In the peaceful north Pacific, a different type of migration has been continuing steadily to the United States for two decades. Visa-free access to the United States enjoyed by citizens of the Federated States of Micronesia, Marshall Islands and Palau has dramatically impacted islanders from these three north Pacific nations in ways both positive and negative. This provision in the Compact of Free Associations with these countries—that gives Washington control of the defense of this vast region, as well as access to an important military installation in the Marshall Islands—has worked as a safety valve for island economies and governments that do not have the ability to provide jobs, education and health care opportunities to meet population growth.

Most of the ‘conversation’ about migration from the islands to the U.S. has focused on the out-bound for obvious reasons: There are estimates that upwards of 40 percent of all Micronesians and Marshallese now reside in the United States and its territories, such as Guam. There is a lot of negative, particularly in Guam and Hawaii where high costs of housing have fueled homelessness, and the large concentrations of islanders in these relatively small populations have in recent years resulted in their being a target of racism and discrimination. Yet, a similar demographic on the mainland U.S.—in Northwest Arkansas, where an estimated 10,000 Marshall Islanders reside in a tri-city area—has been largely positive, with islanders being actively recruited by huge poultry packing companies. Meanwhile, in the western state of Oregon, which has thousands of Micronesians, Marshallese and Palauans scattered in various cities, the island community formed the Compact Action National Network, which has successfully gained Oregon State Legislature adoption of important legislation for resident islanders.

Islanders living in the U.S. mainland do better economically, no doubt because of the lower cost of living in many locations in which islanders have chosen to settle. A small percentage of these out-bound migrants run afoul of the law in the U.S., illegal behavior that often results in deportation and a red-flag status preventing them from returning to the U.S. Deportations have escalated, mirroring the increase in the number of citizens of these three nations living in the U.S. While the number of deportees was generally single digit annually in the early- and mid-2000s, it has risen significantly. In 2015, 70 Micronesians, 23 Marshallese and 11 Palauans were deported from the U.S. Since 2003, the Marshall Islands is averaging 16 deportations annually, with a spike in 2013 to 37. While these numbers are small on a global scale, they are big for small island populations, and have had some negative consequences at home.

An editorial in the October 2, 2015 edition of the Marshall Islands Journal commented on an assault by two attackers that sent a young man to the hospital with a broken jaw and other injuries. ‘The two gentlemen administering the jaw-busting were…deported from the United States for engaging in unbecoming activities,’ the editorial noted. This incident offered ‘a view of the dark side of Marshallese easy visa-free access to the U.S. It is as though we take large groups of our citizenry and transport them off to the States and then, after a period of time, the bad actors are weeded out and returned to Marshall Islands: American employers are beneficiaries of good Marshallese labor while Marshallese citizens here are “beneficiaries” of bashed-in jaws. Is there something wrong with this picture?’

But the in-migration is by no means entirely negative. The Compacts with the Federated States of Micronesia and the Marshall Islands that came into effect in 1986 (and in Palau in 1994) allow islanders to serve in the U.S. Armed Forces. For many young islanders, the U.S. military is their ticket off the island and opens opportunities for post-service education. In fact, by the 2000s, recruitment on a per capita basis from the Compact nations (as well as American Samoa) greatly out-paced enlistment rates of Americans.

An increasing number of U.S. military veterans are returning to Majuro to work. During the past year, we’ve seen demonstrations of what Marshallese veterans with 20 or more years of service bring to the table when they are put into positions of authority. Robson Almen, a ‘lifer’ with over 20 years in the military, retired several years ago, applied for and was hired as the Marshall Islands Chief Electoral Officer in 2014. He established a plan with a timetable and proceeded to implement it in the lead up to the November 2015 national election. It was one of the smoothest-run elections in decades that contrasted sharply with the chaos of the 2007 vote. An editorial in a December edition of the Marshall Islands Journal praised Chief Electoral Officer Almen and Electoral Administration ‘for an efficiently managed national election. In contrast to some past elections, there were very few problems associated with the recently concluded vote.’

In the November national election, Majuro voters elected Kalani Kaneko to serve in the 33-seat parliament. Kaneko retired in 2015 after 20 years of service in the U.S. Army. After President Hilda Heine was elected in late January, she named Kaneko as the minister of health. Solving long-standing problems at the ministry, and in particular Majuro hospital—which suffers from chronic doctor, nurse, medicine and supply shortages—is a Herculean task. Kaneko does not have a health background. What he brings to the table is 20 years experience working in the U.S. Army that inculcated an appreciation of leadership, accountability, systems, and time management. These are the mostly missing ingredients at the Ministry of Health that Kaneko is now working to develop.

The point is, both Almen and Kaneko have an understanding of accountability and systems management from their tenure in the Army, and because of their decades of experience in the military system, they do not seem to have difficulty implementing requirements that lead to improved services to the public while relegating family relationships to a backseat in government service. While opportunities for jobs, health care and education have been the main motivating factors pushing Marshallese and Micronesians to leave to the U.S., in recent years the decline in service by a corruption-riddled government workforce is negatively impacting quality of life for many island residents, and increases motivation to migrate.

President Heine in her inaugural address to parliament in February this year emphasized the need for government workers to improve services for the public. Kaneko, Almen and other U.S. military veterans who have returned to the Marshall Islands are showing how direction, purpose and motivation can be used to engage government workers to deliver services at a higher level.

All of this emphasizes that as dramatic as these north Pacific nations’ experience is with out-migration, it is not a one-dimensional situation of people simply fleeing their islands for greener pastures. It is changing lives of many islanders who have moved to the United States, many for the better, some for worse. But it is also beginning to bring back people with decades of experience that they are putting to work for the benefit of the public.

Caption: Marshall Islands Chief Election Officer Robson Almen (second from left during tabulation of votes from the November 2015 national election) is one of a number of U.S. military veterans who have been returning after years of service in the military to work in key positions in government.

