Jul 13, 2013

Rigo farmers are eager to save

Christine Iauve is a vegetable farmer from Magautou Village, who was among 90 subsistence farmers from the Oman Area of Rigo District in Central Province to open new bank accounts with BSP recently.
Christine and her husband grow capsicum, corn, peanut and recently zucchini as their cash crops, which they transport to Port Moresby and supply to hotels and shops. The hard earned cash is usually kept by Christine in her safe corner back in the village.

When opening her new BSP Kundu Account, an elated Christine said she is very thankful and applauded BSP for taking banking services right to the people in remote areas, in the heart of their communities.
Christine opened a Kundu Standard Account which suits those in rural areas.  BSP has two Kundu Accounts available for its customers, the Kundu Standard is a cheaper option for those who do not use their accounts frequently. The Kundu Standard has no monthly maintenance fee, there is no requirement for a minimum balance and its pay as you go.

The Kundu Standard also gives access to Mobile Banking, so Christine can check her account balance or transfer funds at the comfort of her home, while in the garden farming, or while on the road travelling into Port Moresby.
With her new Kundu Card, Christine and the other farmers now have access to BSP’s ATMs and EFTPoS to withdraw money or obtain goods and services.  

“We are very thankful for signing up with BSP and for receiving our Kundu Cards instantly, and not having to wait weeks,” she said.

The advantage of having an bank account, is that Christine and all the other farmers can now save their money. For Christine, the money she saves, she plans to buy a PMV truck to service the Maggi Highway, a dream she and her family has had for many years.

Another happy farmer, Martin Emilio, opened his account with K40 worth of coins (K1, 50t, 20t & 10t), he had collected from selling sweets, like lollies and biscuits in front of his house. Like Christine, Martin plans to save his money.

Martin say his fellow farmers and him have had discussions with a major retailer in Port Moresby on selling their produce, however, one of the requirements was for farmers to have bank accounts so the retailer can make electronic payments, reducing the risk and costs of cash handling.  

“Opening bank accounts is a milestone for us if we are going to sell our produce to retailers in Port Moresby, because they want us to have bank accounts, so deposits can be made electronically, without too much cash, its good for us too, because we don’t just spend all the money, as we now do, when we have cash on hand,” he said. 

The trip to Rigo by BSP was made possible with assistance from ChildFund PNG, an international NGO that has been delivering projects in Food Security, Water and Sanitation, Education, Health and Child Rights in the area for many years.

ChildFund’s Senior Programme Officer, Sharon B Pondros, says their Food Security and Livelihood projects introduced backyard farming to farmers in the rural communities, with the objective to improve livelihoods, by way of improved diets, and ways to earn an income.
She says there is also huge potential for the farmers to grow on a larger scale for cash income.

To encourage farmers to tap into these opportunities, ChildFund through its partner Fresh Produce Development Agency carry out regular financial literacy trainings to equip farmers with the fundamentals of managing and saving their money.

Childfund PNG also encourages farmers to have bank accounts so they save their money, and become self-reliant by investing in areas that will further help sustain their livelihoods.
“We value our partnership with BSP, because through the bank’s rural outreach initiative they willingly offer to support our cause for the benefit of the rural people. And in doing so our farmers are now one step ahead, so when we link them with buyers they get their payments straight into their accounts and they can access it using their Kundu cards,” Sharon says.

“The good thing about having an account, is they don’t spend all their hard earned cash immediately, like previously when they held hard cash in their hands. They are now able to budget and spend wisely, and with the savings they have over time, they can invest in other areas that can further improve their lives,” she adds.

Ends

Jul 10, 2013

Control middle and backbenchers

By Andrew Anton Mako*

PNG politics was labeled unstable for many years, for some it’s analogous to the well-known political impasse in 2011.

Today we’re still experiencing these problems.

The notion of political “stability” in PNG has often been used by many governments to increase their political longevity in Parliament, and to quash any attempts of change in government. This is a narrow definition of political stability, which was described as elusive at best and been “achieved” in many ways, that undermined parliamentary democracy, and lessened the power of the Parliament or the Legislature over the years.

