Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Biden’s ‘build back better world’ partnership must be big and bold

By Jeffrey Wall - posted Monday, 21 June 2021


Since I began writing on China's influence in Papua New Guinea and the South Pacific for On Line Opinion I have stressed that China is not slowing its expansionary strategies centred on the Belt and Road strategy.

Just about every week I have come across a new initiative that ties PNG and the South Pacific to more PRC debt, often for projects of dubious economic or social benefit.

The latest is the revelation that the Exim Bank of China lent PNG K95 million for a so-called fisheries industrial zone in Madang. So far K300 million has been spent on the project – yet there is ZERO to show for it. The site is overgrown with bush, and the only evidence of the project is a fence in a state of disrepair.

Advertisement

Not only does the PNG Government need to explain what has happened to the K300 million.

Some of it has gone on the repayment of the Exim Bank loan. It would seem that despite zero work on the project, Exim Bank has been paid back K50 million of its loan. In the meantime Australia has generously deferred repayment on at least one loan advanced to PNG in the last two years.

I have written regularly on the need for Australia to be "big and bold" if we are to even slow down China's growing influence in Papua New Guinea, The Solomons, Tonga, Vanuatu, Samoa, Fiji and Kiribati. The so-called "Pacific Step Up" though well intentioned has made no difference. It seems to have only prompted China to step up its own debt trap activity across the region.

There may just be a glimmer of hope that is about to change. The G& Leaders Meeting in the UK endorsed the United States President's "Build Back Better World (B3W) Partnership. The attached White House fact sheet outlined the Biden Administration's strategy. (attach)

The challenge for the Australian Prime Minister is to use his engagement with the G7 Leaders, and the leaders of other democracies such as South Korea and India, to put real substance and action onto the Biden Plan – and for it to happen with urgency.

The danger is that a basically sound strategy will be delayed and diminished by domestic politics in the US and other countries that will have to contribute to it to deliver it.

Advertisement

The absolute urgency that must be attached to the implementation of the plan is overwhelmingly evident given China's unrelenting, and undiminished, activity in our region. To its activity in PNG and the Pacific needs to be added a very aggressive move into Timor Leste, and increasingly Indonesia.

Australia, Japan, New Zealand, South Korea and the United States will have to share the burden of countering Belt and Road in our immediate region. The total public funding required will run into the billions – much of it in grant form. The private sector and financing agencies will need to contribute as well.

In this contribution I want to outline just two major nation-building projects in Papua New Guinea that Australia cannot fund on its own, but could contribute to with its democracy partners.

The economic and social development of Papua New Guinea is in serious decline. The possibility of social discord simply cannot be ruled out.

The policy areas I outlined in my last contribution, such as strengthening democracy, lifting direct funding for church run hospitals, health centres and schools, and assisting the PNG Government rebuild the failed health system ought to be Australian-funded priorities. By restructuring our aid program, and bringing in church and business partners, that can comfortably be financed.

But real and sustained economic development, and lifting living standards and opportunity for young people, requires two major steps, and it requires them to be funded well beyond our aid commitments.

The first initiative is one I have long championed. Papua New Guinea has woefully inadequate and unaffordable electricity supply for homes, businesses and industries. It has been estimated that barely 15 per cent of the 9 million population have access to affordable and reliable electricity.

Australia is committed to funding a solar power project. Even if it goes ahead it will make little impact. China recently inked a deal with the nation's state owned energy corporation for a hydro power project (Ramu2) which won't make a substantial impact and deliver power and even what it delivers will be very costly and uneconomic even for industry, let alone domestic consumers.

The only way to deliver affordable and reliable electricity to the majority of Papua New Guineans, and industry and business, is through the development of the Purari hydro power project in the Gulf Province. I have written here and elsewhere that it is expensive, but it is the only clear way to deliver affordable and reliable electricity across Papua New Guinea.