We must not forget that the same laws will apply in the same national parliament and provincial houses of assembly. In the same national and district courtrooms, case law will grow and precedents will continue to be set in the absence of the hard questions that may never get asked about the blatant breaches in our society and adopted system of government.

From 2017 our leaders will (more than ever before) need the knowledge, political will, grace and patience to restore integrity, democracy and the rule of law as a national emergency in order for all else to be rebuilt without exception. The truth is a new government in 2017 will inherit inter-generational debt, a massive deficit and redundant parliamentary rules/standing orders governing important decision-making processes. Not to mention the crumbling sanctity of the National Executive Council (NEC) or cabinet.

They will realise that legislation set up in principle to provide robust governance mechanisms have been misunderstood or ignored by their predecessors. In 2017 a newly elected parliament will discover an exhausted public service, a manipulated police force, an angry defence force, and many broken Papua New Guineans with drought and income starved families and disrupted livelihoods.

Those elected Members of Parliament will find very drained state-owned enterprises, institutions and agencies incapable of operating with only a steady trickle of public funds to deliver wages, health & education or district support according to policies and promises of the past and present. They will find that the much promised revenues from oil and gas have been committed to paying off the current government’s unilateral decisions and therefore debt for unauthorised loans for generations.

New leaders in 2017 will need to navigate a global economic downturn of epic proportions with PNGs development and economic interests at heart. Our new leaders will discover that our broken service delivery system and our overheated economy will need more than elected candidates with tunnel vision.

Those elected will need to be legislators, not aspiring millionaires or public finance managers. Newly elected leaders will require an understanding of serious fiscal discipline, tax and industrial relations reform and economic modelling that reflect PNG’s economic conditions and our revenue-earning potential in sectors other than petroleum and energy.

PNG will need MPs who are humble yet extraordinary thinkers to guide monetary/fiscal, social, cultural and development policy simultaneously to aid a new-look holistic reconstruction strategy focused on understanding that our vast natural resources should never again be left to a single individual who knows no institutional, spiritual, executive or national boundaries. Those new MPs should be held to the universal promise that candidates seek election (and re-election) to be servants to their people not master manipulators of their resources.

All the hopes in online commentary revert to a single assumption that PNG will inevitably have free and fair elections next year. If all we do is dare to dream it’s no longer enough because we will inevitably get what we vote for yet again.

Photo: Sepik Wewak Urban Local Government facebook group

The audience and esteemed panel of adjudicators were impressed by the high standard of debate, especially considering participants only had one day to prepare for the grand final topic. Jonathan Guyant of Vanuatu was particularly persuasive, putting a personal face to the topic and what it means to be ‘successful’ in Melanesia. He was awarded Best Speaker for the grand final debate.

Below is the transcript of his presentation.

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The affirmative team quote Kofi Annan, and praise the effects globalisation may have on countries all around the world.

Now I could say I disagree – but don’t take my humble student word for this. Take this quote from the Nobel prize winning economist – yes an economist, we are talking about the economy here – and he states that ‘globalisation as it is, is not a force for good. People should govern markets – markets should not govern people. Globalisation and its drawbacks have led us to cross roads and it’s high time we changed direction’.

Distinguished guests, adjudicators, chairman, members of the opposing team, dear audience, a very good morning to you all. We would firstly like to thank PiPP for organising this debate competition. The motion for today’s final is that Melanesia must globalise to succeed.

My team and I find fault in this. We believe the Melanesian countries do not necessarily need to globalise in order to succeed.

do you wish to preserve the identity of your beloved Melanesia? Or do you want to be just another random face on the ever-expanding international body of this globalised world?

My name is Jonathan. I will define the key terms in the motion, introduce our team and the points we have come up with. I will also present our first point, concerning the economic setbacks that globalisation could bring to our Melanesian nations. Kali, our second speaker, will offer a rebuttal on the points given by the opposing side. She will look into the environmental impacts that accompany globalisation and will elaborate upon the fact that globalisation will be a threat to Melanesian culture and it’s custom. Aleesha, our third and final speaker will be the one to summarise all the points raised by our team and conclude our argumentation.

Jonathan Guyant presents his statement at the Grand Final of the 2015 Melanesian School Debate

Now let us take a closer look at the key terms in our motion. We feel that the affirmative team has overlooked these key terms in the motion; must, globalise and succeed. So starting with must. Must has a number of definitions, but the one that seems the most relevant to the motion, and most pertinent to us was the one stating that must describes an imperative need or duty that you are commanded to carry out. This would imply that globalisation is an imperative need or duty for Melanesia. But is it really?

Let us all reflect on Melanesia’s current status in different fields. Starting with the economy. We may refer to Melanesia’s economy as a ‘traditional economy’. This means that our countries suffer little from global financial crises’ that conversely greatly affect the wealthier globalised nations. Here in Vanuatu, 80% of the population live in rural areas. In the Solomon Islands, 78% live in rural areas. In Papua New Guinea the number goes up to 87%. And finally Fiji – yes Fiji – still has 47% of its population living in rural areas.

Ladies and gentlemen, this means that over half the population in Melanesia live in rural areas and rely on this traditional economy.

The next term is globalisation. The Financial Times define this as a process by which national and regional economies, societies and cultures have become integrated through the global network of trade, communication, immigration and transportation. This signifies that all of those things are facilitated though the opening of borders between countries. At first glance, one might think that it holds the answers to many of the worlds needs. But we would just like to clarify that the way you phrase a sentence can have different meaning and influence any given person’s opinion. What I mean by that is, opinions vary form one person to another, sometimes very drastically. It all depends on your perspective.

