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Can Australia prevent Papua New Guinea becoming a failed state?

By Jeffrey Wall - posted Thursday, 29 April 2021


The position today when it comes to investor confidence could hardly be worse, and that is a factor Australia simply cannot ignore as it reviews its relationship with its closest neighbour.

I am fully mindful of course that great care has to be exercised when it comes to major policy decisions by the Papua New Guinea Government and how Australia can carefully and respectfully influence them.

But we cannot be expected to bail out the PNG budget with cash loans, low interest and probably never to be repaid, as well as a generous development assistance program and picking up the tab for at least a million vaccines without offering responsible views on how PNG can avoid falling into a "failed state" position.

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As the Namaliu Government proved way back in 1989-1992 the best way to save an economy from total collapse – and that is facing PNG – is to attract major investment if the resource sector. And it need not just be mining, oil and gas. It can also be agriculture and fisheries in particular.

The state of the major resource sector min PNG today simply has to be of profound alarm!

The Porgera Mine remains closed. Even if landowners can be persuaded to co-operate the mine is not going to be re-opened before mid-2022. The cost of restoring it will run into hundreds of millions meaning that the mine will not contribute to national revenue, and landowner royalties, for years.

The long promised Papua Gas Project has been announced – but major construction is probably a year or mire away. The Wafi Mine in the Morobe Province remains in limbo, and economy-revenue driven activity is probably three to five years away.

And the promised and government trumpeted Pasca Gas Project suffered a serious if not fatal setback last week when Twinza the project proponent effectively delayed any work on the project for another year at least.

This sad position comes at a time when world LNG prices and exports are under serious threat through over production and reduced demand.

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What the Australian Government has to do is to firmly encourage the PNG Government to seriously address the lack of confidence, and absence of investment, in the resource sector.

We should be offering technical support to bring negotiations forward so the serious investment PNG needs can be secured.

The "take back PNG" theme of the Marape Government must be acknowledged – but so must the real world!

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About the Author

Jeffrey Wall CSM CBE is a Brisbane Political Consultant and has served as Advisor to the PNG Foreign Minister, Sir Rabbie Namaliu – Prime Minister 1988-1992 and Speaker 1994-1997.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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