Micro-credit scheme is key to rural growth

I REFER to Terry Kilya’s letter (Nov 19) calling for swift implementation of Government policies given the increase of district support grants of K10 million in the 2008 Budget.
I agree with the writer that the 89 districts of PNG will benefit because they have been marginalised for too long.
This will be the first time about K1 billion is available to the 89 districts in PNG.
The writer identified the much needed projects that require funding in his Wapenamanda district in Enga.
Given the unexpected increase in funding, I believe that each district in PNG will have to revise its district development plan, which is compulsory under the 1997 Organic Law on Provincial and Local Level Government.
Since each district now has more money, it should be in a position to fund more projects. So it is obvious previous district development plans will have to change.
Many people have expressed fear that K10 million is just too much and could be abused by the MPs.
Fear of abuse should not deter this allocation because 85% of PNG’s people live in these districts, where development projects are needed than in our provincial capitals.
To avoid the abuse, I agree with Lagaip-Porgera MP Philip Kikala that K10 million must be tied to projects only and not spent on recurrent expenditures of the districts.
I also suggest that the K10 million be incorporated into the overall district development plan so there is transparency and accountability.
The first challenge for our 89 MP and respective district administrations is to identify the development needs of the district.
The development needs of our districts are not uniform. One distric’s project needs is different from another.
Identifying and funding projects that will have significant impact on the local economy of the districts and socio-economic welfare of the people is vital.
One of the important projects that I believe would have direct impact in the microeconomic level in the districts and on the living standards of 85% of our population is to establish a micro-credit scheme.
It is crucial to set up a micro-credit scheme that is designed to give small amounts of loans to the people in each district who want to engage in microeconomic activities such as raising pigs, goats, poultry, growing carrots, potatoes, selling ice-blocks, fishing and growing vegetables and so on.
The micro-credit scheme should go a long way to facilitate expansion and growth of microeconomic activities or enterprises in our 89 districts.
The 89 Open MPs must bear in mind that financial and other resources are in limited supply but the development needs of the respective districts are unlimited.
We cannot do everything for the districts. We should just help the people to help themselves by engaging them in small business activities.
Many of these activities are both economically and commercially feasible to meet the socio-economic welfare needs of the people but they have been hindered by lack of credit facilities at a micro level.
Establishing a micro-credit scheme may seem an odd job as it has never been the traditional functions of governments the world over .
The traditional role of governments is to maintain internal order and prevent external aggression and provide public goods and services such as roads, bridges, schools, hospitals, parks, among others.
Facilitating microeconomic activities via establishment of credit schemes should now become one of the important functions of the Government and/or the 109 MPs.
If one were to read about the development experiences of the Asian economies, one will note that the governments directly funded or gave money to their citizens who want to start business either within or outside of their countries.
Facilitating microeconomic enterprises is one of the important factors that contributed to the Asian economic success.
One may say micro-credit scheme works in Asia but would not work in PNG because our people are not business minded.
But the important thing is our people must be given the opportunity to allow them to start small economic activities.
Over the past five years, the NA-led Government has achieved an unprecedented macroeconomic success in PNG, yet the people and even ministers have recently expressed dissatisfaction that our economic success has not been reflected in the living standards of the people.
It is a challenge now to achieve microeconomic success, so that the living standards of the people are advanced.
If the rural dwellers are given an opportunity via micro-credit scheme, I am sure it will have a greater multiple effects on the economy and the people’s socio-economic welfare.
This is because focusing on microeconomic activities is an important basis for economic growth and development of PNG.

Mamando Pain
Laiagam