But the Opposition, fuelled by a sense of growing support from the public, has not thrown in the towel on over-throwing the government.
Led by former Prime Minister Sir Mekere Morauta, described by the late Transparency International (PNG) Inc founding chairman Sir Anthony Siaguru as “a reformist Prime Minister”, and former Treasurer and Finance Minister Bart Philemon, the Opposition leader and his deputy are not finished yet.
Their strength is the “coalition of equals” they formed during the lobbying to form the government and the reputation of integrity and consistency they enjoy.
Backed by powerhouse governors in former Prime Minister Sir Julius Chan (New Ireland), leading human rights lawyer Powes Parkop (National Capital District) and mostly first-time MPs, they intend to give it their best shot.
Any breakaways in the coalition government will have to deal with these 21 Opposition MPs, comprising four political parties and an independent MP as one unit.
The Opposition put in an early wedge during formation of government in 2007 with a Constitutional Reference on the qualification of Somare, under NA constitution, to raise his hand for prime ministership.
Another significant aspect of that challenge seeks a ruling that the Integrity Law is flawed and queries the legitimacy of the usage of such law in the process of the formation of government and the election of the prime minister. That case is likely to be resurrected.
However, in mid-December, the Opposition engaged Peter Donigi, of Warner Shand Lawyers, to become the second plaintiff in Western Province Governor Dr Bob Danaya’s court challenge on the constitutionality of the Organic Law on Integrity of Political Parties and Candidates (Integrity Law).
The Integrity Law was Morauta’s double-edged sword solution to political instability from party hopping MPs which among others provides for political parties to have their own resolutions prior to voting on the annual budget and constitutional amendments.
However, this voting along party lines has caused the ire of lawyers and some MPs who feel their mandated rights are under suppression from the Integrity law—a breach of the constitution.
If Danaya is successful before the courts, a lot of parliament decisions could be repealed automatically including the election of the prime minister. Naturally, the Opposition wants to reinforce that and have the courts create a political opening.
That is subject to the courts, however another potential threat to the government’s solidarity is looming from Western Highlands where former Prime Minister Paias Wingti successfully managed to secure a recount by the court of disputed returns on the regional seat occupied now by Governor Tom Olga.
Papua New Guinea has historically had three makers of Prime Ministers: Somare, Sir Julius Chan and Wingti. Somare secured government in 2007 outplaying Chan, whose 10 years out of parliament marginalised his strength.
Wingti has a bone to pick with NA whom he blames for his political demise. There has already been indications that if the count is in his favour, he would call his five-member People’s Democratic Movement party out of the government coalition partnership.
With the ousting of NA MPs via a successful court of disputed returns in David Arore from Ijivitari, Sir Arnold Amet from Madang Regional, Peter Wararu from Yangoru-Saussia, Michael Laimo from South Bougainville, the coalition government numbers would be 80 MPs.
But Wingti has not been twice prime minister for nothing—and is known to sow in advance. He has some natural allies among the Highlands MPs as well as some of the political parties currently in government, as well as in opposition.
Aside from the traditional makers of the prime minister, there are suggestions from some quarters of a growing number of dissenting first-time MPs. Their names are like the changing colours of an octopus but their grips extend beyond political party lines and the government versus opposition divide.
A critical issue is whether Prime Minister Somare backs his son Arthur as his successor or Treasurer and Finance Minister Patrick Pruaitch.
The pendulum has swung from the Pruaitch end to his son on this. The current sales pitch is that once all is secure, Somare will, before he retires, asks NA MPs and coalition partners to allow his son to conclude his five-year reign and lead the NA into another election.
NA can then elect a new parliamentary leader after the election.
Whether the traditionalists especially Wingti pulls something off, how NA handles the prime ministerial suggestion, or if the young first-time MPs manage to upset the cart, the only sure thing is that “one day is a long time in PNG politics”. Nothing conclusive—only scenarios—can be examined until March 23 when parliament resumes. 

 

 

 

2009 is upon us! It will be tough for many of us. For several Pacific governments, firms, and individuals, 2009 may be the ‘time to buy time’.
What does 2009 have in store for us? Let me sketch out some of the major economic problems and the few likely prospects for our dozen or so islands nations of the South Seas. While our individual circumstances differ, they still remain tied to the economic prospects of our places of residence.
The economic prospects for islands nations are tied to events afar. When the US sneezes—the saying goes—the rest of the world catches a cold. This time the US has a cold—and a serious one too. Furthermore, Germany, France, the United Kingdom, Japan, and New Zealand are all in recessions. And Australia is on the brink of one.
Governments of the rich world and those of China and India are spending big to try and avert a serious and lengthy recession. Their central banks are showering their economies with cash in the hope of keeping demand alive.
If successful, this will save scores of jobs from being destroyed. Coincidentally, this will also keep the demand for exports from the islands—tourism, tuna, logs, oil palm and the like—afloat.
2009, in many respects, will be a real test of the efficacy of expansionary fiscal and monetary policies in inducing demand so as to avert a serious downturn in the global economy.
Even if successful, a lot of mopping up would be required after the global economy begins to recover. More on this later, but before then, how will the economies of the Pacific islands fare in 2009?

