Thursday, September 29, 2011

Papua New Guinea’s Development Scorecard: 1975-2011

Papua New Guinea is now 36 years old as an independent nation. This article looks at the country’s development record to see how well we have done. The figures quoted below are taken from official documents such as the PNG Vision 2050 and the PNG Development Strategy 2010-2030. Reference has also been made to a report published by the National Research Institute titled “Papua New Guinea Development Performance 1975-2008”, as well as reports published by various donor agencies and international organizations such as the World Bank, the United Nations and Transparency International.

Eight basic development indicators taken from the above sources are quoted along with brief commentaries so as to show how PNG has fared since 1975. Please be forewarned that some of the data are a few years old.

1. The infant mortality rate, which shows the number of infants who die before the first birthday out of every 1,000 babies born in the country in a year, is 57. Infant mortality in Fiji is 18 per 1,000 births, and the whole of East Asia and the Pacific is 31. More babies die than anywhere else in this art of the world.

2. The maternal mortality rate is 733 per 100,000. This means 733 women die out of every 100,000 woman during child birth in PNG. This is four times higher than countries in the Pacific.

3. PNG’s current life expectancy at birth is 62 years. This compares with an average of 67 years for all developing countries and 72 years for East Asia and the Pacific. People in neighbouring countries live longer than Papua New Guineans.

4. Only 57% of adults in PNG are literate. This compares with 93% in the East Asia and Pacific region and 82% in the world. More people cannot read and write in PNG than elsewhere in the world.

5. Unemployment is very high. Only 500,000 people (13%) hold paid jobs out of a working-age population of some 3.8 million. The implicit level of unemployment is 87%.

6. School drop-out rates at Grades 8, 10 and 12 are 50%, 80% and 70% respectively. This means only half of Grade 8 students go on to Grade 9; 20% of Grade 10s go to Grade 11; and 30% of Grade 12s get accepted into tertiary institutions. The main reason for the very high dropout rates is lack of facilities and spaces in educational institutions.

7. The Human Development Index (HDI) is a measure used by the United Nations to assess countries in three areas of human development — life expectancy, adult literacy, and school enrolment. It also takes into account peoples’ standard of living as measured by the gross national product per capita. In 2010 PNG was ranked 137 out of 169 countries, making it the 33rd least developed country in the world.

8. The proportion of the population living below the international poverty line of US$1.00 per day (or approximately K1,000 per year) was 40% in 2010. Estimates in 1996 and 2006 respectively were 25% and 37%, meaning that an increasing proportion of the population has been progressively becoming poorer. PNG is a rich country full of poor people.

There are many other indicators of development but the above show that PNG has not done well in terms of its people experiencing improvements in their living standards. Commentators state that the country experienced many positive developments between the 1960s and the 15 years following independence in 1975, but indicators have either stagnated or worsened since the 1990s. Smaller and less-endowed countries like Fiji, Solomon Islands and Vanuatu have done much better than PNG.

Some of the reasons advanced for this not so impressive record are the two international oil crises of the 1970s, the Bougainville crisis which started in 1989 and ensued over the next 15 years, political instability which resulted in changes of government every 2.5 years up until 2002, natural disasters like the volcanic eruption in East New Britain, the tsunami which hit Aitape, the cyclone which affected parts of Milne Bay and Oro Provinces, several structural adjustment programs imposed by the World Bank as a result of a high level of public debt due mainly to uncontrolled government expenditure, and the El Nino-induced prolonged drought.

One glaring issue which has had a direct negative impact on development and ultimately on the peoples’ living standards is corruption, which emerged in a more pronounced manner in the 1990s. Corruption has become entrenched and endemic, such as to cause former Prime Minister Sir. Mekere Morauta to describe it as ‘systemic and systematic’.

Transparency International, which issues a Corruption Perceptions Index (CPI) every year, has been tracking the extent of perceived corruption in nearly all countries in the world for many years. It scores countries from 1 to 10, with 1 being the most corrupt and 10 being clean. In 2010 PNG was given a score of 2.1, together with countries such as Russia, Laos, Kenya and the Central African Republic. PNG’s ranking was 165 out of 178 countries, making it the 25th most corrupt country on the planet!

The burning question is, “Can our people realize better and improved livelihoods in the 37th year of independence and onwards?” This question can best be answered by our leaders and bureaucrats.

The country has experienced consistent economic growth in the past 6 or so years but this growth at the macro level has not trickled down to make a real difference where it matters the most: at the micro or people level. In fact, the years of positive growth seem to have coincided with an increase in poverty among a large proportion of the population, unemployment, lawlessness, breakdown of infrastructure, etc. The situation can be summarized as follows: ‘The richer the country, the poorer the people’.

This, again, can be attributed in large part to corruption. As we have seen above, PNG is listed among the least developed and the most corrupt countries. There is a direct relationship between corruption and development.

The new O’Neil-Namah Government has made several very popular decisions since coming into office on 2nd August which are as a breath of fresh air to the people. In addition to free and subsidized education from next year onwards, the decision to fight corruption is the most significant in light of the development experience as highlighted above. We hope that the current investigations into corruption at the Department of National Planning are followed through with prosecution of those found guilty. We also look forward to the establishment of the Independent Commission Against Corruption.

Unless we take drastic action against corruption, our social indicators will continue to worsen despite the country being flush with cash from the proceeds of the LNG and other resource projects emerging all over the country.

Sunday, September 18, 2011

Hungry People Are Angry People

Last week’s National Food Security Policy conference organized by the National Research Institute was one of the best meetings I have attended. If my memory serves me right, it was probably the first meeting I have attended where participants filled the room and actively participated right up to the last hour of the three-day conference. It was a demonstration of how important food is to everyone, and how threatening rising food prices are, considering that everyone eats.

In my article last week, I explained why I think rising food prices is an opportunity to encourage people in rural areas, and particularly unemployed young people in urban areas, to go back to cultivating the land. If the Government can address the major impediments facing farmers in the country, such as transport infrastructure, lawlessness, the absence of an efficient marketing system, lack of credit etc, our people can rise up to the occasion and produce food so that all of us are fed and kept healthy. I asserted that politicians and policy-makers now have no choice but to be serious about addressing farmers’ problems, because they are the ones being hit by rising food prices. If we can make rural life attractive, thousands of unemployed youth will return to the villages as they realize that they can sustain their lives as well as make money producing fresh food, raising livestock, etc.

In addition to the above, I would like to raise an important issue in today’s article, and that is that much of the break down in law and order can be linked to people engaging in unlawful activities just to keep food on the table. As one of the speakers at the food conference put it, some people live to eat but many in PNG eat to live. Those who eat to live are the ones who wake up each morning not knowing where the next meal is coming from, while the ones who live to eat overdo it, become obese and unhealthy.

I once took several leaders of a reformed gang in Goroka to lunch, and spent the whole afternoon listening to their life stories. One thing they told me which I will never forget is that each morning they would get up and promise their wives and children that they would bring food home for the night. They said that once they made the promise, they had to get whatever they promised, no matter what. They related how they would carry out robberies or risk their lives in other ways just to feed their families. I was reminded of this conversation when the gentleman at the conference made reference to people who eat just to live each day.

Sir Henry Chow, owner of Paradise Foods and Chairman of the NRI Council, made this very pertinent statement: “Empires fall on empty stomachs.” What he meant was that when people are hungry, they can do anything, even to the point of revolting against rulers. Look at what has been happening in Israel lately. And consider what happened in Germany which culminated in the rise of Adolf Hitler!

Hunger is a very strong motivating force. When people are hungry, they don’t care about laws, rules and regulations. They will do everything and anything to satisfy their hunger. This is actually an age-old issue. There are many Biblical incidences too. Consider why Esau sold his birthright to Jacob, and why the people of Israel thought slavery was better than freedom. Or consider why people gave their money, their livestock, their land and even their lives to Joseph and King Pharaoh of Egypt. It was all for food!