A decade or so ago the Australian energy sector was interested in the project on the basis that it could provide clean and green, and very cheap, electricity to Northern Australia. Sadly a lack of Australian and Queensland Government interest saw the proposal proceed no further than an initial study.

It will cost in the region of $6 billion, but it can be developed in stages. To that cost needs to be added the cost of delivery of generated electricity to Port Moresby, other major centres, and eventually rural communities. So it is not cheap, but if Australia, and other democracies in our region, want to help PNG achieve its goal of affordable reliable electricity it just has to happen!

The high cost and unreliability of electricity in PNG today is holding back economic development, and rising living standards. The answer can only be a major electricity generation project big enough to lift availability of power to the stated goal of m80 per cent of the population by 2030.

Australia, through the Snowy Mountains Power Authority and any number of state and private energy companies, has the technical and other capacity to deliver Purari in a reasonable time frame. Japan has the right experience as well as does the United States and New Zealand.

And the funding can be delivered under the Biden G7 initiative with a mix of public and private sector capital.

If Purari is built in a staged way it can eventually power the whole of PNG, and lead to the establishment of something PNG desperately needs – downstream processing industries.

There is strong support in Papua New Guinea for Purari. It is environmentally friendly and the fact that the Purari River never runs dry makes the project even more feasible.

It ought to be examined by a task force assembled by the Prime Minister and urgently discussed with G& members and our other friends in the region. But the process needs to start now, and include a significant private sector technical and advisory input.

The second project is arguably just as important. It requires a brief history explanation.

Papua New Guinea is in serious economic decline, with a real decline in living standards across the nation and especially for the rural majority.

Covid-19 is not the major cause of either. Poor governance, including the absence of agricultural extension services and rural road infrastructure, are the major reasons.

As I wrote recently the nation's main agricultural crops – coffee – say a 65 per cent decline in production last year. Recent reports indicate that this year may be even worse.

Unless steps are taken to raise the living standards and opportunity for the rural majority and for young Papua New Guineans in particular I can see enormous social problems not far ahead.

There is any number of steps that should be taken to avoid that catastrophe.

One factor that is discouraging rural communities from focussing on boosting cash crop and export crop production is the appalling state of infrastructure principally rural roads.

In many areas of the Highlands, and some Coastal communities, the roads are either non-existent or in a state of disrepair. The result is the cost of getting agricultural production to major centres and ports for export are uneconomic.

Australia could spearhead an initiative under the Biden proposals to identify the best potential and existing areas for substantial agricultural and fisheries production.

The construction sector in Australia, and our allies, could be marshalled to work with PNG construction businesses, to undertake a massive road infrastructure upgrading program. In some areas it would require entirely new roads, bridges and other infrastructure.

China has been lobbying the PNG Government for some time to agree to a multi-billion dollar "national highways program" that won't really benefit the rural majority or the nation as a whole.

It remains on the agenda. I suspect the requirement that the PNG Government guarantee the multi-billion dollar funding China insists on is an obstacle even for a government that has readily signed up to Belt and Road funding by Exim Bank and other PRC financiers.

Australia could drive an initiative to identify areas where substantial rural and main road infrastructure would enable farmers to lift agricultural production and secure better returns.

Again it needs to be given high priority as many informed observers share my view that with national elections due next year China will be pushing even harder in the coming months for PNG to actually commit to its expensive, and highly questionable, highways proposal.

The standout features of the two proposals I have outlined are simple – they are high priority, they will genuinely benefit the people of Papua New Guinea, and they are expensive!

But if the "Build Back Better World" Partnership is to be effective in matching and eventually eroding "Belt and Road" they simply must be BIG and BOLD!

Anything short of that will simply embolden China's leadership to challenge our influence and effectiveness in the region even more than it is already doing.

There is just one more word that needs to be added to BIG and BOLD – URGENT!!!!

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

4 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

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.

Other articles by this Author

All articles by Jeffrey Wall

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

Article Tools
Comment 4 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy