Is there too much money in the economy??

The Government announced a whooping increase of K3 billion to the National Budget to around K8.4 billion. This is a record breaking budget ever since impendence and it brings a smile to all ministers and members of the Parliament.

Each district has been allocated K10 million which was raised from K1.5 million to K3 million earlier this month. The K10 million for each district seems too good to be true and each district now is preparing to use this money as the next year budget will also be K10 million if the current government stays on.

While PNG is smiling, I am screwing my face behind this computer as my economic senses are being put to test here. I welcome the budget so much…..yet somehow I feel there may be a problem that could be creeping in if our financial planners are not careful.

The problem I see is “Demand Pull Inflation”. Now let me try as much as possible to explain it in a layman’s term. Demand Pull Inflation refers to increase in Inflation due to an increase in demand in the economy. Because there is a lot of money pumped into the economy to be used in a short period of time, there will be a shortage of goods or services to meet the demand. Now because too much money is chasing so few goods, the price of that good will increase.

According to keynesian theory, the more firms will employ people, the more people are employed, and the higher aggregate demand will become. This greater demand will make firms employ more people in order to output more. Due to capacity constraints, this increase in output will eventually become so small that the price of the good will rise

Example: A bag of rice cost K3 at a local village store. Suddenly, 10 villagers who earns money front up to the shop to buy the rice for K3, but since there are only 5 packets of rice available, not all 10 will buy it. And since the shop owner wants to maximize his profit, he will raise the price to K5 to meet the demand.

This is commonly described as "too much money chasing too few goods". More accurately, it should be described as involving "too much money spent chasing too few goods", since only money that is spent on goods and services can cause inflation. This would not be expected to persist over time due to increases in supply, unless the economy is already at a full employment level.

PNG going Green

Global warming has affected a lot of countries around the world and Papua New Guinea is no exception. Since PNG has so many small islands, most of them are in danger of being flooded due to rising sea level. For this cause, Grand Chief Somare is leading Papua New Guinea and pushing for more efforts in the Kyoto Protocol and asking countries to join the fight against climate changes.



Most of you have watched the documentary “Inconvenient Truth” by Al Gore, which gives you an idea of how important climate change is. The need of “Clean Energy” is in demand and the importance of Carbon Trade has now hit PNG.



Here is a write-up by Ogis Sanida explaining the rationale of Carbon Trade

==============================================================
The carbon trade rationale
By Ogis Sanida

Carbon trade is a new market-based mechanism which intends to encourage the reduction and/or offset of greenhouse gas emissions while, at same time, allows income creation. Such trade involves the buying and selling of ‘environmental services’. These services constitute activities that remove greenhouse gases which cause global warming from the atmosphere.
The carbon trade idea developed from the Kyoto Protocol that was signed in Kyoto, Japan, by some 180 countries in December 1997. The Protocol called for 38 industrialised countries to reduce their greenhouse gas emissions between the years 2008 to 2012 to levels lower than 5.2% of those in 1990. However, the Protocol did not give specific instructions on how countries will achieve their reductions. Carbon trade is a mechanism that was developed to address this shortcoming.






How does carbon trade work?
Carbon trade is supposed to work in the following way: An eco-consultancy firm, which plays the role of a broker or middleman, conducts an eco-audit of a client (individuals, industries/firms, or countries) and comes up with a reasonably accurate estimate of how much carbon the client's activities release to the atmosphere.



At the other end of the operation, the eco-consultant searches the world for environmental services that could offset its client's polluting emissions. These services are mainly forests and tree-planting projects, which are known in the carbon trade business as carbon assets or carbon sinks, because trees remove carbon from the atmosphere and retain it in their wood. Employing a variety of methodologies, the eco-consultant arrives at an estimate of how much carbon a particular sink retains, and then assigns it a monetary value and sells it to a client. The client then subtracts from its carbon account the carbon retained by its newly purchased carbon sink. The client is said to be carbon-neutral or climate-neutral when its carbon assets equal its carbon emissions.



In terms of income flows/creation, the eco-consultant receives money from its client and pays the environmental service providers, after subtracting its consultancy fees.



Types of carbon trade



There are three market-based ‘flexible’ systems of carbon trade: clean development mechanism (CDM), emissions trading system, and joint implementation system.

