Unmasking Corruption and Mismanagement in PNG: NPF vs. UBS

 In the heart of the Pacific, Papua New Guinea (PNG) grapples with a persistent challenge: corruption and mismanagement. These issues, while not unique to PNG, have been the focal point of intense scrutiny and debate within the nation. In this blog, we will explore the themes of corruption and mismanagement as they manifest in PNG through two contrasting cases: the National Provident Fund (NPF) inquiry and the controversial UBS loan.

Theme 1: Corruption and Mismanagement

Corruption, the buzzword in PNG's political discourse, is a multifaceted problem. It encompasses a wide spectrum of illicit activities, from bribery and embezzlement to nepotism and bid-rigging. The NPF inquiry sheds light on how these practices can undermine an institution's integrity. As we delve into the NPF case, it becomes apparent that both fraud and mismanagement played pivotal roles in the fund's enormous losses.

The NPF board had approved the purchase of shares, but their decisions were often ignored or misrepresented. Such behavior reflects a dangerous pattern where those entrusted with managing public funds can act with impunity, demonstrating how corruption can permeate even well-regulated organizations.

Theme 2: Trust in Outsiders

The UBS loan controversy presents an entirely different facet of corruption, emphasizing trust in outsiders. In an effort to participate in resource enterprises, PNG's government entrusted outsiders like Peter Botten of Oil Search and the UBS bank. The deal appeared promising, but it heavily relied on external actors, leaving PNG vulnerable.

This reliance on outsiders without a comprehensive understanding of the consequences demonstrates a dangerous willingness to cede control over critical decisions. The UBS loan case reveals that trusting external actors too implicitly can lead to unfavorable outcomes, ultimately affecting the nation's economic stability.

Theme 3: Disregard for Controls

Both the NPF and UBS cases share a common thread: a disregard for controls. In the NPF inquiry, controls were frequently ignored, and expert advice was not sought. Likewise, the UBS loan was executed without proper consultation or scrutiny, undermining vital checks and balances. This neglect highlights the need for stronger governance and oversight in PNG.

Theme 4: Denial of Reality

Another recurring theme is the denial of reality. The UBS loan deal, in particular, assumed an abundance of government resources, ignoring the possibility of changing market conditions. This over-optimism can have devastating consequences, putting immense strain on the nation's financial stability.

In the NPF case, there was a similar denial of reality as financial woes were brushed aside, leading to catastrophic financial losses. Such denial not only damages the nation's financial health but also erodes public trust.

Comparing NPF and UBS

While both cases involve corruption and mismanagement, the NPF case primarily reflects internal issues within PNG institutions. In contrast, the UBS loan case illustrates how external actors can exert influence over the nation's economic decisions.

The NPF case demonstrates the urgency of addressing corruption and mismanagement within PNG's public institutions. Strengthening internal controls, ensuring transparency, and holding individuals accountable are essential steps forward.

Conversely, the UBS loan controversy emphasizes the need for greater self-reliance and careful consideration of the consequences of trusting external entities. PNG must protect its interests and carefully evaluate the potential risks associated with external agreements.

In conclusion, corruption and mismanagement pose significant challenges to PNG's development and stability. The NPF and UBS cases serve as cautionary tales, highlighting the importance of addressing these issues at both internal and external levels. By learning from these cases, PNG can pave the way for a more transparent, accountable, and economically secure future.

The blog was written as a summary to paper as per the link here  

Jan Kees van Donge, Corruption: a plea for more analysis or moving from big words to precise meanings

Dutch Disease and Its Impact on Papua New Guinea's Economy: A Valid Argument?

Introduction 

Dutch Disease is a phenomenon that occurs when a country experiences a boom in natural resource extraction, leading to an appreciation of its currency and a decline in other sectors of the economy. This phenomenon has been observed in several countries, including the Netherlands, Australia, and Papua New Guinea (PNG). In this blog, we will discuss the impact of Dutch Disease on PNG's economy and whether the argument is valid.

The Impact of Dutch Disease on PNG's Economy

The impact of Dutch Disease on PNG's economy has been a subject of debate among economists and policymakers. Some argue that the boom in natural resource extraction has led to an appreciation of the kina (PNG's currency), making imports cheaper and hurting other sectors of the economy. Others argue that the impact of Dutch Disease on PNG's economy is limited, as the other economic sectors outside mining are small and cannot be affected too much.

 Is the Argument Valid?