For instance, if you look at globalisation from the eyes of a money-crazed giant, trampling the forest beneath its feet, searching for ways to enrich itself at the expense of poorer countries, all the while totally disregarding their local culture and customs. Then of course you’ll jump on the globalisation bandwagon. What could the consequences possibly be? If you’re the giant that is.

What I’m trying to say is – globalisation is located in the giant superpowers of this world. The US, Western Europe and increasing emerging countries like China who are all main actors in this race to the bottom.

Consider what huge economic setbacks globalisation could bring to Melanesia. One of them is free trade. It’s supposed to eliminate unfair bias to newcomers and raise the economy in both developed and developing countries. But does it really do so?

Maybe for rich countries, just maybe. But not for us. Let us instead consider fair trade. When we open up markets without regulations our own key industries and businesses may suffer, for example sugar cane, copra or garment industries. Our livelihoods will suffer at the profit of a multi billion-dollar corporation. Also this lack of regulation leads to substandard working conditions and low pay. People, this happens when you cut costs at the expense of human rights.

The recent Trans-Pacific Trade Agreement and PACER-Plus are suppose to offer an opportunity to help Pacific countries benefit from enhanced regional trade and economic integration. But do they do this for Melanesia? They encourage competitiveness yes, but do not create a level playing field for the countries that are involved. These economic policies can also lead to labor migration. When there are fewer employment opportunities at home, people will move away in search of jobs. This decreases the labor force and can also lead to a brain drain of our young educated and talented people.

The third and final term that I will define is success. Once again, success can be defined in many ways. But success cannot be measured – you cannot rate success in any way shape or form. This term is defined by the Merriam Webster online dictionary as the correct or desired result of an attempt. Now see we disagree. Others may say that success is the absence of failure. Again we disagree. Today, my team and I want to win. If we loose will we have failed? I don’t know yet, because success is a feeling. Success is the love that you see in your family and friends eyes, and the love that you give back. Success is the smile on your lips as you shrug off the defeat. Success my dear friends is anything you want it to be, and is discarding Melanesian ways, customs and traditions the path to success? Do you think that in the future you will be able to buy success at the next KFC or Adidas store they open in town? Do you really want to sacrifice your Melanesian identify just for the sake of globalisation.

To conclude my team and I believe that Melanesia must not resort to globalisation. But ladies and gentleman, what do you think? Do you wish to preserve the identity of your beloved Melanesia? Or do you want to be just another random face on the ever-expanding international body of this globalised world.

Photo credit: National Geographic

The first part of this blog was published last week. The following is part two:

However, the report fell short of proposing a mechanism to protect the rights of the informal economy participants. Subsequently, there is no mention of the need to properly organize informal economy participants and their activities into groups for the purpose of dialogue and consultation. Section 3(1) of the Informal Sector Development & Control Act 2004 provides for the administering authority to consult (if they wish to) with relevant ward committees, the police force and relevant government agencies responsible for health, physical planning and building, when declaring areas on which informal economy businesses could be conducted. However, experiences thus far have indicated that this has not been the case.

Even if this exists in some provinces there is little evidence to suggest that the administering authorities sought views from informal economy operators or vendors because informal economy, both its activities and operators, are disorganised. Furthermore, given the complexity and cross-cutting nature of the informal economy, provinces need to have special informal economy committees comprising of key stakeholders to deal with these issues. For instance, border provinces such as Vanimo see massive influx of cheap Indonesian goods into Vanimo town and the villages along the highway leading to Batas. These imported goods (with questionable content and quality) make up a large portion of the informal economy in Vanimo and the neighbouring villages. To protect consumers and ensure fair play, the provincial government or the Vanimo Town Authority will have to work with the Border Development Authority, customs, police, NAQIA and others. Therefore, the absence of such a mechanism will do little to change the status quo of the situation.

The report also did not highlight the need for a proper restorative justice mechanism to be in place to deal with cases of harassment and abuse inflicted by enforcers on informal economy participants. The Informal Sector law in its current form is silent on this matter. Section 3(6) of the law only goes as far as saying that “an operator (informal economy vendor/participant) aggrieved by the decision of the Administering Authority under section (4) and (5) may appeal to the District Court”. Yet for most informal economy operators or vendors the Village Court is the most affordable, reliable, reachable and dependable arm of the justice system since it addresses individual and community’s legal concerns through a typically PNG way. The District Courts can be utilized by an interest group or an entity representing the interest of informal economy vendors/operators. Therefore, the report fails to recognize that the infringements done by the informal economy participants (apart from the sale of drugs, counterfeit products and homebrew) are ‘economic crimes’ and not criminal offences that would require the ‘heavy arm of the law’. Thus section 4(2) of the Informal Sector law should be reworded or amended to ensure that the members of the police force are excluded from being appointed as inspectors to police the informal economy.

The NCDC buai ban law demonstrated that administering authorities armed with additional powers can abuse it and in the absence of a voice and an appropriate restorative justice mechanism for the informal economy participants, the informal economy will be suppressed to a point where lives could be lost. Deaths relating to the buai ban have been well-documented in the media. Such actions would thereby defeat the whole purpose of the law. In saying that the law does provide sufficient space as captured under section 3, where the administering authority is required to “adequately notify and welcome feedback from the informal economy operators of its attempt to make changes/determination to the law”. The operator(s) on their part should respond within a set time frame or take the matter to the district court if not satisfied with the authority’s feedback. In addition, inspectors appointed by the administering authority as per section 5(2) should properly notify the informal economy operator/vendor of its decision or actions. However as alluded to earlier, with most of the operators/vendors lacking basic literacy skills and resources (funds) they would need someone to do this for them, or better still an entity like an informal economy market vendor association to represent their common interests and amplify their concerns in order to get the attention of the authorities or policy makers.

