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Corruption in PNG: curse of the rent seekers

Martyn Namarong in BrisbaneMARTYN NAMORONG | Supported by the Chalapi Pomat Writing Fellowship

IN TRYING TO UNDERSTAND the roots of corruption in PNG, I draw upon my lifelong interaction with the resources sector in my country.

I grew up in a logging camp in the Western Province, and I appreciate the services provided to the local community by the company.

It was there that I came across a Tok Pisin translation of extracts from the Barnett Inquiry.

The inquiry was an investigation of widespread corruption in the forestry sector. Its revelations led to changes to forestry laws and regulations and the introduction of log export monitoring.

I believe the unintended consequence of the tightening of forestry regulations has been the recent land grab known as Special Purpose Agriculture Business Leases (SPABLs or SABLs).

Tomorrow I will present a paper on Corruption in PNG at the Australian National University in Canberra. My trip to Canberra and later Sydney is part of an award for the work I did in reporting the findings of the Commission of Inquiry into Sepik SPABLs.

There I saw extensive logging and very little agricultural activity, which led me to believe that land had been acquired under the pretext of agriculture in order to circumvent strict forestry regulations brought about following the Barnett Inquiry.

If the Forest Authority was granting Forest Clearance Authorities (FCAs) for agroforestry, one would expect to see plantation agriculture crops mixed with plantation trees. This would by definition be called agroforestry. Based on what I observed and what I know, there is no agroforestry, just rampant logging activity with token agricultural plots.

As I’ve moved on in life, I confront the opportunities and challenges brought about by the mining industry. It is through my close association with the industry that I have come to appreciate the Curse of the Rent Seekers.

The mining industry has been the main engine of growth in PNG in recent times, providing about one-third of the government’s budget. But, as observed by anthropologist Dan Jorgensen, this was not what the founding fathers of PNG intended the nation to be. Jorgensen writes:

In attempting to reconcile generic notions of tradition with modernist hopes, the ideology of the Melanesian Way also grappled with one of the worries that preoccupied planners and politicians in the state’s early days, namely, the tension between egalitarian goals and the reality that development often produces inequality

If you wish to understand what type of nation PNG was meant to be, read the Somare government’s Eight Point Plan of 1972 which was subsequently incorporated into the Constitution as the National Goals and Directive Principles.

This Papua New Guinean model of development focused on small holder agriculture and small business owned by Papua New Guineans and was successfully implemented in the first decade of independence. 

As long time PNG watcher, Professor Ronald May has observed:

During the first decade or so of independence, economic performance was generally satisfactory: although increases in real GDP were small (averaging 1.4 per cent over the period 1976- 1985) they were, except for one year, positive; there was a gradual diminishing of dependence on aid; and, under the government’s ‘hard kina’ strategy, economic management was sound

Jorgensen states that a World Bank Report report in the 1970s laid the groundwork for the shift from this Papua New Guinean model of development to the current neo-liberal capitalist model in the 1980s.

As the world through Ronald Reagan and Margareth Thatcher moved towards embracing Milton Friedman’s neo-liberal capitalism, PNG shifted from empowering local people through agriculture and small business towards facilitating the exploitation of natural resources by multinational corporations.

The shift in development policy recommended by the World Bank meant that, by the 1980s, PNG became increasingly dependent on revenue from extractive industries while other sectors of the economy declined, exposing the nation to shocks in the resources sector.

When revenue from Panguna ceased as a result of the Bougainville crisis, the state could barely plug the holes in the budget despite the existence of Ok Tedi and the Kutubu oilfields.

As well as land conflicts and environmental concerns, corruption also became widespread. Even in the nineties, the Barnett Inquiry had highlighted many corrupt practices involving public officials and logging companies.

Most recently, the O’Neill government will be investigating the abuse of funds earmarked for landowners associated with Exxon Mobil’s LNG project and a recent report by the National Research Institute has called for greater transparency in the disbursement of revenue from the Porgera mine.

The best times in PNG’s history as an independent nation were between 1975 and 1985 when a Papua New Guinean model of development that focused on agriculture and small scale activities was being implemented.

Following the shift to the World Bank’s neo-liberal model, conflicts and environmental issues dogged the nation along with governance issues surrounding the distribution of wealth.

Between 2005 and 2010, mining and petroleum projects paid K12.7 billion to the government amounting to about one-third of revenue.

Despite the growth in income from resource rents there is widespread inequality as Sir Mekere Morauta highlighted in a 1996 speech:

GDP has grown five times but the distribution of income is more skewed and less equitable than in 1975. Nominal per capita income has more than doubled, but 80 per cent of the population actually earn less than the 1975 average. Corruption, both petty and profound, permeates society today

Corruption, when viewed from the perspective of the World Bank’s neo-liberal model of development, is the distortion of the distribution of natural resource wealth in favour of a few multinational corporations and a powerful rent-seeking class.

It is this misapplication of the wealth of a nation that I refer to as the Curse of the Rent Seekers. The excessive demands by so called resource owners and the kickbacks demanded by public officials are classic examples of such greed-driven rent seeking behaviour.