Constant change in government is disruptive to socio-economic development and should not be encouraged. However, in PNG the Executive Government’s practice of amassing power, particularly in the last decade, at the expense of the Legislature, the second arm of government, is in itself undemocratic, and impedes the separation of power between these two arms of government.

Since 1977, PNG has had only coalition governments – small parties coming together to join a party which had won many more seats (although on average less than 30 percent of total seats contested across PNG) than the other parties. Successive coalition governments have been fragile and, until the last decade, haven’t lived out their full terms of five years in Parliament. In the PNG Parliament, the balance of power that ultimately determines the lifespan of a government lies with the middle and backbenches of the Parliament. This is where “unattached” Members of Parliament (MPs) are seated. By “unattached” I mean those MPs who either aren’t in government, or at least not occupying portfolios in the government. They aren’t important powerbrokers in the coalition.

History shows that ensuring the support of the middle and backbenchers has been an important goal of any government. If a coalition government can successfully “shut out” the middle and backbenchers of the Parliament, it can ably last a full term of five years. This was brought to the fore in the last decade under Prime Minister (PM) Somare’s two terms of government.

How did the previous governments control the middle and backbenchers?

Formal attempts were made by the Executive Government during the early 2000 to bring stability into Parliament – in the context of this article - to “control” the middle and backbenchers. The government headed by then PM Sir Mekere Morauta enacted the Organic Law on Integrity of Political Parties & Candidates (OLIGPAC) in 2000 which required that all MPs voted along party lines, including in an event of a change in government. For a decade, the OLIGPAC successfully “controlled” the power shifting forces of the Parliament until 2010, when Supreme Court ruled that the particular provision (of compelling voting along party lines) of OLIGPAC was unconstitutional. This high court ruling rendered OLIGPAC ineffective as far as “controlling” the middle and backbenchers was concerned. The middle and backbenchers of the Parliament have since become the key power brokering/shifting force of the political landscape of PNG.

Before the 2010 Supreme Court ruling, from 2002 to 2010, the coalition government headed by then PM Sir Michael enjoyed nearly a decade of political “stability” in the history of this nation. This is largely due to OLIGPAC, as well as by employing other control mechanisms to evade any opposition. This included gagging of debate in Parliament, and “appeasement” of the middle and backbenchers by promises of privileges like easy access and timely release of District Services Improvement Program (DSIP) funds, and other funding streams like the Provincial Services Improvement Program (PSIP). However, during this period, a dangerous precedent was set as far as the balance of power between the Executive Government and the Legislature is concerned, i.e. the former amassed powers by eating into the latter’s powers in its quest to successfully control the middle and backbenchers.

Yet, there would always be disgruntled middle and backbenchers that made this group a “powder keg”, ready to explode any time when ignited. This became apparent at the end of the last decade, and apparently after the OLIGPAC was quashed by the Supreme Court in 2010. In 2011, when the opposition finally had a breakthrough in having its voice heard in Parliament, it moved for a change in government when the incumbent PM was in hospital overseas. Almost the entire middle and backbenchers crossed floor to join the opposition to form a new government. 

How is the government currently dealing with power shifting forces of Parliament?

