Saturday, November 19, 2011

Empowering Ordinary Papua New Guineans To Create Wealth Through Business And Financial Management Training
I was privileged to be invited to participate in the joint Certified Practising Accountants PNG and Australia Conference this week. The theme of the conference was “Wealth Creation, Management and Sustainability – The Accountant’s Role." What follows is an abbreviated version of my speech.

The topic I have chosen to speak on – Empowering Ordinary Papua New Guineans To Create Wealth Through Business And Financial Management Training - is very important because I am convinced that Papua New Guinea is at the social cross-road! The development journey we took as an independent country 36 years ago has not led anywhere for the majority of our people. Most of the ideals our founding fathers aspired to and wrote into the preamble of our Constitution have yet to become a reality. We basically started off well but lost track along the way.

Our development experience thus far can be summarized as follows: The country has been advancing economically, but the lives of the majority of the people have not improved. By majority, I am referring to 85% of the 7 million people that are not educated like all of us in this room are. We are indeed a privileged lot, and I have come here to remind us to spare a thought for our fellow Papua New Guineans who are struggling to make a living on a daily basis.

I will be making reference to various social indicators to lend support to my assertion that the lives of the majority of our people have stagnated in the face of economic growth. Let me refer you firstly to the United Nation’s Human Development Index (HDI), which is usually used to determine the level of progress made by the people in different countries of the world.

The UN uses four indicators to determine the level of human development in its HDI. They are:

1) Life expectancy at birth;
2) Mean years of schooling;
3) Expected years of schooling; and
4) Gross national income per capita.

These indicators are further divided into three dimensions of human development:

1. Health;
2. Education; and
3. Living standards.

This year PNG has been ranked as a country where human development is low on the UN HDI. The UN gives scores between 0 to 1 to determine where countries rank on its HDI. For 2011, this is what the UN has stated about PNG: “Papua New Guinea's HDI is 0.466, which gives the country a rank of 153 out of 187 countries with comparable data. The HDI of East Asia and the Pacific as a region increased from 0.428 in 1980 to 0.671 today, placing Papua New Guinea below the regional average.”

If we consider this ranking from the least developed to the most developed country, Papua New Guinea comes out number 35, which is near the bottom of the pile.

The Vision 2050 document states that Papua New Guinea aspires to be among the top 50 countries on the UN HDI in 2050. If we are currently ranked as 35th least developed after 36 years of nationhood, can we be counted among first 50 countries in 2050? We shall know in 40 years’ time.

In comparison, Samoa and Fiji, which are much smaller and less endowed countries, are categorized as medium development countries on the HDI. These countries are ranked 99 and 100 respectively.

Referring to Fiji, the UN report states as follows: “Fiji's HDI is 0.688, which gives the country a rank of 100 out of 187 countries with comparable data. The HDI of East Asia and the Pacific as a region increased from 0.428 in 1980 to 0.671 today, placing Fiji above the regional average.”

The Fijian people have done better than Papua New Guineans over the past 21 years, despite the political problems they have been through, and despite not being endowed like we are.

Let me present to you some more social indicators. All of us are no doubt familiar with them, but I would like to remind us in order to build up my case for the topic I have chosen to speak on at this conference.

• The proportion of people living under the international poverty line of US$1/day (US$365 = K870/year) has increased from 25% in 1996 to 40% today. This means that around 2.8 million people in PNG don’t see K900 in a year. PNG is a resource-rich country filled with cash-poor people.

• The number of school drop-outs is very high – over 80%.

• 90% of school-leavers cannot find jobs upon graduation.

• The army of educated but unemployed young people is filling the streets at a rate of approximately 40,000 per year.

• Only 500,000 people out of a workforce of 4.8 million in the country hold paid jobs. The unemployment / under-employment rate is 87%.

• Frustration and disillusionment among the youth is mounting…the “time-bomb” is ticking!

• While the elites find security behind barbed-wire fences (prisons), the under-privileged are taking control of the streets and the highways.

• After 36 years of independence, only 10% of businesses are nationally-owned while 90% is foreign-owned. The wealth of the nation is in the hands of foreign entities! The majority of Papua New Guineans are passive spectators on the “economic playing field”.

• Prostitution is on the rise. An increasing number of women are selling their bodies for a living.

• Prostitution and promiscuity stand as major impediments to the fight against the spread of HIV/AIDS.

• The rise in the number of so-called “single mothers” indicates that the family – the basic unit of society – is falling apart.

• The rise in the number of “street kids” shows that many parents are not able to look after their children. They are either poor or negligent.

• The increasing rate of drunkenness and drug addiction indicates peoples’ desire to escape the realities of life in 21st century Papua New Guinea.

I am involved with a growing number of former marijuana smokers in the Western Highlands Province. When I ask them why they decided to take the drug, the common reply I get is, “Laif em hard.” In other words, taking drugs helps them to forget their hardships. They find comfort in living in an imaginary world because the real world has nothing good to offer them. I guess the same goes for young people (both males and females) who are drinking ‘steam’ and other alcoholic beverages on a habitual basis.

Ladies and gentlemen, the acid test of development is peoples’ living standards. Development is not about constructing nice buildings like hotels, office complexes, cities, roads, etc. These are only means to an end. Development is really about raising peoples’ living standards. That is the bottom line. Sadly, the majority of Papua New Guineans are getting left behind.

Economic growth hasn’t trickled down to the micro or people level. The past 9 years of consistent growth have not been translated to raising the peoples’ quality of life. Growth has actually improved the lot of a very small minority while the vast majority has heard about it but not seen it impact their lives.

The picture on the human front is depressing.

