Free up customary land to generate wealth, says PM
The National, Copyright 2000
November 9, 2000
SOME degree of mobilisation of traditional land is necessary, most urgently around the country's main centres, Prime Minister Sir Mekere Morauta said yesterday.
Speaking on an issue which caused confusion and confrontation among many landowners when it was first seriously mooted in the early 1990s, Sir Mekere however, said this could not be done without consensus.
"The law clearly recognises customary title. The Government of Papua New Guinea recognises customary title."
Sir Mekere said therefore that there was a need for engagement and consultation between the State, customary landowners and other authorities to develop a mutually agreeable and acceptable system of mobilising land for urban development.
"This is not a new concept. The excellent work done by Sinaka Goava and his colleagues in the early 1970s in the Customary Land Mobilisation Committee, by the INA and Government in the early 1980s, and by the World Bank and Government in the 1990s, all point to this need."
Sir Mekere was speaking at the Urban Local-Level Government Conference which opened in Port Moresby yesterday.
He said that the issue for PNG, in terms of economic activity and wealth generation, was the ability to mobilise land, just as it was in terms of a sustainable and enjoyable urban lifestyle.
"The fact is that millions of our poorest people are sitting on the greatest part of the wealth of the nation, and they are unable to exploit it except largely in traditional ways for the production of subsistence crops.
"There has in recent years been communal agreement to allow traditional land to be mobilised for use in the developed economy -- notably in the palm oil sector. But such agreements require years and years of expensive negotiation and in the end do not fully free up the land for individual exploitation.
"Customary land by definition remains outside the legal system in terms of the permanently enforceable property rights required by business and commerce. It is therefore not a basis for sustaining individual entrepreneurial activity."
Sir Mekere said that in a developed economy a house and land are means of generating wealth by using them as collateral for borrowing for business. In the PNG economy however, land is not a tradeable commodity outside a small clan or tribal group and therefore it cannot be used to generate meaningful non-traditional wealth, he added.
He said PNG has undergone rapid urbanisation, but there is no real underpinning of domestic capital development. It is really a house of cards built on government activity, aid and foreign investment.
"Unless there is substantial growth of domestic capital generation, the house of cards will be blown away. Government activity has, of necessity, slowed. Aid and foreign investment are not permanent solutions. The solution is domestic private sector growth. But that cannot, and will not, occur unless land is turned into an asset that can generate wealth.
"I do not wish to rekindle the pointless and harmful debate between those who wish to open up all customary land immediately and those who want to lock it up forever. What I do wish to say, however, is that national economic independence hinges upon some arrangement that is acceptable to the providers of capital, either domestic or international, and those who hold the assets that can be converted into capital."
Sir Mekere said it was timely for the country to consider this issue now. "The informal sector is growing quite quickly, and there is a need to bring much of this activity into the formal sector.
"The absence of 97 per cent of our land from the internationally recognised system of property ownership, and therefore from contract law, is a severe impediment to the development of a domestic entrepreneurial class in the formal sector.
"So there are two very strong reasons why a form of land title that is adaptable both to custom and to the needs of business and commerce needs to be created.
"The two reasons, development of towns and cities and the development of the domestic economy, are related and are intertwined. The need to encourage both is becoming urgent. One of the fundamental ways of doing so is to address land issues."