Page 26 - IB AUG 2017

Politics
O’Neill wins bizzare elections

hard landing for the kina and an evapora-
tion of their diminishing foreign reserves.
This process is being managed through
a regime of foreign exchange rationing,
which is choking private sector invest-
ment. While the kina is slowly depreciat-
ing, experts argue that it is still 20 per cent
by Sam Vulum higher than a market clearing rate.
PAPUA New Guinea’s Prime Minister Peter As the PNG - Mid-Year Economic and
O’Neill recorded history by being elected O’Neill is congratulated by other MPs. Fiscal Outlook (MYEFO) 2017 statement
Photo: Sam Vulum
into office for a second year term on July 2. incidents of alleged vote buying, including released on July 1 reveals, the govern-
He defeated a determined coalition of par- through using state resources and provin- ment’s fiscal situation is dangerously un-
ties known as ‘The Alliance’ in a vote 60 cial and district development funds made tenable. It needs to take immediate steps to
to 46 but the real challenges are those that available to incumbents. These funds were correct its previous mismanagement of the
lie ahead for the re-elected Prime Minister. alleged to have been used to buy voters’ economy if it is to deliver on the ambitions
The returning Prime Minister will have support or for projects to induce voters. set out in its policy platform.
many questions to answer for the general “The Group was advised that money The MYFO indicates that the fiscal out-
conduct of this year’s elections, the ninth politics has significantly influenced the look showed mismanagement of the bud-
in PNG’s short history. The election has electoral process and may have led to an get was worse than previously thought.
been marred by violence, numerous alle- uneven playing field for the parties and An Australian economist Paul Flangan
gations of malfeasance, an attempted kid- candidates in the 2017 elections. The who has long taken an interest in PNG’s
napping, and comical court proceedings. PNGEC and the Office of Integrity of Politi- economy said the government had already
A common feature across the country cal Parties and Candidates (OIPPC) should run the biggest budget deficits in PNG’s
was the poor state of the electoral roll. consider the formulating of campaign history over the past five years and this
Thousands of Papua New Guineans, many finance regulations through appropriate had climbed further in the seven months
of whom voted in 2012, were disenfran- legislation.” since the last budget.
chised, ineligible to vote because their O’Neill also faces other substantial “The budget has blown out by more
names did not appear on the updated list. challenges of leading the nation, chief than a billion kina ($US309million),
Independent observers have called the among them the state of the economy. He spread evenly between falls in revenue
state of the electoral roll ‘alarming’, and started his first term in office when PNG as well as expenditure being higher than
it is the largest single issue that threatens was booming. The construction phase of expected. The public debt has blown out
the legitimacy of the election. its largest natural resource project, a $US- from 21 billion kina ($US6.5 billion) to 25
The Commonwealth Observer Group 19billion liquefied natural gas project, had billion [$US7.7 billion] or 29 per cent of
highlighted in its preliminary report that just begun, and was expected to transform GDP to 34.5 per cent. That is an extraor-
a key issue and challenge to the election the nation’s economy. dinary turn around in the explosion of
has been the significant number of eligible Anticipating more money than they public debt levels, all within the last seven
voters whose names were not on the would know how to spend, the govern- months,” said Mr Flanagan.
common roll. The Group was very disap- ment made bold commitments to free In addition to these immediate chal-
pointed to note that previous COG reports education, free healthcare, a massive lenges, the government has significant
that highlighted the need to address this decentralisation program, and hosting issues on the horizon that will need to be
issue, have yet to be implemented. the APEC leaders’ summit in late 2018. It delicately managed. The first is the hosting
“It is critical that adequate expertise and even went so far as acquiring a stake in of the APEC leaders’ summit next year,
funding required by the PNG Electoral Oil Search, PNG’s largest company. followed by the promised Bougainville
Commission for creating a credible roll PNG’s fortunes abruptly turned with the independence referendum in 2019. With
should be provided in a timely manner collapse of global commodity prices at the many senior members of the former gov-
before the next election. The people of end of 2014, just as the LNG project came ernment not retaining their seats or now
Papua New Guinea deserve better and online. Government revenue has collapsed in opposition, quick and effective decision-
eligible voters must be allowed to exercise to 2004 levels after adjusting for inflation making will be even more difficult.
their democratic right and participate in and population growth, and is expected to Despite the problems, Mr O’Neill entered
their national elections. remain low for the foreseeable future. The the ninth general elections in a position of
“We recognise the fact that despite the government was very slow to react, and significant strength.
shortcomings associated with the common expenditure priorities have not been re- A masterful politician, Mr O’Neill had
roll, observed in all four regions of the aligned. They have been unable to finance built a coalition government that held 93
country, political parties and candidates record deficits, and cash on hand for the of 111 seats, and from the outside ap-
continued to participate in the elections,” government has come close to running out peared unbeatable.
Group chairman Sir Anand Satyanand numerous times. But alliances are tenuous in PNG politics
said. This fiscal crunch has been exacerbated where there are no permanent enemies or
The Group also highlighted other wor- by an overvalued exchange rate, a result friends, only permanent interests.
rying anomalies in the elections. “We of the central bank’s effort to prevent a r vulumsam@hotmail.com
note with concern a number of reported

26 Islands Business, August 2017