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West Papua

West Papua reducing contributions from 12 percent to 8 percent (currently employees contribute 6 percent of their salary each month and employers contribute a further 6 percent; contributions were to be reduced to 4 percent each). The proposed legislation would also have reduced the amount of the fund permitted to be invested overseas from 50 percent to 15 percent. This was seen by many as a way to increase political interference in the provident fund. However, the Minister of Finance maintained that this move was proposed due to the need to maintain currency stability, given that foreign currency reserves were already very low. The bill was withdrawn for the midyear session of Parliament; it resurfaced for the November session of Parliament but was again withdrawn. In August reports that the provident fund was being pressured into buying long-term government bonds that were not of interest to commercial banks because they were not a good investment increased concern about political interference in the provident fund (VDP, 2 Aug 2003). Molisa has also been involved in internal struggles for leadership in the Vanua`aku Party, and some have questioned his role in government. The political events of 2003 have been turbulent and many http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Contemporary Pacific University of Hawai'I Press

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Publisher
University of Hawai'I Press
Copyright
Copyright © 2004 University of Hawai'i Press.
ISSN
1527-9464
Publisher site
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Abstract

reducing contributions from 12 percent to 8 percent (currently employees contribute 6 percent of their salary each month and employers contribute a further 6 percent; contributions were to be reduced to 4 percent each). The proposed legislation would also have reduced the amount of the fund permitted to be invested overseas from 50 percent to 15 percent. This was seen by many as a way to increase political interference in the provident fund. However, the Minister of Finance maintained that this move was proposed due to the need to maintain currency stability, given that foreign currency reserves were already very low. The bill was withdrawn for the midyear session of Parliament; it resurfaced for the November session of Parliament but was again withdrawn. In August reports that the provident fund was being pressured into buying long-term government bonds that were not of interest to commercial banks because they were not a good investment increased concern about political interference in the provident fund (VDP, 2 Aug 2003). Molisa has also been involved in internal struggles for leadership in the Vanua`aku Party, and some have questioned his role in government. The political events of 2003 have been turbulent and many

Journal

The Contemporary PacificUniversity of Hawai'I Press

Published: Aug 31, 2004

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