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21 January 2012

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Michael - Indeed my arguments are premised on better alternatives to engaging our prople's productive labour: coffee, cocoa, copra, vanilla, cardamon etc are what I'm arguing for.

We are talking too much buai and are forgetting these important commodities. PNG belongs to the global village of nations and we can not pretend as if international trade and the economics of it doesn't affect us.

Villagers don't know what balance of trade is and they don't care, but that does not mean it doesn' affect them. I used to buy a small tinpis in my village for only 10 toea when I was a kid. That same can now costs K5. But wait, this is at a time when buai bisnis has been flourishing.

How do we engage our people? Well the answer is pretty clear, isn't it? Pressure the government to recreate the enabling environments for these commodities and actively encourage and reengage our people again. Didiman officers must rejoin teachers and nurses back in the villages.

David - Your questions assume that there is an alternative job waiting four buai vendors so we could assess cost benefit. How do you make this conclusion?

Villagers are not concerned with our balance of trade but daily survival. How do we engage them?

With other developments comes more money spent on buai that goes to villagers. They buy imported items. So how do we estimate this loss of kina?

What is the opportunity cost of buai bisnis? Would the effort put into paddling buai be better spent elsewhere?

Buai trade has a real economic impact on the prices of imported goods as it contributes nothing to our balance of trade inspite of the enormous amount of productive time and effort that our people spend on it.

While on the one hand we are busy importing rice, we export less and less of our own produce. The result is an eternal balance of trade deficit on us. This means the prices of imported goods keep on going one way in Kina terms: upwards.

So we end up with a problem of an unnecessarily imported inflation due to the missalocation of our own productive labour. The fact remains that buai is neither an export commodity nor a substitute of an import. Hence, the pressures on our balance of trade would remain unabated for as long as we engage in the buai bisnis.

Our resource projects will turn this situation around but that must not cloud the facts about the economics of the buai trade.

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