By Jordan Dean PNG Writer & Author - JDT Publications
Dear Prime Minister,
Your question about how we can make PNG a truly rich black, Christian country in 10 years’ time got me thinking.
While I’d really love to go all academic and research the solutions in detail, I’ll leave that to our good professors at our universities.
However, here are a few practical tips that I can think of for now:
1. Right-size the Public Service, Control Government Expenditure and Value for Money.
The public service consumes about half of the national budget every year. It needs to be right-sized. A lot of offices, commissions and secretariats are established because everyone wants to be the boss and paid at Executive Level 4 or 5 salary. Agencies that do not play a crucial role have to merge with mainstream departments.
Another issue is that the old people still hold onto senior positions and never seem to retire. They should have enough savings and superannuation by now to retire and start a business and employ new graduates. The longer these old public servants remain in top positions, they become bottle-necks and so new graduates have no chance of been employed. The General Orders should state that no person should serve as a departmental head for more than two (2) terms.
The government has to control its expenditure. A lot of money is misappropriated by agencies on unnecessary overseas travel. Contracts are also inflated. A job or service that can be done for K10,000 is invoiced for K100,000! Are we getting value for money when about K1billion disappears from our national budget because of inflated contracts and corrupt deals? Proper valuation has to be done on bids before a contract is awarded.
2. Reduce Taxes and Expand the Tax Revenue Base.
The government has to reduce the current taxes. This gives people an extra incentive to work. Clearly, society benefits when the incentive to work more hours increases. Besides, the less a government taxes its citizens, the more money they have to pursue their own goals.
At the same time, the government has to reduce tax holidays given to mining and logging companies.
The government has to expand its tax revenue base by imposing tax on the informal sector. The informal sector makes a lot of money but pays no direct taxes to the government. Taxis, PMV buses, landlords who rent out rooms to people, the street sellers and the vendors at Pom City Markets need to be taxed for the income they earn.
3. Invest in Innovation, Technology start-ups and Downstream Processing.
Twenty first century is driven by science, technology and innovation giving rise to the Fourth Industrial Revolution that will create more convenience to the livelihood of humans and also assist in solving and alleviating many of our social and economic dilemmas.
Papua New Guinea is largely a consumer of innovation, imported technologies and knowledge products but must give prominence to Innovation as a key driver for economic growth and to move up the value chain to be a producer of innovation. The government has to invest in innovation hubs and technology start-ups.
The government must also encourage downstream processing in agricultural production. For instance, instead of exporting copra, we can manufacture and export organic virgin coconut oil products and derivatives. The by products of virgin coconut oil include; Coconut soap, Cooking Oil, Hair Conditioner, Shaving Oil, Shampoo, Body Lotion, Hair Food, Detergents, etc.
4. Invest in one or two Tourism Hubs.
We have beautiful beaches that are on par with Bali or Hawaii. Yet, PNG only attracts 180,000 vistors per year (probably less than 50,000 tourists). Bali attracts 6 million foreign tourists plus 8 million Indonesians from other parts of the country. That’s 38,350 visitors every day – the equivalent of 200 Boeing or Airbus flights to Denpasar per day.
The government needs to develop Alotau or Kavieng to be tourism cities. Build good roads, shopping malls, banks, ATMs and foreign exchange, entertainment areas, parks, international airports, reduce airfares, hotel prices, taxes, etc. Law and order must be maintained and our people’s attitude has to change! We have a huge tourism potential. Market our country as a tourism destination. Tourism brings in free money to our economy. Let’s try aim for a million visitors by 2025!
5. Capital flows, Foreign Investment and Competition.
When foreign companies invest in PNG, our economic choices are expanded. It not only creates employment for locals, but it also creates other spin-off business opportunities for local distribution companies, local manufacturers, and so on. However, foreigners will invest in a country only if they believe they will be able to get their money out of the country. Therefore, it is essential that our government allow capital to flow freely instead of restricting foreign exchange.
A lot of mining companies and development partners employ expatriates in managerial jobs while the locals occupy the lower paid jobs. Even Chinese laborers are brought into the country to work on road construction. The government has to control the number of expatriates been employed in PNG. Impose work permit levies on skilled expatriates and protect jobs for our people.
Also allow competition in the airlines industry. Encourage foreign airlines to compete with Air Niugini to allow for affordable airfares and more efficient service.
6. Government intervention in the economy.
The real estate industry has to be regulated. Rentals and property prices in PNG are among the highest in the world.
Raise the minimum wage to K5/hour. Penalize any Asian company that underpays our people by deregistering them and/or deportation.
The government should give out soft loans for young people to start up SMEs. They can repay the loan in 10-20 years at a low interest rate. When the government supports entrepreneurs to start-up businesses, they create employment opportunities as well as pay tax back to the government. Imagine a 100,000 SME’s paying K10,000 per year. You’ll have a billion kina tax revenue!
We can learn from Brunei, Dubai, Qatar and Singapore if we want to be the Richest Black Christian Nation.
Thank you.
Jordan Dean.
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