Increasing penalty fees and repealing section 18 of the Act, which has a list of laws and their clauses that were excluded, means that informal economy participants will be forced to comply with standards that may be too high for them, especially when most of these participants have very poor literacy skills and lack formal employment to supplement their meager incomes. While the intention is to put forth a progressive and rosy image of the city and urban areas, this should not come at the expense of people’s livelihoods. PNG is now a country that is already experiencing a widening gap between the rich and the poor amidst its most prosperous period in its 40 years of nationhood. Early indications are that the PNG LNG will not be as transformative as it was predicted to be. On the contrary, the emergence of the PNG LNG project has created more problems than solutions for this nation. The cost of basic household goods and services have dramatically increased while the government is being forced to make deals that could possibly cost this country a great deal. At a difficult time when this nation is heading into uncharted waters, the wisest thing to do for the PNG government is to lean on its strengths. The informal economy with almost 80-85% of its population engaged in myriad of activities is its strength. Through the good and bad times, it has helped this nation to ride out crisis after crisis. Giving it its long overdue consideration in the national agenda may well be a game changer for PNG.

Caption: Village men in the Trobriand islands (PNG) work on their carvings. Many informal sector participants are innovators and skilled survivalists. Photo by Ben Bohane – wakaphotos.com

He gave a speech affirming the achievements of the Millennium Development Goals (MDGs) over the past 15 years and also called for commitments and cooperation in the adopting and implementation of the post-2015 Sustainable Development Goals (SDGs).

“We should take it as a new starting point to work out a course of equitable, open, all-round and innovation-driven development in the interest of common development of all countries,” he said.

President Xi’s call for the international community to focus on implementation was clear and uncompromising.

He said: “The post-2015 development agenda is a high standard list of deliverables that carries with it our solemn commitment. It is often said that the worth of any plan is in its implementation. I therefore call on the international community to redouble their collective efforts for the joint implementation of the post-2015 development agenda in the interest of cooperation.”

Toward the end of his speech, President Xi stated that China is ready to work with “relevant parties to move forward” the implementation of the ‘Belt and Road’ initiative.

President Xi reiterated that China has basically realized the MDGs by lifting 439 million people out of poverty and making remarkable progress in areas of education, health and women’s welfare.

“China’s development has not only improved the well-being of the 1.3 billion-plus Chinese people, but also given a strong boost to the global cause of development,” President Xi said.

Since his speech at the United Nations, President Xi has gone on an official visit of the United Kingdom, not only engaging in trade and investment talks with the British government but also warmly welcomed by the pomp and ceremony of British royalty.

The media heralded President Xi as the most significant and most powerful Chinese leader since Deng Xiaoping.

The Belt and Road initiative

China has released a vision for peaceful cooperative development based on a two thousand year old trade route known as the Silk Road in which there were social and cultural exchanges linking the major civilizations of Asia, Europe, and Africa.

But what is different about the Belt and Road initiative and activities from that of the creation of another regional trade block with China as leader?

In early October, the Chinese Communist Party hosted in Beijing over 60 political party leaders and representatives from the Asia-Africa-European region, accompanied also by a media forum of journalists and media practitioners from the region.

The summit was called the Asian Political Parties’ Special Conference on the Silk Road. The theme of the summit was the Silk Road trade and development co-operation concept.

The Belt and Road initiative proposed in Beijing 2015 was endorsed and adopted by the political leaders of the countries that met and consulted together in Beijing.

The Silk Road was a trade route that linked China and its immediate neighbors with the countries of Asia, Africa, and Europe. It is China’s pro-active attempt to build a Eurasian economic belt, and extend the Silk Road to the rest of the world, over land and sea.

But ‘Belt and Road’ is not just a proposal for cooperative economic partnership and development. China is already engaged in building infrastructure, creating a ‘Belt and Road’ fund and investment bank, creating many development projects, and more importantly establishing a consensus among the countries of Asia, Africa, and Europe, that Belt and Road is the pathway to the future.

With over 60 countries with political parties endorsing and adopting the Belt and Road Beijing initiative, the maritime ‘road’ that links to the Pacific islands is very much a part of this massive global plan for economic and social cooperative development.

The Belt and Road initiative is not confined to economic cooperative development but extends also to the social and cultural exchanges that would advance peace in a new world order.

Speaking in support of China’s efforts, Yong Rui, famed host of CCTV’s English Dialogue Program remarked in Beijing: “China is not just a major economic power. It is also a major civilization.”

The point is, economic development does not happen in a vacuum, but also allows parties to work together for the common good of their respective societies in every area of development ranging from sports and entertainment, cultural exchanges, as well as the advancing of common values that are part of social development.

Trade in the past two millennia was in silk, spices, porcelain, paper, noodles, and other things. But the Chinese have taken this concept and framed it into the Belt and Road initiative which will link not only the former regions of the Silk Road but all the countries of the world through the 21st century Maritime Silk Road linkages.

And even though the Chinese economy has slowed down from double-digit figures to a stable 6.5% growth, it is still the fastest growing economy, and is just behind the United States as the second largest economy in the world.

The Chinese still speak optimistically about this slowdown as a “cooling off” period to allow its economy to consolidate.

The Chinese insist that the Belt and Road initiative is not just another Chinese project but rather a peaceful cooperative development effort with other countries, working at a ‘win-win’ outcome.

As for what the Pacific region offers, we bring into the Belt and Road vision and partnership the world’s largest ocean, the world’s biggest tuna stocks, multi-billion dollar reserves of oil, gas and sea-bed minerals. And that is before we start to speak of tourism in one of the most beautiful and relaxing destinations in the world.

China and its larger development partners are also very aware of the fact there is marine wealth in the Pacific as well as something that money cannot buy – the relatively peaceful co-existence and relationships that are ever present in the Pacific region.

Each Pacific island nation will need to determine what and how to participate in the partnership, but there is also the need for collective dialogue and cooperation with China.