• Clean development mechanism: This involves the trade of environmental services mainly between the industrialised and developing countries. The intention of CDM is to enable industrialised countries to meet their domestic emission reduction targets by investing in projects that reduce or offset greenhouse gas emissions in developing countries. Such projects typically focus on carbon-neutral projects such as renewable energy, energy efficiency, eco-forestry, wildlife conservation, and small-scale hydroelectric schemes. PNG is currently developing CDM projects through the Department of Environment and Conservation and other relevant stakeholders.


• 
  Emissions trading system: This mechanism mainly concerns trading of ‘pollution rights/permits’ among the industrialised countries. Under the system, countries or industries which exceed their pollution targets will have to buy extra quotas from companies or countries that undershoot their pollution targets.


• 
  Joint implementation system: This system is a specific form of the CDM where the Western and/or industrialised countries are to fund climate-friendly (or carbon-neutral) projects in the former Soviet Bloc.

The rationale
The rationale of carbon trade can be understood when we consider the impracticality of the environmental ‘purist’ argument on the one hand, and economic growth maximisation on the other.



Extremist environmental organisations argue that the only way to address climate change is for countries to undertake a direct reduction of carbon emissions by reducing ‘pollution-creating industrial activities’. These organisations contend that any other options are just an indirect blockage to the real solution to global warming which is reducing and finally eliminating fossil fuel burning. The idea that people can burn fossil fuels and then plant trees to clean up the carbon dioxide is simply wrong, so goes the argument. This false ‘solution’ will merely keep people digging up oil and coal. The only ‘solution’ is for countries to reduce carbon emissions.



However, the environmental ‘purist’ approach would be an ‘economic and social suicide’ for many countries. Outright reduction in industrial activities would lead to a fall in economic growth, loss of jobs and income. This would have a flow-on effect in the social arena where spending in health, education and other related activities will have to be cut. Because of such concerns, many countries have been reluctant to take the ‘purist’ approach. Until new technologies are commercialised, people will continue to drive cars, take flights and use energy from fossil fuel sources.



At the other extreme, some countries, mainly the big industrialised nations, are taking a rather passive approach to the global warming issue. These countries seem to think that they should continue to maximise industrial development and hope that future scientific advancement will provide the ‘vaccine’ to solve the global warming problem. If the adverse effects of global warming are correct, then outright ignorance of environmental issues would be detrimental to our welfare in the long term. The rights of citizens of a country or the global community, in general, to live in a secure environment would be compromised.



Given these two opposing scenarios, it is now obvious that carbon trade is the way forward. By reducing or containing carbon emissions and generating revenue, simultaneously, carbon trade addresses both the environmental and economic concerns. Carbon trade is not the perfect solution; however, it is the ‘best’, given the current situation.



Moreover, by its nature, carbon trade could have a wider appeal to governments and private sector entrepreneurs. The challenge facing countries venturing into this new form of international trade is how to plan for and implement it, in order to get the best value out of it, both in economic and environmental terms. In the PNG context, the current work of the Department of Environment and Conservation and the stakeholders in trying to get the CDM activities off the ground should be given full support by the Government, private sector and the NGOs.



Ogis Sanida is a Research Fellow with the Economics Studies Division of the National Research Institute

Rest in Peace - Lucky Dube

Johannesburg - Reggae star Lucky Dube, 43, was shot dead in a hijacking in Rosettenville, Johannesburg, on Thursday night, police said.


Captain Cheryl Engelbrecht said the incident took place at about 20:20 when the singer and performer was driving in the Johannesburg suburb. She said Dube was dropping off his son in the area when he was attacked.



"His son was already out of the car. When he saw what was happening, he ran to ask for help."



The boy was too traumatised to provide police with any information, Engelbrecht said.



The hijackers were still at large.


Melvin Khumalo from Gallo Records - Dube's recording company - was not willing to comment on the incident, saying the company was attending to Dube's family.

Khumalo was on the scene in Rosettenville on Thursday.

Dube, born in Johannesburg in 1964, was named "Lucky" as he was born in poor health and doctors thought he would die, according to Wikipedia.

But Dube survived and went on to become a frontline artist in the reggae genre.

He had recorded over 20 albums in his music career which spanned over 20 years - according to the singer's website http://www.luckydubemusic.com/.

His albums included Rastas Never Die, Think About The Children, Soul Taker, Trinity and his latest, released in 2006, is called Respect.

The reggae sensation, who did not drink or smoke cigarettes or marijuana, despite the association of the substance with Rastafarians, had won over 20 awards for his music contribution locally and internationally.

