Official Presentation by
Ian Kemish AM, Australian High Commissioner
Lowy Institute
Good afternoon ladies and gentlemen. I greatly appreciate the opportunity to speak to you about developments in Papua New Guinea, our closest neighbouring country. I thank the Lowy Institute - Michael and his colleagues, many of whom seem to be former colleagues of mine – for the invitation.
We diplomats speak often of people-to-people links as central to any relationship. This happens to be particularly true in the case of Australia and PNG. There are many Australians for whom PNG is part of their personal history. And there are others whose forebears fought and died at places like Milne Bay, Sananda, and Isurava on the Kokoda Track. There’s also a community of present-day Australians who find it difficult to get the country out of their system – professionals who keep returning for one more project, one more posting. I’m pleased to say that there are several such people at the Australian High Commission in Port Moresby.
Paradoxically, Papua New Guinea is a blind spot for many other Australians. Many in this country would be astonished by the extent to which Papua New Guineans understand what makes us tick – they are closely familiar with our politics, our culture, and of course the personal histories of every member of each team in the National Rugby League.
Given what they often hear about the wildness and savagery of the country through the media, many Australians would also be astonished by the people of Papua New Guinea.
A generous people: an enthusiastic crowd is guaranteed to emerge immediately if an expatriate’s vehicle breaks down, or gets bogged, or slips into a ditch. While this can be alarming to a newcomer, they will invariably only be anxious to help you get back on your way.
A hardworking people, as employers in regional Australia have discovered in the course of the Pacific Islander Seasonal Worker Pilot Scheme. The extraordinary determination and commitment I have witnessed on the part of some nurses, doctors, teachers and some senior public servants – in circumstances that would completely faze most of us – can be truly inspiring.
And an enterprising people. I think here of young boys who take it on themselves to fill potholes in the road, working in the hot sun in the polite hope that some drivers will stop and reward them for their efforts.
Speaking of innovation and creativity, I am reminded too of the Comfort Funeral Directors in Port Moresby, who last year publicised a special offer in the national press – free embalming for mothers on Mother’s Day.
Even the criminal class is not without its strange charm. Someone I know was recently car-jacked at gunpoint. Two days later she received a call from the perpetrators seeking to arrange to return the vehicle to her. They explained politely that they had only wanted to use it in a burglary. Having fulfilled this objective, they no longer had any need for it.
Ladies and gentlemen, I put it to you that Papua New Guinea is in almost every respect a country in transition. The changes underway there are potentially profound, and have significant implications for both PNG and Australia.
It is my view that Australian observers and commentators, with some notable exceptions, are not really doing enough to keep up.
For those who do follow developments in PNG, there can be a tendency to fall back on the weary cynicism that has developed among many observers of the country over the often-difficult years since Independence. I understand this temptation entirely. I was raised in Papua New Guinea in another, hopeful era – the period prior to Independence, when my parents and their contemporaries were working, in the narrow timeframe available to them, to prepare the first generation of leaders to shoulder the burden of self-determination.
Against this background the challenges facing modern PNG can sometimes seem overwhelming, and past failures to capitalise on opportunity have been dispiriting. Until relatively recently we had seen a steady decline in the resources made available by Government for key services such as health and education, and the degradation of key infrastructure – roads, ports, government buildings and the like.
But cynicism is unlikely to be of much use to us in the years ahead. The changes underway in Papua New Guinea today are profound, and important to Australia. And, 36 years on from Independence, the country is truly at a watershed.
Demographics tell an important part of the story. The population is probably growing by as much as three per cent each year, and has now reached something like 7 million. 40 per cent of the people are younger than fifteen. By 2030 the population will have grown to 10 million. It is projected to be approaching that of contemporary Australia by 2050.
Combined with the prospect of continued rapid economic growth, something I will discuss shortly, population growth is not without implications for regional dynamics.
It is also true that this level of change brings with it some serious challenges for PNG, putting strain on health and education services, and making the country more challenging to govern. Administrative capacity has been struggling for years to keep up with rapid demographic change, which is seen most acutely in the growth in informal settlements on the edge of key centres such as Port Moresby and Lae – a major contributor to the law and order challenge in these centres. The security situation, while generally misunderstood and often distorted, remains a significant impediment to the country’ s development.
The Australian aid program has played an important role in mitigating the difficulties that have arisen in post-Independence PNG. It has saved thousands of lives.
As Australians we should be pleased with what is being achieved under the Australia-PNG Development Cooperation Partnership, at this point in our shared history. The aid program is much more tightly focused in 2012 than it was even two years ago, and far less reliant on foreign advisers and consultants.
