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From Theo Michael on ‘Take Back PNG’: Prime Minister Marape and his audacious vision for PNG
Take back PNG, especially is synonymous to a national voice of economic freedom but has not political cohesion.
Many sees it from religious perspective-even mentioned by PMJM himself.
But the translation of his rethoric take back PNG still fall short to creating opportunities that will harness indigenous participation for economic freedom.
The recent SME loan arrangement was Iscariotic in nature-right policy decision underpinned by wrong intention.
From Songo Nore on Kina devaluation revisited
I agree Prof. David Lea, but strongly disagree with Prof. Martin Davies.
Depreciating the kina exchange rate by 20% will only increase the cost of imported goods as it will require more kina to buy imported goods. Businesses are driven by profit-motive and if they pay a higher price for imported goods, then they will charge higher price to the consumers to make profit. The prices of basic necessities like imported rice, fuel, medicines, etc. will skyrocket because of imported price inflation. School fees for colleges and universities will also increase, leading to massive withdrawals from low-income earners, depriving them of their basic right to higher education. Generally, the cost of living will become very expensive because of a mere tweaking of monetary policy on the exchange rate. PNG is one of those countries with a very high cost of living, and devaluing the PNG Kina by 20% as proposed by Prof. Martin Davies will only worsen the socio-economic status of most ordinary Papua New Guineans, systematically pushing them into poverty and below poverty line. Hyper-inflation would be the most likely effect.
Also, most of the state-owned-enterprises foreign debt and the government's foreign debt are held in US Dollars. Depreciating the kina exchange rate by 20% devaluation will require more kina to offset foreign debts. The USD value of our foreign debt will remain status quo, but the kina value will increase because of currency devaluation. Therefore, most of the SOEs will face difficulties to offset foreign debts because their revenues will be diverted toward debt-service repayments. Thus, loss-making will be inevitable. That was the case after October 1994 when the kina was floated and then devalued by 10-12% by Sir Julius Chan's government. The SOEs will not make profit but continue to make losses. A particular case is the Air Niu Gini where imported aviation fuel will cause flight fares to go up to make profits but because of price controls mechanisms, it will continue to make losses instead of profits. Government revenues from this important SOE will shrink bigtime which can contribute to our continuous fiscal deficits scenario.
Given the fact that the former US President Richard Nixon has suspended the convertibility of the US Dollars into gold, there is no guarantee for price stability on the global market. On 15 August 1971, 35 US Dollars is worth an ounce of gold. After the abolishment of its convertibility into gold, now an ounce of gold is worth $1,790 US Dollars. PNG Kina is pegged to the US Dollar, and it uses the USD to measure its value. With a depreciating US Dollars overtime, the PNG Kina is also depreciating fast. On the same note, currency devaluation by 20% will remove the kina's purchasing power bigtime.
Lastly, the government continuous fiscal deficits and perpetual foreign exchange shortages did not improve with the kina devaluation of 10-12% in 1994 and then by 40% kina devaluation in 1998 as argued by IMF, World Bank, and other international donors.
I think it is time we should 'think out of the box' as to how we address the problem of continuous foreign exchange shortages and fiscal deficits in Papua New Guinea. And the first step is for the US to revert back to the Gold Exchange Standard to help other countries
which are using the US Dollar as an anchor currency to maintain price stability. Secondly, the International Monetary Fund must not impose restrictions on its 186 member countries in regard to the setting of exchange rate arrangements, even if it means for countries to choose to peg their currencies to gold. Finally, PNG is facing a chronic shortage of foreign exchange for more than a double decade (1995-2020) and the government must innovate to new exchange rate arrangements to deal with their foreign exchange shortages and fiscal deficits.
From Christine O'Halloran on PLS+SWP=PALM: more questions than acronyms
I hope there won't be any confusion with PALMS! www.palms.org.au
From Trust Maka on Women’s economic empowerment: five lessons from the field
Good information on women empowerment!
From Rejon Paul on Can PNG become the richest black nation in the world in ten years?
When dreaming about the things, our mind can confuse us. Our mind can make every thing possible. But to put in practice, it will take time.
1 Time and resource
2 Management and leadership
3 Political influence
4 Corruption
5 Policy
Just for the limited time, if PM managed above 5 points, then at least he will do some changes.
Otherwise there are big question marks.
From Stephen Pollard on Advancing the UK’s new aid agenda
Spot on Graham and not just UK and not just DFAT.
From Graham Teskey on Advancing the UK’s new aid agenda
Certainly the point about buying short-term results is relevant: there can never be any 'skipping straight to Weber'. Now Raab has been sacked it will be interesting to see what may change. Probably little.
From Kiole IMALE on PNG: the hungry country
The report for me truly is unsound.
I suppose there is another interest that we can not easily figure out. Using Western Template to measure hunger in PNG does not resonate.
I have land which I own, I have forest which I own, I have waters which I own. Only the lazy go hungry.
From Linda Kelly on Advancing the UK’s new aid agenda
Very insightful and useful blog Graham. Might also be relevant to DFAT right now???
From Anna Gibert on Advancing the UK’s new aid agenda
Great piece - with much to consider for the direction of Australia's aid program and the need for approaches underpinned by this kind of sophisticated understanding around how social change happens and the usefulness (or otherwise) of external actors in that process.
From Shailendra Singh on Solomon Islands public positive about their government’s COVID-19 response, but divided on the vaccine