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| Pearls & Irritations | Republished from The Diplomat

Illustration by China Times
Illustration from The China Times

PORT MORESBY - While Australia and China have very different approaches in Papua New Guinea, both are working primarily with political elites - and alienating the PNG public.

Two recent financial deals that seemingly benefit PNG indicate the problems at the heart of the country’s political and economic outlook.

Separate agreements between PNG and two rival partners, Australia and China, will have superficial upsides for all parties. But the ‘devil in the detail’ of each arrangement lays bare the reality that both countries are getting it wrong and all three will likely suffer the consequences.

In April, during Chinese foreign minister Wang Yi’s visit to PNG, the two sides sealed new deals improving PNG’s access to China’s market. In particular, two separate agreements allow direct exports of PNG’s unroasted coffee and cocoa beans to China. Both governments also pledged to push forward negotiations on a broader free trade agreement.

Calling the agreements “a huge success,” PNG’s foreign affairs minister Justin Tkatchenko boasted that the deals will benefit “over 80% of our people that live off the land and [allow] the farmers to become self-reliant.”

The geopolitical underpinnings of the breakthrough are clear. Tkatchenko noted pointedly at the press conference to announce the signing: “I want to take this opportunity to reassure foreign minister Wang Yi of PNG’s support for the ‘One China’ policy since both countries established diplomatic relations in 1976.”

During Wang’s visit, China and PNG also signed a funding agreement on information communication technology cooperation, continuing Beijing’s increasing control over PNG’s communications infrastructure.

PNG’s ‘Look North Policy’ has redirected its foreign energies away from traditional partners like Australia and New Zealand and toward Asia. It is part of the Marape government’s vision to increase PNG’s economic independence through a wider reach into more lucrative and populated markets.

While Beijing has been following the kind of tied investment and loans and program-aid approach embodied in the latest deals –maintaining its aggressively pro-China Belt and Road initiative – Australia has been taking a different route.

Soon after Wang’s visit to Port Moresby, Australia announced a K1.6 trillion budgetary assistance package for PNG.

Australia has been willing to prop up PNG’s government coffers in unrestricted aid injections such as this for some time. Over the last four years, Canberra has provided K6.7 billion in budget support funds, untied to program or sector outcomes.

Each was a retrospective fix for budgetary shortcomings in PNG’s bottom line the previous year. Australia’s money has few accountability mechanisms, even self-serving ones, and no real Australian private sector involvement.

While both Chinese and Australian approaches are clearly and significantly different, both are in fact joined in terms of their negative outcomes for PNG….

However, PNG remains a country in crisis. Even as trade deals are done with Beijing, and government coffers are filled by Canberra’s generous handouts, Papua New Guineans are questioning who is actually benefiting from the supposed progress.

Criticisms, not only of the current government but of the prevailing economic and political system, are building. Many people consider the country’s leaders to be interested only in their own power and wealth. Faith in the PNG’s leaders is low.

Australia and China have very different approaches in PNG but they are united in finding ways to alienate the people they should be working with, Papua New Guineans themselves.

It’s clear that PNG’s political elite has been distracted by the region’s geostrategic tensions. PNG’s leaders have been caught playing China against the USA, the latter through its great ally Australia.

For Australia and its partners in the Pacific Islands region, the only sustainable direction is to redress this top-heavy approach. This means working more accountably, transparently and directly with the people of PNG and devising ways to bring them and Australians together.

For Canberra, a ‘third way’ favouring a people-centred relationship between Australians and Papua New Guineans will almost certainly provide not only greater regional stability but also plenty of popular support.

But a ‘third way’ would require new thinking, and that is a rare commodity in the current Indo-Pacific environment.

Carolyn Blacklock* Carolyn Blacklock. Following a successful corporate banking career working with Australian top tier banks, in 2009 Carolyn moved permanently to Papua New Guinea to establish the International Finance Corporation (the private sector arm of the World Bank) where she led the office for the next four years.

Following a stint overseeing key projects across the Pacific for Hawkins Infrastructure, New Zealand, Carolyn was engaged by the Government of PNG in Treasury as Specialist Adviser with a specific mandate to accelerate infrastructure development and create a pipeline of bankable projects to attract high quality developers and investors to PNG.

Carolyn was subsequently appointed by the PNG Cabinet as managing director at PNG Power, the country’s only provider of electricity. She led a team of 2,500 and an annual budget of over two trillion kina and oversaw a restructure of the company and revitalisation of assets, workforce and reliability.

Carolyn founded the PNG Business Coalition for Women an organisation supporting safe and respectful workplaces for women. In 2018, Carolyn raised K4.7 billion and initiated the US; Japan; Australia; New Zealand and PNG Electrification Partnership to provide access to electricity for 70% of Papua New Guineans by 2030.

Carolyn is known for her track record of taking large, complex projects through to successful delivery with high energy and compassion. She serves on the Board of St Johns Ambulance PNG and is completing a Master of Chemical Engineering (Sustainable Energy) at the University of Queensland. She divides her time between Port Moresby and rural Queensland where she owns and operates a small cattle breeding enterprise in the Brisbane Valley.


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Lindsay F Bond

That "people-centred relationship" was a component of outcome from the input by Chalkies during 50s and 60s.

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