One group of people who are fighting for survival on a daily basis in PNG is squatter settlers who live on the fringes of the urban centres. While working people have money to buy food (low income earners may not be among those who can afford it) and village people grow their own food, settlers don’t have any regular income or food gardens. It is also generally accepted that settlements are breeding grounds for people who engage in unlawful activities as a way of living. These people have been struggling to feed themselves when prices have been low. Now that prices are escalating, we can imagine these people really feeling the impact harder than workers and rural dwellers. When these people become hungry, they become very angry, and they can make life difficult for everyone else.

PNG is not like other countries where food is so short as to cause a famine. There may be small pockets of the country where the possibility for extreme hunger exists, but generally, there is a lot of food grown in the country. The problem therefore is not one of availability, but of accessibility. There may be a lot of food available in the country, but having access to it is a problem. That, I believe, is what is giving rise to escalating food prices. And that is why our leaders need to allocate resources towards fixing the country’s transport infrastructure and law and order as matters of national importance.

It is actually on indictment on our leadership over the years that in a country which the rest of the world refers to as Paradise, a large proportion of the population lives in poverty after 36 years of independence. I have heard several commentators refer to PNG as a country of paradoxes, one of which is that it is a very rich country full of many poor people. Let it not be said of PNG that it is a food-abundant country full of hungry people. Poverty is out of place in Paradise; so is hunger.

In conclusion, the increasing price of imported food provides an opportunity for our farmers to cash-in by increasing the production of locally-grown food. It is an opportunity for PNG to replace imported food with more healthy and locally-grown food. But as well as being an opportunity, it is a major problem for the increasing number of low income and settlement dwellers in the country. When these people become frustrated and angry because they cannot afford to get access to food, they can get violent.

We hope our leaders remember that hungry people are angry people. We also hope they remember that empires fall on empty stomachs.

Sunday, September 11, 2011

The Financial Treadmill

Last week I discussed the lifestyle of people who run the ‘financial rat race’. I described it as one of working hard, getting paid, meeting expenses, and going back to work again – basically running around in circles, akin to rats running around in a maze.

I hope the article made some readers of this column mad at themselves and the lives they have been living – mad enough not only to vow but actually do what it takes to get out of the rat race at all cost.

Somebody sent me a text message to announce that he was going to leave his current job and look for a better one. This is not what I mean by getting out of the rat race. Getting a high-paying job will not get you out of the rat race. If you compete with others in the workplace, beat them and win in this race (get promoted, higher pay etc), it doesn’t mean you have come out. You may be highly educated, highly qualified, and highly paid, but you are still a rat!

Today’s article is on the ‘financial treadmill’. As many of us would know, a treadmill is a machine you find in many gyms. It is basically has a moving belt which people run or jog on, and it has instruments which indicate the time someone has run on it. It also indicates the distance the person would have covered had he or she actually run on the road. Some treadmills also show the speed at which the belt has run.

When someone runs on a treadmill, he or she feels several effects on the body. After a few minutes breathing intensifies and sweat begins to pour out on the forehead and other parts of the body. The person will also feel tired after some time. The ultimate effect would be a loss in weight and hence a lightness in the body. Continuous running will lead to a firming of the muscles and better health.

A financial treadmill is once again a lifestyle which people live, and it is determined by the way they conduct their financial affairs. It may involve all or many of the following (not necessarily in sequence):

• Going to school and getting a job;
• Getting married and having children;
• Receiving further training;
• Getting promotion and climbing the corporate ladder;
• Receiving pay rises and other perks and privileges;
• Increasing expenses to meet income;
• Living beyond means and getting into habitual debt;
• Ageing (graying for both sexes or bald for males); and
• Nothing to retire on during old age.

In essence, the financial treadmill records the time and effort put in over a life-time, but whereas running on a normal treadmill leads to better health, running the financial treadmill leads to little or no wealth. It is jogging on the same spot for years and thinking that you are making progress, but actually not getting anywhere.