Importance of Distance Learning

You can make a good thing better. With three successful deliveries its credit, the fourth series of the Microfinance Training of Trainers course opened on August 16 at the Tokyo Development Learning Center (TDLC), with 653 participants in 52 countries. It it the first time that the course incorporates Moodle, an open-source learning management system that is accessible free of charge to anyone with Internet access. The course is organized by the TDLC, the Asian Development Bank Institute, and the United Nations Capital Development Fund (UNCDF) in collaboration with the World Bank Institute.


The need to reach participants beyond capital cities drove the course team to experiment with the Moodle platform. Internet-based interactions are combined with videoconference sessions, but most participants experience the entire course online from registration to viewing the videoconference lectures via webcasting. New features to increase outreach and effectiveness keep the course current, and allow participants to tailor their learning experience to their individual needs. For example, nearly half of registered participants in this offering have selected online tutoring to help them complete the course


"Today we live in a world where more than three billion people do not have access to formal financial services. Providing access to microfinance is providing people a chance to improve their own lives", said Mario Lamberte, Director of Research at the Asian Development Bank Institute


The course runs through the end of November Participants will complete a final exam online, and successful candidates will be accredited as UNCDF Microfinance Distance Learning Course trainers. Since its first offering in 2005, the course has accredited 91 trainers. Eleven graduates of previous courses are serving as online tutors in this offering.


For more information visit http://mftot.jointokyo.org

Why is GreenCom in shades?

Now that GreenCom is ready to play soccer, it be good now. I was trying to look up GreenCom on Google but I couldn’t locate them on the web this was earlier in the year when Digicel and Telikom was playing football.

Anyway, my search ends today as I finally found Greencom on the web. But wait……the website is incomplete!! Oh……and to add to that, GreenCom is offering services to UK only. But wait……GreenCom is website says they are based in Ireland. Isn’t Digicel based also in Ireland?? I’ve always thought that GreenCom is an Indonesian Company. Maybe I should do a search on GreenCom

Now my nose may be stuffed or something but my mind is running crazy at the moment. Just last week Pangtel accuse Digicel of illegally using Greencom’s mobile spectrum. Digicel and GreenCom did a joint statement that there was no illegal use of the spectrum. So if the owners of are from Ireland, could it be a coincidence?? Maybe they are owed by the same person or family or something??




Here is a link to check


http://www.unicef.ie/greencom.htm



Any so we will really have a mobile competition in Papua New Guinea at last

This is confusing now. I’ve always though that there will always going to be a mobile competition and the Government was NEVER going to throw Digicel out of the country. But Sir Mekere Morauta question Hon. Arthur Somare why the Government is doing a U-turn and letting Digicel stay.

Am I the one confused here or is Sir Mekere Morauta the one confused??

What I understand is that, there was never an intention by the Somare Government to do away with Digicel but to only give Digicel an OPERATOR license and not a CARRIER license. The carrier license should be owned by the STATE and Telikom is the sole CARRIER. B’mobil, Digicel and GreenCom are all OPERATORS using the Telikom’s gateway.

Petition Against Family Violence

Post Courier on Tuesday 2nd October reported a most bizarre story I’ve ever read. It was a case of most horrific inhumane behavior a human being (of which I am ashamed to call myself a human) could have ever done.

The story of a man beating his wife, putting his hand through her genitals and pulled out the baby. He then proceeds to pour hot water into her genitals and later forced her to go to sleep. I could not imagine the extent to which human beings can bring themselves to but this has sparked calls by various women groups and leaders to make a petition to the floor of the Parliament.

Let us all wear balck to work on Tuesday when Dame Carol Kidu presents her petition to the floor of Parliament.

“The second Post Courier article of today's edition, also attached, recorded some of the reaction from the public condemning domestic violence,etc This incident is not an isolated one. There are many women and children out there who suffer this daily. As part of the need for the community at large to be informed of this cancerous behavior, and, which must be rid of, Minister Dame Carol Kidu, will be petitioning Parliament on Tuesday next week for proactive action to be taken against this sort of abuse. It has been proposed that a limited number ( as many as the parliament gallery will allow ) of people, men & women wearing black be in the gallery when Dame Carol is presenting the petition.”

Petition
Notes to the Petition:The Petition in relation to Violence against Women & children to be presented in Parliament on Tuesday in Parliament. It will be published on Monday's Post Courier.

