World Bank: sapping Papua New Guinea

By Lisa Macdonald On August 29 the World Bank and the Papua New Guinea government finalised a structural adjustment loan. In return for agreeing to adopt a series of rigid economic reforms — a structural adjustment program (SAP) — PNG will receive a $290 million "rescue" package, to which Australia is expected to contribute $68 million. According to Phena Buhrich from AID/WATCH, a non-government organisation which monitors Australia's involvement in overseas aid programs, massive protests have occurred across PNG in response to the threat of the SAP. AID/WATCH reports that the protests, including a rally of more than 10,000, a boycott of classes by students at the University of PNG, and strikes by teachers and public servants, have resulted in three killings by police. One government minister was dismissed from cabinet for abstaining in a vote on provincial government land reforms, originally part of the SAP. Twenty-two community based organisations, including labour, religious, student, women's and other community groups, have formed the National Coalition for Socio-Economic Justice (NCSEJ) to oppose the introduction of the SAP. The SAP put forward by the World Bank/IMF requires massive economic and social changes including the abolition of all barriers to foreign investment, the scrapping of the minimum wage, the removal of price controls for basic foodstuffs, and cuts to health and education budgets. The World Bank is also targeting the traditional PNG system of land ownership. Ninety-seven percent of PNG land is held under customary title, supporting 85% of the population. Despite high growth rates and a history of foreign firms engaging in natural resource extraction with healthy profits, the World Bank claims the customary title system needs to be dropped to make "doing business" easier for multinationals. Following the anti-SAP protests some concessions have been made, including the postponement of the land mobilisation package until next year. "The driving force behind this latest adjustment program are disgruntled companies who have been lobbying for easier access to the rich resources in PNG" said spokesperson for NCSEJ, Peti Lafanama. "The PNG government may have sold out our people to the World Bank but we will not stop the fight against the oppressive measures." AID/WATCH is demanding that the World Bank renegotiate the SAP in consultation with local communities. As part of their campaign, AID/WATCH will host a national speaking tour by Peti Lafanama in late November. Funding for this tour will be raised from a benefit concert on November 5 at the Basement, Circular Quay in Sydney. For details see pp. 29-31.