I read a short statement made by John C. Maxwell, American leadership guru, which has stuck with me for some time now. He said, “Activity does not equal progress.” He was referring to companies and organizations such as churches engaging in a lot of activities, spending money etc, but not necessarily making money or achieving results.

I believe that the statement applies as much to the majority of working people. There may be a lot of getting up in the morning, taking a quick shower and breakfast (if at all), rushing off to the office, working whole day, coming home tired and worn out, taking a shower, having dinner, watching TV, and sleeping, and repeating the same routine the following days – for years! A lot of commotion and activity, but not necessarily getting anywhere.

If you this has been how you have been living your life up to this point in time, I propose to you that it is time you made drastic changes in your life. You just cannot go on living like this and expect to succeed financially. As Albert Einstein has said, “Insanity is doing the same thing and over and over and expecting a different result.”

The ‘Financial Rat Race’

In a previous article I mentioned the ‘financial rat race’. I wish to elaborate on this term in this article. I hope that you will see whether you have been running that race. I also hope that you will make a commitment to get yourself out of the lifestyle I will be describing if it speaks of you.

Rats are favourite animals for scientists when it comes to experimentation. Over the years they have conducted many experiments on rats and the results have contributed to their understanding of the behaviour of human beings.

To understand the behavior of rats, and hence people, scientists usually place the animals in a maze, which is a box with many hallways and doors inside it, and they set the rats loose. The scientists look down upon a box, but to the small minds of the rats inside the box, it is a huge place with many passages and doors. So the rats run around in the box, thinking that they have taken a long journey, whereas the truth is that they have been running around inside a box. And the first rat that comes out at the other end of the maze gets a cheese as a reward. This is a literal ‘rat race’.

A ‘financial rat race’ is a term used to describe a lifestyle that basically involves working at a job, getting paid, paying off debt, taxes and bills, and going back to work again, without any savings, no investments and a lot of debt. It is being an active part of a system that was designed to get people to work hard without making progress in their lives.

People that have been working for a long time, progressed professionally, received higher pay over the years, but have nothing to show for it, have been running the financial rat race. They don’t have any savings or investments. Instead, they live from payday to payday. When unexpected events take place, they take payday loans, usually from informal lenders who charge very high interest rates. Borrowing is the way they solve their financial problems.

I have conducted personal financial management and investing seminars for the employees of corporate organizations for several years now. What I have found is that the majority of working people in PNG spend almost all of what they earn within a few days of the money landing in their accounts. Many have in fact borrowed against future income, so they have effectively spent the money before they have received it! Such people don’t have any savings. What they leave in their accounts is the minimum balance required by their banks to keep the accounts current. Many have surrendered their bank cards to lenders, who keep the cards until the loans are repaid in full.

Another interesting thing is that the people with the most financial problems are those that are relatively highly educated and occupy higher-paying positions. It seems that the higher the pay, the higher the level of indebtedness. In other words, the more they earn, the more they misuse, and the more they borrow. On the other hand, low paid employees (especially cleaners and tea boys) tend to save a lot of money, and they tend to lend to their highly-paid colleagues.

If what I have briefly described is the kind of lifestyle you have been living, it is time for you to take a really hard look on your financial life and make the changes you know are necessary for you to get out of the rat race. You may think that it is hard to save money in this high and rising cost economy, but the truth is that you can. You just need to be determined to analyse your costs and cut out all unnecessary items, do a budget and stick with it no matter what. You just cannot go on working, earning and spending like you have been doing up to now, especially now that you know what a ‘financial rat race’ is.

High Food Prices: Problem Or Opportunity?

An important conference took place this week at the National Research Institute which brought together policy makers, farmers, food manufacturers, scientists, academics, researchers and interested members of the public. It was the Food Security Policy Conference on High Food Prices In Papua New Guinea.

The major concerns addressed by conference participants were:

1) What are the drivers of unprecedented food prices?
2) What are the impacts of escalating food prices on consumers? and
3) What can be done to reduce food prices for the benefit of the population?

