PNG'S ECONOMIC ADVISOR HAMIDIAN-RAD OFFERS TO RESIGN

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By Neville Togarewa

PORT MORESBY, Papua New Guinea (September 29, 1998 - The National)--- The government's chief economic advisor, Dr. Pirouz Hamidian-Rad, has offered to resign if the World Bank extends financial help to Papua New Guinea.

In a letter to Prime Minister Bill Skate, dated September 21, the former World Bank employee said his resignation will take effect on the day the bank approved a US$ 90 million (K 209 million) loan to Papua New Guinea.

He said he would not seek any compensation for voluntarily terminating his two-year contract and might sue the bank for "dragging my name in the press." Dr. Hamidian-Rad said his appointment had attracted a lot of attention because of the personal agenda of one of the bank's executives and he had become a victim for questioning the bank's economic reform policies.

"I have kept silent so far because I thought that the World Bank would not allow an individual's personal agenda to dictate its operational policies and its relationships with the shareholders. I guess I am proven wrong," he said in his three page letter.

According to a press statement the bank released on September 18 on private discussions Mr. Skate held with its managing director Sven Sandstrom, Dr. Hamidian-Rad said, it had allowed its policies "to be driven by the personal agenda of the Country Director for Papua New Guinea, Mr. Klaus Rohland."

"As I had alerted the government at the time of my recruitment, Mr. Rohland would not stop at anything short of my disappearance from the Papua New Guinea scene in order to satisfy his own agenda for the country - a supply-driven approach to push as much lending as possible," said Dr. Hamidian-Rad.

He said that as country team leader, he presented his first draft of the country assistance strategy for Papua New Guinea in January 1998, but Mr. Rohland strongly criticized him "for not having been aggressive enough and including more project lending operations."

He said he had argued that Papua New Guinea was receiving more project grants from Australia than it could handle and there was no need for additional borrowing for projects. Mr. Rohland had told him and one other person that he would stop him from getting the job as chief economic advisor.

Dr. Hamidian-Rad resigned on June 1 and started work for the government on June 15 under IKUB Consulting Pty., Ltd.

"The objective of IKUB was to assist countries and governments in need of economic reforms to develop their policy agendas rather than being dictated to by external financiers," he said.

"I have also maintained that the objective of my assignment has been, and is, to help Papua New Guinea to develop and prosper without too much reliance on external borrowing," said Dr. Hamidian-Rad.

"It now seems that our objective might not materialize because the World Bank team feels threatened by my involvement in the program.

"The press release issued by the bank and the media in Papua New Guinea as well as the Opposition believe that my disappearance from the scene would result in automatic release of funds by the bank in support of Papua New Guinea's program."

He told the Prime Minister he wanted Papua New Guinea to prosper as much as Mr. Skate did. "That is why I would like to reiterate my previous offers, and state that I will submit my resignation to the government the same day the World Bank executive board approves the Social and Economic Development Program Loan, in the amount of US$ 90 million in support of Papua New Guinea's reform program, as designed and negotiated to the satisfaction of the government," Dr. Hamidian-Rad said.

"Such approval must be secured before the end of this year so that it could finance the 1998 budget in the amount of US$ 60 million. I would also like to state that I would not seek any compensation from the government.

"Once I have resigned, I could then deal with the bank through legal channels for dragging my name in the press and coming after a small boy who has questioned their self-proclaimed monopoly in knowledge of economic reform policies, the reforms they claim are supposed to be owned by the client countries!"

In a letter to the World Bank's managing director Sven Sandstrom dated September 25, Treasury and Planning Minister Iairo Lasaro defended the government's decision to appoint Dr. Hamidian-Rad, saying it was "in the best interest of Papua New Guinea."

The Prime Minister's office confirmed receipt of the letter and said the matter would be discussed by the full Cabinet when it meets before Parliament today.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

HAMIDIAN-RAD'S CONTRACT WORTH K 2 MILLION (US$ 880,000)

PORT MORESBY, Papua New Guinea (September 29, 1998 - The National)---Chief economic advisor, Dr. Pirouz Hamidian-Rad, is contracted to the government at a cost of K 2 million (US$ 880,000) over two years through his company IKUB Consulting, Ltd., contract documents show.

The K 2 million contract, while made in the name of his company, is for his services, and does not cover other IKUB consultants who render services to other areas of government.

Dr. Hamidian-Rad, who is the managing director of IKUB Consulting, said "any additional services would be covered by different contracts."

He said to date there have been four IKUB consultants whose services have been engaged by various government authorities under individual contracts. They include former head of the Office of Higher Education, Dr. Naomi Tulaha, Dr. John Korimo, Dr. Ali Khani, and Dr. Willey for periods ranging from two to four months.

Dr. Tulaha is engaged with the newly formed Rural Development office, Dr. Korimo is a consultant with the National Planning Office, Dr. Khani was engaged for privatization of public enterprises and communication, and gas legislation but left the country in August, while Dr. Willey was engaged at the Bank of Papua New Guinea.

Former journalist Cletus Ngaffkin is engaged by IKUB for its public relations work, including the publication of the Treasury and Planning department weekly newsletter, Treasury Weekly, Dr. Hamidian-Rad said.

IKUB Consulting was registered in the tax haven of British Virgin Islands on April 23, 1998 as an "international business company."

It has two directors, Dr. Hamidian-Rad who is an Iranian, as managing director, and Amir-Alikhani Alinaghi, a French national.

IKUB Consulting was registered in Papua New Guinea as an overseas company under the Companies Act of 1997 on July 14, 1998, but began business on June 1, 1998. Its business address in Papua New Guinea is: c/o Law Partnership, Allens Arthur Robinson, Level 11, Pacific Place, Musgrave Street, Port Moresby, but the company operates from a suite at the Islander Travelodge Hotel in Waigani.

Its principal activities include "consulting services in economics and finance, industrial development and private sector development in Papua New Guinea and the Pacific islands."

The contract employing Dr. Hamidian-Rad, which began on June 1, was signed in Port Moresby between Treasury and Planning Minister Iairo Lasaro on behalf of the State, with Dr. Hamidian-Rad signing on behalf of IKUB, and the document was witnessed by the present Governor of the Bank of Papua New Guinea, Morea Vele.

For additional reports from The National, go to PACIFIC ISLANDS REPORT : Newspapers/The National (Papua New Guinea).

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