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21 August 2014

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Hi Wenego, First of all, I would like to think that the State owns all traditional land across the country.

We have read on paper and seen on TV that all SABL contracts are now revoked because of abuse and high level corruption.

The SME sector being our only hope for increasing projections for capital is the solution but if only the government recognizes its people by awarding more contracts to them instead of foreigners would be marvellous.

There are two ways which the government can pull itself out of this mess, it is by either adopting the Keynesian model of economics and, or allowing the copper mine in Bougainville to reopen.

The problem with this budget deficit that the current government is pushing for is that money pumped into infrastructure development around the country is presumably leveraged against future earnings, most notably the LNG project.

This is a risk given the volatility in gas prices. Hopefully the proposed Sovereign Wealth Fund will smooth out the price volatility. However, if this fund is compromised then the so-called LNG miracle money or windfall will not mean anything. Subsequently, historical GDP growth projection and its promises will go out the door.

In saying that these capital investments especially in infrastructure will yield future benefits interms of providing access to markets like the Highlands Highway and other road maintenance and development. However, there is a real concern that most of these contracts are inflated beyond their real market value. Therefore, we may not be getting the value for our money for these projects.

Capitalist as a system of economy has its problems however, it is unfair to say that it is primarily responsible for the never-ending gaping gap between the rich and the poor.

In saying that it does promotes greed when it allows the rich to accumulate wealth at the expense of the poor. This is where the government needs to come in to re-distribute or spread wealth across the country. In the absence of a systematic wealth transfer mechanism the government should promote informal economy and SMEs.

At the same time the government should not only focus on increasing the tax income threshold for formally employed workers but channel windfall gains to super funds for the benefit of its members, most of whom are ordinary members.

Papua New Guinea has yet to reach a stage where it has systems and infrastructure that can convert its "idled/dead" capital such as land into "live" or workable capital.

This is the reason why financial institutions do not feel "secure" in getting into a loan/credit agreement with a typical ordinary Papua New Guinean. There is simply no records or valuation to indicate the market value of these "idle" assets. This is the task of the government.

The problem with a stimulus budget (deficit budget) is that because it will become politically popular it will be very difficult to stop it. In the end a government that attempts to rein on these expenditure to maintain fiscal discipline with the budget will end up being "unpopular".

Peter O'Neil em strategist yu tok, OHE Insider

Indeed, happy birthday, Papua New Guinea.

PNG is on the verge of experiencing a credit crisis with the Prime Minister spending lavishly with the government’s inability of managing public funds.

The call to probe the financial records has somewhat come under much scrutiny with corruption being the main culprit in ineffective governance.

The inextricable government borrowings to cater its citizens are so far from real with deteriorating governmental services and infrastructure in the remote-rural areas.

So, why the uncontrolled borrowing when projected revenues from the much anticipated LNG exports and other fiscal earnings have fallen short to the budget deficit?

For all I’m aware of is that never in this country’s history has a tycoon or a shark risen the bar to monopolize businesses and companies when corporations are benefiting from the policing of the government and bureaucratic arms.

Unless, there are capitalists and conglomerates amongst us. I would like to think otherwise however given the trend at which the government is handling the public purse is like a bank operating on leverage.

It borrows and spends to make a profit however this is quite the opposite with the current budget deficit predicted to increase and, fall short of millions of kina in credit.

This leaves us with the predicament of philosophy that the capitalists create their own destruction and, the anarchists believe that the urge to destroy is a creative urge.

Is the prime minister an anarchist by heart parading as a sheep in creating a coalition government working towards its own doom or, is he a capitalist sinking the country to its own reformation of the democratic constitution.

The prime minister as an anarchist is substantiated with the notion of many contradicting self-determinate developments and decision-making.

For instance, the government that he heads and the bureaucratic arm that he appoints are surprisingly of his ethnic resemblance. And, his intention to create a university in his own electorate is somewhat erroneous to the current standards of universities around the country needing dire rehabilitation.

If this is the case then the number game that he plays in the Tambaran has its repercussions with party leaders changing now and then in the coalition government. This gives him no chance of winning in the next elections unless he makes a lot of reform to the constitution.

Given his ability to manipulate and review legislature with his lavish lifestyle does not give him a second thought that he will serve for a second term.

This leaves us to the second assumption that he is a capitalist driving the country to its own destruction for reformation.

All I've heard from stories is that the prime minister is a business-man having lots of businesses and shares from financial to security assets mounting to their ever peaks around the country. And, if there’s any in Cairns or Brisbane, Shanghai or Bangkok, the Middle-East or Russia, he is a fright everyone needs to be wary of the chances that this country is headed for a recession.

A recession for reformation from a democratic constitution to a liberal democracy – for capitalists to enjoy more of their lavish lifestyles and the poor to get poorer.

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