A year of promises and risks

THE ying yang principle derived from ancient Chinese wisdom symbolises the duality of all things: opposites possess small traits of each other.
In all things good there is resident of some evil and, in evil, there is some good.
It is a good philosophy to remember as we embark on 2012, in many ways a very important year in the life of this nation.
It is the year when two multi-billion-kina resources projects, the Ramu nickel/cobalt mine and the PNG liquefied natural gas plant, go into full construction and, in the case of the former, it should start production this year now that all legal obstructions have been cleared.
The impact upon the country from these projects, both positive and negative, will be immense.
Up until now, so much concentration has been on the positive gains for the country – about the inflow of billions of kina, the opportunities for business and employment, and for an unprecedented growth in the economy but be sure that as day follows the night, there will be a lot of negative aspects as well, and plenty of it.
Big money attracts all manner of people and corporations and not all of them good. Drugs cartels, international terrorism, prostitution, people smuggling and money laundering will make their play in a big way here. A population unprepared for the arrival of such evils of development will fall prey and pay dearly for it.
This is what the population is mostly unprepared for and its government has been too busy making the deal and promoting it that it has had scant time to prepare its people for the side effects these projects will bring.
The effects are already here and they will get worse.
Big money erodes the economic base that has always been small and which at best responds sluggishly to such intrusions. The best test is inflation and the value of the kina.
There will be high economic growth but there is also continuing shortage of skilled labour and available land which pushes up wages and rental prices. High global demand is also pushing up food and fuel prices which will ultimately lead to high cost of living. There is also concern expressed in government circles that official inflation forecast at 8.2 per cent in 2011 are actually under-estimating the true extent of inflationary pressures in the economy.
So the domestic economic outlook while positive is not without risks. Those risks include volatile and falling commodity prices, landowner issues, bad weather, mine disruptions and rising inflation.
The kina, whose value has been sustained with a managed float against a small basket of currencies of PNG’s most significant partners, has been rising steadily aided by a weakening US dollar.
From about 0.32 US cents to the kina in 2007 the kina appreciated in value to 0.38 in March last year and was yesterday worth 0.47 cents. This makes a significant difference in the cost and value for PNG’s imports and exports. 
 2012 is also important because it is the year of the general election. Every election has always been fraught with tension and violence but this election will be especially so because the stakes are very high now.
Being a member of parliament once used to be a thing about power. Now, added to power is the sheer weight of money. To be an MP means one gets to control and dictate the use of, literally, millions of kina. People will die during this election and some MPs are openly promoting the idea, stating in certain highlands electorates that their supporters can kill and they were ready and willing to pay compensation. This is criminal intent and criminal talk of the worst sort.
2012 is the year the PNG budget for the first time busts the K10 billion figure. It is expected that there will be no looking back from here on. But whether K10 billion or K10 how it is spent is the most important question.
Far too much money has been wasted in the past that the mere size of the budget is unimportant. It is far more important to manage the use of this money.
2012 is important is also important because it is likely women will get 22 exclusive seats to contest for. This will see the entry into parliament, for the first time, of 22 and possibly more women. The political landscape will never be the same again.
It is the year when the PNG Games will be staged in Kokopo and the Olympics will be held in London.
It is a year when we look forward to a bright future but a future that is fraught with risks, risks attached to its very brightness.
It pays to count the blessings and take extra care to see the curses sprinkled throughout as well.