the next few
weeks.
It is probably a sad reflection, but true, to suggest that many of
the problems faced are not much different to the challenges of the
past. We have been constantly reminded of these issues in the
daily media, in speeches by our national leaders and from the
observations of overseas analysts and commentators.
One way of measuring possible future achievements is against the
goals encapsulated by the Millennium Development Goals laid out by
the United Nations as targets for 2015.
They include the halving of extreme poverty, achievement of
universal primary education, promotion of gender equality and
issues such as combating of HIV/AIDS and malaria and ensuring
environmental sustainability. To this list, one needs to add the
subject of law and order.
Unfortunately the record for PNG has not been a good one in these
areas and it appears unlikely, at this stage, that many of these
goals will be met in the timeframe set.
Despite this negative note, there is indeed much that can be
achieved if the next government is able to build on the
achievements made during the five-year term of the Somare
Government.
The most positive have been the government budget surpluses,
broader spending initiatives made possible by ‘windfall’ tax
revenues from the commodities boom, the greatly reduced level of
foreign debt and the big increase in the country’s foreign
exchange reserves.
This is a far cry from the situation inherited by the Somare
Government when it took office in August 2002 when the exchange
rate of the kina was plunging to an all-time low and politicians
and bureaucrats had to cope with the worst budget blow out in the
country’s history. Fortunately much of that is behind us.
There had been grave concerns expressed within PNG, and especially
from commentators in Australia, following the sacking of former
treasurer Bart Philemon that fiscal prudence was about to go out
the window. This has fortunately been shown not to be the case.
According to the latest report from the Bank of Papua New Guinea
in the three months to March this year, a particularly sensitive
period in view of the lead-up to the national elections, the
National Government had an overall surplus of K231.5 million or
about 1.3% of gross domestic product.
BPNG said this was due to higher revenue as well as lower
expenditure. Key tasks for the incoming government will include
the need for a major review of the education and health sectors to
determine if these public services can be ramped up to meet the
Millennium Development Goal targets in the coming eight years.
Particularly in light of the comments by Health Minister Sir Peter
Barter about the lack of spending in the health sector, from
supplementary budget funds that have been set aside, there is
clearly a need for a thorough review of available funds and
whether they are being put to the best possible use.
The government, clearly, will have to deal with the shambles
represented by current telecommunications policy.
It was most unfortunate that the Somare Government, after
overturning privatisation of Telikom PNG on two occasions, chose
to instruct the ICCC to issue two new mobile phone licences and
then to subsequently announce a withdrawal of those licences.
At least one of the companies with a new licence, Digicel, has
gone to considerable lengths to establish a credible presence and
public reaction is indicative of the highly positive response this
company has generated.
The next government will also have to deal with the question of
the legitimacy and purpose of the newly established Petromin,
which is to be gifted with government-owned stakes in various
resource projects and run like a private company.
There have been some half-hearted attempts in the recent past to
deal with corruption and an incoming government will need to
determine its stance on the so-called Moti affair and the
suspended inquiry into the Department of Finance.
On the fiscal front, much of the good work of the past has to be
maintained to provide for prudent management of government
spending, along with a satisfactory level of good governance and
accountability.
 
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