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Subject: It's a lost cause.... it always has been....


Author:
SB
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Date Posted: Mon, Sep 15 2008, 12:06:04am
In reply to: tony 's message, "Price protest! by Unitech Students" on Sat, Sep 06 2008, 08:02:17am

During the times that I studied at unitech I always thought that a strike at Unitech would make PNG stand still, guys would shout from the mess forum area and say we are the cream of the nation, we have to take the lead for the weak and mouthless. I led a few of those student initiated unrest at unitech as well, you know the common believe we Engans have, ol narapela lain ol girly girly yah, we Engans are born learders and we had to take the lead in evetrything. Lest did I know PNG kept doing its business, the politicians did not stop stealing, they did not even give a damn if unitech students were on strike. I didn't realise we were only putting our future at risk by fighting a lost cause.

I always thought highlanders were born to lead PNG, we took the lead as soon as a forum was called to dicuss anything. The strongest highlanders rounded up everyone, forcing guys and ladies out of their rooms to attend a very important forum. We made sure none of our coastal mates attended class secretly, everyone had to stand united to fight a just cause. However the opposite is true at the national level, the country is being ruled by our Nabis countrymen. Our highlands MPs including our own Engan MPs can't stand up and dominate parliment. They are playing second fiddle to smart coastal man who use their head instead of their strenght. Our own Don Polye who was an outspoken student leader in the early 90s at unitech is polishing Somare's shoes.

Guys don't lose focus on your numberwan priority, your studies. Remember even if the price of a rice bag was reduced, what would you gained from it. Life goes on, you may get a pat on the back for fighting for the reduction on a packet of rice. Will that get you to your destiny, to fulfil your dreams, to one day work and earn your own salary? If I had the second chance to be at unitech, I would be mindful of what I do or say, the next time I am given the mic.

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[> Subject: Re: Price protest! by Unitech Students


Author:
larsen
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Date Posted: Mon, Sep 15 2008, 09:47:30am

The Post Courier newspaper reported that the petition by Unitech was for hunger or ricebag; a mockery gesture-have a think about it.

Seven pages petition, as was reported, the issues presented are:

(i) Un-updated CPI Index with base year 1977
It is true it incorrectly measure CPI marginally. The government currently funds a K3.0 million project called 'Household and Economic Survey' with ADB and is being conducted by the National Statisitical Office to update the CPI.

Comment: How is this issue, a National Government issue, related to the objective of the strike. How was the cost of the strike related to the benefit of asking government to update the CPI index.

(2) Minimum Wage Board: The government has increased the wage base of the publice service sector by 3% incrementally over a two year period. Had given bonus awards to public servants.
Increasing consumption through increasing pay for public service is not a good economic instrument to attain tangible economic development when domestic supply-side of the economy is not responding. It only increases imported inflation through increased imported consumables.

(3)Increasing Competition in other sectors of the economy
The request to invite competition in other sectors is better but the government adopts thorough transition procedures and processes. Government has investment in some of these areas and also government is still regarded as public goods and service provider; clearing market distortions and regulator. In consideration of these facts, transition will be evolutionary.

Comment: Given the interests of the government over some time period, how does this issue relate to the objectives of the strike. It is good you have re-vitalized a fight which began some 10 years ago and will take some ten years to win.

(4) Balance of Payment Surplus
The petition's analysis to index the undervalued CPI to revaluing BOP surplus and deducing that budget surpluses not proper.

Comment: What is there that is the subject of the petition and the strike? You figures and calculation methods would have been wrong too. The central balance maintains the foreign reserves to control the exchange rate for the interest of the country: exchange rate does not increase or decrease at certain levels to penalize importers and exporter. It is unclear from what angle this issue was a topic of the petition.
...........................................................

The Petition should have included:

(i) Highlands highway rehabilitation and maintenance
The government should have been reprimanded to improve the HH. The option of alternative transportation system should have been requested since the HH is subjected to problems frequently. This is to ensure that materials for development and materials for the stomachs for highlands is constantly being supplied.

(ii) Subsiding food stuff
Should have requested government to subsidize basic food like rice and tin of fish for a period of 4 months so people can be assisted with the consumption choices, maintaining same amount of consumption basket as same prior to such inflation increase.

(iii) Increasing Telephone, Power, Health, Education, Water Supply and Agricultural Supports

Should have asked the government to continuous relat the budget surplus to the district level by funding the district service improvement programmes so that common people in kandep, liagaim, maramuni, porgera, kompiam have access to these essential services.

Roads services improved so that markest are supplied with local produces.
...........................................................