Presentations were made under several sub-themes. These were:

1. Global and regional perspectives: trends in food prices and volatility, trade and international relations;
2. Food production and processing: industry and farmer perspectives, challenges, costing and pricing issues;
3. Food provision: food imports, packaging, marketing, transport and distribution;
4. Food consumption: impacts, affordability and coping mechanisms; and
5. Stakeholder interventions, strategy and options: the way forward.

The major lesson that has emerged from the conference is that food prices have been rising both internationally and domestically, and they are likely to escalate further. The concern in Papua New Guinea is not only that food prices are expected to rise, but the general price level for all goods and services (i.e. inflation) is expected to go into double-digits (meaning in excess of 10%) for the first time since 2003. The sum total of these developments is that people in the country will have to fork out more money from their pockets for food and others goods and services.

My presentation was on the major impediments or constraints, problems and challenges faced by food producers in the Highlands. High food prices indicate that there is a lot of demand for all kinds of food, but supply is low. In other words, high prices are supply-related.

There are many challenges faced by all farmers in producing and supplying food in the country, and the ones I highlighted are in fact common throughout the country. These are:

1. Market access. High prices of food indicate that there is a huge market for locally produced food, but access to those markets is a major impediment faced by farmers, due to reasons such as very bad road conditions, unavailability of transport and high fuel costs.

2. Increasing lawlessness discourages farmers from producing food. Many food gardens are destroyed during tribal conflicts. Food gardens, small-scale piggeries and poultries are also the subject of theft, and most farmers are subject to harassment by unemployed youth roaming in towns, drug addicts, and criminals.

3. Food producers are faced with high costs of imported production inputs such as fertilizers, weedicides, insecticides, seeds, feed, etc. Import duties contribute to high prices of these inputs.

4. In many parts of the Highlands arable land is becoming scarce with the increase in population. This is particularly so in areas which are near the main centres where access to markets is relatively easier. Land shortage is not yet a problem in more remote areas, but farmers in such areas have to carry farm produce on their backs for long distances in order to get to the main roads.

5. Generally, people who have been producing food and keeping the rest of the country fed have grown old over the years. Dwindling physical strength reflects itself in smaller quantities produced. Young people would rather look for jobs in the major centres than go back and work on the land. This may be a result of plain laziness or the mental programming they are subjected to while in school which conditions them to seek employment.

6. Efficient marketing systems are absent. Most farmers waste time and money transporting their produce to markets in Lae, Madang and Port Moresby. In the process they not only pay high costs of transport but also experience losses due to improper packing and handling, break down of trucks, bad market timing, etc. For instance, it costs about K70 to transport a bag of kaukau from a village in Mount Hagen to Port Moresby. When farmers lose money in the process, they get discouraged and stop producing altogether. It’s a case of ‘once bitten, twice shy’.

7. Food producers and farmers in general lack business skills such as farm planning, budgeting, costing, pricing, financial management, investing, etc. Highlands farmers tend to make huge gardens, plant and harvest them in one go, and when they make money, they tend more to spend the income than to save it. When they have money, they take long holidays. Farming is therefore ad hoc and unsustainable.

8. Commercial banks view farming as very risky and unbankable, so farmers don’t have access to credit.

I concluded by stating that food security equals national security. Papua New Guinea cannot go on importing food from other countries in the face of wars, terrorism, bio-terrorism, pollution, diseases, contamination, unfavourable weather due to climate change etc. The country lives a hand-to-mouth lifestyle; what it produces or imports, it consumes, hoping that food will keep on coming. There are not many food manufactures in the country, and no warehouses with strategic stocks. This is a very risky lifestyle.

Policy makers and other relevant authorities must create an environment that is conducive for food producers in the country, because everybody from the Prime Minister downwards eats on a daily basis. This becomes more imperative in light of an ever growing population. The farmers have land, time, labour and capital to produce, and they are willing to work because they too live in a world where they need money. If the major impediments are effectively addressed, our farmers can rise to the occasion and keep us all fed and healthy.

