2024 started terribly for Papua New Guinea as civil riots rocked the nation. What started as a protest by law enforcement officers (police, defence force and corrections staff) on 10 January over high deductions from their first pay of the year quickly escalated to looting and destruction of shops in Port Moresby as people took advantage of the security vacuum in the city. The violence quickly spread the next day to Lae, Goroka, Bulolo, Kavieng and Kokopo, albeit on a smaller scale, but was quelled by the rapid intervention of law enforcement in those locations.
Prime Minister James Marape convened an emergency cabinet meeting, declared a 14-day state of emergency (SOE), and suspended the secretaries of the departments of finance, treasury and personnel management. The police commissioner was also suspended, and an acting commissioner appointed to oversee the SOE. Police reinforcements and soldiers were deployed to restore and maintain security in Port Moresby. An investigation was initiated. The government also threatened to shut down access to social media.
In terms of costs, more than 20 people died and many more were injured during the riot. Many retail companies suffered millions of kina worth of damage in goods and property. The Gerehu shopping district, which serves a large suburb in Port Moresby, was devastated.
Hundreds of jobs were lost and many small businesses, including those of farmers who supply the supermarkets in the city, were badly affected. It will take time and investment for the many businesses, large and small, that suffered extensive damage to recover. Then there are the negative impacts on the country’s reputation and the insecurity felt by thousands caught up in the riots.
The political fallout from the riot is already evident. Seven backbench MPs have left government. The prime minister still has a huge majority, but his leadership has been challenged by a member of his own Pangu Pati. The timing could not have been worse for Marape: next month the 18-month grace period ends – the period in which an attempt to remove a prime minister following a general election is forbidden by law. For now, Marape looks safe, but he has already said he will be reshuffling his cabinet, so others might have to pay the political price.
According to the government, “a technical glitch” inadvertently increased the tax deducted from public service salaries. That this happened, that it was not quickly communicated to all affected, and that the security forces thought they were justified going on strike on account of it, are all symptoms of governance dysfunctionality. Most concerning of all are the suggestions that some police actually encouraged the looting and burning of buildings.
Clearly there were deeper social causes at play as well. The riots brought to the surface the simmering social tensions among the people caused by the country’s high cost of living, high unemployment, crime and corruption.
Annual inflation of about 5% over the last ten years (2024 National Budget, page 41) has eroded take-home pay. Cost of living adjustments for public servants have typically been around 3%. The minimum wage has not been increased since 2013, and today is only worth half of what it was then, after inflation (2024 National Budget, page 37).
The other problem is the lack of jobs. Formal sector employment peaked at 300,000 in 2013, and is now at less than 270,000 (PNG Economic Database). Over this same period, the population would have grown by about 30%. The government tells people to return to the countryside, but it is the lack of employment in the countryside and rural decay that brings people to the cities in the first place.
The government has put in place temporary measures to alleviate cost of living pressures by, for instance, increasing the tax-free income threshold to K20,000 from K12,500, and once again abolishing school fees.
However, only real wage growth and job creation can turn things around for PNG.
Successive governments have failed to broaden the country’s economic base in a meaningful way in the last twenty years. Lip service has been paid to job creating sectors such as agriculture, fisheries, forestry and tourism, but not much effort has been directed to structural reforms. Recent actions by the government, such as the creation of additional ministerial portfolios for the agriculture sector, are misguided. Increased investments in roads are welcome, but the allocation of large sums of public monies (including to constituency development funds) without strong accountability and governance mechanisms is ineffective and liable to cause waste.
The focus of the government must be on enacting reforms to address the underlying drivers of the high cost of living in the country. It’s a big agenda. Here are three immediate and much-needed reforms.
First, the job-destroying madness of foreign exchange rationing which has persisted for a decade needs to be ended. This is a policy that condemns the country to low growth and high unemployment.
Second, state-owned enterprise reforms are urgently needed, with electricity and air travel services both in crisis.
Police reform has to be the third priority. PNG has said that it will be hiring 50 international police officers with Australian funding into leadership positions. This will surely help, but it doesn’t seem obvious that the riots resulted from a failure of leadership. The fact that five police officers were detained for a break-in at a Port Moresby bottle shop on New Year’s Eve speaks to the problems the police force faces with its rank and file. Since the riots, Marape has said that he will “clean up the police force”. Whether he will – and can – follow through on this will be crucial.
