PNG - Beware The Pitfalls Of Privatisation

Beware The Pitfalls Of Privatisation

Source: The National (PNG)

PORT MORESBY: The privatisation debate enters a crucial stage.

Soon [Papua New Guinea's] Parliament will meet for the all-important
Budget 2000 session.

Privatisation is expected to be a crucial feature of the budget because
the proceeds are expected to retire much of the domestic public debt
incurred by successive governments.

On that point we would like to know what mad man or mad woman could
claim leadership and incur runaway debts that threaten to bankrupt the
nation and force us to mortgage the future of our children.

At the very least it is criminal negligence - but what happens to such
individuals or groups of individuals? They will inevitably get off
scot-free.

But that is by the way.

The issue is privatisation - and because of its importance to the next
budget we fear that determined efforts to resist the process is already
a useless exercise.

We can only hope that this Government will not try to correct the
mistakes of past mad governments with rash decisions of its own that
history might judge in a similar light or worse.

The leaders spearheading this drive must look beyond the immediate need
to retire debts to the future privatised and deregulated market economy
they envisage for us.

They must look to a privatised Telikom and a privatised Elcom providing
for the needs of not only residents of Port Moresby, Lae, Mt Hagen and
Lorengau but also the greater needs of the Telifomin, the Baining, Jimi,
and the Kaintiba.

They must see a privatised Air Niugini and PNG Harbours Board finding it
profitable to deliver services to Kerema, Daru, Oro Bay and Finschhafen
as well as the main ports.

For these are the real concerns. Under direct state control these
institutions have, as yet, been unable to fulfill their statutory
obligations, so it is a big question whether these privatised,
corporatised entities will be able to do better with a profit motive.

How will the Government pull this one off and still continue its push
for rural electrification, rural housing, rural telecommunications among
scores of others.

There is no great wealth awaiting some enterprising company to set up a
telecommunication system profitably.

Will privatisation suddenly create the instant wealth that would be
necessary for expansion of the economy which would increase demand and
therefore ensure there is room for competition and not the emergence of
monopolies.

For if it is a monopoly that will eventually emerge, it would be better
left in the hands of the state rather than in private hands which might
find it tempting to succumb to the march of global mergers.

In the end it is not the emotional question of ownership of these
institutions. It is a question of capacity, the capacity of individuals
and companies to invest in these companies, capacity of the newly
privatised companies fulfilling the needs of the people; the capacity of
the economy to expand quickly enough to provide all the ingredients of a
free market economy that presently do not exist.

And it is the question of whether or not this act can, in the medium or
long term, deliver the nation from the clutches of poverty, from the
clutches of ignorance and dismal living standards.

These are the questions our good Government and the architects of the
privatisation moves need to address very carefully.

For, therein lies the dangers which may gather to deliver a body blow to
the nation at some future date.

Article provided by the Journalism Programmme, University of the South Pacific. Pasifik Nius.

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