PNG “financial maturity”

in new loans-Somare

The Papua New Guinea Prime Minister, Mr Michael Somare, returned to Port Moresby in December well pleased with the success of his economic mission to Japan and Hong Kong. His visit provided yet another indication of the rapid waning of Australian involvement in PNG’s financial management and affairs.

In Japan, Mr Somare negotiated a soft loan equivalent to Asl2 million, and in Hong Kong he signed an international consortium bank loan equivalent to $23 million.

The significance of the arrangements was that for the first time Australia was not involved as an underwriter for PNG’s international borrowings.

Mr Somare said that he regarded the arrangements as historic, and important evidence of PNG’s financial maturity. He said his country

had established its financial integrity and credit rating on the world scene, and was being accepted in its own right as a negotiator and as a stable and trusted international bor rower.

Mr Somare said that trade between Japan and PNG was well balanced at present, and his visit had indicated it would stay that way, while at the same time expanding.

He said that Japanese busi ness and investment interests had shown him a good general reaction to the possibility of joint ventures in PNG.

Neither country was making any concessions to the other, but there was a wide range of mutually beneficial partner ships. Fishing ventures were one activity which would be followed up when PNG declared its 200-mile econ omic zone over the sea in March.

Mr Somare said that reference had been made dur

ing his visit to PNG’s action in closing down a Japanese oil palm venture which was not meeting its commitments. He believed Japanese investors in general had appreciated the fact that PNG had first called in an international arbitrator, and as a result there had been no Japanese loss of confidence in PNG.

Mr Somare also forecast that as a result of his visit the big Wabo hydro-electric scheme appeared likely to be undertaken within a decade.

The scheme, which will tap the headwaters of the Purari river north of the Gulf of Papua, will be of world pro portions.

But it cannot be undertaken unless there is a guarantee that new industries will be at tracted, prepared to buy the power generated. Mr Somare said that Japanese interests had not committed themselves to guaranteeing the involve ment of such industries, but prospects appeared good.

Niue suffers

for its sins

In the days long ago when royalty reigned on Niue, the king, who had both secular and priestly responsibilities, was blamed and expected to commit suicide in times of national disaster.

Then, when the kings died off and pastors took over the maintenance of religion, any thing that could not be logically explained was at tributed to sins they had com mitted and they were put on trial to confess them.

Although not taken too seriously today, the tradition was recalled during the severe drought last year when Niue suffered its driest period be tween May and November since weather records began in 1906. No one expected the Castors to take the entire lame for the lack of rain but it wasn’t long after someone suggested putting them on trial in the Alofi courthouse to be cross-examined on their sins that the rains started.

That, however, was too late to save Niue from what government officials regard as a national disaster. As a result of the drought, this year’s sub sistence crops are seriously affected, copra production is expected to be cut by up to 50%, the lime and pas

sionfruit industries suffered, about 70 cattle, 10% of the total herd, died, and more thap 1 000 acres of bush were

destroyed by fire.

Between May and Novem ber only 255 mm of rain was recorded, far below the pre vious lowest reading of 350 mm for the same period in 1915.

The subsistence crops, the major one being taro, are ex pected to be in short supply for the first six months of this year because of the lack of planting materials. In the bush gardens, which have no method of irrigation, the taros were baked in the ground and few young shoots survived for the next planting cycle.

The growth of coconut trees, which would normally be fully bearing late last year, was also seriously stunted in the dry heat and their copra crop could be cut by half this year.

The fruits of the pas sionfruit and lime trees were smaller than usual many falling to the ground during the drought but production could pick up if the rains last longer as they did the pre vious year.

The cattle pastures are not expected to recover fully for up to two years and the deple tion of the herd and effects of the drought on the breeding cattle may mean the cattle in dustry, which has considera ble problems apart from the drought, will suffer for some time.

The effect of the bush fires will also be felt for a few years as the land cannot be immedi ately used for crops.

For the last three months of the year, the island’s water supply was solely dependent on the bore supply which meant severe rationing of water.

Most government offices in Alofi ran out of water and one even asked permission to close down because of this.

Schools were forced to close periodically as their water supplies dried up and they were all closed a week before the end of the final term. The hospital ran out of water for a few days and some convalesc ing patients were sent home.

Domestic supplies were strictly limited, the bakery was forced to close occa sionally, and even the ice cream machine in the centre of Alofi dried up.