The title of this article is a question I posed at the conference: Is high prices a problem or an opportunity? The answer depends on which side of the market you are on. If you are a consumer, high prices of food is a major problem, because now you have to spend more money for the same quantity or basket of food you normally purchase for your household. Either that or you go for cheaper, lower-quality food, thereby placing your health and general welfare at peril.

But if you are a producer, high food prices is a great opportunity to take advantage of. I have been going around the country encouraging people, particularly young people, to till the land. To me, now is an opportune time for farmers in the country to make money. It is their time to become fully engaged in the cash economy, because now they have what the whole country needs: food. They have the opportunity to share in the wealth of the nation by working on their land, not receiving hand-outs.

High prices of food also provides an opportunity for the hundreds of thousands of unemployed young people to return to their villages and work the land. My assessment of the whole situation in the country is that people who will be handling most of the money coming out of the LNG and other resource projects are those who are self-employed: business people and farmers. Working class people will miss out, because they will be spending more, seeing the average family in PNG spends between 50 and 60% of their income on food.

I see rising food prices as an opportunity for PNG to experience a shift from rural-urban migration to urban-rural drift. I foresee unemployed young people as well as working people returning to their village as they realize that there is more money to be made there than in the towns. At least the land is rent-free, and the income is tax-free also.

The way I see it, politicians and policy-makers have no choice but to be more serious and committed in addressing the impediments faced by food producers in the country, whether they are farmers or manufacturers. It is in the personal interest of decision-makers to do it, because high food prices are hitting them in their hip pockets and just above their belts! It is now going to be a case of “address the problems of food producers and eat” or “neglect them and starve”!

My encouragement to unemployed young people and students reading this article is that they must seriously consider farming as a means of living. In fact I should extend it to working class people as well. Imagine a farm as your private pipeline into the economy. It is definitely not like sitting in an office for ten days and receiving a pay cheque, but you will never go wrong producing food. High and rising prices of food present a great opportunity to make a sustainable, comfortable, healthy and wealthy living. At least that is the way I see.

Finally, if you are already into producing food crops and livestock, you are doing the right thing at the right time. I encourage you to keep on keeping on. Do more of what you have been doing. The country needs you now more than ever. Shortage of food is the country’s problem; your problem may be money. Solve the country’s problem, and your problem will be solved. How about that?

Free Education Plus Unemployment Equals Disaster

Last week I had the privilege of participating at the National Development Forum on the theme ‘Creating Employment And Broad-Based Economic Opportunities And Government Actions For Implementation’. My paper was titled ‘Self-Employment: The Answer To Unemployment.’

The essence of my presentation was that Papua New Guinea’s workforce of some 3.8 million people has three options.

The first is to look for and secure paid employment. This is a nightmare for the majority of people today, particularly school leavers, because there just aren’t enough jobs for everyone. My estimate is that only 500,000 people of the total workforce are on salaries and wages employment (In fact the total number of people is probably around 400,000, but I am being generous here). If these estimates are correct, currently only 13% of the working-age population holds a paid job. The unemployment rate is very high - around 87%.

The situation is getting worse by the year, considering that the education system produces some 53,000 school leavers (or job seekers) while the economy generates around 10,000 new jobs in a year. The result is that over 40,000 young people cannot find the jobs that were promised them by the system.

Large resource development projects cannot generate enough jobs, because they are very capital-intensive. A classical example is the much-acclaimed LNG project. This multi-billion Kina project is expected to generate only 15,000 jobs during the construction phase (of which 5,000 will be nationals). When the project is operational, it will employ less than 1,000 jobs. The spin-off activities might actually provide more employment opportunities than the project itself. The same can be said of all the other projects.

The Government’s Medium Term Development Plan (MTDP) 2011-2015 aims to create 202,835 jobs by 2015 and 2,000,000 by 2030. But at an average growth rate of 2.3% per year, the country’s population will be around 11 million by 2030. It is clear that there will always be more job-seekers than the number of jobs available.
The conclusion that can be drawn from this analysis is that a paid job will not be a dream-come-true for the majority of school leavers. This leads to the second option available to people, which is to roam the streets in search of jobs. The situation is already explosive, with thousands of young people wandering around the streets of the major centres every day, looking for opportunities to make ends meet. I have stated in previous articles, and other people have said so too, that educated but unemployed young people in Papua New Guinea can be likened to a ‘time-bomb’. You can feel the bomb ticking as you go through the towns, markets, highways etc. The rise in social problems such as crime, prostitution, drug addiction etc are symptoms of the very high unemployment level in the country.

