Not All GoPNG’s Decisions On SOEs Are Based On ‘Economic Rationalisation’

Our country (and all countries) is conceived with a ‘going concern’, i.e. it will continue on into the foreseeable future long after we all are gone from our mother Earth. Into that foreseeable future, decisions on progressing the country will continue to be made based on economic rationalisation and national rationalisation. Economic rationalisation decisions are often based on the NPV (net profit value) trade-offs. National rationalisation decisions on the other hand are those reached with the country’s ‘going concern’ in mind where economic value takes less precedence. These are decisions made in the present to sustain the existence and the national identity of a country going forward and cannot be easily or readily quantified with an economic value. We pay now the economic price or we will pay later but many times over the loss of nationhood price.

When it comes to making decisions, especially in running a country and in particular in managing GoPNG SOEs, many of us are probably scratching our heads on why poor performing SOEs are not yet sold off. Often we will based our views on economic rationalisation. However, there is the ‘National Rationalisation’ side of the coin to contend with that appears to be at play in these sagas where endeavouring retention of our poor performing SOEs appear to create conflicting views.

Conflict arises when we are confronted by choices and are unable to make a decision. When we are deciding between economic and nationalism choices, there is bound to be conflict. But with our hearts in the right place and our minds vision clear, we can’t go wrong on our mission in making national rationalisation decisions that will ensure the continuity of our country into the foreseeable future (more on ‘hierarchy of loyalty’ in serving our country in the link below).

In the two articles below (and the links within these articles where I delved deeper) I covered the ‘National Rationalisation’ dilemma of maintaining a ‘National Identity’ and ‘Energy Security’ that are confronting GoPNG decision makers on our Air Niugini and our PNG Power Limited which many of us will tend to see mostly from an ‘Economic Rationalisation’ perspective.

1. Why Would GoPNG Not Rush Into Putting Down ANG As A ‘Panting Dog’?

2. Has Potential To Be GoPNG’s Strategic ‘Milking Cow’ SOE

Air Nuigini GoPNG

Why Would GoPNG Not Rush Into ‘Putting Down’ ANG As A ‘Panting Dog’?

In our country where many places are still not linked by road and air access is still vital, Air Niugini is more than just our national airline, it is a symbol of our country’s astonishing progress from independence and with the background of this physical accessibility challenges, ANG has helped to bring diverse local communities together in creating a more unified nation.

Air Niugini has been a reliable air service provider for many years since its formation almost incidentally with the birth of our country. However, in the recent past years ANG’s services appears to have deteriorated which was brought on by an onset of many technical issues which threaten to ground the airline.

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The technical issues can also be attributed to ANG being operated as a SOE with community service obligations and profits not retained to carry out vital maintenance or upgrade its aircraft fleet which were becoming obsolete. These contributes to high cost of ownership. From an economic rationalisation perspective, ANG appears more as a cost burden and a liability: it was making losses and the unit cost was high. Many times it was the subject of debates to sell it off as a non-performing GoPNG SOE and this consideration is still on the table as the GoPNG appears not in a hurry to put down ANG as a ‘panting dog’.

GoPNG recently came to the rescue of ANG with a K2 billion funding but PMJM issued an ultimatum that ANG must make the most of this financial life-line or GoPNG will change its protectionist policy by ‘opening up the skies’ and allow more competition into ANG’s air coverage market. GoPNG’s decision to persist with and patronaging ANG is understandable given our airlines symbolism and status it projected for our nationhood. Hence, pursuits in maintaining a ‘National Airline’ is an endeavour that should be pursuit more on National Rationalisation than Economic Rationalisation.

As another prominent senior citizen Alois Jerewai is noted stating in one of his recent Facebook post, while our country still lacks total connectivity by road, the continued operation of Air Niugini is a public service and not necessarily a business concern while the. For National Security reasons also, this Airline’s survival is the survival of this Country.

Responding to many commentators on his post who viewed the situation with our National Airline from the Economic Rationalisation perspective, Mr. Jerewai said “the Airline is still the biggest mobiliser of our travelling public, business-people, and in case of immediate national state of emergency, the transportation of our security forces. While I agree with your various observations, the fact remains that the airline is not strictly a business concern. It is currently a public necessity.”

I agree with Mr. Jerewai and from a technocratic perspective our Airlines is salvageable from its current situation.

My suggestion for salvaging our National Airline is given in this article below.


PNGn Formal Sector Workers Are The ‘Kings And Queens’ Of ‘Charity’

Below is an extract from the writings of the late Bernard Narokobi in his seminal work ‘The Melanesian Way’.

Extract from Bernard Narokobi’s seminal work ‘The Melanesian Way’.

“We are often preached at by missionaries to be charitable and to give and not to count the cost. We are often urged by service organisations to engage in community work as if we have never known community service in our villages. In saying this I do not deny that the village ‘closeness’ is no longer true for towns and cities. Wantoks don’t live close to each other any more or have the time and resources to help each other. There is definitely a need for organisations like St. Vincent de Paul, Red Cross, the Port Moresby Development Group and Apex. I cast no aspersions on the sincerity of their members and am a member myself of some of these. I often wonder, however, whether some of these organisations exist as elite clubs to propagate themselves and to justify many smart business deals and activities that cannot measure up to either Christian or Melanesian standards of care and concern for one’s fellow.

“We must be careful not to destroy the Melanesian values of self sacrifice for the benefit or others, or make beggars and dependents out of our people by good works and deeds. Let me emphasis this point. I am not against charity organisations. There is certainly a place for charity organisations like St. Vincent de Paul in Port Moresby where for whatever reasons tribal and “wantok” links have broken down, and a need for government or publicly financed institutions for the aged, the blind, the deaf, the dumb, the lame and the disabled throughout Melanesia. Relatives and “wantoks” can no longer look after their physically handicapped without help, and need the support of all of us.

“Too often we join charity organisations for wrong reasons. Our foreign brothers and sisters seem to undertake charity or welfare work to justify their financially advantageous positions. Papua New Guineans are often made to feel that volunteer service is something imported to our shore sand planted in our hearts. How wrong this attitude is. It is nothing more than “Euroegocentricity”. Many Papua New Guineans support their aged parents, infant school relatives, widowed parents, and divorced sisters without ever asking for financial support from the Government, the Church, private enterprises or charity organisations. They do this because tradition dictates it.”

In a collectivist society such as ours, PNGn workers are ‘Kings And Queens’ of ‘Charity’. Even the pay we get does not stay only with us but is spread thin across our extended families and relatives. These people, our extended families and relatives, happen to be the very people our government is set up and we pay taxes to so they can be served.

But our GoPNG policy has not been kind and very disheartening to our PNGn workers. It was even heartless as it dip its fingers into the PNGn workers retirement savings.

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There were many instances where it even refuses to pay the PNGn workers their rightful dues and here is such an example.

But the PNGn workers are steadfast in our duty to our fellow citizens and still hold out hope that our GoPNG will be proactive in encouraging our charitable hearts. These are the four actions that I think will encourage the heart of our ‘Kings And Queens’ of ‘Charity’:

1. Allow personal income tax payers a discretionary component of our taxes.

2. The other three are: reduce PIT if a discretionary component of tax is too difficult; remove dual pay salary so there is more money staying in the country and flowing within the circular flow of cash; and regulate the real estate industry so PNGn workers can have large disposable income to spend into the economy in other sectors and not just the real estate sector.

These above four actions I think will result in a win-win situation that will empower, enable and encourage the ‘Kings And Queens’ of ‘Charity’ which are the PNGn workers.