Papua New Guinea’s capital, Port Moresby, is recovering from looting and burning of businesses in its National Capital District (NCD) after members of the PNG Police Force went on strike last month.
“Black Wednesday” resulted in 22 deaths and massive losses to businesses amounting to over K1.27 billion (US$0.33 billion). In its wake are lingering fears that the long-standing development issues that sparked Black Wednesday will continue to pile up, exacerbated by the country’s ongoing governance difficulties and setting up a similar crisis point in the future.
What happened
January 10 was the first government pay day of 2024. That’s when members of the PNG Police Force in the NCD/Central Province Police Divisional Command noticed an unexpected rise in the tax deduction in their pay. The K300 (US$81) increase in taxes was due to the payroll not being configured to factor in the tax threshold changing from K17,500 (US$4,719) per annum to K20,000(US$5,393) per annum, as announced in the 2024 National Budget.
That Budget was passed in the National Parliament on 28th November 2023. Frustrated members of the police force began passing messages on to their colleagues, as well as to the members of the PNG Defence Force, the PNG Correctional Services, and other agencies, urging them to meet at the Unagi Oval, minutes from Port Moresby’s Jackson International Airport.
And so by 9am, a huge convoy of police vehicles, and military and prison guards with flashing blue lights and blaring sirens gathered to demand answers from Prime Minister James Marape and Treasurer Ian Ling Stuckey. They were met by the National Police Union President, Lowa Tambua, who delivered a provocative speech.
Despite efforts to calm the agitated crowd by the Police Minister, Peter Tsiamalili Jnr, NCD/Central Province Police Divisional Commander, Assistant Commissioner Anthony Wagambie Jnr, and Port Moresby Metropolitan Commander, Superintendent Silva Sika, the gathering moved West to the National Parliament, about one kilometre away from Unagi Oval.
They were met there by the Speaker of Parliament, Job Pomat, who attempted to calm them down. By 10am, social media was awash with photos and videos of members of the security forces protesting. The public, mostly unemployed youths living in huge, unplanned squatter settlements, took advantage of the protest and went amok, looting and burning business houses across the city – mostly in the electorates of Moresby South and Moresby Northwest.
As the mayhem intensified during the day, there was division among the members of the police force. Some members of the force went around encouraging looters while others prevented further looting of business houses in other parts of the city.
The looters spared no one. Foreign-owned shops, as well shops owned by Papua New Guineans were looted and burnt to the ground. Social media posts instigated looting in other urban centres in PNG. However, security forces based in those centres moved quickly to quell those disturbances.
When the chaos ended at 6pm, looters were heading home with their spoils from the big shops of Brian Bell, Elisio, City Pharmacy Limited, Bishmil and other foreign-owned stores. They were not afraid of being seen with their loot, even taking to social media to show off their spoils.
Speculation
Social media was rife with speculation that the looting and burning was politically orchestrated to create instability for the Marape-Rosso Government, given that a vote of no confidence was afoot for Parliament’s first sitting of the year on February 13.
There were also rumors that some politicians had colluded with certain members of the security forces and government staff handling the Alesco payroll system (handled by the Department of Finance and Department of Personnel Management) to create mayhem.
The next day, January 11, the National Government declared a 14-day State of Emergency and launched an investigation into the incidents. At the end of the emergency period on January 25, Prime Minister Marape announced the demotion of Treasurer Ian Ling Stuckey, and the suspension of key police and finance ministry figures. The investigation also led to the arrest of PNG Police Union President, Lowa Tambua.
“The darkest day of our lives.”
City Pharmacy Ltd (CPL) Chairman, Sir
Mahesh Patel
He was charged with inciting the riot. A Commission of Inquiry has been set up to investigate the breakdown of police command and the breakdown of communication between the government agencies that led to the payroll glitch. Internal Revenue Commissioner, General Sam Koim said in a press statement “it was a system configuration issue and nothing to do with tax increase.”
He continued: “Apart from the removal of dependents’ rebates, which is yet to come into effect, the government has not raised any tax rates in Personal Income Tax and Goods and Services Taxes that would affect the average people and the working class in Papua New Guinea.”
The Commission of Inquiry will be headed by a National Court Judge, who will also work with the Department of Justice and the Attorney General on legislation to call out the military on the streets to protect public lives and property if policemen ever go on strike again like they did on Black Wednesday.
In addition, the Department of Information, Communication and Technology was tasked with monitoring social media for hate speech, elements that instigate violence, fake news, and pornography.
Social cost
Fijian-born businessman and City Pharmacy Ltd (CPL) Chairman, Sir Mahesh Patel, who has lived in, and has done business mainly in Port Moresby for 40 years, told local media that Black Wednesday was more damaging than previous rounds of looting and rioting he has witnessed in Port Moresby since arriving in PNG in 1984.
“I witnessed the Okuk rioting (1986), Sandline crisis rioting (1997) and the Bill Skate rioting (2006). But this [Black Wednesday] rioting was worse and this small bunch of idiots [looters/arsonists] destroyed it. They put PNG in world headlines in the wrong way. Here we are into 50 years of independence and the looters have taken us back 10 years. I hope and pray that such rioting will not happen again in the future,” said Sir Mahesh.
