History of Papua New Guinea

Please Support PNG Group's Challenging the World Bank's Structural Adjustment Programme

From the Ecologist,
27 October 1995

The Papua New Guinean National Coalition for Socio-Economic Justice is challenging the structural adjustment programme the PNG government has recently concluded with the World Bank in order to gain more aid money from the World Bank, Asian Development Bank, Australia, Japan, Germany, France and New Zealand.

The Coalition comprises thirty-five organisations which have held major protests against the SAP and prepared an alternative adjustment programme which would raise money without endangering PNG's health, education, workers' rights etc.

SEE background information at end of alert for more details.

** Please print out the appeal, sign it and send it to AID/WATCH in the next few days: the PNG budget session starts on 5 November. AID/WATCH's fax number is + 61 2 264 6092.

** Please also write directly to your country's representative at the World Bank, 1818 H Street, N.W., Washington DC 20433, USA, and to one or more of the following key PNG politicians and officials, expressing your concern and asking that the SAP be renegotiated after full consultation with PNG community-based organisations:

Hon Chris Haiveta, Finance Minister, Fax: + 675 288 433

Hon Masket Iangalio, Shadow Minister of Finance and Planning, Fax: + 675 3277753

Kila Ai, Deputy Secretary (Policy and Planning), Dept. of Finance, Fax: +675 288 495

Hon Bernard Narakobi, MP, Fax: +675 327 7753

Appeal for a people's budget in Papua New Guinea

We, the undersigned organisations wish to voice our concerns about the World Bank's Structural Adjustment Program and its impacts on both the people and the environment of PNG. We beseech you to listen to your people and respond to their demands.

We recognise the necessity for stringent measures to resolve the financial crisis facing PNG. However, we are concerned that the current Structural Adjustment Program for PNG and the proposed 1996 budget, will further impoverish the people and will not address the fundamental problems facing PNG. The SAP relies on the unsustainable exploitation of PNG's mineral resources to fuel its development, rather than strengthening local industry and promoting self-sufficiency.

We support the PNG people in calling for development that is ecologically sustainable, locally-based, and which promotes human rights. In order for this to occur, it is imperative that the PNG people are involved in their own development.

We believe that the proposed 1996 budget will further entrench key aspects of the World Bank SAP which will be detrimental to the people of PNG. We call on you, as elected representatives, to bring down a budget that meets the needs of the majority of the people in your country. We strongly urge that urgent consideration is given to the following points:

1. Imposition of greater fees for hospital and tertiary education services. Access to adequate health care and education are fundamental human rights that must be respected by the PNG Government. We urge the government to establish a national system of free, efficient, accessible and well-resourced rural and urban health centres. We further urge that the government ensures that education at all levels is given priority in the allocation of funding, and that tertiary education remains accessible to all Papua New Guineans.

2. Trade liberalisation measures, including removal of restrictions on foreign investment, and abolition of price controls on basic foodstuffs. These measures benefit foreign corporations and increase the cost of living for an already struggling population. The International Monetary Fund itself has acknowledged that an emphasis on export-led recovery through the exploitation of mineral resources will result in severe balance of payments difficulties in the future. Instead we call on the PNG Government to promote local industries, strengthen the screening powers of the Investment Promotion Authority, protect wages, reintroduce price controls, and institute effective environmental regulations. We urge the government to promote local agriculture projects so PNG can move towards being self- sufficient in food production. The latter will assist to reduce PNG's foreign debt and build the country's foreign reserves.

Sacking of public servants, imposition of wages freeze, abolition of minimum wage, restrictions on union activities and privatisation of state owned enterprises. While there is an urgent need for prudent public expenditure, the burden of the changes should not be confined to working people. We call on the government to commence dialogue with workers' unions in order to determine the terms and conditions to improve the delivery of services in PNG. We further urge that the minimum wage is maintained.

4. Forestry practices. Provisions in the SAP covering forestry practices are highly commendable, however, we stress the need for greater transparency. We are concerned at reports that the forest revenue system could be dropped and the participation of NGO representatives on the national Forest board and Provisional Forest Committees could be greatly restricted. We ask that you ensure that the government adheres to the forestry provisions of the SAP.

5. Consultation with the non-government organisations. The urgent economic and social crises that PNG is now facing can only be solved with the full involvement of the people of your country. To facilitate this we urge that you immediately open up a comprehensive consultation process with representatives of community and non-government organisations, including the National Coalition for Socio-Economic Justice.

Please fill in and fax to +61 2 264 6092.

[Editor's note: the form is here omitted]

Background

Thirty-five Papua New Guinean organizations, including trade unions, indigenous groups and womenUs groups, have united to oppose the structural adjustment programme (SAP) that their government is undertaking. Up to 10,000 people rallied against the planned SAP in a series of protests in July, and three demonstrators were killed by the police.

The World Bank and the PNG government finalized the SAP programme on 28 August, committing PNG to drastic economic reforms to qualify for a $US683 million loan from the World Bank, Asian Development Bank, Australia, Japan, Germany, France and New Zealand. Reforms include scrapping the minimum wage, removing price controls on basic foods, introducing fees for health and education services and abolishing controls on foreign investment. Land law reform to give companies easier access to forest and mineral resources, originally part of the package, has been withdrawn or at least postponed due to the protests.

The anti-SAP movement, the National Coalition for Socio-Economic Justice, admits that economic reforms are needed, but has prepared a detailed alternative adjustment programme showing ways to raise money without endangering peoplesU health, education, wages and land ownership. Infant mortality is already high in PNG and only half the adult population is literate.

A two week series of stop work meetings is being held across the country in early November, demanding that the World Bank renegotiates the SAP in consultation with PNG organizations. International groups will press the Bank to carry out its promises to consult with affected groups and consider alternatives to its discredited economic programmes.