Is all hope lost? Can something be done? Whose responsibility is it? Can I do something?

These are probably the kinds of questions going through your minds right now as concerned Papua New Guineans or friends of the people of Papua New Guinea as the case may be.

Let me suggest to you what you as an accountant can do to address some of the social problems the Papua New Guinean people are facing right now. This, I guess, is the gist of my message at this conference.

Let me start by making this statement: Financial problems lie at the root of social problems and law & order problems in PNG. I have been either directly involved in or interacted with several NGOs, churches and charity organizations who work with disadvantaged and under-privileged people in different parts of the country. What they have told me invariably is that most of the social problems they have encountered in their work are related to people’s need for money. People steal, kill, rape, hold up others, get involved in prostitution, etc because of lack of economic opportunities.

But I have established that what our people really need is not money (handouts), but empowerment through information and ideas with which they can sustain their lives. Yesterday somebody raised the issue of information-sharing in the workplace. I am saying that we also need to share our knowledge and ideas with the common people as well.

We all know the Chinese saying which goes: “Give a man fish and you feed him for a day; teach him how to catch fish and you feed him for life.”

My version of that philosophy for the purpose of this conference is this: If we the educated elites give ordinary people money, we feed them for a while; but if we give them information and ideas, we will empower them to feed themselves for life.

This includes both other people and our ‘wantoks’ – yes especially our ‘wantoks’! A lot of our people have land, their physical strength, skills, time etc with which they can make money. When we give money to them, we help them become lazy and dependent. They go away for a while but return again when they have financial problems. So we don’t really help them; we actually destroy them.

Coming back to the topic of empowering ordinary Papua New Guineans to create wealth, my proposal to all of us that are gathered here is this: The accounting fraternity needs to design and deliver simple training programs aimed at enabling ordinary people to make money as well as to manage and multiply it.

School drop-outs and other under-privileged people (youths) need training to start their own small businesses. And they need training to manage as well as grow their businesses.

As some of you may know, I have been publishing articles in the news papers. In the Sunday Chronicle I encourage readers to start their own businesses, while in the Post-Courier I discuss financial management and investing. I also go around conducting motivational seminars with students, unemployed youth, working class people etc. A lot of the work I have been doing has been free of charge too. Why have I been doing this when I could be busy minding my own family’s interests as most of you in this room have been doing?

Here is what I believe: As long as people don’t have enough money to look after themselves, they will cause problems for everyone else. They will stop scratching for a living, and start scratching and pinching us! I trust you know what I mean.

I would actually go as far as making this statement, which I hope you take home with you for this conference: As long as there is a wide gap between the “haves” and the “have-nots” in PNG, the “have-nots” will ensure that the “haves” do not enjoy what they have.

We may have our businesses, money, nice houses and cars, jobs etc, but we will not enjoy what we possess as long as the majority of the people are mere spectators. We will always live under a sense of fear and insecurity.

You only have to look at what has been happening in Lae recently to appreciate what I am saying. The situation there started with Morobeans aiming at driving off unemployed youth from the Highlands who were harassing other people on the bus stops and streets of Lae City, but ended up with business people from that region becoming the target of peoples’ anger and frustration.

My prediction is that it is not going to be long before riots and civil disturbances go from ethnic clashes to clashes based on social status, basically the “have-nots” fighting the “haves”. In other words, it is going to be the “have-nots” fighting the “haves” to have what the “haves” have.

The greater the gap between elites and ordinary people, life will become risky for the elites, such that many will migrate out in search of peace and prosperity.

It is in therefore in the personal interest of educated elites to empower the ordinary people to live sustainable lives. Empowering people is not just a role for the Government, NGOs, donor agencies etc. We the educated people need to do our part. In fact we are better-placed to teach, train and motivate our people to improve their own lives.

Ordinary Papua New Guineans must be transformed from being passive spectators and beneficiaries of handouts to becoming active players on the economic playing field. The people in this room have a very important role in this regard.

The Prime Minister stated in his address that accountants used to be number crunchers but are more becoming strategic business advisors. I am saying that accountants need to take their skills and knowledge to the ordinary people of this country, not just limit their activities to the walls of their corporate organizations.

Papua New Guineans need to shift from a poverty-alleviation (scarcity) mindset to a wealth-creation (abundance) mindset. Once again, the accounting fraternity can facilitate this transition.

Ladies and gentlemen! When I was asked by the organizers to participate in this conference as one of the speakers, I knew exactly what I wanted to accomplish. Instead of just providing some information to add to what you already know, I wanted action from members of CPA to rise up and contribute to addressing the social problems we face in our country.

I came to an assignment to this conference. My assignment was this: To motivate elites to leave your high offices and go down to the level of ordinary people and empower them to rise up from poverty, create wealth, and live sustainable lives.

I hope I have succeeded in getting some of you to think about and see things that are happening in the lives of our ordinary people a little differently. Instead of just blaming them or the Government for the problems, I have brought part of the responsibility for solving those problems straight to your door step. I hope that you will rise to the challenge.

I trust that some of you will start talking to your relatives and sharing ideas with them this coming holiday period instead of just handing them money.

I hope some of you will gather a group of unemployed people and talk to them about starting their own businesses.

I hope that some of you will use your holidays and free time to offer free financial advice to struggling local business people.

Thank you ladies and gentlemen for your attention!

I really hope that the accountants took something back from my presentation. I also hope that elites in other professions take this message to heart. Send your comments to secos@global.net.pg or text me on 7688 0033 or 7280 4588.

10 comments:

George Came said...
This comment has been removed by the author.
George Came said...

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