The above is the unfortunate situation of PNG Parliament the current coalition government inherited after the 2012 National Elections. Given the legislative void, the Executive Government faces a mammoth challenge in ensuring the middle and backbenchers are appeased and supportive. The current coalition government couldn’t use the same tactics as its predecessor mainly because: (i) the Parliament now has a Speaker who is “resilient”, and  has proven that he cannot be easily influenced to gag Parliamentary debate; (ii) promises of privileges to “appease” the middle & backbenchers can be ineffective mechanism to contain them because, like in 2011, they can easily cross floor to form a new government; and (iii) the coalition government has publicly announced that it will be a transparent and responsible government.  So to ensure political “stability” or for the coalition government to live out the full five years term in Parliament, the Executive Government had to further lessen the powers of the Legislature by amending key legislations including specific sections of the supreme law of the land, the Constitution. An example of such legislative change enacted in recent months was to extend the grace period to 30 months (from 18 months).
Recently, the government has announced that further legislative changes will be made to ensure political “stability”. The proposed Constitutional amendments will: (i) require a mover of motion of no-confidence against an incumbent PM/Government give three advance months (an increase from one week), and ensure signatures of 1/3 (an increase from 1/10) of total MPs nominating an alternative PM; and (ii) reduce the minimum sitting days of Parliament from 63 to 40 days.  The nature of the proposed legislative changes is such that the demarcation of powers will again be negatively impacted – more powers will be amassed by the Executive Government at the expense of the Legislature. Essentially, this will lessen the noise (if any) the middle and backbenchers could make against the government.

The opposition has strongly opposed these proposed legislative changes. However, it is powerless to effect change given it now has less than eight MPs as the majority of its initial MPs (some of whom were very vocal and critical of the Executive Government) have left. They have either joined the government (and become backbenchers) or are in the middle-benches. All these former opposition MPs claimed on their dates of departure that being in the opposition would be to miss out on bringing development to their electorates/provinces. This is a diplomatic way of saying they’d miss out on privileges enjoyed by those MPs in government or middle-benches, e.g. the timely and easier access of DSIP and PSIP funds. And those still in opposition claim their development funds have been withheld.

What has been happening in the parliament and the actions successive Executive Governments had taken since the last decade (and proposes to take) are due to the “fear” the incumbent governments have of being ousted by the (minority) opposition when the (majority) middle and backbenchers rise against them. How can this dilemma be addressed? This calls for a bi-partisan approach that could introduce radical political reforms to be passed by Parliament which would bring meaningful solution(s). Reforms that would turn political “stability” in PNG on its head are needed. Such reforms for example, should include the reduction of the number of political parties. This could be done without restricting democracy, for example, by lifting the bar on the registration of political parties, and/or, requiring that they contest a larger minimum number of seats 

*Andrew Anton Mako is a Research Fellow under the Economic Policy Research program at the National Research Institute. The views expressed here are his own and do not necessarily reflect those of NRI or any political party.

BSP and SVS sign MoU for Supa Stoa

Port Moresby, 9th July 2013 | Bank of South Pacific Ltd (BSP) and Super Value Stores Ltd (SVS) today announced the signing of a Memorandum of Understanding (MoU) to formalise a strategic relationship to facilitate financial inclusion and expansion of small business opportunities in Papua New Guinea.

SVS, as one of the nations' largest retailers, recently announced their pla...ns to rollout 3000 Supa Village Stoas throughout PNG, and has elected to enter into an exclusive and strategic business relationship with BSP.

Under the scope of the MoU each Supa Village Stoa will become a BSP Agent and benefit from BSP's range of e-payment solutions and be eligible for specially tailored Smart Business financing.

The MoU paves the way for BSP and SVS to further assist in growing local businesses and delivering their respective services.

Bringing together the country's leading bank and retailer will be a catalyst for local communities to be supplied with high quality goods, financial services and new business opportunities on a national scale.

BSP Group CEO Robin Fleming said, "BSP is committed to helping small businesses grow and is proud to work with the Supa Village Stoa project".

"Our collaboration with SVS is a unique opportunity to offer banking services in rural areas, through a trusted businessperson in the local community under a nationally recognised retail brand".

BSP currently has more than 200 Agents nationwide and continues to build on its award-winning innovative solutions to deliver the most affordable and accessible banking services.