The argument that Dutch Disease is affecting PNG's economy is valid to some extent. The appreciation of the kina due to the boom in natural resource extraction has led to inflationary pressures and a decline in other sectors of the economy. However, the impact of Dutch Disease on PNG's economy is limited, as the other economic sectors outside mining are small and cannot be affected too much. Moreover, the recent growth in PNG's economy, buoyed by higher commodity prices, suggests that the country's economy can grow faster.

Conclusion

Dutch Disease is a phenomenon that occurs when a country experiences a boom in natural resource extraction, leading to an appreciation of its currency and a decline in other sectors of the economy. The impact of Dutch Disease on PNG's economy is a subject of debate among economists and policymakers. While the argument that Dutch Disease is affecting PNG's economy is valid to some extent, the impact is limited, as the other economic sectors outside mining are small and cannot be affected too much. With the right policies and practices in place, the management of natural resources in PNG can be done in a way that promotes sustainable development, protects the environment, and benefits local communities.

This is the first series of blogs discussion of the political economy

Citations

[1] https://www.worldbank.org/en/news/press-release/2022/09/14/png-economy-returns-to-growth-buoyed-by-higher-commodity-prices

[2] https://onlinelibrary.wiley.com/doi/full/10.1002/app5.205

[3] https://www.imf.org/en/Publications/WP/Issues/2016/12/31/The-Macroeconomic-Effects-of-Natural-Resource-Extraction-Applications-to-Papua-New-Guinea-40623

[4] https://artnet.unescap.org/publications/working-papers/papua-new-guinea-and-natural-resource-curse

[5] https://www.wallstreetmojo.com/dutch-disease/

[6] https://thekeep.eiu.edu/cgi/viewcontent.cgi?article=5650&context=theses

Lawmaking Challenges in Papua New Guinea Parliament: Recommendations for a Stronger Democracy

 Papua New Guinea's parliamentary democracy faces several challenges that hinder the effective lawmaking process. These challenges include the dominance of the executive legislative process, inadequate time given to the bills committee, and the need to review standing orders and the parliamentary committee Act 1994. Additionally, parliamentarians often lack adequate understanding of proposed legislation, which further complicates the lawmaking process.

 Dominance of Executive Legislative Process

 The executive legislative process in Papua New Guinea is often dominant, which means that the executive branch of government has significant control over the lawmaking process. This dominance can lead to a lack of transparency and accountability in the lawmaking process, which can undermine the democratic process. To address this challenge, the parliament needs to assert its independence and ensure that the legislative process is transparent and accountable.

 Inadequate Time Given to Bills Committee

 The bills committee is responsible for reviewing proposed legislation and making recommendations to parliament. However, the committee often has inadequate time to review bills thoroughly, which can lead to poorly drafted legislation. To address this challenge, the parliament needs to provide the bills committee with adequate time to review proposed legislation and make recommendations.

 Review of Standing Orders and Parliamentary Committee Act 1994

The standing orders and parliamentary committee Act 1994 need to be reviewed to ensure that they are effective in supporting the lawmaking process. The review should focus on improving the efficiency and effectiveness of the lawmaking process, ensuring that the parliament is transparent and accountable, and promoting public participation in the lawmaking process.

 Parliamentarians Not Having Adequate Understanding of Proposed Legislation

 Parliamentarians often lack adequate understanding of proposed legislation, which can lead to poor decision-making and ineffective laws. To address this challenge, regulatory procedures should be reviewed to ensure that all members of parliament have adequate understanding of proposed legislation before parliamentary debate.

 Recommendations

1. Standing orders need to provide for people's views to ensure that the lawmaking process is transparent and accountable.

2. Laws and status on members of parliament in terms of their codes of conduct should be reviewed to ensure that they are effective in promoting ethical behavior and accountability.

3. Regulatory procedures should be reviewed to have all members of parliament have an adequate

understanding of the proposed legislation before parliamentary debate.

In conclusion, strengthening the parliamentary democracy in Papua New Guinea requires addressing the challenges facing the lawmaking process. By asserting its independence, providing adequate time for the bills committee, reviewing standing orders and the parliamentary committee Act 1994, and ensuring that parliamentarians have adequate understanding of proposed legislation, Papua New Guinea can build a stronger democracy that is transparent, accountable, and effective.