None of this will be easy. But PNG has to get out of its low-growth slumber. Waiting for the next big resource project is not good enough. The whole country has been given an extremely painful wake-up call. Is the political class listening?
Disclosure
This research was undertaken with the support of the ANU-UPNG Partnership, an initiative of the PNG-Australia Partnership, funded by the Department of Foreign Affairs and Trade. The views are those of the author only.
Good Morning Policy Advisors and Makers alike,
For PNG, Land Reform TALKS are as old as the 19, 20 and 21 century.
We are looking at the problem and talking about it. If we look at the solution and start planning to take a procedural approach to addressing the problem of land reform, its should become clearer for a solution in the near future.
Relevant authorities and stakeholders should work together to educate customary land owners, time and again, so they understand the importance of land registration for development process. Landowners need to accept the importance of organizing themselves for development and clearly see where they will benefit.
I bet, a lot of people have cloud cover over their head, when their hear land mobilization/registration.
So, it will be good to start with what’s going to be better understood by customary land owners, than to indulge and delve further into things that looks and sounds like myriad of complicated process.
Just an opinion.
James Gande
Great overview and analysis Andy, Port Moresby and PNG is becoming more unsafe with time. There were also a reported case of kinaping a Child believed to be of Chinese origin and women and girls raped. What transpired on the 10th January has pinned a bad image for investors to invest in the country going forward.
Hi Zechariah, the riot indeed painted a bad image of the country. I hope the government investigation also covers the kidnapping and sexual assault cases which appeared on social media, but seemed to have not picked up by the mean-stream media.
The best kind of analysis this blog has to offer: a clear overview of context, backed by data, with clear recommendations. Thank you!
> Formal sector employment peaked at 300,000
This is so incredibly low compared to the population. Gives an idea of how tough it must be to get a decent job for unqualified workers.
Thanks and appreciate. A very informative and thought provoking insight in the events of Black Wednesday.
The widespread looting experienced on Black Wednesday are caused by the unemployed who do not pay a single tax to the government.
The PMJM’s notion to implement the Vagrancy Act in support of NCD Governor Powes Parkop is simply a knee jerk reaction.
What the Pangu led Government should prioritise is to get all unemployed youths roaming our cities to work on the land.
It is now back to the Government to identify huge acres of farm land to rollout massive agriculture projects such as cocoa, rice, tapioka for ethanol feul, large scale plantation pine and teak, hybrid coconut, banana plantations for export, coffee, vanilla, sugarcane, etc.
These projects will allow our unemployed to be fully engaged, and they will in turn pay their fair share of taxes to the government.
The Government must cease borrowing from offshore financiers such as ADB, IMF and World Bank.
In order to service these loans, the Government will continue to tax its own citizens for debt servicing.
Reconsider foreign investors that the government provides tax holidays for certain period of time.
Our LNG shipments exported for debt servicing but retain certain percentage to government as revenue so that it does not tax its own citizens.
My humble take on the events of Black Wednesday.
Agree with you Bonny Bonsella on creating jobs for the young people of the country, as youth unemployment is a critical development issue which the government and the policymakers of the country must quickly work to address.
Thank you for the insight Mr. Mako.
This Tax Compliance update (January 1 2024) is now hitting the private sector.
The government of the day has announced the removal of tax rebate option from the tax tables in the most recent budget. It has already taken effect in the payrolls.. With high inflation at this time..
Thanks Rose Yabo for your comment. Yes, the removal of tax rebate on dependent affects both the private and public sector employees. I believe the removal of the dependent rebate must be revoked.
Well stated here.
7 backbenchers have already moved over now it’s the time for a real leader to show his or her people if he really represent thee people in their respactive electorates and Provinces ..PNG is ranking the most corrupt..
Find time to send media’s to locate those woman being raped while looting was happening, and make documentary for the history, not your publicity only,
Further to Mr Mako’s analysis, the economic and social injustices is not any excuse or reason to burn and loot. The businesses are not the cause of the economic woes endured by the citizens.
PNGians can’t stand up for the greater good. Fighting against corruption and white collar crimes. Lack of service delivery. High crime rates. Murder and rape of women and girls.
These are issues the citizens should direct their energy and attention at. Not burning and looting innocent businesses.
Agree with your observation, Erry Tara.
A major problem hindering the economic development and the employment opportunities is that the registration of customary land has not been achieved.
This should have commenced by the Australian administration at least a decade before Independence in 1975.