There is a lot that could be done to achieve a favorable outcome and due to the geopolitical power shifts taking place in our world today, our future may end up being defined by our partnership with China.

Caption: “Build friendship”: a Chinese naval ship displays a friendly banner during a port call in Port Vila, Vanuatu 2010. Photo by Ben Bohane/wakaphotos.com

Furthermore, if provided with the right environment, it could unleash entrepreneurialism and innovation that is abundant among many Papua New Guineans but lethargic due to lack of support. One should only take a bus ride to the infamous Gordon Market or travel up into the Kakaruk (chicken) Market in Goroka or elsewhere to witness the vibe of energy and salesmanship at play. This is what the law aims to nurture but in compliance with appropriate minimum standards to protect consumer welfare and generally minimize its negativity.

Yet the challenge will once again fall on the shoulders of the government to ensure that the intention of the law is realized. Already the government is urged in the report to step up and provide leadership in administering the law as well as providing essential public goods and services to encourage the development of the informal economy in PNG. So far the government has failed miserably in this area although it has introduced a policy and a law to address issues affecting the informal economy. This reinforces the sad reality that implementation and enforcement have always been a challenge for the PNG Government. Most Local Level Governments are struggling to function effectively in most areas of the country due to lack of support both in terms of resources and limited understanding of their functions and responsibilities. The report alluded to the fact that most LLGs that were consulted had no idea about the existence of the law although it is a national law.

At the national agency level the report found that no oversight was provided making way for administering authorities to make laws without alignment to the Informal Sector Development & Control Act 2004. In most cases administering authorities simply turned a blind eye on the law. For instance, in 2012 the courts making reference to the Informal Sector Development & Control Act 2004 restrained the Lae City Council from implementing its decision to close down informal markets in the city. In the case of National Capital District Commission (NCDC), buai producers and political leaders in Central Province issued threats challenging the legality of the buai ban law although this has not come to pass. If the ban was contested in the courts with reference made to the Informal Sector Development & Control Act 2004, the outcome could have changed the dynamics of the informal economy in PNG.

This is where the Constitutional Law Reform Commission’s (CLRC) foresight in introducing a ‘modal law’ is important as it bypasses the difficulties that could have eventuated if a national law superimposes itself with no regard to the administrative set up of certain provinces like NCDC. By allowing provinces to have the freedom to make necessary amendments to the modal law to suit their unique situation, it is hoped that they will effectively control negative aspects and promote the positive side of their informal economy. By having the Department of Community Development & Religion as the lead agency providing oversight on the law, it is envisaged that the amendments will be made with due respect to the spirit/intention of the national law as well as in alignment with the national informal economy policy.

The department to its credit has already embarked on a restructure (with no progress as yet) that will see a new section dedicated to coordinating the implementation of the policy and the law. Yet questions are being asked if this arrangement will yield any tangible results. The department itself is still reeling from the leadership tussle which transpired two years ago which has seen the department fragmented into factions as staff took sides. The aftermath of this battle can still be seen today with most of its offices half empty and manned by only few dedicated officers. In this environment there is no guarantee that the law will hit the ground running once it is passed by the government. This is where the department with the aid of CLRC should explore options that will lead to the effective implementation and administration of the policy and the law. One option would be for the department to quickly work towards establishing a stand alone mechanism, like an office within its structure. Such a set up, apart from speeding things up, would allow the department to effectively reach out (going beyond its traditional role as a social welfare department) to other stakeholders whose mandate or policies are related to aspects of the informal economy policy and Act.

On the other hand the informal economy participants for their part, misunderstood the law the first time it was passed by parliament, subsequently giving rise to the proliferation of diverse sets of informal economic activities, some of which posed serious health and safety risks. This meant that balance needed to be found in the law to ensure that the growth of the informal economy is controlled to minimize its harmful effects. The informal sector law in its current form in fact advocates for this. This is contrary to the views that it ‘gave fire’ to the widespread chaos that is unfortunately the hallmark of PNG’s informal economy. The draft report to the credit of the CLRC, has reinforced this idea with penalties raised depending on the severity of the offence, which is determined by taking into consideration an informal economic business activity’s impact on the environment, hygiene, health, safety and the nature of the items sold such as whether it is addictive and other factors. Furthermore, it has inserted a provision to deal with betelnut-related issues which now imposes a much tougher penalty for irresponsible chewers.

(To be continued next week…)

Caption: Fresh produce at the local food markets in Port Moresby, PNG – John Conroy

Today, it is easy to assume that it is a case of ‘the same old story.’ Simply replace Chan with Somare, and Skate with O’Neil. With falling oil prices, the government is short of liquidity and trying to mortgage the future of its people for cash today; the kina is in decline, and the Central Bank holding back foreign currency. High inflation and the effects of another El Nino event are ramping up food prices.

But some things are different now. For starters Port Moresby is a cosmopolitan city, so physically transformed it is barely recognisable from what was only twenty years ago. Despite all of the challenges, the economy has managed to absorb a population that has more than doubled since independence. There is a significant middle class of Papua New Guineans who are educated, vocal and more than capable of both demanding change, and also determining what that change should be. Even a casual glance at social media shows the depth of talent and debate.

Whilst it remains true that much of the development benefits have been focussed on Moresby, and too little outside of the capital, the country remains blessed with immense cultural and mineral wealth. It also remains a country where hope, courage and luck can always improve the situation. The question is whether these ingredients are enough to enable the country to overcome its current challenges?

As always, there is a core group of observers who seem to view the current economic and political malaise as a hopeless situation. Today’s story – whispered in private or told via social media, but never quite openly discussed – is that through the egregious use of the nation’s wealth in order to benefit the few in Waigani, Prime Minister Peter O’Neil has managed to establish the sort of ‘de-facto’ dictatorship nobody thought possible in a Melanesian state. With next to no political opposition at home, the Manus detention centre has been a brilliant mute on Canberra. As has been the notion, held by some in the Australian capital, that a stable semi-authoritarian regime in Port Moresby is preferable to a government that changes often – albeit democratically. No matter how hard the prime minister may prod DFAT, they are simply unable to respond. With such a free hand, O’Neill has managed to enhance his reputation with his regional neighbours. His international standing will continue to be bolstered as PNG prepares to host the APEC summit in 2018.

