Sunday, April 13, 2008

Governor General's Speech at Launching of "Young Money"

"Young Money, my second book was launched by His Excellency Grand Chief Sir. Paulias Matane, Governor-General of Papua New Guinea, on Saturday 5th April 2008 at the Granville Motel in Port Moresby. It rained very heavily right throughout the day, but His Excellency was kind enough to come on time, have lunch with us, and launch the book. Here is Sir. Paulias Matane's speech which he delivered before launching the book.

"Ladies and Gentlemen, it is with great pleasure that I accepted the invitation from Tiri Kuimbakul, one of Papua New Guinea’s upcoming writers, to officiate at the launching of the book titled “Young Money”, with the subtitle “What Working Class People Need To Know And Do To Achieve Financial Independence And Freedom.”

"As many of you know, I have been encouraging Papua New Guineans to write about our culture, our country and our personal experiences. Our country is unique in many respects, and most of what people in the world read about the country, has been written by foreigners. I have been advocating on numerous occasions for Papua New Guineans to write about their own country, which they know better than foreigners. I am glad to say that a number of people have taken up the challenge, one of whom is the author, whose second book will be launched today.

"I wrote the foreword to “Success After Graduation”, the author’s first book which was published in 2006. The foreword to “Young Money” was contributed by my friend Samuel Tam, founder of the Entrepreneurial Development Training Centre and Personal Viability (PV) training programme, which teaches financial independence and freedom among other very important topics.

"“Young Money” comes at a time in our country marked by financial struggle as a result more of mismanagement at both the individual and national levels.

"At the national level, despite the fact that there is a lot of money around than at any time since independence 32 years ago, not much tangible development is taking place. Our hospitals are still without vital drugs, and our schools are continuing to turn students away due to shortage of space. This is happening despite the fact that millions of both our own government as well as donor funds have been channeled into health and education. I put the reason down to mismanagement, abuse and abdication of responsibility by those in charge of managing the resources and providing these services. Our roads and other vital infrastructure are also falling apart for the same reason.

"At the personal level, the majority of working people in our country are struggling to make ends meet. One of the reasons for our people struggling is the rising cost of living. But the other major contributing factor is financial mismanagement. Our people just do not know how to manage their money. They are financially illiterate. The majority live from fortnight to fortnight without saving anything for emergencies, much less for investment. They actually live above their means, and prop up their lifestyles by borrowing from banks, financial companies and informal money lenders who charge exorbitant interest rates. One missed fortnight pay is enough to send them into bankruptcy.

"The results of mismanagement at the individual and family level are dire. Thousands of school-age children of working people are not able to go to school because the parents do not have the money to pay for their school fees. Money problems seem to be cause of many marriages and families breaking up. Money problems are also driving our young women and girls into prostitution, contributing to the escalation in the HIV infection rate. And bad money habits are contributing to a significant drop in the living standards of most of our working class people once they are terminated, retrenched or retire. Money is essential in modern Papua New Guinea, such that when people fail financially, they fail in many other areas of life as well.

"It would probably be true to say that a lot of the stealing and white collar crime that goes on in the country is because people are not able to manage their personal finances well. Many of our public servants find that their lifestyles cannot be sufficiently supported by the salaries they receive, so they ask for additional payment from the people they are supposed to serve free of charge. Sadly, much of what is received through this means is spent on daily consumption and not on investment.

"A large proportion of our workers spend a lot of their money on unnecessary areas such as gambling, alcohol, smoking and betel nuts. Papua New Guineans spend at least K100 million a year on poker machines alone, not mentioning what people spend on lotto tickets, horses and other forms of gambling. It is also said that PNG politicians, bureaucrats and landowners are going to cities like Cairns and Brisbane to gamble. I shudder to think what the situation will be like when casinos are introduced into the country.

"Papua New Guinea is a nation of consumers. When people have money, they generally want to spend it. It seems like there is an insatiable desire to buy and consume or accumulate things, rather than to make money grow through investment. It seems like money is for spending only.

"I am convinced that we Papua New Guineans are very rich. There is no place like our country. And I am speaking as someone who has traveled extensively. I have said this many times and I will say I again: We have the potential to become the richest and most powerful black nation on earth!

"For a start, we each have some land in our villages. If all these land were titled and valued, we would realize that we already sit on thousands, if not hundreds of thousands.

"Our country is a land of unlimited opportunities to do business in. Unfortunately, most of our people are blind to these opportunities. We are allowing foreigners to take over even the small businesses which we could run ourselves. We are becoming spectators on our own land, because every time we have money in our hands, we just want to spend it. Saving and investment are not in our vocabulary. We do not know how to invest and multiply the amount of money that is available to us.

"The author shares in the book that working people need to regard part of their income as “food” for eating or spending and part of it as “seed” for sowing or investing. They need to look upon their jobs as “seed-source”, and he encourages them to become “seed-minded” and not “need-minded”. These are good ideas to open our peoples’ minds and eyes.

"One thing I have also noticed is the money habits of the children of our local business people. These children generally do not appreciate the hard work done by their parents to come to where they are. They take a lot of things for granted. They misuse vehicles, demand money to drink and enjoy life with their mates, spend a lot of time in pubs, night clubs, poker houses, etc. I am fearful that such habits will ruin the businesses their parents worked hard to build up.

"“Young Money” also comes at a time when our country is experiencing economic recovery. The prices of all our export commodities are at an all-time high. Our foreign reserves are up. The Kina is stable, and interest rates are low. Banks have more money to lend than people are borrowing. And with the new developments in the resource sector (for instance the Ramu Nickel project, the LNG project and the Frieda River gold prospect), we are set for even better times in the years ahead. But I fear that if we do not learn how to manage and grow this wealth, we will squander it all and our people will continue to live in poverty.

"Ladies and gentlemen! We need to manage our money more prudently. It is not how much we earn that matters; what really matters is what we do with what we earn. If we do not manage well, we will continue to struggle, regardless of how much we earn. Many of us sitting here think that earning more is the solution to our money problems. But I am saying that if you do not know how to manage the little you already earn, you cannot manage bigger amounts. You will only find yourself spending more as your income rises.

"I believe that “Young Money” will help a lot of our working people. It is a simple, common-sense book, written in simple English in the contemporary PNG context. The author informs me that he has either sold or received orders for more than 600 copies already. This is a sign that people do want to know how to manage their money.

"But, as useful as “Young Money” is, just reading this one book will not be sufficient to get most of our people to change their habits. What we really need to do is to include financial literacy in our education curriculum. We need to teach our children the importance of budgeting, saving and investing. We need to teach them to avoid bad money habits. We need to highlight the effects of debt, gambling and other harmful ways of spending money.

"The author states in the preface to the book that the United States and Australia have come to realize that financial education has been missing in their education systems, with the result that the majority of highly educated and professionally successful people fail financially. These countries have only recently (2003 and 2004 respectively) taken steps to educate their people about good money habits. They have established task forces and even legislated laws to educate their people to help their people become financially literate.

"If such developed countries which have hundreds of years of experience in dealing with money can do this, a developing country like Papua New Guinea definitely needs to begin to educate its people. We need more people in the country who are financially independent and free. Without financial freedom, we cannot be truly free, both as individuals and as a nation.

"I am proud that one of the young writers who counts me among his mentors, has plans to write more books on money, business and investment. I am sure that these books will help a lot of people in our country to become better managers, savers and investors.

"Ladies and gentlemen, with these remarks and observations, it is now my pleasure to congratulate the author as well as to launch “Young Money: What Working Class People Need To Know And Do To Achieve Financial Independence And Freedom.”

"Thank you for your attention!"

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