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Papua New Guinea prepares for its most consequential elections since independence

By Jeffrey Wall - posted Friday, 10 December 2021


In that election the then Prime Minister Peter O'Neill led the PNC Party, securing 28 seats with 13.5% of the total vote. Second was the National Alliance Party, with just over 6% and 15 seats. No fewer than 19 parties secured at least one seat.

Why will the 2022 elections will be the most consequential in PNGs short history as a nation?

Since his election as Prime Minister in 2018, James Marape has been seeking to carve out a political agenda on the broad "Take Back Papua New Guinea" theme. In essence, it means that Marape wishes to reduce the level of foreign ownership in PNG – especially in the resources sector.

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The first result was the closure of the profitable Porgera gold and copper mine as a result of the government's determination to increase its "equity" in the project. Landowner unrest added to the forced closure. The mine remains closed despite extensive negotiations between the Marape Government, the provincial government, landowners, and the majority owners Barrack Mining (which has a minority PRC partner).

It was recently estimated that re-opening the mine (now scheduled for April next year) will cost over K1 million (1 kina = .28 USD). A very expensive result of "Take Back PNG", not to mention the hundreds of millions lost in revenue since the mine closed.

The "Take Back PNG" strategy has extended to every proposed oil and gas and mining project, with the national government vigorously negotiating greater equity in all projects. The strategy is one reason why the potentially very rich Wafi Mine in Morobe Province – majority owned by Newcrest – is being delayed for an indeterminate period….at a time when PNG desperately needs the investment, revenue, and jobs it would create.

In recent weeks the "Take Back PNG" agenda has taken on two quite different and significant (and worrying) aspects.

Firstly, the national government signed an exclusive agreement with a foreign owned company (with Australian links) to process all of PNG's gold production. At present gold producers make their own arrangements, as they have done for generations, with the state benefiting from taxes and other charges.

There is limited processing in PNG, and while the "value adding" principle is not without justification in a number of areas (such as fisheries, timber and some mining) the effective "nationalisation" of gold processing has rocked the confidence of the mining sector.

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Secondly, last week the Minister for Agriculture, without industry consultation, announced plans for a "central export agency" for the nation's agricultural production – notably coffee and cocoa.

Ominously, he said one reason why PNG needed a central export agency (controlled by the state) was that "China wanted 20,000 tonnes of PNG coffee, but he could not give it to them because the nation's 50,000 tonnes of annual exports was managed by private sector exporters.

As a seasoned coffee industry expert reminded me, China won't be interested in paying the world prices PNG currently receives for its coffee and cocoa exports.

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Article edited by Margaret-Ann Williams.
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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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