O’Neill has managed to keep a hold on power by raiding the numerous cash pots available to the government and by mortgaging the country’s future resource base. This strategy has so far enabled the government to run debt defying budget deficits. The plan to fill the current hole is a combination of a half billion dollar foreign currency loan, the sale of shares to landowners in the National Petroleum Company PNG (NPCP) and potential revenue from the sale of Oil Search to Woodside. Any money raised through the takeover over of Sustainable Development Program (SDP) will be a bonus. These funds are necessary to continue the superficial building (and rebuilding) of roads and other infrastructure in the capital and also funding the K10 million district funds overseen by MPs; thereby keeping the crony capitalists and political elite satisfied.

However, in the same way that much of the analysis twenty years ago was overly simplistic and lacking in context so too is this story. For starters it is hard to place the entire blame for the current state of the economy purely on the current government. Many previous administrations pursued similar strategies, just perhaps not as effectively. Also very few economist predicted the rapid decline in commodity prices or the drastic impact of El Nino on agricultural production. Were it not for these factors, some of the current economic constraints, especially in terms of limited liquidity, would not be as severe.

The private sector and the donors, smelling loans, have been falling over themselves to be the lender of choice and have therefore deliberately not been up front with the government for fear of losing business. Australia has been almost totally silent in terms of the underlying economic situation, with the exception of a few advisers within government. The government itself, meanwhile, simply points to recent GDP growth rates as a sign that things will get better. It has been left to a few independent thinkers to point out that ‘you cannot eat GDP growth’ and that current levels of borrowing has a price that the people of Papua New Guinea just cannot afford – inflation.

There is a phrase used amongst Pacific civil servants – policy moonwalking – which, like the famous dance by Michael Jackson, refers to when the policy of government appears to be moving forward, but in fact is actually going backwards. It appears as if O’Neill’s policy moonwalkers have failed to accept and adapt to the radical change in circumstances. Rather they continue to pursue the strategy of relying on short term financing in the vein hope that things will get better. These analysts are correct in that the country still has many long-term assets that can be mortgaged, but they have missed the fact that with oil prices falling so sharply this strategy can actually be a trap – in that the more you borrow now, the more desperately you have to borrow in the future. The price is inflation, which is fuelling the looming crisis. By printing money to finance the massive deficits, the government has reduced the value of the kina, and this is what has made imports such as rice more expensive. While the economists and academics can argue all day, the reality is that what people can afford to eat has drastically decreased. You don’t need to be an economist to forecast the situation – simply ask any Papua New Guinean. The drought and frost in the highlands has made the situation worse, and while the foreign owners of the hydroponic farms might be benefiting, the population are suffering and this will eventually lead to frustration, anger and potentially violence.

It is unlikely the ‘foreign bond’ of half a billion dollars can be issued unless, like the UBS loan, it is secured against a national asset. At this stage it is not clear what that asset would be. In the same way the government’s financial expectations of the sums of money they would receive from the landowners taking an increased equity in NPCP seems far removed from the financial reality, and all indicators are that the landowners are receiving rational private advice in this regard. So with the state owned enterprises seemingly in debt, and the Central Bank and government building up short term liabilities, the most likely outcome is that – despite the long term outlook for the country being sound – in the short term the government will have no money and inflation will get worse. The potential debt burden is made even worse by the hidden liabilities in terms of debts owed by government entities that don’t yet have audited accounts, but which could still be a drain on future budgets.

There will ultimately have to be some sort of political ramification. What the trigger will be nobody knows, but the tension amongst the rural and urban poor is noticeable. The prime minister might have control over the heads of the army and the police, but if civil servants and people are seriously poor – as seems evident now – the people of Papua New Guinea can and will effect democratic change. Whether it be a motion of no confidence, based on the fact that O’Neill can no longer deliver the financing necessary to keep political stability, or a result of the numerous court actions against him, or a massive turnover at the polls – something will have to give.

As the poor increase in numbers and go ever more hungry, while the political elite continue to flaunt their wealth on the streets of Moresby, the real concern is whether this change will be brought about civil or political unrest.

All sounds great. However, a report from the Overseas Development Institute (ODI) had this to say about the proposals: “Developing countries stand to lose out from trade reforms that are pushing the EU towards more protectionist policies which will hamper the global economy and damage developing countries.”

The ODI assessment is, evidently, a generalization. The impact of these proposals would differ for each developing country or groups of developing countries. This is so since developing countries are treated differently under the various market access schemes offered by the EU especially those offered on a unilateral basis, e.g. GSP, GSP+ and Everything But Arms (EBA). This blog assesses the impact of these proposals on the PACP (Pacific ACP) states that are still in the throes of negotiations on a comprehensive EPA (cEPA).

The connection between the GSP reform and the EPA is one proposal that is attracting a lot of controversy. The EU proposes that, under the GSP, more trade barriers will be imposed on a range of products for countries that have no EPA with the EU. This implies that a country has to negotiate an EPA to avoid increased trade barriers under the GSP. But such an argument lacks lucidity: for if a country is able to negotiate an EPA, there is greater rationale for that country to opt for the trade concessions under the EPA thus cancelling out the need for GSP. This validates the views reflected in the ODI report that this proposal by the EU is essentially to apply pressures on ACP states that have not concluded their EPA negotiations to do so.

