The National, Thursday November 5th, 2015
WHEN Greece’s economic troubles were just surfacing some years back, the austerity measures asked of the population might have had
a ring of nobility about them.
Today, however, austerity has become something of a curse because it only fuels a cycle of misery for the Greek public.
It seems the best of intentions by the European Union and the world at large are just insufficient to truly bail out the sinking economy.
The more bail out money, the more conditions, the more austerity is required of the government, business and the public.
Public demonstrations, businesses going bust and frequent changes of government have all been hallmarks of the country’s economic trials.
The world wonders what might have gone wrong in the birthplace of democracy, philosophy in general and much of today’s body of knowledge of the sciences, mathematics and art.
In Papua New Guinea we have bragged and others have marvelled at this country’s natural wealth.
Some time back a prime minister in a jolly mood declared that his was an island of gold floating in a sea of oil.
The budget lock up on Tuesday morning was told that the El Nino induced drought and the collapse in the price of oil have come
in a ‘double whammy’ for us.
Papua New Guinea may not be in the same league as the United States or members of the Organisation of Petroleum Exporting Countries but its crude oil exports account for a significant portion of its annual revenue.
So when the price of oil slumps by up to 50 per cent as we were told it has, that must hurt.
A world economy largely dependent on burning fossil fuels obviously feels the impact of such fall in
For the Papua New Guinea economy it is not only crude oil that is affected but other commodities such as agricultural produce and mineral – all the country’s major revenue earners for years – have likewise been hit by drops in world prices.
The fall in revenue has been in discussions the past few months and when the Government began effecting major cuts to essential service agencies such as the National Department of Health and faced difficulties with its funding of the Education Department it was sending out a very clear message that there was a cash crunch afoot.
Finance Minister James Marape had come out publicly with an admission that there was indeed a shortfall in government revenue projections for the 2015 fiscal year.
Consequently it would and has indeed begun prioritising and cutting back on wastage and some recurrent expenditure.
Capital expenditure for some major infrastructure projects will have to be deferred to the next or following budget. Tuesday’s budget was reflective of such earlier predictions by the Government.
The budget cutbacks on expenditure announced in the budget speech do not compare in severity with what countries like Greece would do.
Papua New Guinea is a by far a lot more fortunate than most other countries in the world.
And problems may be still far into the future.
Nevertheless, their experiences are clear lessons even for a country well-endowed with the abundance of nature, is still susceptible to the dictates of modern economics and especially so by nature itself.
The current drought has clearly exposed Papua New Guinea’s vulnerability.
The passage of the K14.2 billion 2016 budget by 84 votes to 12 is yet another show of the O’Neill-Dion Government’s numerical strength.
And it is further proof that the Opposition would have to rethink its motion of no confidence or work harder to win the support
it needs to make the
After the first attempt to get the motion tabled in Parliament failed, the Opposition reworked and resubmitted it to the acting Speaker amidst the budget session on Tuesday.
The motion will have to be deliberate on by the Private Business Committee before it gets introduced in Parliament in the next sitting.
The motion was signed by 17 MPs including two members of the ruling People’s National’s Congress party.