 Citations:

[1] https://www.academia.edu/38451314/Women_and_Politics_in_Presence_Case_of_Papua_New_Guinea_pdf

[2] https://www.files.ethz.ch/isn/87018/2005-12-19.pdf

[3] https://www.academia.edu/27542988/A_Melanesian_Icon_Professor_Bernard_Mullu_Narokobi_Ca_1940_2010_

[4] https://erc.undp.org/evaluation/documents/download/1452

[5] https://pacificinstitute.anu.edu.au/sites/default/files/resources-links/Pandanus/Building_a_Nation_in_Papua_New_Guinea.pdf

[6] https://www.lowyinstitute.org/sites/default/files/pubfiles/Scott%2C_Reimagining_PNG_1.pdf

The Challenges of a Westminster System of Government in Papua New Guinea after 1975

 Introduction

Since gaining independence in 1975, Papua New Guinea has adopted a Westminster system of government. This system, inherited from its colonial past, has posed several challenges for the country. In this blog, we will discuss three key challenges faced by the Westminster system in Papua New Guinea after 1975.

 1. Adjournment of Parliament

One of the challenges faced by the Westminster system in Papua New Guinea is the issue of adjournment of parliament. According to section 124(1) of the constitution, it is mandatory for parliament to sit for 63 days in a 12-month period. However, there have been instances where the government has adjourned parliament for extended periods of time. For example, in 1997-98, the government adjourned parliament for 7 months, and in 2021, it adjourned for 4 months. 

This prolonged adjournment of parliament raises concerns about the effectiveness of the system in ensuring regular legislative activities and democratic accountability. It can hinder the timely discussion and resolution of important issues, leading to a lack of transparency and accountability in governance.

2. Perception of Corruption in Parliament

Another challenge faced by the Westminster system in Papua New Guinea is the perception of corruption within the parliament. There is a widespread belief that there are two sets of rules - one for the common people and another for the politicians. This stereotype undermines the importance of parliament in representing and serving the interests of the people.

The perception of corruption within the parliament can erode public trust and confidence in the democratic process. It hampers the ability of the system to effectively address the needs and aspirations of the citizens. Efforts to address this challenge should focus on promoting transparency, accountability, and ethical conduct among parliamentarians.

3. Patronage and Dual Responsibility

The third challenge is related to patronage and the dual responsibility of Members of Parliament (MPs). In Papua New Guinea, MPs not only serve as legislators but also as fund managers. This dual role can have implications for their effectiveness as lawmakers. The overuse of constitutional grants, which allows MPs to allocate funds for development projects in their constituencies, has resulted in executive dominance and a concentration of power. This can undermine the separation of powers and the checks and balances necessary for a functioning democracy.

Furthermore, the dual responsibility of MPs as fund managers can divert their attention and resources away from their primary role as legislators. This can lead to a neglect of important legislative duties and hinder the effective functioning of the Westminster system.

Conclusion

The challenges faced by the Westminster system of government in Papua New Guinea after 1975 highlight the need for reforms and improvements to ensure effective governance and democratic accountability. Addressing the issues of adjournment of parliament, perception of corruption, and patronage and dual responsibility will require concerted efforts from both the government and the citizens.

By promoting transparency, accountability, and ethical conduct, Papua New Guinea can strengthen its democratic institutions and ensure that the Westminster system serves the best interests of its people.

References

1. Is PNG's Westminster system worth keeping? - East Asia Forum (https://www.eastasiaforum.org/2013/10/05/is-pngs-westminster-system-worth-keeping/)

Supporting Citations

[1] https://www.eastasiaforum.org/2013/10/05/is-pngs-westminster-system-worth-keeping/

[2] https://przegladeuropejski.com.pl/article/01.3001.0013.5173/en

[3] https://www.britannica.com/place/Papua-New-Guinea/Government-and-society

[4] https://constitutionnet.org/news/future-governance-papua-new-guinea-consultations-begin-form-and-system-government

[5] https://www.csis.org/analysis/addressing-fragility-papua-new-guinea

[6] https://documents1.worldbank.org/curated/en/426851468145477761/pdf/686490ESW0P11400in0Papua0New0Guinea.pdf

Weak Political Party System in Papua New Guinea 1975 - 2002

Introduction 

Papua New Guinea (PNG) has a parliamentary representative democratic multi-party system, with the Prime Minister as the head of government and the monarch serving as head of state. However, the political party system in PNG has been characterized by instability, weak party organization and structures, and a lack of ideological premise and discipline. In this blog, we will discuss the following themes:

1. Fluid and weak party organization and structures

2. Political Party allegiance are personal and localized

3. Political parties without ideological premise and discipline

4. Party hoping and coalition become localized and personalized

Fluid and weak party organization and structures

Political parties in PNG have been characterized by weak organizational structures, with parties often being formed around a single individual or family. Parties are often formed and dissolved quickly, with members frequently switching parties. This has led to a lack of institutionalization and continuity in the party system.

