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Letter from Papua New Guinea (PNG) 7 January 2002 * by Annonymous Editor's Note. The writer of this letter, a resident of PNG, has requested to stay annonymous, stating, "Please keep my name out as I have been truthful about the state of the country and we do not have the same freedom of speech that you have in the USA. I have to renew my visa every 3 years, political pressure can make it very difficult in the best of times." I live in Lae, Papua New Guinea (PNG). This country is on what was originally called the island of New Guinea. These island chains must have the largest reserves of gold known to man in a small area of land. Starting in the west with Freeport Mac FCX 50,000,000 proven reserves of gold, in West Papua (Indonesia) to Bougainville copper 15,000,000oz+ reserves and Lihir Gold 12,000,000+oz reserves at the eastern end on a line of islands stretching toward the Solomon Islands. Other huge gold mines between include Ok Tedi 5-10,000,000 oz reserves on the Fly river, Pogera 12,000,000oz , Misima 2,000,000 ?oz, and Highlands Gold just starting off their mine this coming year 1,200,000 reserves. Mt. Kare to be developed by Madison with about 5,000,000 oz. in reserve but for the inability of the local land owners to come up with an agreement. The gold price has a great affect on our currency. Wafi creek 1,000,000+oz gold reserves and Hidden Valley 1,000,000+ not started yet. Freida River is huge in Copper and Gold but I do not know what their reserves are. The PNG government as a newly independent nation in 1975, has had a huge amount of assistance from the Australian government (approx. USD 6,000,000,000 since independence) and the World Bank in aid and training over the years since but most of the money has been drained away in corruption, poor planning and lack of implementation. In fact, what we see happening on a global level has happened here on a miniature but accelerated level over the last 12 to 15 years. Currency devaluations, stealing from the public purse, police corruption, mob rule, highway bandits, attacks on hospitals, gang rapes almost developed to the level of a national sport, violence against women one to one across every village, break down in the health system, deterioration of dirt roads, bridges washed out by floods but not replaced, disintegration of the education available, lack of knowledge and the unwillingness to accept their limitations and bring in the necessary experts to address the problem due to pride and an inability to humble themselves to make the changes required to cut the waste etc. I could list friends who have been stabbed, raped, shot, both Papua New Guinean and other. Successive governments blame their predecessors and others like, the expatriates who work here, overseas aid donors for not giving money without attachments, (the Government claim they know how to use the money correctly) and the colonial leaders of the past. The problem with blaming the latter is that sooner or later one has to make some changes as you cannot blame leaders of 30 years ago seeing that the present leaders should have done something in the meantime. I've lived in PNG for over 35 years. The only way I have been able to make money in the last few years is really back to front. I have bought machines, equipment and vehicles and leased everything, taking the money back out of the local currency Kina and put it into Gold shares and US currency and other major currencies. Recently I have put more and more into Silver and Gold shares. The profits in trading were large during the devaluations as I kept raising my prices quickly and the leases being fixed at the same amount of money each year onshore kept my cost steady in the local currency, but eventually this year, it has all caught up with the Government and nobody wants to invest. The major disadvantage with the wholesale or importing business has been the taxes which have to be paid on a profit which does not really exist as the original purchasing basket of reserve has shrunk even after making a profit because the goods purchased are always in USD or AUD$. One step forward, two steps back. Fortunately I have been able to borrow when the currency was at its strongest in April and May and send the money out for new stock again before the currency started back downward in a descending wave action. Finally now nobody is buying much in the wholesale business because the new government does seem to be doing the right thing and addressing the waste and none payment of their obligations over the last 6 to 10 years. They have cut back on spending in an attempt to control the blowout in their budget. But this leaves us all with a poor cashflow in the meantime while the controls are put in place. Our only hope here is for an increase in the gold price and the present government keeping the population behind them in their austerity measures until they can start spending where the money is needed urgently. During the 1930's under the Australian administration, this country boomed because of the gold price increase and the lack of work elsewhere in the world. New Guinea, specifically Lae where I live, had the heaviest movement of air cargo in the world. More than the whole world put together for 3 years running, between 1930 and 1935. Records were made with the heaviest loads, most landings and takeoffs. Profits were huge and airplanes were necessary to replace the back breaking work of human carriers carrying everything on their backs including food for themselves which was half of their load. The carriers walked 15 days though malaria infested jungle terrain and mountain ranges to the Eddie creek and surrounding gold fields. In fact Germany developed the Junker for the moving of gold dredge parts into the Wau/ Bulolo area for the alluvial gold. Giving them a head start on bombers for the Spanish civil war and WW2 as no one else was interested or thought that air cargo was a money making enterprise. Junkers were first used as bombers in the Spanish civil war. They gave Germany a chance to perfect their use before being used in WW2 against an unprepared Europe. Amelia Erhart, the first woman to attempt a complete circumnavigation of the world left Lae and was never seen again. I suppose the decimation of their currency earlier had made labor cheap enough to be profitable when other countries could not compete. We seem to be starting again into a round of decimating our home currencies wherever our currency happens to be to lower the cost of our labor to compete against each other. Greetings from PNG. *********
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