PRIME Minister James Marape’s message to mining, petroleum and business communities in Sydney recently was that Papua New Guinea is one of the safest and most predictable investment destinations in the Indo-Pacific.
That might have sounded a wee bit hollow at the time he raised it.
Not any longer.
Following the United States-Israel and Iran conflict, that statement has gained substantial credence.
The world can no longer put all its energy eggs in the one basket passing through the Hormuz Straits.
For energy starved Asia, PNG is in the best spot geographically, as an exporter of crude oil and liquefied natural gas.
Overnight, PNG’s hydrocarbon prospects, are moving from borderline projects to highly feasible.
That means increased revenue for the country.
The country has other valuable resources that makes it a envy of many resource poor nations around the world.
PNG today exports rare earth minerals in nickel and cobalt which is in high demand as the world moves towards high tech gadgets that operate on batteries and chips.
PNG exports gold in large quantities and copper and silver.
As part host of the world’s second largest tropical rain forest, the economic wealth of its forestry is huge both when harvested or left untouched and marketed for its carbon storage.
Its fisheries and marine resources potential is virtually untouched at present.
A large collection of riverine valleys throughout the country and volcanic soil give high marks for PNG’s agricultural potential.
So why is it that a nation so richly endowed is aid and loans dependent today?
This paradox is not too difficult to unravel.
It seems a choice thing and management.
Maybe they are one and the same thing.
When Australia, perhaps reluctantly granted Independence to PNG, it did not particularly cut off the umbilical cord.
It judged the young nation not quite grown and mature enough to go it alone, perhaps rightly so, and decided to park some K300 million annually with the young nation as budget support.
There were no conditions attached, just untied aid.
And this continued year after year for over a full decade.
By about 1988 and 1989, Australia saw, perhaps too late that it had spoiled its protégé witless.
There was nothing to show for the billions – some K28 billion at about that time – that had been poured into PNG.
There began a move towards programme or tied aid.
And that is where we are today.
But the protégé had learnt what it meant to depend on the free money coming from kind-hearted donors.
Aid seemed too beneficial a gift to give up on a whim and so it was built into the budget and into the psyche of the young nation.
And there it has remained 50 years on.
While Australia flooded the country with aid, it did not do so much with trade. International Trade and Investment Minister Richard Maru points out the trade imbalance every so often.
“Australia has done very well out of our relationship with A$27 billion (about K76 billion) investment resulting in creation of jobs and increased tax revenues,” Maru said once.
“They are benefiting from our resources while our main export into their market is only gold (98.9 per cent).
“We cannot even sell a can of fish to Australia, and yet we can flood it into the European Union market.
“A couple of months ago, they pulled the plug on our Ox and Palm which is made from the beef we import from Australia and prepare here and which is canned by an Australian company.”
Aid keeps PNG dependent. Trade makes Australia and PNG deal on equal terms as equals.
Do others see it as Maru does?
According to the Australian government’s department of foreign affairs and trade: “PNG is Australia’s largest development partner, with an estimated US$637.4 million (about K2.7 billion) in Official Development Assistance (ODA) funding (2024–25), an expanding programme of blended finance (loans and grants) for infrastructure development under the Australian Infrastructure Financing Facility for the Pacific, and US$2.56 billion (K10.7 billion) in budget support loans (non-ODA) since 2019, linked to fiscal repair and economic reform.”
Trade implies work and independence and having something to exchange for money.
Aid on the other hand, is free but it inculcates a mentality of dependence and reliance on others to provide for our needs.
After 50 years and given the resources at the disposal of this country, dependence upon aid should not even been an item on our minds, much less in the budget books.
It’s about time that the Government takes drastic steps to seriously remove aid completely and move aggressively on trade.
And there, as we have said at the beginning of this discourse, it has a plethora of very attractive resources to sell the world.
