PUT CRUDELY, IT STRIKES ME that the state in Papua New Guinea has become something of a channelling tool for steering the revenue generated - largely from the extractive industries - into the capital accumulation strategies of a largely urbanised national elite who have significant interests in the service sector (legal services and real estate spring to mind).
Taking morality out of this picture, you have to marvel at the profit rates that can be achieved through these scams.
One can pick up a prime piece of urban real estate for several hundred thousand kina - which is about the going rate for a Land Board bribe I am told - and then flip it for triple of four times that rate.
Or if you look at the Finance Department inquiry. Prominent public officials and lawyers were scamming several million in a go. And given there were little overheads, once divided this was all cream.
So it begs the question, why invest in a coffee plantation, for example, where the profit rates are small and unstable, when you can make enormous profits with minimal risk, and near absolute impunity, through scams and the black market in real estate and government contracts.
The resource sector is an indirect beneficiary of this illicit economy as a largely urban-based band of predatory capitalists - to put it inexactly - want a steady flow of foreign capital into natural resource because (even with the mammoth tax holidays) it breathes life into internal revenue.
And Phil Fitzpatrick is 100% spot on that Australian business plays a big role. I have seen Australian banks ignore highly irregular activity. (Who can forget the Sandline inquiry where it was alleged that a K500,000 bribe was plonked right into an Brisbane bank account of a PNG official).
Political solutions won’t solve these problems; they may in fact exacerbate them. Some of the most revealing moments into corruption and graft have been a product of schisms in the national elite (particularly the breakdown of the Somare dynasty).
A much more holistic attempt to break the parasitic class is needed. In a different situation, the uprising in Egypt was very much a cross-class alliance built on frustration with the especially parasitic character of Mubarak and his cronies. But that movement appears to have fractured.
It’s going to be a very tough path ahead for PNG if it’s going to break the bottleneck of power which is strangling the country.
But its uplifting, and a rare treat, to see the likes of Gary Juffa and others, developing serious analyses of the situation confronting PNG.