I should stop here but the next time, after having received a bad petition, the government will not recieve a bad petition from Unitech again.

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[> [> Subject: Re: Price protest! by Unitech Students


Author:
.
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Date Posted: Mon, Sep 15 2008, 10:06:41am

lakapei o, plisss, ol enga yu pela kaikai kokonut na skul gut yah, plisssssss. play play wanem yah.

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[> [> [> Subject: Re: Price protest! by Unitech Students


Author:
Peles-Economist
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Date Posted: Wed, Sep 17 2008, 06:12:06pm

I would like to respond to this very interesting topic in following manner. Larsen you mentioned in your earlier statement that, Monetary polic has to respond to high liquidity in the banking system. I agree with you on this one, but, when you look at private sector credit, it is also on the increase. When private sector credit growth is pumped into an economy that is already existing at full capacity, then, the economy is said to be over-heating. In the case of PNG, yes, you are right, economy is over-heating and the Bank of PNG has done its bit by increasing the indicator lending rate to cool down the economy.

I am also of the view, that the students from unitech have a point in regard to fiscal measure to absorb external shocks, like fuel and food prices increases. In economics, monetary policy is not seen to be an effective tool in curbing inflationary pressure that is caused by supply side shocks, i.e, international price shocks. Fiscal policy is needed to curb inflationary pressures in the economy. On the other hand, monetary policy is the right policy tool to adjust given, demand push inflationary pressures. Hence, the overheating of the economy is driven by high demand, as indicated by high credit growth in the private sector.

International prices shocks can only be curbed by fiscal policy, as such, the government should have done something when crude oil prices hit US$149/barrel early this year. The government should subsidise fuel, in order to absorb shocks from this external shocks. On the other hand government was enjoying lucrative collection of tax from the mineral sector from this high prices, which the people suffered paying for the governments failed policy response to fuel price increases. The real impact of the fuel price increases havent been felt yet. Inflation in the September and December quarters will show this impact, because of price stickiness. The pass through to consumers of the increases in prices of fuel to other sectors of the economy hasnt been felt yet.

The government failed to absorb the shock through fiscal policy at the first place, hence allowing the full impact of the shock to hit the economy. As a consequence, the price increase have been felt, and the people are suffering. As pointed out by the UNitech students, real wages of people have come down, due to inflation and the employees federations should fight for wage adjustments.

The second round effect of the price shocks are not felt yet. Unitech students raised this issue, but, i dont think they were clear about the sources of inflation, and what policy tool is responsible to curb this inflatonary pressure. If they had addressed the issue properly, i think they would have got a good response. From their petition, they were beating around the bush, and they did not know what they were talking about, and that is a failure.

I think, this is an industrial issue and it should be left to the PEA and other employees associations to fight it out with their employers. As for the students, i salute them for raising the issue and they should liase with the unions to push this matter forward.

I can say that, the government through its fiscal policy failed to address the issue, when the country was hit by the international price shocks. Now it is too late, the impact of the price increase have already filtered through to the economy.

Bank of PNG has done its part, it is the government of the day that should be blamed, for pumping the economy with lots of cash into the system, and then again, did not respond to the external shocks affecting the economy.

Few thoughts

Peles-economis

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[> [> [> [> Subject: Re: Price protest! by Unitech Students


Author:
larsen
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Date Posted: Wed, Sep 17 2008, 10:10:14pm

Peles-economist,

Very essential reading of the inflationary economy of Papua New Guinea.

I note that the Government has been retiring its stock of Treasury bills through operating an expansionary fiscal policy regime supported by huge mineral revenue receipts due to higher international mineral prices above budget forecast. The Central Bank has use its central bank bills to absorb excess liquidity in the economy and believe the rates would now be unattractive to an investor.

(a) In the short run/term, the Government can abosrob inflationary growth as you have mentioned in various programmes; subsidize the consumers or the importers or other programmes. Fuel should be subsidize and well as basic food stuffs for a specific period of time.

(b)In the long rum, the real factor is to promote developments in the supply-side economy. The domestic food stuffs can easily substitute some of the imported goods such as rice.

The government should provide consistent and increased support to programmes/projects such as the Wheat Project in Kandep, the Rice Projects in the Coastal Regions and in Highlands Regions.

The government should develop a very efficient and effective transportaton system linking up all the regions of the country. This transportation system will reduce transportation/freight costs and also made available all nutritious food stuffs from the coastal region available in the highlands regions and vice versa. A fresh fish harvested in the coastal region would end up in the dinner plate in the highlands in just three hours.

I note your essential comments and thus stop here.

cheers,

larsen

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