Papua New Guineans organise against structural adjustment

October 16, 1996

PETI LAFANAMA is chairperson of the recently formed PNG Watch-Council for Socio-Economic Justice, a coalition of non-government organisations and grassroots activist groups opposed to the World Bank and PNG government's structural adjustment program. Lafanama is also national general secretary of Melanesian Solidarity (Melsol). While on a recent visit he spoke to Green Left Weekly's NORM DIXON about developments in PNG.

The most important issue in PNG over the past several years has been the government's attempts to impose austerity, Lafanama began. "In 1993-94, PNG ran into an economic crisis; its foreign reserves ran low. The government went to the World Bank and IMF. They decided to give loans on the condition that it accepted a structural adjustment program."

The SAP agreement was signed in August 1995 in Washington. In return for US$400 million in loans, Port Moresby pledged to implement measures that would further open the economy to overseas investment, particularly in the mining, oil extraction and forestry industries. The bank, backed by the Australian government, insisted that PNG abolish the minimum wage, remove price controls on basic necessities, impose "user pays" fees on health and education, privatise government enterprises and reduce the public sector work force by at least 4500.

Angered that there was no consultation with the PNG people, around 35 trade unions, grassroots community organisations, environmental, religious, student and women's groups came together to form the National Coalition for Socio-Economic Justice to oppose the SAP and demand a say over the direction of change.

"We felt that the government was responsible for most of what went wrong. Since independence 20 years ago, the system was designed by the government and the bureaucracy, and the people were not involved. We realised that we really needed to make our concerns known", Lafanama said.

When the agreement with the World Bank was signed, the NCSEJ activists went into rural communities to tell of the experience of SAPs in other countries. "Our warning went out to the people, warning them of the implications of the structural adjustment program and what might happen if people are not involved in the whole thing", Lafanama told Green Left Weekly.

"The main thrust of the program is to liberalise the economy so there will be free movement of multinational companies, which will supposedly help the government raise revenue. They were also looking at cutting the bureaucracy, affecting the workers. Another thrust of the program is to try to cut down on social service expenditure — education, health — to save money."

Plans to make people to pay for treatment and medicines at rural health clinics led to large mobilisations. Some of the largest demonstrations followed the government's 1995 proposal, at the urging of the World Bank and Canberra, that all customary land be registered in the name of its "owners" and clear boundaries be demarcated.

Rural people saw the plan as an attempt to undermine collective land ownership. The current system of land ownership — indigenous communities own 97% of the land — is seen by western governments and companies as restricting their activities.

Students boycotted their lectures and returned to their home provinces to organise awareness campaigns about land registration, the SAP and what it meant. The resulting nationwide mass protests forced the government to "postpone" the proposals.

Lafanama said an important aim was to get the government and bank to discuss the details of the SAP with the NCSEJ "so that we could make an input". This approach has been controversial among some activists in PNG, who accuse the NCSEJ of compromising with the World Bank.

"We felt the government and the bank must be made to explain their plans to us. If their aim is to restructure the economy, then it has to have a PNG face, not like other World Bank programs in Africa and Latin America. We know how the bank works, but we also know there has to be some restructuring in the economy. So we were conscious that if the PNG government was left on its own, then the people's needs would be ignored."

The NCSEJ supports the bank's proposals concerning the "mess" in the forestry industry, Lafanama told Green Left Weekly. The bank proposed that the royalties forestry companies pay be increased significantly so as to discourage uncontrolled logging. The bank recommended that royalties be increased from the giveaway rate of 4-5 kina per cubic metre. The 1995 budget proposed progressively lifting royalties to K23, but the forest industry baulked at the first rise of K10 earlier this year.

Lafanama said that the NCSEJ had succeeded in bringing the bank to the discussion table, which is something that has rarely been achieved in other countries. In these discussions, "nothing should be given freely and taken for granted" by the bank. If restructuring must take place, it should "be in a way that at least gives people time to adjust to any change. The people must be aware of the consequences and costs of the SAP from the start."

While the NCSEJ may be prepared to accept that students "should begin to pay for some of their education", they must not have to pay for it all, Lafanama insisted. "The government must subsidise education." The NCSEJ is opposed to a user-pays health system: "The problem is that the churches are shutting down most of the rural health services and clinics, and there's been no money from the government. That's where the majority of the people are. Something has to be done in the rural areas."

The NCSEJ is against the attacks on workers. There has been a wage freeze for several years. Cutting wages and sacking public servants will only make PNG's problems greater.

Lafanama said the NCSEJ strongly challenges liberalisation of the economy. "It will allow more big companies to come in. We already have big companies operating in PNG, and what good is it to us? We are already having problems with them in Bougainville and Ok Tedi and other mining areas.

"We are saying that if you are really seriously concerned about restructuring the economy, then we have to look seriously at those loopholes that allow PNG's resources and wealth to escape overseas. If we are serious about reorganising the economy so that it benefits the people, we need ways of putting pressure on forestry and mining companies to invest their profits back into the country."

In August, the NCSEJ consolidated itself as the "voice of civil society", Lafanama told Green Left Weekly, with the formation of PNG Watch-Council for Socio-Economic Justice, an executive body of the NCSEJ. Including women's groups, trade unions, community-based organisations, churches and advocacy groups such as Melsol, it is the PNG's first peak NGO organisation.