Political Party allegiance are personal and localized

In PNG, political party allegiance is often based on personal relationships and local affiliations rather than ideology or policy. This has led to a highly localized and personalized party system, with parties often representing the interests of a particular region or ethnic group rather than the nation as a whole.

 Political parties without ideological premise and discipline

Most political parties in PNG lack a clear ideological premise or policy platform. This has led to a lack of discipline within parties, with members often voting based on personal interests rather than party lines. Parties are often formed around a charismatic leader rather than a set of shared values or beliefs.

Party hoping and coalition become localized and personalized

Party hoping and coalition-building are common in PNG, with members frequently switching parties and forming coalitions based on personal relationships and local affiliations. This has led to a highly personalized and localized party system, with parties often representing the interests of a particular region or ethnic group rather than the nation as a whole.

In conclusion, the political party system in PNG has been characterized by instability, weak party organization and structures, and a lack of ideological premise and discipline. Political party allegiance is often based on personal relationships and local affiliations rather than ideology or policy. Parties are often formed around a charismatic leader rather than a set of shared values or beliefs. Party hoping and coalition-building are common, leading to a highly personalized and localized party system.

Citations

[1] https://crawford.anu.edu.au/pdf/staff/ben_reilly/breilly3.pdf

[2] https://www.lowyinstitute.org/the-interpreter/party-politics-papua-new-guinea

[3] https://2009-2017.state.gov/outofdate/bgn/papuanewguinea/35862.htm

[4] https://www.ndi.org/files/Political-parties-and-democracy-in-theoretical-and-practical-perspectives.pdf

[5] https://en.wikipedia.org/wiki/Politics_of_Papua_New_Guinea

[6] https://www.nap.edu/read/9897/chapter/12

The Secessionist Movement and Political Decentralization in Papua New Guinea

 Introduction

Papua New Guinea, a country that gained independence from Australia in 1975, experienced a secessionist movement prior to its independence. This movement was particularly prominent in the southern region of Papua and the district of Bougainville. In response to these movements and to address grievances, the government of Papua New Guinea implemented political decentralization through the creation of the Organic Law on Provincial Government in 1973. This law aimed to establish a system of governance that would promote efficiency, accountability, and self-reliance at the provincial level. In this blog, we will explore the secessionist movement and the impact of political decentralization in Papua New Guinea.

The Secessionist Movement

1. The Papuan nationalist movement: The Papuan nationalist movement emerged as a challenge to the Papua New Guinea state in early 1970s to independence. However, it lacked cohesive support and gradually faded away. The involvement of the well-educated local elite in government and commerce contributed to the movement's decline.

2. Bougainville: The district of Bougainville, known for its important copper and gold mine at Panguna, became the center of the most dramatic challenge to the Papua New Guinea state. The Bougainville Revolutionary Army (BRA) was formed in 1988, leading to a civil war that lasted until 1998. Grievances over environmental damage, lack of benefits for local people, and perceived neglect from the central government fueled the conflict.

 Political Decentralization

1. The Organic Law on Provincial Government: The Organic Law on Provincial Government, enacted in 1973, aimed to decentralize political power and promote self-rule at the provincial level. It sought to address grievances and prevent further conflicts by granting more autonomy and self-reliance to local governments.

2. Implementation challenges: The implementation of decentralization faced challenges, including conflicts between national aims and difficulties in capacity-building at the local government level. Reconciling decentralization with the goal of equality was particularly challenging.

Impact and Future Developments

1. Bougainville Peace Agreement: The Bougainville Peace Agreement, signed in 2001, recognized the importance of decentralization and provided for the establishment of an autonomous Bougainville government. This agreement aimed to bring stability and address the fluid party affiliations of Papua New Guinea's politicians. 

2. Continuing challenges: Papua New Guinea continues to grapple with issues of decentralization and governance. The country's post-independence relationship with Australia, its former colonial ruler, has also been a factor in its political development.

Conclusion 

In conclusion, the secessionist movement in Papua New Guinea prior to its independence and the subsequent implementation of political decentralization through the Organic Law on Provincial Government in 1973 have shaped the country's political landscape. While the secessionist movement faded over time, the challenges and grievances it highlighted led to the adoption of decentralization as a means to address these issues. The impact of decentralization and the ongoing efforts to strengthen governance and self-rule at the provincial level continue to shape Papua New Guinea's political climate.

Citations:

[1] https://successfulsocieties.princeton.edu/document

[2] https://www.britannica.com/place/Papua-New-Guinea/Attempts-at-secession

[3] https://successfulsocieties.princeton.edu/publications/provincial-secessionists-and-decentralization-papua-new-guinea-1985-1995

[4] https://successfulsocieties.princeton.edu/document

[5] https://pngnri.org/images/Publications/DP_143

[6] https://www.jstor.org/stable/

The Absence of Civil Society and the Rise of Ethnic Groups in Papua New Guinea: Impact on Political Party Development

Introduction:

In Papua New Guinea, the absence of a strong civil society has contributed to the rise of ethnic groups and the formation of boundaries in the country's structural politics. This has had a significant impact on the development of political parties and the functioning of democracy. Benjamin Rielly, in his paper "Making Democracy Work in Papua New Guinea," explores the role of social capital and provincial development in an ethnically fragmented society. This blog will discuss the ideas presented by Rielly and shed light on the challenges faced by political parties in Papua New Guinea.

1. The Role of Social Capital

Rielly argues that social capital, which refers to the networks, relationships, and trust within a society, plays a crucial role in the functioning of democracy. In Papua New Guinea, the absence of strong social capital has hindered the development of political parties and their ability to effectively represent the interests of the people. 

2. Ethnic Fragmentation and Boundaries

The ethnically fragmented nature of Papua New Guinea has led to the formation of ethnic groups and boundaries, which often supersede national identity. This has resulted in the prioritization of ethnic interests over broader national interests, making it challenging for political parties to build broad-based support.

3. Impact on Political Party Development

The absence of civil society and the dominance of ethnic groups have affected the development of political parties in Papua New Guinea in several ways: 

    (a) Limited Ideological Framework: Political parties in Papua New Guinea often lack a clear ideological framework, as they tend to focus more on ethnic interests rather than broader policy agendas. 

    (b) Fragmented Support: The dominance of ethnic groups and boundaries has led to fragmented support for political parties, making it difficult to build broad-based coalitions and achieve political stability.

    (c) Patronage and Clientelism: The absence of strong civil society has created a political culture characterized by patronage and clientelism, where political parties rely on personal connections and favors rather than policy platforms.

4. Implications for Democracy and Development

The challenges faced by political parties in Papua New Guinea have significant implications for democracy and development in the country:

    (a) Limited Accountability: The absence of strong political parties hinders accountability mechanisms, making it difficult to hold elected officials responsible for their actions.

    (b) Inequality and Marginalization: The focus on ethnic interests can perpetuate inequality and marginalization, as certain groups may receive preferential treatment while others are left behind.

    (c) Policy Implementation Challenges: The lack of broad-based support and ideological clarity within political parties can hinder effective policy implementation and development initiatives.

Conclusion

The absence of civil society and the rise of ethnic groups in Papua New Guinea have had a significant impact on the development of political parties and the functioning of democracy. Addressing these challenges requires strengthening social capital, promoting inclusive politics, and fostering a sense of national identity that transcends ethnic boundaries. By doing so, Papua New Guinea can work towards a more inclusive and effective democratic system that promotes the interests of all its citizens.

Citations,

[1] https://library.fes.de/libalt/journals/swetsfulltext/15592826.pdf

[2] https://researchprofiles.anu.edu.au/en/publications/making-democracy-work-in-papua-new-guinea-social-capital-and-prov

[3] https://www.researchgate.net/publication/249973162_Making_Democracy_Work_in_Papua_New_Guinea_Social_Capital_and_Provincial_Development_in_an_Ethnically_Fragmented_Society

[4] http://www.eods.eu/library/NDI.Political%20Parties%20And%20Democracy%20In%20Theoretical%20And%20Practical%20Perspectives.pdf

[5] https://www.idea.int/publications/catalogue/political-parties-conflict-prone-societies

[6] https://www.lowyinstitute.org/sites/default/files/pubfiles/Scott%2C_Reimagining_PNG_1.pdf