Given that this is the situation as it is, just imagine what it will be like when we push a lot of young people through the education system as a result of the proposed free education policy! We will have hundreds of thousands of educated people who cannot get jobs in the country. I say that is a recipe for disaster.

To avoid this inevitability, our young people must be a given a third option, which is self-employment. As regular readers of this column will have gathered by now, I am a preacher as it were of the gospel of self-employment. I am convinced that the logical and most viable alternative to paid jobs is for people to start small businesses and become self-employed.

We need to realize that our unemployed young people are not good-for-nothing failures and drop-outs. They are human beings with a lot of potential just like the few of us that are well-to-do. They possess intelligent minds (which may need to be reprogrammed to think of starting their own businesses rather than looking for jobs), skills and knowledge, time, strength and energy, natural talents and abilities, dreams and aspirations. Many have land in their villages. These are assets the nation can mobilize for development.

Most if not all young people do not realize that they have all the above. They have been so indoctrinated into expecting paid jobs at the end of the education process that they lose their self-belief once they get labeled as drop-outs or become unemployed. They need help to look within themselves to appreciate the greatness that lies within them. Somebody once said that what lies is above or around us pales into insignificance when compared to what lies within us. This is so true so far as our young people are concerned. They possess so much but don’t know that they do so, so they park at the minimum of their potential.

The following are the recommendations I made at the forum to tackle the high level of unemployment but also to provide real hope to the majority of the country’s workforce:

1. The Government to provide a business-friendly environment by introducing appropriate legislation and policies. A conducive environment for business includes better transport infrastructure, readily-available and low-cost utilities, law, good order and justice. Some laws and policies have to discriminate in favour of national businesses.

2. The National Government to introduce a National Entrepreneurship Training Program aimed at equipping school leavers and unemployed people with basic business skills. Ideally the program should be conducted by people that are already in business, not classroom teachers or academics, under a public-private partnership arrangement. The program should enable participants to gain a working knowledge of all business-related subjects (economics, accounting, law, management, investing, etc) as well as personal viability, ethics, leadership, etc.

3. The National Government to establish a Business Incubator Grant which people that have undergone the entrepreneurship training can access to start their own small businesses. The Independent Fellowship Scheme operates along these lines, but what I am proposing is a bigger program which gives most of the unemployed people an opportunity to be involved and engaged.

4. Provincial Governments to build up the capacities of their Divisions of Commerce and Primary Industry in order to provide advice and technical support to small business people in the provinces. Most of the businesses envisaged under the program will be agriculture-related.

5. The program to include on-going coaching and mentoring in order to minimizing the number of failed enterprises.

Papua New Guinea desperately needs more local businesses. It is business people that generate cash flow, multiply wealth and create jobs. The country needs thousands of them who can provide employment and hope to the thousands more that are living in hopelessness and poverty.

Even if the above proposal is not acceptable, something has to be done seriously to address the very high and increasing level of unemployment in the country. Otherwise, pushing more young people through school will be counter-productive in the long-run. The country will be filled with educated people without jobs who engage in unlawful activities to put food on the table. Lawlessness will repel both foreign and local investment, leading to more unemployment and lawlessness, and the vicious circle will continue.

In concluding, free education is a good policy. However, if it is for paid jobs that people go to school for, I have argued that there will never be enough for everyone. The best alternative is to empower the majority who are not likely to get jobs to start their own small businesses. The recommended training, funding and mentoring program should be introduced immediately, starting with the large number of unemployed people we already have in the country. The only other alternative is to allow unemployed people to continue to roam the streets, which will be bad for all of us.