 

Deepening effects of the
financial sector meltdown in the US
We have been repeatedly reminded that the domestic financial sectors of the island-pacific are immune from the ‘sub-prime’ problems of the US market, the epicentre of the global credit crunch. (See my piece in the October issue on this subject).
The problems that emanated within the financial sectors of the rich world have now spilled across to the real sectors of the economy. In the US and Europe, outputs are contracting, workers are being laid off and several governments are busy propping up demand.
Pacific islands governments will not remain insulated from these contractions. Recessions in the US and Europe together with serious economic decelerations in Asia will reverberate throughout the Pacific islands.
Papua New Guinea and Solomon Islands are heavily dependent on commodity exports and thus likely to feel the slack in demand for their exports to Asia.
A slump in the price of logs, oil palm and minerals will hurt jobs, export income and government revenues. The falling oil prices are likely to be of some relief to many, however.
Losses of income from superannuation and trust-fund investments abroad will continue to mount over much of 2009. Retirees will feel the pinch in the immediate term. Governments of Kiribati, Nauru, and Tuvalu are also likely to feel the heat from a tumbling global stock market.
Governments heavily reliant on invested funds sources of revenue will need to consider alternate finance so as to maintain prevailing levels of access to basic services. It would be a mistake to cut services in the face of falling revenues and rising unemployment.
Tourism is likely to remain subdued for much of 2009. This will hurt economic prospects of Cook Islands, Fiji, Samoa and Vanuatu. PNG was also experiencing a recent surge in tourist arrivals, albeit from a small base.
A recession in Japan, New Zealand and the US, and a major slowdown in Australia will all dampen tourist arrivals. The strengthening of currencies of many of the Pacific islands destinations vis-à-vis the source nations are already hurting.

 

Remittances and
overseas employment
Remittances are likely to fall in 2009. Families dependent on these receipts need to tighten their belts; and quick.
Unemployment rates are already trending up in Australia, New Zealand and the US.
Tonga, Samoa, and Fiji remain heavily reliant on remittance receipts from their nationals working abroad.
United Nations peacekeeping operations have thus far been a secure and healthy source of employment for Fijian soldiers—many of whom remit the bulk of this income to support their families at home. A restraint on their deployment to new missions will hurt both the balance of payments and raise the levels of poverty in Fiji.
Vanuatu will also be hurt. The Recognised Seasonal Employer (RSE) scheme recently introduced by New Zealand has seen large numbers of ni-Vanuatu take up seasonal work abroad. Some preliminary analysis shows that the benefits of the RSE have flowed on to many poor families in the islands.
Australia is due to start its own scheme in 2009, closely modelled on the RSE that will allow some 2500 workers from Kiribati, PNG, Tonga and Vanuatu to work for up to seven months a year in the horticulture industry in regional Australia. The timing of this pilot could not have been worse given rising unemployment in Australia.
There is a ray of hope for job seekers from the Federated States of Micronesia, the Republic of Marshall Islands and Palau. The planned infrastructural investments by the Americans on Guam will create many low-skilled construction jobs. The Compact of Free Association gives workers from these states unfretted access to the US labour market; and Guam is close.

 

The natural & man-made
disaster blind-spots
Disasters, natural and man-made, remain the wildcard for 2009. Several islands provinces and coastal areas of Papua New Guinea were hit by a king-tide last month. Disturbingly, political strife, and the risk of civil disorder, can never be ruled out altogether in the region. It is the combination of man-made and natural disasters in tough economic times that has the potential to hurt most.
The Pacific islands are always vulnerable to natural disasters such as cyclones, droughts, and tsunamis. Some of the islands are already drowning. Sea level rise due to climate change, while gradual, is likely to adversely affect many atoll communities. Some Pacific nations are large enough to accommodate refugees from within.
Others may need to start thinking about longer-term and thus more permanent solutions.
Natural disasters, particularly those that are truly ‘acts of nature’, are impossible to predict a year in advance; thus preparedness remains a priority.
Man-made disasters, in contrast, are easier to foretell and possibly to forestall. Honiara and Nukualofa are still recovering from the riots of 2006. We do not need any more and least so in 2009.
Are there imminent dangers of man-made disasters on the horizon within the islands? Tonga and Fiji are both in preparation for fresh electoral systems.
Political instability continues to plague the newly elected government in Vanuatu. Concerted efforts at ensuring that any political transitions that take place are achieved peacefully remains a challenge for the region as a whole.

 

Subsistence
as the saviour
It is not all gloom for 2009. The subsistence sector has always served as the ‘holding sector’ for Pacific islanders without jobs and savings.
While reassuring, this cannot be a complete saviour. Rising populations in several of the nations, soil erosion and poor farming practices in many localities, the degradation of the terrestrial and marine ecosystems in some neighbourhoods, and the encroachment of the sea into land for food gardens are all threatening the meagre natural resources of many islands communities.
Fortunately for some, the sea remains a fertile source of food. If conserved, these resources that have served several Pacific communities well for centuries may once again prove their worth during a tumultuous 2009.
Current assessments are that the economies of the Pacific-rim will begin to rebound around mid to late 2009. If so, then 2009 may not be the best year for the islands, but one that may end on a happy note.

 

Buy time and build
capacities for a rebound
Clearly, the first half of 2009, if not more, will be tough. But the economies will rebound.
The challenge is one of buying time. Use may be made of fiscal stimulus wherever room for such a package exits. It could be time to fix those deteriorating physical and social infrastructure, perhaps.
Many of our central banks need to consider letting their currencies to weaken so as to cushion the effects of a slowing global economy.
Some targeted transfers to the poor are well overdue. It is high time the landless, jobless, elderly, handicapped, etc, are provided a safety net. The ‘wantok/kerekere’ system, family support and clan contributions help. But these are not as effective as used to be the case in the past. Governments must step in to relieve some of the pains inflicted by the slowing local economy.
The wider population could benefit from reduced taxes on food imports. This will push many budgets into deficits. This is fine, but only if debt levels are kept in check and surpluses are built when economies recover.
Easy credit now will require much mopping up later if the current pumping of liquidity is not to lead to yet another financial crisis in future. This is a warning more to the central banks in the US and Europe than those at home.