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Shortage of cash in wake of bank closures

PORT MORESBY, Papua New Guinea (PNG Post-Courier, August 11, 2008) – Kainantu – the gateway to the Highlands – is slowly grinding to a halt following the closure of the Bank South Pacific branch.

[PIR editor’s note: Eastern Highlands Province is located in the central region of Papua New Guinea’s mainland peninsula. Kainantu is southeast of Goroka in the Eastern Highlands province.]

Imminent collapse of the economy has forced the business community, leaders, police and the public to launch a major exercise to flush out criminals and convince the bank to reopen its branch.

The town yesterday reported an acute shortage of cash, forcing businesses to close shops.

People in the town and surrounding villages were making long and risky trips to Goroka and Lae to do their banking over the last six days.

The branch handles some PGK5 million [US$1.98 million] worth of transactions each day.

An emergency meeting was held on Wednesday to assess the situation and plan strategies to flush out criminals and restore law and order in the town.

"BSP is a business entity just like any other business in town. It is not the only one facing threats from criminals, all businesses houses are facing the same but we choose to continue operating.

"Why can’t it do the same instead to closing its doors? Now we are victimised," Raymond Ehesupe of Kainantu Oil Services said.

Since the closure of the bank, more than 200,000 people from the Kainantu and Obura/Wonenara districts and parts of Henganofi and Okapa, workers, government institutions, churches and businesses including the Kainantu gold mine had suffered.

Obura-Wonenara MP John Boito, Kainantu MP Sailon Beseo, Kainantu town mayor Lui Anis and presidents of local level governments joined the business houses to call on the BSP board and management to reopen the branch.

The concerned parties were funding the clean up operation with the Eastern Highlands Provincial Government giving K72,000.

The Kainantu administration said funds were provided for the police to maintain "around the clock" security surveillance and protect bank staff and their families, including the bank premises, and hunt down the people who were threatening bank staff.

Groups of people were engaged and they were going into communities to carry out awareness on crime and its impact on Kainantu.

THEY would also appeal for community help to apprehend known criminals.

"We are calling on the directors and management of BSP to reopen the Kainantu branch to service our people," Mr Boito said.

"The people of Kainantu and Obura-Wonenara are suffering and have been victimised over the earlier bank robberies in Kerema and Madang.

"We were taken by surprise to see and hear from the media that the Kainantu BSP branch is closed and staff fleeing for their safety."

He said the management of the bank had not informed the business community, the people and the leaders that they would close the bank.

Mr Boito who was also the deputy governor, said they would do anything to protect the management and staff of the bank.

MP Beseo said K340,000 was allocated by the government for additional policemen to be posted to Kainantu and the men would arrive soon to boost the strength of the men in town.

A public forum was being organised by the leaders to debate the crime situation, the closure of the bank and its impact on the businesses and lives today.

Papua New Guinea Post-Courier:

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