Thursday, February 25, 2010

Allowances problem for SI students in Cuba

Hello again,

I wish to comment briefly on the above item which was highlighted in the media recently.

I understand and do acknowledge that sending money to Cuba, a communist country isolated and economically barred by some of the capitalist giants of the world, is difficult and hence the delay. But what took the authorities so long to react?

 I am really surprised to hear that after almost a year without allowances responsible authorities have only recently started to take the matter seriously. As reported, the students have not received any form of allowances from the government since June 2009. My question is; why does it have to take the responsible authorities seven solid months before they can be serious about addressing the issue?

According to media reports, it was only recently that serious formal high level arrangements were initiated between the Ministry of Health and the Ministry of Foreign Affairs to identify the best possible ways to send the money to our students in Cuba. Why have you taken the issue so lightly? I am sure that the authorities will say that they are taking the matter seriously. But it was only after the students threatened to boycott their exams that they were shaken.

Regardless, for such an important issue which involves the lives of Solomon Islanders, seven months is just too long a time for it to be properly addressed and resolved. I see this as grossly unacceptable and a total ignorance of duty by relevant authorities.

I would have thought that such arrangements, such as the means of paying the students allowances, would have been high in the agenda when the deal was sought and made between SIG and the Cuban government to initiate such a programme. However, it is now clear that these vital issues may have never been part of the discussion, or if they do, have been greatly understated and underestimated.

I only hope that the issue does not prevail over the years and is sorted once and for all so that in the future our students will not have to worry about such issues that are outside of their academic responsibilities.

And as sad and frustrating the issue can be, the lessons learnt from it must not be taken lightly. The government must tread carefully in the future when making deals with foreign countries, especially those known to be hostile to the Western world. And when entering into bilateral contracts with other countries, especially when dealing with training such as the case of our students in Cuba, all dimensions of the case at hand must be taken into consideration. For a good deal is not only measured by its economic merits but also its moral and social values.

Wednesday, February 24, 2010

17 Proposed Parliamentary Seats- Why it should not be passed by Parliament.

As recently highlighted in the media, in the upcoming parliamentary sitting, the government is going to table a bill proposing to introduce seventeen new constituencies, and hence parliamentary seats.

 The Chairman of the Constituency Boundaries Commission (CBC) has clearly stated that according to the section 54 (4) of the Constitution of Solomon Islands, "(p)arliament may, by resolution, approve or reject the recommendations of the Constituency Boundaries Commission but may not vary them; and, if so approved, the recommendations shall have effect as from the next dissolution of Parliament". Thus, Parliament only has the power to 'pass or defeat' the bill but it will not change the principle contents of the bill. This is a constitutional requirement that Parliament must abide to.

 For many Solomon Islanders the introduction of seventeen new seats in our Parliament is a positive development because now they will be able to benefit more from the constituency funds such as Rural Constituency Development Fund (RCDF), and the Millennium Development Fund (MDF), the Rural Livelihood Fund (RLF), the Micro-Project Development Fund (MPDF) and the ROC Constituency Micro-Project Fund (ROC-CMPF). This is because demarcating the current constitutional boundaries would mean reducing the number of people within each constituency hence increasing the real economic gains of constituents when properly and effectively utilising such funds.

 Population, as stated in section 54 (3) of the Constitution is one of, if not the main criterion that the CBC has relied on to reach its decision for the additional seventeen constituencies. This is indeed a valid consideration as population size is the main determinant of how fair public funds are distributed and expended within each constituency, especially in ensuing the constitutional principle …"that the number of inhabitants of each constituency shall be as nearly equal as is reasonably practicable" is upheld.

 At the outset, given the Constitutional mandate of the CBC, the validity of the proposed constituencies is unquestionable. The CBC is mandated by the section 54 (2) of the Constitution to…"review the number and boundaries of the constituencies whenever they consider this to be desirable and shall do so not later than ten years after they last reviewed them…" Hence, the Constitutional validity and correctness of the proposed constituencies is one that requires no further reckoning.