Currently, twelve PACP states have no EPA to speak of; only Fiji and PNG have signed onto the iEPA (Interim Economic Partnership Agreement). Assuming that there is no progress on the cEPA, then those PACP states, also beneficiaries of the GSP scheme, will face increased trade barriers, e.g. in the form of increased tariffs. Furthermore, the ODI report pointed out that non-tariff trade barriers (NTB) can also be imposed if, for instance, any of the PACP states excludes European firms from its government procurement system.

Currently, the prospect of concluding a cEPA is in doubt. The EU has imposed a three-year suspension of the negotiations. Clearly, the argument above that the GSP reform is to apply pressure on the PACP states to conclude their EPA expeditiously seems groundless as far as the region is concerned. This can only mean that the suspension imposed is grounded on more serious and substantive issues.

The EU argued that this is done to allow the PACP states to formulate measures for the effective conservation of their fisheries resources. The PACP states, on the other hand, consider such an intervention as unnecessary procrastination and have been calling the EU back to the negotiations. PACP Leaders have now proposed a meeting at the margin of COP21 in Paris later this year when a clear roadmap to the conclusion of the negotiations can be agreed.

The tactic by the EU has generated much speculation – not only on the motive behind the tactic, but also whether a cEPA is still a serious contender to be pursued. From the beginning of the EPA negotiations, it was always understood that if an EPA cannot be concluded then a PACP state, or an ACP state for that matter, can opt for any of the alternative trade arrangements (ATA) on offer including the GSP or the GSP+ for those qualified or the EBA for the LDCs. But the GSP option has just been made difficult by the reform. For those PACP states that have no other option apart from the GSP, they will be worse off. This would represent a breach of trust. Furthermore, the increased tariff and other trade barriers imposed will render the EU market less competitive, especially if EU prices are going to be further depressed by production subsidies that are not curbed under the reform. PACP exports will thus seek alternative destinations.

Doubt on concluding a cEPA has been fueled by pressures being applied on PACP states to sign onto the iEPA and join Fiji and PNG. The reluctance to pursue a cEPA by the EU, implied in such a move, can be considered strategic. By not pursuing a cEPA, the EU thus avoids having to consider the extension of the rules of origin on global sourcing to also include chilled and frozen fisheries products. Such an extension is a principal stance by the PACP states in pursuing a cEPA. The EU and especially their fisheries industry stakeholders, however, have consistently regarded this issue as a red line in the negotiations.

With PNG’s withdrawal from the cEPA negotiations, the country’s choice for the iEPA is clear. This raises many problematic questions. Is there any merit in pursuing a cEPA given the prospect of having two versions of EPA existing side by side in future? Such prospect may not even be negotiable from the EU perspective. From the PACP perspective, the situation is not likely to be conducive for regional integration processes. As such, the EU may use PNG’s withdrawal as a platform to push for either signing onto the iEPA or opting for any of the ATA on offer.

PACP states will have to go back to the drawing board to work out the relative gains of the options they face. Clearly, opting for the iEPA will mean having to shelve plans to develop the countries’ fresh and frozen fisheries industry. Given the importance of fisheries in PACP states, this represents an opportunity foregone. Some PACP states may still sign onto the iEPA for the market access opportunities it offers and especially as an avenue to avoid increased trade barriers proposed under the GSP reform. Some least developed PACP states may opt for the EBA. Those facing increased trade barriers under the reformed GSP may just go back to the drawing board once more.

Image: Workers in a tuna processing plant in Madang (PNG)/ Nancy Sullivan

WTO has always prided itself as a member-driven organization. It created its ‘Green Room’ as a means of getting representative views on all issues including its membership. It got to a point, however, where the majority of members: essentially from the developing countries, the least developed countries and small vulnerable states who were the small and marginal global traders, felt that the Green Room was being dominated by the large trading nations. Those being dominated have to await invitations, where logistically possible and convenient, to enter this hallowed ground. Pragmatism has thus been abused for sectional interests.

According to Ambassador Pambagyo, this malpractice continues in Geneva and has worsened. The Green Room has been reduced to the ‘so-called G5-Plus countries’ – comprising the US, the EU, China, India, Brazil, Australia and Japan. The Director-General chairs the restricted meetings. This aberration is further tainted by the fact that the meetings underway in Geneva are convened behind closed doors. The rest of the membership is not allowed in. There is no transparency. Their representatives in Geneva do not even share in any media releases from the closed meetings. They have to get their news through outside means, e.g. through the Washington Trade Daily or the Third World Network’s journal SUNS.

But there is more shenanigan going on in the privacy of the G5-Plus surrounding. According to Ambassador Pambagyo, the developed G5 members are placing increased pressure on the two emerging global traders: China and India, to lower their ambition on market-liberalization of agricultural and industrial goods. For if this can be lowered, then the flexibility being sought by developing countries can then be commensurately aligned at a lower level. This, the G5 members reckon, would still afford policy space for them to continue their domestic subsidization and exportation of subsidized agricultural products. These subsidized exports invariably play havoc to the production and marketing efforts of developing countries that are still trying to develop their primary industries to their full potential in order to integrate fully into the global economy. The ever-resourceful developed country negotiators are justifying their actions as the need for a ‘recalibrated’ approach (the US) or for a ‘simplified’ approach (the EU). All this is done in the name of concluding the Doha Round of trade talks (DDA) that were originally aimed at creating an even playing field for the majority of WTO members – the developing and least developed countries including the small vulnerable economies.

What is happening however, is abuse of trading power by the large trading nations; or the exercise of ‘power politics of negotiations’, as Professor Jane Kelsey puts it in her book: “Serving Whose Interests?” It is nothing new in the context of the WTO. These large global traders are corrupting the multilateral trading system and the WTO specifically. And that is not surprising. “Power corrupts”, as US statesman, Adlai E Stevenson stated in 1963.