As High Commissioner I find it easy to speak clearly about concrete achievements in the aid program. Over the last year these have included the delivery of 1.5 million text books to almost 4,000 schools, the construction of hundreds of classrooms and teacher accommodation blocks, and subsidies to eliminate school fees in the first three years of school. The number of female court magistrates has been increased, thanks to the Australian aid program, from 10 in 2004 to 685 in 2011. Courts, corrections facilities and community centres have been built. And in the deeply problematic health sector, medical supply kits containing essential drugs have been distributed by AusAID to thousands of remote health centres.
But Papua New Guineans want more from their own Government. Despite some very promising moves by the current Government, there are still too many other players standing in the place where Government should be: donors, volunteers and the churches. And Papua New Guineans want to see substantial improvement. The health sector is still in very bad shape overall. At 733 deaths per 100 000 births, maternal mortality is the highest in the region. Preventable diseases remain widespread.
Papua New Guineans have also seen some real glimmers of hope in very recent years. Education is steadily being made more accessible to all – even if much more needs to be done - and they hold out hope that the very significant resources that are set to flow from the LNG project will play a transformational role in the country’s development.
The sustained economic growth that has been experienced in PNG in recent years is highly significant, and is increasingly being characterised, by many observers as representing an important structural shift.
PNG was the seventh fastest growing country in the world in 2011 – a year that sealed a decade of uninterrupted expansion. It is projected to grow by a further 8 per cent this year.
Industry has made the largest contribution to growth, boosted by the construction of the 16 billion dollar liquefied natural gas project.
Relative to PNG’s still small economy, the LNG project is very large indeed. Having visited the project site several times in the last two years, I have little doubt the gas will be flowing by 2015. The project has of course been subject to landowner claims, road closures, landslides and other disasters, but there is something inexorable about the way it is being rolled out.
There is little room for doubt that the project will deliver its commercial objectives, and that it will result in substantially increased revenues for the country. The estimates that the economy will grow by between 20 and 25 per cent in the year 2015 should be taken seriously. The number of other very significant mining projects in the pipeline – 60 to 80 billion USD worth - point to a positive ongoing picture for growth.
Revenues of the kind promised by all this resource development come with risks to manage. The terms “resource curse” and “Dutch Disease” are familiar to educated Papua New Guineans. And increased revenues do not, of course, guarantee development for all. Public sector weaknesses, and the extent to which corruption has infected this sector will be a real challenge in capitalising on this opportunity. Political stability will also be very important. And perhaps above all else, much more needs to be done to promote a stronger role for women in national decision-making if the country is to realise its true potential.
But the current generation of Papua New Guinean are acutely conscious that significant, albeit lesser economic opportunity have been missed before, and seem determined to avoid this happening again.There are many Papua New Guineans who want to change things, and it is them we need to support.
Translating economic growth into real development will be the ultimate test for the emerging generation of political leaders. Whether they can achieve this is the core question in Papua New Guinea today.
I speak deliberately about an emerging generation of leadership. Because PNG has also reached a political watershed.
The political dispute that broke into the open in December last year was at bottom a dispute about generational succession. It is clear that the Independence-era generation is passing.
Along with the LNG economy - with all its potential for the country’s development – generational succession will be at stake in this year’s national elections. Key political figures understand this point very well. These factors help explain the passions we have seen on display in recent months.
The new generation of leaders grew up in an independent Papua New Guinea. This makes them more confident in dealing with Australia. It naturally makes them more inclined to be selective in their international dealings, taking each external relationship on its merits. We need to understand and accept this.
So when we imagine the future shape of Australia’s nearest neighbour, we should be imagining a country led by people more inclined to be assertive and selective in their dealings with Australia, with a population approaching contemporary Australia. Over time it will likely play a different kind of role in regional affairs. It will remain confronted by very significant development challenges, and yet have access to unprecedented new wealth.
It stands to reason, then, that our relationship with PNG will change. We already recognise that development cooperation is already only one part of our relationship, and that others – trade, business and investment – are becoming increasingly important.
(Let’s be clear; there are many benefits in the relationship for Australia: two-way trade today is worth AUD 7 billion, and Australian companies have already won contracts with the LNG project worth at least three billion.)
The process underway to negotiate a broad-based economic cooperation treaty, to replace the Development Cooperation Treaty as the agreement at the heart of the relationship, points to another kind of structural shift. So do recent revelations that PNG is considering seriously a buy-out of the Gold Coast Titans.
But Australia will have an important supportive role to play in PNG’s development into the foreseeable future. Over the years, our focus will increasingly be to help PNG unlock its own resource potential, and to translate increased revenues into broad-based development. Education, and skills transfer, will need to remain at the heart of this.