Look at what the British administration achieved in Fiji years before Fiji independence.
In the 1960s the ANU in Canberra with Australian academics and selected upcoming PNG educated elites, discussed the possibility of community land tenure and registration so that landowners and investors could develop land with secure title and be able to obtain bank loans via mortgage.
This never eventuated because of the fear registration could mean loss of the land to outsiders.
Now look at what situation PNG is in with landowners selling parcels of land to other tribes or individuals for a quick financial gain resulting in less land available for the fast growing families requirements.
These new unregistered owners can be seen negotiating deals in hotels and coffee shops with foreigners to operate a company and business with the foreigner having 49% equity with the “landowner” holding 51% equity but usually little involvement in the management or operation of the company.
In the 1980s the Land Group Incorporation Act (ILG) was legislated, initially to involve customary landowners in resource developments of mining and oil and gas extraction and benefits.
Rarely was a survey conducted of these ILG land areas and the registration of these ILGS through the Dept of Lands was abysmal.
ILGs could not mortgage their land for bank loans.
As well as all the problems detailed in the above paper, there is no mention of the unregistered Customary Land issue.
If the Australian Government had adopted the Fiji land registration model approach in PNG some 10 to 20 years before Independence, PNG could have had large commercial agricultural and industrial development throughout many parts of the country and PNG may not be facing many of the current problems.
Landowner identification, survey, documentation and registration could have commenced using Government officers (Kiaps) of the Department of District Administration in conjunction with the Department of Lands.
Land issues are a major concern in PNG and must be addressed as a high priority.
Good point Warren. You know of the failures then because you were a kiap, weren’t you? My late father who worked for the colonial administration in the ’60s and early ’70s always said ‘PNG was not ready for independence’. Independence in 1985 or even 1995 would have prepared PNG very well to make the most of the land and natural resources we have because the populace would have been well-educated. An educated populace keeps its politicians in line, demands governance and accountability etc. Right now, having a 50% illiterate populace is of great benefit to the politicians. They don’t respect their voters. They take advantage of them. Change is generational for this rich yet poor and corrupt country.
Great point Jane Mills. It’s good to express our view from wealth of our experience. PNG is in a state profiling good and bad, there are numerous issues outline demanded solutions. I strongly believe that, if we are well fed and continue to be over spoon feed by colonizer, we won’t have a colourful history. Our upcoming generation will be privilege to profile good and bad, know how to read between line and take this nation forward successfully because we gave them change to learn and create balance from our history moving forward.
Hi Warren, I agree with your view on land reforms for development in PNG. Land scarcity (given more than 90% is customary owned) is a key determinant of the high cost of production (rent) in the country – which contributes to high price of goods and services, and generally holds back development in the country. It is a complex issue to deal with but one that must be tackled head on by the government and policymakers of the country.
Thank you for this timely piece, Andrew. This is probably the worst riots since Sandline. The issue of rural-urban drift and income generation have been part of PNG’s development discourse for decades, yet successive governments have failed to address these issues.
I agree with your suggestion on police reform-in fact the whole law and justice sector needs to be able to be one that is responsive in terms of holding perpetrators to account but also providing adequate rehabilitation for long term behavior change.
The concern is high inflation and taxation. Are our National security forces on strike for their own belly or does it includes others on the entire scale?
Hope what the successive gov’t or the existing one does is address this issue to the satisfaction of everyone and not just the police, defense and the correctional services. Besides reshuffling cabinet could hopefully improve anything.
What’s so wrong in addressing the problem directly than cutting around corners to get to the real cause? Again is technical glitch an excuse or a reality? Unless newly introduced, ‘technical glitch’ excuse is not acceptable, but if it was used for sometimes, then why is it happening and why wasn’t it reported before the strike happened.
This uncovers gov’t deliberate attempt and yet tried to hide something.
Just reduce the inflation, and tax is what the country needs right now that is the overall cause of this event bursting out pin the gov’t on the wall with all its mistakes.
Good observations, Tony Guan. Thanks.
Thank you, good overview. I understand an additional cost, often not mentioned, was the sexual assault of a number of women
Hi David, I hope the investigation initiated by the government also uncovers sexual assault on women during the riots. I heard stories about it on social media, but was not reported by the mainstream media, so it wasn’t include in the blog.
Mr. Mako your article clearly describes the events that happened on 10th January 2024, very insightful. Thank you for sharing it.