And where is the WTO heading? A corrupted system will not survive. The ‘death of multilateralism’ has already been coined. This directly relates to the convolution surrounding the DDA and WTO’s seemingly inability to conclude these talks. From another perspective, Gordon Wong, wrote in ‘The Beginning of World Trade Disorganization’ in January this year. He put this down to the relative decline of US power and its reducing influence and ability in underwriting this multilateral system.

In the light of what is happening in the WTO, greater clarity is now emerging as to the true motives of some of the big players and of the respective slogans they love to bamboozle the general membership of the organization and the world at large with. Before Wong’s paper, Dr Jason Hickel had written in ‘Free Trade and the Death of Democracy’ that “It turns out that ‘free trade’ has very little to do with meaningful human freedom, and rather a lot to do with corporate freedom – the freedom of corporations to extract and exploit without hindrance.”

With the death of multilateralism, observers are seeing an increased growth in plurilateralism and regionalism, e.g. TTIP, TPP, TISA, RCEP etc. This is being touted as a natural response in this process of fracture. However, the ‘power politics of negotiations’ still pervades. As such, we see new expressions of trading power politics. The latest which is creating a buzz around the globe is the Investor-State Dispute Settlement (ISDS), under which corporations can take governments to court for any government action that leads to reduction in the profitability of any commodity being marketed by these corporations. Closer to home, PACER Plus may not see the likes of the ISDS provision, however, there is every likelihood that there will be telltales of ‘power politics of negotiations’ in the final legal text (including omissions from the text); a constant reminder that in any FTA negotiations, trading powers, if not moderated with a sense of justice and compassion, will continue to corrupt.

Whether it is disorganization or the death of democracy, the WTO is fracturing; and this is being internally-driven. To attribute what is happening here to the law of entropy may be far-fetched, however, it is the nearest to explaining the disorganization that Wong wrote about and the disorder that is emerging when power politics is exercised for the reaffirmation of the power divide that exists amongst the membership. Furthermore, such reaffirmation acts only as a license for those who wield power to arrogantly derogate from approved principles – in the area of domestic subsidies, for example, whilst disallowing this same opportunity to those without power but who desperately need these subsidies for their livelihood and for sustainable development.

Photo: ABC

What takes place in the Recognized Seasonal Employer (RSE) schemes in the Pacific is part of a global movement of labor force, often referred to as ‘labor mobility.’

It is when one or more countries provide the labor force needed by another country, and the receiving countries are able to benefit from labor they could not obtain locally.

The growth of this massive international movement of labor force on a temporary basis has been effective in the labor-intensive industries in hosting countries as well as the remittances of needed cash to the home countries.

The ‘receiving economies’ that compensate for labor and skill shortages deter industries from moving offshore to labor-rich locations. By the same token, the ‘sending economies’ provide individuals with opportunities, income, and remittance flows that become an enormous source of foreign exchange earnings.

But Pacific governments are yet to see the tremendous potential of this industry to become a major contributor to economic development in their nations.

Having mobile and exportable human capital provides a first line of primary earnings that go directly to families, many of whom are trying to alleviate poverty in their midst.

But just as the horticulture and viticulture industries are being served significantly by the mobile labor force, there are definitely other industries that could be served by semi or fully skilled mobile workers.

There have been plans to explore senior care, carpentry, nursing, teaching, hospitality, construction and other industries that could hire Pacific workers. Obviously, the nature of these industries would differ in that they would be more longer-term rather than seasonal labor.

They would also need workers who are trained in these services. In other words, the RSE and Seasonal Worker Programme (SWP) initiatives could be upgraded to include special skilled workers that could fill labor shortages in receiving economies.

So what could go wrong? What are the challenges faced by receiving RSEs and what potential difficulties may be experienced by the Pacific workers?

The temporary employment schemes that facilitate people movements and employment have also provided student and trainee movements that facilitate the acquisition of skills.

In many cases, skills acquired can be applied in the home economies, when workers return.

But workers who are hired temporarily are not ‘products’ that can be used and thrown away. They are human beings who have rights, and who are ‘re-usable’ and their productivity depends very much on how they are managed.

The quality of supervision and management as well as the needs of workers, will significantly contribute to their productivity and thus raise the benefits obtained by receiving economies.

It also contributes to long-term benefits gained by those hired in all labor mobility programs.

A World Bank report in 2006 (before RSE and SWP started) stated:

“Greater labor mobility would expand the employment options available to Pacific islanders, but it is currently limited and skewed in favor of skilled workers.”

Affirming the labor mobility concept, and thus in support of RSE and SWP, the report continued:

“While labor mobility alone will not make Pacific member countries prosperous, it could make a significant contribution towards enhancing economic and social stability in the region.

“Global evidence also indicates that trade liberalization of labor must be pursued in its own right. Indeed, the benefits from the liberalization of the movement of labor may far outweigh the benefits from further trade liberalization for some Pacific island economies.”

Pacific island leaders, especially in Vanuatu, Tonga, and Samoa, are waking up to the fact that ‘labor mobility’ as defined in this blog is growing into an industry that could beat out the traditional productive sectors of agriculture and fisheries export, even tourism, in terms of poverty alleviation and provide a major injection into Pacific economies.

The World Bank has called for greater access to labor markets. It has stated:

“The greatest potential for job growth in the Pacific islands depends on greater access to labor markets in Australia and New Zealand.”

The report also stated:

“The priority for policy is to provide people from Pacific Island Countries (PICs) with access to work wherever it exists.”

Right now, the reality of the labor situation in larger economies is that there are increasing numbers of jobs that run into labor shortages. These economies are therefore faced with hiring offshore or in some industries, outsourcing their services.

The countries that supply labor on the other hand, acknowledge the fact that each year the number of unemployed youth increases steadily, thus the opportunities to supply the labor market in New Zealand and Australia significantly helps in the economic development of labor supply countries.

Photo credit: ABC