13 Aug 2002

World Bank says PNG government must have public support for privatisation to be successful

4:25 pm on 13 August 2002

The World Bank says that Papua New Guinea's Prime Minister, Sir Michael Somare must gather public support for privatisation to ensure its successful implementation in the country.

The World Bank's PNG Director, Klaus Rohland says a lack of public awareness was one of the factors contributing to the failure of the previous government in selling off its state owned enterprises.

In the face of widespread public criticism, the previous Prime Minister, Sir Mekere Morauta pushed for the quick sale of state owned assets after the World Bank said it was a condition for the release of funds necessary to bail out the economy.

PNG's new leader, Sir Michael Somare has suspended any further sales of public assets, including that of PNG Telikom to Fiji Telecom, in order to conduct a review of the process.

Mr Rohland says the suspension is not a criticism of the World Bank's support for privatisation and he says he welcomes Sir Michael's freeze on pending sales.

Mr Rohland says a review should help garner public support for the process.

"We support the privatisation process mainly because public enterprises in PNG, by and large, generated huge loses, we however feel that for privatisation to be successful,you need to have public support, and a review is probably an appropiate instrument, to gather that support."

Klaus Rohland from the World Bank