Devaluation of Kina will add fuel to fire

THE Government is lauded by most Papua New Guineans for the fundamental reforms in laws and structural reforms in the government systems and economic strategies going forward.
The most notable reforms are in the legislations to fight corruption, growing and empowering the economy, promoting large scale agro-economic downstream processing industries in selected sites in PNG under Special Economic Zones concepts.
These are good homegrown Government intervention policies to grow the economy and create wealth for improved livelihood of ordinary citizens.
With the five new extractive industries of New Porgera, Papua LNG, Wafi-Golpu Mining Project, Pasca Gas Condensate, P’nyang and existing industries, the future looks positive in the next 10 – 15 years.
However, we now read on the dailies and the mainstream media outlets that the Government is going to devalue our local currency the Kina by 15 or 20 per cent.
Which Government is talking about this devaluation of the Kina while the same Government has just spent K70 billion into the economy in less than four years in office (The National, June 28, p.39).
Instead of waiting to see the implementation of the reforms and its positive outcome over time, it decides to throw everything into chaos and jeopardise its own good works by resorting to devaluation of the Kina.
If we have local economics graduates from UPNG out there can you use this column in our two dailies and shed some light on this issue of devaluation of the local currency by a significant portion of 20 or 15 per cent and its rippling effects in the economy.
Economics is not ‘Rocket Science’ and I am not afraid to challenge local economists who are silent on this issues.
Can they advise the Government on the pros and cons of the devaluation of the Kina and come out on public media, especially our two dailies, so that the average Papua New Guinea middle class can be better informed of this crucial impending decision?
We are already battling with skyrocketing basic prices of goods,
income earning opportunities have dwindled over time, no new investments in the private sector and our few manufacturers are on the brink of downsizing operations or in the worst case scenario completely shutting down operations.
How can devaluation of the Kina help in the immediate term undersecretary economic conditions?
I doubt very much this measure (devaluation) will help relive the economy, but instead this action would be beamed to be rubbing salt against the bleeding wound, so to speak.
Can the Government shelve this idea of devaluation advice from whoever is advising behind the curtains?
Our country has already fallen victim to such major advices from foreign or local sources in collaboration in the last three decades and today we are faced with this outcome.
Our economy is not highly industrialised and complex, it’s a simple rural-based semi-commercial subsistence economy where 97 per cent of the people fend for themselves.
How is it too difficult to control only less than 5 per cent of the economic activities in the country are deemed to be formal? Where is the logic behind hiring so-called economic advisors with their hard to understand jargons to make it look genuine and confusing at the same time?
Let me take this opportunity to give my advice to this government, that if they go ahead with the devaluation of the kina concept, you as well prepare to calculate the costs of your actions and prepare for the likely unprecedented and uncontrollable magnitude of lawlessness, chaos and anarchy that can erupt across the country due to economic hardship that is possible under current trend.
Devaluation of the Kina can only add fuel to the fire.

Philip Ukuni