PNG gas boom could cause economic woes

PNG gas boom could cause economic woes

Updated 9 July 2013, 19:07 AEST
Papua New Guinea's central bank is warning the government to take care of the economy amid big changes wrought by the country's expanding mining projects.
It's created a housing boom in the capital and employed thousands of locals.
But the Bank of Papua New Guinea says not all the changes will be positive and some come with major risks. Timothy Pope reports.
Reporter: Timothy Pope
Speaker: Robin Fleming, CEO Bank of South Pacific. Bryant Allen, Australian National University. Kelly Howlett, Port Hedland mayor

POPE: The latest economic outlook has some blunt warnings for the PNG government. With the end of construction in sight for Exxon Mobil's massive ESSO Highlands project, the Central Bank Governor is forecasting the onset of so-called Dutch Disease. It's an economic malaise brought on when the mining industry booms and strangles the rest of the economy.
Bank of Papua New Guinea Governor Loi Bakani says urgent investment is needed in the country's traditional agriculture industry. He says high wages offered by resource companies have lured workers away from farming.

CEO of Bank South Pacific Robin Fleming:
FLEMING: Certainly agriculture has suffered and that's been a combination of a number of factors. First it has been in the soft commodity area there's been a slowdown in demand. It dis-incentifies landowners and people who harvest those types of crops to participate in that particular sector.

POPE: Spurred on by the Central Bank's warnings the government has already mooted an economic stabilisation fund to make agriculture more attractive.

FLEMING: If properly funded and properly managed could be able to allow for the downturn in commodity prices, put aside revenues during the more buoyant times to be able to stabilise the prices, stabilise the output, outcomes for people involved.

POPE: But agriculture isn't the only area that's lost workers to the resources boom. Bryant Allen is a former community affairs field manager for Esso Highlands and a visiting fellow at the Australian National University's State Society and Governance in Melanesia project. He says just as in Australia's mining industry, workers are drawn from every field.

ALLEN: The wages paid by the gas and petroleum industries are much higher than the wages paid say to a school teacher, but the school teachers have qualifications that are needed by the gas industry, school teachers can read and write and there's plenty of evidence that school teachers are leaving their jobs to join the industry.

POPE: But he says these workers aren't lost to their professions forever.

ALLEN: The other side of it is that when the construction phase of the industry's over and employment drops by about 80 per cent, they'll come back into the general economy and they'll be better skilled and better qualified.

POPE: Robin Fleming says the government has planned for one situation the Central Bank is warning of, when construction workers are laid off there are a host of government projects in the pipeline.

FLEMING: That's certainly a clear intention of the government when they introduced the budget last year, the total budget was about 13-point-eight-billion kina of which five to six-billion kina is in infrastructure development, and the intention of the government was they could anticipate that there would be skilled workforce who would be available for redeployment.

POPE: But the Bank of Papua New Guinea is also concerned about the cost of living. High wages and an influx of foreign workers on these projects has seen a housing bubble in Port Moresby.
Bryant Allen, himself a former fly-in fly-out worker in PNG, says prices are soaring.

ALLEN: For normal sorts of accommodation they've gone through the roof. There's been a building boom in Port Moresby which for apartments and serviced apartments and things like that where expatriates, people who've worked in the oil industry come from all over the world because of their particular skills and need somewhere to stay.

POPE: Bank South Pacific says the locals not employed in the resource sector are the losers, with a severe shortage of affordable housing. It's a problem faced in mining towns like Port Hedland in Australia's Pilbara, home to a huge iron ore industry.
Port Hedland mayor Kelly Howlett:

HOWLETT: Particularly if you're not working in the resource industry or not having the company paying for those house prices or those house rents, you find if long-time locals, if they can't afford to live and remain in the community anymore, you'll see a drain of those people leaving town.

POPE: She says PNG should also watch its tourism industry, as housing in her town has become so tight there's no room for visitors.

HOWLETT: I guess it's really difficult to provide that incentive for anyone to operate say a backpackers accommodation when they know they can rent out their premises to resource industry for in excess of three-thousand dollars a week.

POPE: The Bank of Papua New Guinea says with careful planning all these issues can be managed, but it wants to be sure the LNG slowdown doesn't lead to economic disaster.


http://www.radioaustralia.net.au/international/radio/program/pacific-beat/png-gas-boom-could-cause-economic-woes/1158826