PNG’s Bakani defends board’s overseas travel expenses

The governor of the Bank of Papua New Guinea (PNG) has hit back at one of his predecessors, who claims a board meeting held in the Federated States of Micronesia (FSM) is an “outrage”.

Former governor Mekere Morauta expresses concern in a public article, published on September 20, that the central bank wasted resources in sending the board overseas for its meeting.

“Can the governor tell us how much this trip is costing the bank?” asks Morauta. “How much is it costing for the entire board of eight members, the assistant governors, board secretary and other support staff to travel to and stay in Micronesia?”

The former governor says it is “an insult” to the general public and businesses that are owed money by the government to see the central bank “wasting money in this matter”.

Speaking exclusively to Central Banking, current governor Loi Bakani says the trip was necessary in order for the bank to maintain a connection with outer regions: “As a contemporary central bank with a strong commitment in recent years to advance the cause of financial inclusion, the bank has a practice of holding two board meetings in the capital and the other two meetings outside.”

The governor adds it is “very disappointing” that criticisms focus on “a random misguided estimate of cost”.

In the past, the bank has held board meetings in Alotau, Milne Bay province, Mount Hagen and Manus province. Micronesia is the furthest the board has travelled for a meeting.

The governor believes “spreading the geographic scope” of the bank’s board meetings has proven to improve governance and support for the central bank, in terms of raising awareness of its financial inclusion initiatives.

Morauta disagrees in the statement: “No doubt he [Bakani] thinks his junketing around the world is also of no interest or importance to the people of PNG, but he is wrong. The man is clearly not fit to be the governor of the central bank.”

Bakani addresses the cost concern, stressing the bank considered a “cheaper option” but the cost of the trip to Micronesia turned out to be equal to that of holding the meeting in Manus.

“The board made a conscious decision to support the recently opened route by [PNG national airline] Air Niugini to the FSM, which would promote public awareness of business co-operation between the two countries,” the governor says.

Members of the bank’s board also used the trip as an opportunity to meet with other government organisations and businesses, the governor adds.

“The meetings will lead to [a] mutual ongoing benefit for PNG and FSM, which would have likely not developed had the board meeting been held in another town, at the same cost,” Bakani tells Central Banking.

The governor does not provide a figure for the cost of the trip, but says the bank will continue to “carefully” evaluate meeting venues.

This is not the first time the former governor has failed to see eye to eye with Bakani. Earlier this year, the governor hit back at claims the central bank had become a “puppet of the government” after Morauta accused him of “irresponsibly” financing the deficit.