Economic development

IT does not take a rocket scientist to rightfully assert that the overall economic development of PNG will face a quite turbulent era in the following years to come due to the lack of fiscal responsibility by the previous government.
The recent commendable proposition by Prime Minister James Marape to reduce the salary of certain heads of government departments including MPs is a clear act of bracing for the impending storm the national economy is about to go through.
This is evident when Charles Abel, who is a government minister, publicly warned about two months ago or so of billions of kina shortfall in the nation’s coffer in the near future.
Such negative implications always tend to generate grim sentiment to potential investors, but regardless of this, the truth must still surface.
To avoid such a predicament, the government must seriously consider to invest in fund-raising mechanisms especially in offshore economic giants.
China has demonstrated unarguably a revolutionised income-generating machinery by launching its Road and Belt Initiative program, a feat which includes billions of dollars’ worth of overseas infrastructure developments that would with no doubt earn a fat return in the long run.
PNG does not have such a mammoth capability monetarily speaking to invest in such extraordinary magnitude as China, but make no mistake, the path has already been set, and it is a matter of adopting such a model but in a more simplified and miniaturised version that is suitable to realise certain endorsed economic goals and targets.
Given that China is among PNG’s major trading partners, the latter needs to invest in the former’s exponential consumer growth.
Critics all too often point out that China’s economic investments are more one sided, but given the reciprocal nature of trade, what can be done to at least have a finger in China’s ever-increasing pie?
Capitalising in China’s massive consumer demands could most likely be the key to boost national economic growth and, as in PNG’s case stabilise the dwindling foreign exchange which continues to hurt the value of the kina. Chinese spiralling cities house hundreds of millions of people, and the government must look at ways of setting up businesses there.
Tax is paid to the Chinese government and Chinese citizens are employed while PNG reaps the profit. Hospitality and tourism, malls and supermarkets are very simplified yet pragmatic examples of being potential X-factors in PNG’s economic uncertainties.
The onus is on the national government to establish such practical investments. The previous regime was often praised for “thinking outside the box”; that was for the development part of the story only but its principle method of securing funds was very old school: loan. Nothing but loan.
The ball is in Marape’s court if he wants to prove to the nation that he is a creative leader who has the ability to mellow not all but some of the so many “wrongs” in the country.
The government cannot continue to rake in hard-earned cash from its citizens through its burdensome tax programmes.
If foreign-owned businesses are some of the crucial factors why the PNG kina is seeping out of the nation, then why not the government establish businesses overseas or come up with realistic incentives to encourage its citizens to do so in order to at least recoup some of the money and even make huge profits out from them?
Currently, it all seems to be a one-way traffic and this trend has to stop now. The idea is in plain sight, probably waiting for the right implementer.

Timothy Nigaul
OCDT