Sir Mahesh said that while the cost to business was over K100 million (US$27 million), the major impact will be on the staff and the network of 1000 small-scale farmers that CPL has developed over 10 years across PNG.
“[The farmers] supply us with fresh garden produce, coconut oil, honey, jam and so on. This time of the year, parents are looking for money to pay for their children’s school fees. The affected staff and the farmers need money for their children’s school fees. We get honey and jam from Goroka, coconut oil from East Sepik, woven baskets from Bougainville. Now, we will cut all the farmers’ orders in half. We have 500 affected staff. We are keeping them on the payroll. But sooner or later, we will have to make a decision on them. These looters just stabbed them in the heart.
“Some of the staff have been with CPL since the early days and we have three generations now working with us. And they really wept and wailed over the destruction of our shops. It was like attending a funeral. This is the darkest day in our lives.”
The loss of CPL’s community health services is another major blow to the people.
“We deal with 20,000 patients per month. They come to our clinics and pharmacies. Now, they will be putting pressure on the public health services. We had set up our first baby clinic in Rainbow. It’s gone to the dust now; it took us 18 months to develop that project as part of the CPL Foundation.”
Another victim was businesswoman Behori Joku, who had set up a shop in her customary land in her village. Her store was looted and gutted. “This is a loss of everything that we have worked for,” she
told the media.
“I tried to be an example to the local people, landowners of Port Moresby who are the Motu Koitabuans and other indigenous people in the city. I was proud of owning this shop and now it’s all gone and I really don’t know how to rebuild.”
Tinder box
Senior PNG economist, Institute of Public Affairs Director, Paul Barker says while the disaster can be attributed to the breakdown of communications over the tax issue between central government agencies, as well as the lack of communication between the police force and these central agencies to determine the cause of the tax hiccup, “this occurred at the time when [the] vote of no confidence was looming, giving [rise to the] thought that [Black Wednesday] was politically motivated.”
Barker says the police alone cannot be blamed for what happened, because the withdrawal of their presence was simply a catalyst.
“It was a tinder box. Things were ready to explode and you just needed an opportunity to ignite it.” Barker and other experts are of the view that the tax issue was simply a trigger to the socio-economic malaise that grips PNG.
“With a high rate of unemployment, high school-leavers, struggling forex issues leading to scaling down of business and laying off [of] employees, huge urban migration, lack of job creation, limited placing at tertiary institutions and high schools, it just needed a spark,” says Barker. “And the computer glitch was the spark”.
An Australian Development Policy Centre article by visiting lecturer at the University of Papua New Guinea, Andrew Anton Mako, outlines the challenged state of PNG’s economy. Annual inflation has been about 5% over the last 10 years.
Cost of living adjustments for public servants have typically been around 3%. The minimum wage has not been increased since 2013, and today is only worth half of what it was then, after inflation, writes Mako.
He cites the lack of jobs as another major problem. Formal sector employment peaked at 300,000 in 2013 and is now at less than 270,000. The population would have grown by about 30% over the same period.
One of PNG’s most significant development challenges is its “youth bulge” – where the number of young people exceeds all other age groups. According to the 2011 Census, 58% of PNG’s 7.3 million inhabitants were under the age of 25, “one of the highest proportions in the Pacific.” That there has been no census in more recent times, and the challenges that poses to development planning, is an issue on its own.
But as Barker puts it, Papua New Guinea is now full of people under the age of 30 who are struggling to establish themselves in life.
“So many young people, and some of them are alienated and have high aspirations. They feel they should be getting a better lifestyle. However, the cost of living is very high, especially in Port Moresby. Even in the settlements, rentals for accommodations and food [costs] also are high. And there is high aspiration. They want jobs, they want things that other people have like the latest mobile phones and other expensive
gadgets. They also want bigger objects like television, washing machines, refrigerators and so on. Basically, they just envy the Jones that live next door.”
Out of touch
Barker feels the government is out of touch with the needs of the people and needs to up its game of connecting with the grassroots. One of the ways he suggests doing that is through a community engagement program with young people, especially in the settlements, to get its finger on the pulse of
the nation.
“You will obtain interesting information – like in education, politics, and economics. In fact, you will get information about how the youths feel. Like their only recreational land for sports activities was bought off by private people with shady deals under the table with government officers. There are not many places for young people to have recreational activities.
“We need to have a population census.”
National Research Institute Chairman, Wilson Thompson
“Government must focus on youths instead of seeing them as difficulties. They are a key part of their community. We must not use them for selfish political gains. Every five years, elections come and candidates go out and try to appeal to the youths. They make lots of promises and after the election,
they forget about these youths that they engaged during the election.
The other side of PNG’s blunted double-edged development sword is the lack of a rural development plan.
“The government tells people to return to the countryside, but it is the lack of employment in the countryside and rural decay that brings people to the cities in the first place,” says Mako.
Barker says the government needs to create more economic activities and better services in the rural areas while providing practical lessons in agriculture, processing, and finance skills for people to stay in rural areas.