 However, on the other hand it is an issue that requires thoughtful consideration by all stakeholders and more especially the government of the day and future governments for that matter. We have come a long way and thirty-one years on our economy is still striving to gain real momentum for progress. Economic growth is low, if not stagnant or declining. The country's economic base remains weak and fragile and we are still miles away from creating an environment that boosts investor confidence and one that is conducive to entrepreneurial creativity and innovation. Our balance of trade is unfavourable and we are caught up in the vicious cycle of dependency and heavy reliance on our donor partners' financial deliverance.

 Our economy is in a sad state and literally public expenditure has continued to rise while revenue generation continues to be slow and in some sectors worryingly declining. Therefore, while the economics of the proposed new constituencies is not a constitutional prerequisite to decision making by CBC, it is a moral factor that requires serious contemplation. Undoubtedly, it is a very expensive exercise and the government and parliament for that matter must be cautious in their actions to ensure our ailing economy is stretched no further than how it is now.

 Even with the current fifty constituencies, governing the country is already a very expensive exercise. For instance, taking the 2009 Parliamentary Entitlements Regulations into consideration, an individual ordinary Member of Parliament requires around SBD$200 000 a year for salary and other entitlements. This amount subsequently increases if an MP becomes a Minister or holds any other responsible position within parliament or government. This excludes the ex-gratia and terminal grants which together amounts to SBD$200, 000 for an individual Member within a parliamentary term. In addition, to subsidise development within a single constituency through the specified funds as the RCDF, MDF, RLF, MPDF and the ROC-CMPF, it requires more than SBD$2 million a year. So apparently, as it stands, the amount of money spent for each of the fifty constituency each year, including the entitlement of each constituency's respective ordinary Member of Parliament and the various development funds is more than SBD$2.5 million, which means that for a whole term of parliament the tax payers and donors have to provide more than SBD$10 million for each constituency to ensure that Solomon Islands is governed and that development is fairly distributed among the constituencies. This, as we know, is exclusive of the recurrent expenditure incurred in the normal functions and operations of government which makes up the biggest proportions of expenditure borne by the tax payers of Solomon Islands, both in the public and private sector.

 And as recently reported in the media, for the proposed additional seventeen Constituencies, the country will need to generate an additional amount of SBD$46.7 million a year to finance the undertaking. This is a lot of money that tax payers have to incur if the proposal is passed by Parliament. Indeed, the economic and social implications of the proposal are worrying for the private sector. For if parliament is to pass the proposal and hence finance it, much of the costs will be borne by the private sector, through increased taxes, rates and so forth and in a situation where investor confidence is low, such an objective would be highly detrimental for Solomon Islands in the long run.

 The focus Solomon Islands needs now is not so much for the increase of governance instruments, but on improving the state of our economy, through increased investor confidence and empowerment of current market tools that have been put in place to boost private sector investment and governmental initiatives that would help to stimulate growth in the economy.

 Hence, it would have been beneficial for Solomon Islanders if the CBC would have also make moral considerations, based on the economics and public-value perspectives of the issue, rather than just limiting their consideration around constitutional prerequisites. In the current state of our weakening economy this is necessary, for the issue of increasing public expenditure in light of our ailing economy was the major factor of consideration that resulted in the nullification of the Parliamentary Entitlement Commission's decision to award $50 000 for a spouse of a Member of Parliament as terminal grant previously. Hence, why has CBC seen it fit to come up with an expensive proposal just a few months after the previous PEC decision was nullified? This argument is still alive and true for Solomon Islands and will remain so for many more years to come. Logically, the CBC should have been strong to counter external influences and should have only allocated new constituencies where they are needed most than to succumb to all requests they have received and even going a step further by proposing demarcations where no proposals were received from particular provinces. This is ignorant practice and must be discouraged.

 There has never been a time more crucial in the history of parliamentary democracy in Solomon Islands that calls for responsible leadership that now. The people are divided over whether to support or oppose the proposal, given its mixed attributes. But one thing is clear, that our economy will not be able to afford and sustain an additional seventeen seats. The private sector is only beginning to recover and even the income-generation capacity of government has not improved.

