Rodney Cole
The
Papua and New Guinea Development Bank was inaugurated in 1967 with the
principal objective being the promotion of the economic advancement of the
indigenous population. This would prove
to be a serious challenge to a nation on the verge of political autonomy. How would a subsistence-based, rural
community respond to the opportunities offered by an increasingly monetised
economy? This book considers the
structure of the new institution as providing a basis for meeting this
challenge. It recalls the enthusiasm and
commitment of former staff members who, in the Bank’s formative years, converted
opportunity into reality.
Regrettably,
the inevitable progress of history often leaves in its wake events, and
occasions, that seemingly fail to stand forth as worthy of permanent
recognition. Should we, who introduced the
assumed benefits and rigid obligations of a monetary economy to communities
living a subsistence-based lifestyle, feel aggrieved if our efforts appear to
have faded from memory with the passing of time? Should anyone, in this year 2015, seek to
discover public records of our efforts to introduce such radical changes, they
would seek in vain for this important phase of Papua New Guinea’s development
appears to have been overlooked with the passage of time. The vehicle for change to which this
introduction refers was the Papua and New
Guinea Development Bank, a development finance institution that not only no
longer exists but also is denied its very birth by the latest in a line of
three successor institutions. This
institution claims: ‘Founded in 1967 its primary function is to
provide accessible development credit to citizens to engage in income
generation to improve the quality of lives of our people especially the people
in the rural areas where 80 percent of our people live.’ (National Development Bank of Papua New Guinea
website)
While it is not suggested that the development finance institution now
serving the people of Papua New Guinea is indulging in identity theft, there
has emerged for one-time PNGDB staff a very real challenge. Is it necessary to create a record of
the Bank’s past endeavours such as this publication represents? We, who have contributed to the writing of
this book, believe it is important to right what appears to be a
serious omission from the history of economic development in Papua New
Guinea. In so doing it seems proper to
draw on Rudyard Kipling’s poem, The
Recessional, and seek to echo those immortal words Lest we forget in bringing together the memories of some who
contributed to the activities of the Bank in its formative years.
To write a complete and creditable history of the Bank from its inception
to eventual demise (at least in name) would be an ideal memorial for an
institution that set out to promote an understanding of the role of monetary
credit in the process of economic development.
Sadly, however, this is beyond the resources and time available to those
who have contributed to this publication.
While we aim for historical accuracy, this is not a sequential history
but rather we have restricted our contributions, in the main, to our personal
experiences and factual issues concerning the nature of the institution during
our time of service.
In meeting the challenge of setting out to record at least some of the
history of the PNGDB, it is inevitable that a substantial segment will be
devoted to what might best be described as technical issues; that is, to
demonstrate how the process of lending, and then recovering, money functioned,
the social and economic circumstances of our focus group, the rural community,
and what was done to adapt traditional Western banking practices to meet the
challenges of a developing country.
While the rural community was regarded as of prime concern, the Bank was
mandated to lend to commercial and industrial undertakings that involved, at
least initially, the expatriate community.
This aspect of the Bank’s operations does not loom large in this
publication as it generally involved the traditional practices associated with
trading bank operations.
Recognition of the contribution made by individuals in the establishment,
and ongoing activities, of the Bank was given serious thought but, on balance,
it was felt that to try and single out an individual or group for particular
mention would not be appropriate. Rather,
recognition is due to all who served the Bank, be they indigenous or expatriate
officers, for creating an institution that, while of only a relatively short
life in its original format, laid the foundation for the entry of the rural
community of Papua New Guinea into the market economy.
The people of Papua New Guinea were probably more familiar with the
concepts of obligation, debt and responsibility for ‘payback’ than most people
in developed economies. The reason is
that accumulated ‘wealth’, whatever form this might take, was the measure of
whether the individual ranked as a ‘big man’ in his society, a status much
sought after in the absence of a traditional chiefly hierarchy. The essential difference between our Bank
clients and Western borrowers was the manner in which debts and obligations
were treated in terms of time; put simply, with our clients a debt could
continue for years but, until repaid, was never forgotten. For Western-trained bankers seeking to operate
in tandem with a traditional system accepted and understood by Papua New
Guineans, major problems emerged in persuading clients to recognise, and adopt,
the basic principles of interest and repayment schedules.
As straightforward as this might seem, it was never easy in those early
days. Traditional wealth, signifying
status, took many forms; for example, shells, pigs, Bird of Paradise feathers,
all of which were assigned a value and were recognised as such. With the entry of Western banking principles,
time was essential in adjusting to the new concepts. A good example of this was an elderly borrower
who constantly failed to meet scheduled loan repayments. The time came for an expatriate officer to
intervene. When he berated the client,
who at the time was sharpening a large knife, he was told, “Yes, I know I owe
you money and, yes, I will repay it but at the moment I have other
priorities. A son needs support with
bride price, I have had to provide a feast for a funeral and other matters more
important than your dinau. If I don’t pay you my son will and if he
can’t my grandsons will be responsible.
And if your local staff don’t stop hounding me I will give them a whack
with this knife.” The outcome was, in
time, success.
Insofar as Government agencies in rural areas were concerned, the Bank
developed strong and valuable relations once it was recognised we were ‘on the
same side’. Staff of the departments of
Agriculture, Stock and Fisheries, District Administration and Business
Development appreciated that the ready availability of credit for projects
aligned to Bank lending policies could only help in their efforts in moving the
country towards commercial and agricultural progress and, ultimately, political
independence. It is our hope that this
book will make it clear how we valued their support and that without it our
tasks would have made little progress in the early days of the Bank’s
operations.
A Conclusion
It might seem somewhat bizarre
to write what is intended as a conclusion as part of the Foreword to a book,
but then this is no ordinary book.
However, to even contemplate a whole chapter that purported to offer a
‘Conclusion’ under the circumstances that led to this publication would be even
more bizarre. So, rather than invite
readers to read all 14 chapters before noting editorial conclusions, they are
offered now!
Those of us who agreed to write
about the establishment of the PNGDB, and our experiences over the first years
of the Bank’s operations, did so on the understanding that what we wrote would
be ‘our story’. Apart from the initial chapters
that deal with rather mundane organisational issues, I believe my fellow
writers have taken considerable pleasure in casting their minds back some 40
years to relive what for most was a great adventure. Much of what has been written deals with the
rural sector that was still very much in the process of emerging from a
subsistence economy. The challenge
confronting all staff in fulfilling the ambitions of the Bank’s legislation
required imagination, enthusiasm and true commitment, all of which have been
clearly demonstrated by virtue of this collection of memories.
What we set out to achieve was
to ensure that the role of the Papua and New Guinea Development Bank in the
economic history of the nation it was designed to serve is not overlooked. We trust we have fulfilled this ambition.