He suggests a range of other pro-rural measures such as facilities to support MSMEs, establishing markets for fresh produce and other micro-business and sporting facilities, as well as formalising settlements so that people become committed to owning a house, whether on State or customary land.
Another leading political and economic analyst, National Research Institute Chairman, Wilson Thompson, says the government does not have key data such as the number of unemployed, the number of skilled people and their skills. He says the Labour Department’s National Employment Services, which stopped functioning almost 30 years ago, used to keep track of school-leavers, especially from technical colleges, and act as a job placement service for them.
“We need to get this service back to track down all school-leavers. That way we can track and address the
unemployment issues. And we need to have a population census. We’re saying [the] population is 11 million. But those are just estimations. And when we have a National Census which the Prime Minister had said we will have this year, we really need to get people’s data right. We must not just get the statistics of the people, we need to also know their education level, and if they are employed.”
University of Papua New Guinea’s School of Business Economics Studies lecturer, Kelly Samof, says while Black Wednesday was due to Papua New Guinea’s struggling economy, the looting and burning also shows that the people do not trust government systems.
“The public are aware that the government system is weak. Bribery and corruption is rife. They don’t trust the government systems, [which have] deteriorated over the years. They are aware that you can get a land title by bribing government officers. They are aware of the ‘whom you know’ system to get employed. They are aware of inflated infrastructural projects for people in the government system to get bribes.
“And so, the computer glitch and policemen accusing the government of huge cuts in tax because of government mismanagement of the economy was fuel for the public to go on such massive rioting, looting, and burning down of business houses.”
Samof cites the Connect PNG program, which is building roads into rural areas to allow those populations access to markets and government services, as one initiative that has broad-based developmental potential.
“Remote areas that were only accessible by air can now be accessible by roads. It makes it cheaper to travel by road to access goods and services. It also opens up untapped arable lands in rural areas for large agricultural projects. So, this is one way to grow the economy and discourage people from
drifting into urban areas to seek employment opportunities.”
Is anyone listening?
In the days after Black Wednesday, Prime Minister James Marape announced an assistance package for affected businesses. “The Government has sufficient funding in this year’s
Budget, including K200 million (US$53.9 million) for SME intervention, the K150 million (US$40.5 million) for State equity, and others, to support commerce and business in our country,” he said.
In a significant development in early February, Marape tasked four ministries to draft an urgent plan to address youth issues and to outline strategies that would help address the ongoing issues through a youth mobilisation programme.
“What happened here in Port Moresby on the 10th of January is a signal to us that if we are not conscious and actively doing something to address this increasing youth bulge, we are not safe from destruction,” he was reported as saying by local media. “Government must work to find the solutions for society, if not, then we are all wasting our time.”
In an interview with PNG business magazine, Business Advantage PNG, Prime Minister James Marape said that over the past four years, his government had been working to deliver new resources investment, focusing on five crucial projects – the Papua LNG, P’nyang, Pasca A gas projects, and mining operations at Porgera and Wafi-Golpu – which Marape says will all mature in 2024, “laying the foundation for PNG’s
next big investment wave.”
The publication quoted him as saying that his government had tried to strike a balance between the urgent need to raise wages and the standard of living for Papua New Guineans, while also ensuring that resource projects in the country will be profitable enough to attract investment.
PNG is home to the world’s third largest rainforest and is endowed with an abundance of natural resources wealth. However, its large-scale resource extraction-based development strategy pursued by successive governments since 1975, and which has allowed some of the world’s largest mining, petroleum, and timber companies to extract its gold, silver, copper, nickel, oil, natural gas, tropical hardwoods, and palm oil, is seen as having failed the aspirations of its people.
Says Mako: “PNG has to get out of its low-growth slumber. Waiting for the next big resource project is not good enough.
The whole country has been given an extremely painful wake-up call. Is the political class listening?”
Samof says the huge population of unemployed and restless youth threatens another ‘Black Wednesday’ in the future. “There is a huge bulge of a youth population less than 30 years old in PNG. We have huge numbers of school-leavers from tertiary and secondary schools annually.”
Samof quotes National Education Department figures, according to which, of the 30,000 school-leavers sitting for the Grade 12 national examination annually, only 10,000 continue their education at universities and other tertiary institutions.
“And 20,000, we don’t know about. And if we go back another 10 years, then by now you have 200,000 Grade 12 students unaccounted for.
“That’s for Grade 12. For Grade 10, about 50,000 Grade 10 students don’t continue to Grade 11. Such statistics are frightening and if we continue [on] that path, you are looking at about one million unemployed school-leavers in 10 years’ time. And that’s for unemployed Grade 10 and Grade 12
school-leavers. We don’t know the statistics [for] unemployed Grade 8 school-leavers. We don’t know the statistics for unemployed graduates from universities and colleges in the country.
“We don’t have accurate population statistics, no real statistics for economic growth, no statistics for
unemployment. The reality is we are living in a guessing game and that’s a disastrous future for our country. It’s more like living in a pressure cooker where things can explode any time.”