 So, indeed while the proposal is genuine given its constitutional affirmations, the government and parliament are also morally obliged to act responsibly, and thoroughly consider both the economical and public-value aspects of venturing into such a very expensive undertaking. The gravity of the economic implications of the proposed new constituencies calls for rational judgment than one that is based on constitutional shrewdness or political ambitions. It calls for responsible governance based on public value and the economic morality, measuring against the values of representative democracy and political absolutism. The government therefore must tread carefully in considering the recommendation of the Commission.


Thursday, February 4, 2010

WHY BEMOBILE? Digicel lelebet!

Dear Editor,

 After seeing a lot of views being shared in the media regarding the issue surrounding the right to provide mobile telephone services to Bemobile instead of Digicel by the Telecommunication Evaluation Committee (TEC), it became obvious that the decision was one that does not go down well with many Solomon Islanders, hence I too would like to share my views on the issue.

If I can recall correctly, the main reasons leading to the demand to open up the telecommunication market was three-fold. Firstly there was this issue of unreliable telecommunication services, especially with mobile telephone services and mainly mobile network congestions and so forth. Secondly there was this issue of cost, where the service provided was so costly and expensive that user talk time in Solomon Islands becomes relatively one of the most expensive in the world. The third issue was regarding the issue of accessibility to mobile telephone services, as the service was centralized only within urban areas, leaving out the rest of population residing in the rural areas. In Solomon Islands most people live in the rural areas and it is at the rural areas that the real economic base of Solomon Islands lies. Hence, there was this realization and recognition that the mobile telephone service must also be extended to the rural areas. 
So due to those three major issues, the ordinary people of Solomon Islands demanded a change of legislation so that another service provider is allowed to compete with the existing provider, which is none other than Our Telekom. The Telecommunication Act was consequently reviewed after some negotiations between the government and Out Telekom and the ordinary people were able to contribute their views in the process. During that time, an interested investor, Digicel was also very much involved in the process, even presenting as a party in the parliamentary review of the Telecommunication Act hence demonstrating its seriousness and genuine intention to invest in the telecommunication sector (mobile) in Solomon Islands. It even set up office in Honiara and went out on its own survey missions to identify best sites to set up mobile telephone infrastructure, equipment and facilities. Its commitment to invest in Solomon Islands therefore was unquestionable and unwavering regardless of the hostile environment it had found itself in, exacerbated by Solomon Telekom's tense dislike to free up the market. A brief look through the Bills and Legislations Committee's Hansard reports of the review will confirm this situation.

Consequently the Telecommunication Act was amended by Parliament and therefore a call for submission by tenderers was made. From what I gathered, and I stand to be corrected on this, only three companies responded, and out of the three only Bemobile and Digicel made genuine submissions. The TEC comprising all prominent Solomon Islanders, with the guidance and advice of the government-hired legal counsel from New York and elsewhere assessed the submissions and made their decision and as we all know the bid to provide mobile telephone service in Solomon Islands was won by Bemobile, a company that is based in Papua New Guinea.

 Bemobile, from my knowledge, which is subject for correction, has been based in Papua New Guinea for some time now and when it first came into operation in Papua New Guinea, its products were sold under PNG Telikom. In fact, some facts even show that Bemobile is a remake of B-mobile a defunct division of Telikom PNG. When its shares were sold, Telikom retained 50% while the other shares were divided among NASFUND (5%), Nambawan Super (5%), and the US-based Trilogy International Partners LLC (20%) and GEMS Ltd (20%). When this deal was announced in 2008 the PNG State Minister then described it as a "historic milestone for PNG's telecommunication industry" and indeed it was. But is the decision to have Bemobile instead of Digicel to provide mobile services in Solomon Islands also a milestone in Solomon Islands telecommunication services industry, especially for ordinary mobile service users?
Well the answer depends on how you look at it. However, looking back at the three main reasons as to why there was the need to open up the market, I strongly believe that it will never be the case at all for Solomon Islanders. The keywords in the whole equation are efficiency and reliability, two things that Bemobile has never been close to achieving in Papua New Guinea. As far as mobile service user's are concerned Bemobile has never made any great impacts in PNG's mobile services since its establishment. It has been described as highly ineffective providing a service that is expensive but very unreliable. On the other hand, no one can say those same sentiments about Digicel since it has entered PNG Telecommunication industry. All comments and feedbacks about Digicel have been very positive and encouraging. In addition, Digicel has wide experience in the industry, having operated in many other countries around the world hence its proven track record of success around the world. Bemobile is untested even around the region and its only hope is to bank on the experience of its Trilogy partners who are providing mobile services in New Zealand as 2 Degrees. However, even 2 Degrees remains greatly unpopular in New Zealand as it cannot compete with the might of other service providers such as Vodafone and Telstra. Having subscribed to their service myself at one point I have found it very costly and their promotion tactics misleading. I only used their service for a week to realise that I had made a wrong choice and had to switch back to Vodafone which is much more affordable and reliable.
The odds in the tender process in Solomon Islands therefore, taking into account the three basic issues mentioned earlier which gave rise to the need for an open telecommunication market were against Bemobile. Digicel was the stronger competitor and there was no logical reason that its bid was going to be turned down. As it turned out these odds were defied and the result was totally the other way round. The question now is, why did the TEC came up with the decision it made?