The World Bank has now backing the Extractive Industry Transparency Initiative to address problems created by its prescribed model of development. But the EITI is just window-dressing by the World Bank as it does not address the fundamental issue of how those rents are distributed by the rent collectors.

I have tried to show the reader that the shift from the Papua New Guinean model of development to the World Bank’s neo-liberal model of development has created the problems that were foreseen by the founding fathers when they warned about the Darkness of Neon Lights in the Constitutional Planning Committee Report.

It would be easy to say corruption concerns ethics, but let’s ask ourselves if the current model of development provides the conditions necessary for unethical behavior to thrive.

Award winning writer Martyn Namorong has just begun a two week study tour of Australia. He is in Canberra this week and will be visiting Sydney next week. If you would like to meet Martyn, email Ben Jackson here


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Bernard Yegiora

A very accurate analysis by Martyn.

The problem was we could not continue with our home grown model because we are part of the international system that was and is highly classed.

As a country on the periphery according to the international relations theory of Marxism, we had to comply with the trend spearheaded by the developed countries in the core.

The core countries and their agenda was pushed by international financial organisations like the World bank and IMF.

Thus, it was a strong current to go against as we risked being tagged as an undemocractic or authoritatian nation.

The core will still find ways to invade, like in Iraq or other weak countries who want to take an independent path.

The point is that the change from a home grown development model to the neo-liberal model was unavoidable and was the current trend during the time period Martyn mentioned.

Ian Fraser

Here's the thing. Martyn's right: of course getting money for nothing -- the politicians just give permission to companies to use others' land -- generates corruption.

And of course education is inappropriate, producing (at best) graduates ready for non-existent clerical jobs.

But...all that was not only obvious, but widely acknowledged, in the early 90s when I first worked in PNG. And the literature from the 70s & 80s suggests these points were pretty well-known then too.

So? So it's not a matter of knowledge. It's motives. People still vote for immediate goodies, which rent-seeker politician can indeed provide.

People would rather have one wantok student actually get the government job or professional career than have all their children properly prepared for life, so they keep the lottery curriculum.

Hoping voices like Martyn's eventually open enough ears...

Alex Harris

Amen Martyn.

The clan-based Melanesian Way - subsistence wantoks sharing what they have with wantoks, making a living from modest farms and enterprises - is socialism at it's idyllic best.

It doesn't matter what our own politics; what PNG had for thousands of years worked.

I remember villages full of healthy, happy people, a pristine environment, rich with exotic flora, birds and wildlife.

What has development brought?

Are the majority of people better off?

Are the majority of people happy as they go about their day?

Are they still able to feed their wantoks? Their clan? Their family? Themselves?

Do they have still have pristine rivers and safe fishing?

The answers to these questions will also answer the questions surrounding the build up of PNG's military for the purpose of protecting the mines from the people.

Friedman is a pox on the planet still. Nowhere more so than PNG.

David Wall

Martyn, In the past few years I've made visits to PNG. On each occasion the state of the nation seems to be getting worse.

In my rather uneducated way I've been asking myself, why? Your article gives me a lot of answers!

The villages in and around the Sepik River seem never to be visited by government representives, both civic and political.

In the so-called colonial times officers of District Services, Health, Agriculture and even Public Works made yearly and 6-monthly visits.

Airstrips were maintained by the government and the missions. From these airstrips medical emergencies were flown to places like Angoram and Wewak.

It is true that for a number of years directly after Independence things seemed fairly OK.

One thing I wonder about is: what happened to Somare's early idealism?

Martyn, your insights I find most informative, thank you.

David Kitchnoge

"The best times in PNG’s history as an independent nation were between 1975 and 1985 when a Papua New Guinean model of development that focused on agriculture and small scale activities was being implemented" - Martyn Namorong.

Spot on!

I grew up in my village during that decade and I can attest to the development model working at that time.

How much I crave to go back to that model (small scale, family/clan based agriculture and small scale enterprises)supported by the power of the aggregates.

A real broad based, bottom up approach to economic development where the individual family unit can nod in agreement to the GDP growth numbers when we see them published in the newspapers.

And not be disorientated by some fancy number we can’t see, feel and touch.

Michael Dom

With you Martyn.

And thanks Phil.

'Notta to da left, notta to da right, justa keep it ina da groove".

Phil Fitzpatrick

Martyn's article is well worth contrasting with John Fowke's article on education, where he largely sheets home the blame for a dysfunctional system onto idealistic "lefties".

John makes a valid point. Educational models are responsible for the mess to a large extent but I'm not sure they were so much the child of the left.

The vision of Papua New Guinea's founding fathers on the other hand was a distinctly left wing approach.

And, as Martyn points out, it worked in the first ten years after independence until the World Bank, pushing distinctly right wing policies intervened.

Right wing politics support social hierarchy and social inequality. Right wingers variously regard these conditions as either inevitable, desirable, natural and normal. They sometimes refer to it as a 'natural law'.

So for the right wingers the exploitation of resources in Papua New Guinea is good, as is the poverty of the rural majority.

So while the left wing might have stuffed up education it is the right wing that has created the terrible economic situation.

Left or right are just as bad as each other.

Best stick with the original vision.

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