Our detailed and intensive work to assist PNG in developing legislation for sovereign wealth funds to properly manage resource revenue is very important in this regard. PNG deserves respect for passing this legislation in place in recent weeks. As the Prime Minister indicated publicly during PM O’Neill’s visit to Canberra in October last year, Australia is ready to continue with this pattern of cooperation, providing training and support to those responsible for the management and implementation of the funds.
Let’s turn, finally, to very recent and current political developments.
It’s important to understand that the dynamic we saw on display in December and January – the contest between Sir Michael Somare and Peter O’Neill for the Prime Minister’s position - is already fading as the defining dynamic in PNG politics. Other dynamics are developing – between leading members of the emerging generation – as we approach the elections scheduled for June-July.
PNG’s key institutions are largely aligned on the question of who is currently Prime Minister. Certainly O’Neill is Prime Minister as far as Parliament is concerned. And as far as the Public Service heads or security forces are concerned. And indeed as far as the Governor-General of PNG is concerned – albeit after some initial uncertainty on his part last December.
While the overwhelming political focus is now on the imminent electoral contest, the events of December last year do remain subject to further consideration by the courts. The next step will be for the Supreme Court to consider Parliament’s assertion that its legislative action since early December last year, including the re-election of Peter O’Neill, renders obsolete the Supreme Court’s judgment of 12 December. That judgment, it needs to be remembered, focused on the conduct of O’Neill’s initial election in early August.
PNG’s institutions have been put to the test in the last several months. And there have been moments when PNG’s record as a democratic nation, which has consistently held elections on time in accordance with its constitution, appears to have been at risk. But common sense has generally prevailed, and in many ways recent events say some reassuring things about the country’s key institutions.
There have been three moments in the last few months when attempts have been made to get the security forces involved in the political dispute over the Prime Ministership. On 12 December last year, when a small but dangerous element of the RPNGC sought to prevent O’Neill’s access to Government House; a week later, when attempts were made to call out the PNGDF by the Somare group; and the short-lived mutiny on Australia Day.
On each of these occasions the leaders of the RPNGC and the PNGDF have shown remarkable maturity. They have refrained from becoming involved in what they rightly see as only a political dispute, despite the significant pressures placed on them. And they have exercised very good judgment in the disciplinary approach taken in dealing with the small disaffected elements within their midst.
The populace has certainly not been behaving as if there was a crisis. Papua New Guineans have a clear sense of the political dispute, but it is quite striking how everyday life and business has continued as normal in Port Moresby, and across the country.
There is no shortage of opinions about how Australia should conduct itself in PNG. The approach the Australian Government has taken through the recent turbulent period has been to be very active behind the scenes: encouraging restraint and persuading the parties, through confidential dialogue, to keep what is a political dispute in the political arena. This has involved some very clear personal messages at key moments from both the Prime Minister and senior Ministers. There have been times when there has been direct contact at the political level. We speak privately and, on the ground in Port Moresby, we speak publicly. We are not locked into one approach or the other.
What we have done in the last few months has involved some successful, creative diplomacy with the police and defence forces to keep the temperature down.
ADF and AFP colleagues from the High Commission have been instrumental in this regard, staying in close touch with their PNG counterparts, providing counsel when sought, and at one dangerous point in the crisis involving the police, bringing competing figures together informally to help bring the temperature down.
PNG politicians of all stripes agree with the central point we have been making – that the only hope of restoring real political stability lies at the ballot box, in this year’s national elections. This calculation informs the extent to which Australia is providing support to PNG to help ensure the success of these elections. I will not detail this support – the list is too long - but I can say without any doubt that the level of assistance being provided by Australia in 2012 is unprecedented. It includes very substantial assistance to the PNG Electoral Commission, in personnel, advice and equipment; a major air lift capacity provided by the Australian Defence Force; and the assistance of the AFP in helping the Royal Papua New Guinea Constabulary in building a national communications network prior to the election period commencing.
Ladies and gentlemen, in political terms this is the most significant contribution we can make at this pass – at this watershed moment - for Papua New Guinea. Many things hang in the balance. The potential for a brighter future for PNG is clear, and the risks are understood. A successful election which sees the emergence of an uncontested political leadership will be a key to the unlocking of the country’s potential.
Beyond the elections, the most helpful Australian approach will be one which understands that it is only Papua New Guineans who can bring about lasting change, but which remains committed to supporting those who are willing to lead.
In the end greater prosperity and security for Papua New Guineans is in our own interests. But to suggest that this is our only motivation is to misunderstand the depth, and warmth, of the Australia–PNG relationship.
Wednesday 21 March 2012