The Prime Minister made a public statement and emphasized that they (TEC and the legal counsel) had made careful assessment of the bids and based on their specified criteria selected Bemobile instead of Digicel. From his statement it was obvious that the decision swayed greatly from the original issues that needs addressing, namely efficiency and reliability, affordability and accessibility. These were the original concerns raised by ordinary Solomon Islanders which resulted in the review of the Telecommunication Act. I am sure you do not have to seek legal counsel from US-based experts to have a complete picture of the situation. These are people from developed countries who do not experience the everyday frustrations of ordinary Solomon Islanders in relation to the high cost of mobile services as well as its inefficiency and unreliability. Moreover, who would guess the independence of the US-based legal counsel when Bemobile is partly owned by two US-based Telecommunication companies?
Hence, in all regards, while I will not question the wisdom of TEC in regards to the decision it has made, I for one sees the decision to engage Bemobile as a highly economical and political one between Solomon Islands and Papua New Guinea governments. It was a decision highly influenced by the economical situation of both countries (due to the global economic crisis and the ailing economic state of especially SIG) and the bilateral relations of the two countries (through MSG) both politically and economically. 
This was clearly highlighted in the Prime Minister's statement when mentioned that Bemobile was willing to provide around SBD$10 million (or some money amounting around that) as a show of their genuine intention to invest in Solomon Islands. I find this as a very lame excuse because Digicel has shown its intension to invest in Solomon Islands and has already been pouring money into the economy long before the million dollar guarantee was made by the untested and little-known Bemobile. Even the name itself, Bemobile, is not market-friendly in Solomon Islands as it can be used to mean various things that are insensitive to our normal day to day language (pidgin).

On the perspective of the TEC, definitely Bemobile will be the best competitor for Our Telekom because it is weak compared to the mighty Digicel. Hence, Our Telekom will be able to stay in the market and may be increase its revenue base which is good for Solomon Islands economy. As we all know SINPF is the biggest shareholder of Our Telekom and SIG owns SINPF. Thus an increase in the earning of Our Telekom will be a direct bonus to SIG. On the other hand PNG Government will also benefit because Telikom PNG, which is partly owned by the PNG Government will also expand its revenue base. This is a very simplistic view of the situation but the list of trickle-down effects of the economic returns of the deal can go on.

The biggest concern however will remain that the ordinary people of Solomon Islands will be the biggest immediate losers of the deal. While Bemobile has made many mouth-watering promises, from the PNG experience I am quite certain that there will still be limited competition and therefore mobile services in Solomon Islands will remain highly ineffective and unreliable, unaffordable and inaccessible. Until another service provider like Digicel enters the market this situation will still remain unchanged.

Above all, while I will refrain from questioning the wisdom of the TEC in reaching their decision, I wish to reiterate that it was a decision made based on reasons that swayed greatly from the original issues that have contributed to the need to open up the telecommunication industry of Solomon Islands. I may be tempted to say that it is a bit selfish of them to sway away from the original cries of ordinary Solomon Islanders, but I am also mindful that the real economic returns of such a deal are yet to be fully realized. However, it is undeniable that the decision will have no positive effect on the mobile telecommunication services in Solomon Islands unless another strong competitor is allowed to enter the market.