1. That there is a general, pervasive feeling of dismay and helplessness about the increasing levels of violence in all sectors of society, particularly violence within the family which should be a safe haven for all people - women, children and men.We remind honourable Members of some recent horrific crimes : last week a young pregnant woman was repeatedly beaten by her husband who then forced his hand into her vagina and ripped the unborn child from her womb – she may survive but psychologically and emotionally she is scarred forever; three weeks ago a woman was chopped to death by her husband in Gordons market watched by Security Guards – nobody helped and now she is dead ; a few months ago a young girl was reportedly raped by 30 men; in November last year Josephine was tortured for days - burnt with hot stones etc etc by her husband and died after this horrific ordeal; recently an innocent woman was attacked by her drunk husband who chopped her left wrist causing it to hang off. As she reached out to hold the chopped wrist the husband then slashed her right elbow cutting off the main tendon and nerve system then slashed her across the right shoulder blade also cutting off the main tendon. She is now unable to go to work and is unable to feed herself nor do anything as the injuries sustained have disabled her for life.Sadly, these horrific crimes are occurring on a daily basis somewhere in PNG – many of them are never recorded and never reported but we all know they are happening.


2. We, as concerned citizens, acknowledge that governments over the last ten years have made significant progress with legislative and policy reforms in the social sector but we are concerned that the implementation of these reforms needs far greater commitment from both government and civil society.
   

Your Petitioners therefore humbly pray that:

1. The problem of violence in families and society at large be treated as a matter of national importance by this, the eight National Parliament, and we call on each Member of Parliament to make a personal commitment to advocate against and take action against violence in their electorates, particularly violence against women and children.


2. The government provides the necessary financial and technical support to complete the work presently in progress with the drafting of the Family Protection Bill and for each member of this Parliament to provide leadership to ensure that the citizens of this country have their rights protected as stated in our Constitution, laws and international agreements.


3. The government forms partnership with key stakeholders including ngos, faith based organizations, business community, educational entities, relevant statutory government authorities and donor partners to ensure affirmative action against violence.


4. The government provides resources to enhance the capacity of responsible government agencies to implement existing laws to protect women and children.


5. The government establishes additional facilities and improve existing Family Support Centres to provide care and support to women and children who experience violence, abuse and exploitation.


6. The government institutes a register to record all instances of family and gender-based violence at hospitals, clinics and care centres run by non-government organizations and churches to be used as a basis of planning preventative and support measures.

And your Petitioners, as in duty bound will ever pray.

Is Papua New Guinea really on a Break-through in Techonlogy?

Accessing Broadband Internet via HF Radio has stirred a lot of interesting companies in Papua New Guinea and the World. Interest in the new technology has given Telikom the run for its money especially with the looming competition with GreenCom and Digicel.

A good friend of mine pointed out something that arouses my interest so I decided to share with you my readers. So what’s that curiosity about?? It’s about JINDALEE!! Let me quote this article

“Australia is using a sophisticated new radar network that can detect stealth bombers, curb illegal immigration and spy on neighboring nations from at least 3000 kilometers away. The $A1.8 billion Jindalee Operational Radar Network (JORN) has taken more than 30 years to complete but is now undergoing final trials. JORN is designed to monitor air and sea movements across 37,000km of largely unprotected coastline and 9 million square kilometers of ocean. It is being used to cast a security shield across Australia's remote northern approaches without the high cost of maintaining constant maritime and air patrols.” View here

So can you see my line of thoughts yet?? Not quite??.....Okay……here are some more…
"JORN is the front-line of Australia's wide area surveillance capability and is likely to remain so for at least the next two decades," Mr. Ric Smith, Australia’s Secretary for Defense, said” View here

Still not seeing where I am coming?? Here is the last one
“The Jindaleee Radar System was a great example of the Australian ability to think outside the square. Scientists concluded that if the bomber could not be detected, perhaps the turbulence it makes passing through air could be. While standard radar sends a signal along line of sight until it bounces off a target ship or aircraft, Jindalee bounces signals off the ionosphere, which lies above the stratosphere and extends about 1000 kilometers above Earth. The signal then bounces down onto its target.” View here

The Broadband Internet via HF Radio uses the IONOSPEHRE to bounce of it’s signal as in my earlier posts……the Jindalee Radar System also uses the IONOSPEHRE to bounce of its’ signal. So if we can develop the system and build our communication network using the proposed project, Papua New Guinea will be looking to match Australia in its security effort.

But the only difference will be the cost. We can build the protective shield to detect stealth bombers for only $1.8 million while Australia’s is $1.8 billion…of course….they may be other infrastructural costs as well….but I’m just being funny here.

So can Papua New Guinea move forward now??? Lets wait and see!!