Foreword to the Book

Meeting the Challenge: Lest we forget

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.