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It’s make & more probably break time in Papua New Guinea

PNG flag on rockfacePHIL FITZPATRICK

A LOT of people in a lot of countries are closely watching what is going on in Papua New Guinea at the moment.

In Australia, the USA and China there are nervous resource developers wondering whether they should review their investment plans for the country.

In Australia, in particular, the government is keeping its fingers crossed that it doesn’t have to launch a RAMSI-style rescue mission.

About the only country that might be happy about the recent events is Indonesia because PNG’s troubles are taking the heat off West Papua.

But it’s in the other Melanesian states, like Vanuatu, Solomon Islands and New Caledonia that most interest is being generated.

In the Melanesian world Papua New Guinea is the big banana. Economically and demographically it casts a giant shadow over its near Pacific neighbours.

They know that if Papua New Guinea descends into turmoil, or becomes the dictatorship that it is rapidly heading towards, the repercussions for them will be dire.

They know that their own political classes will take the lead from whatever happens in Papua New Guinea. Papua New Guinea will be the future blueprint for Melanesia.

When Vanuatu started falling apart, for many of the same reasons now affecting Papua New Guinea, it took an outside military intervention to stabilise the small nation.

When the Solomon Islands imploded the same thing happened for the same reasons.

In between, Papua New Guinea experienced its own cataclysm in Bougainville, mostly brought about by rivalry over development spoils.

All of these events should have been salutary lessons in how not to govern a country. But the lessons don’t seem to have been learnt because it is now happening in Papua New Guinea. The big banana looks set to join its tinpot cousins.

Yet there is still hope that the country will pull out of its downward spiral. That hope lies firmly with its ordinary people, with those brave people like the students who don’t want to see their nation become another failed Pacific state.

It’s quite a challenge but the gauntlet has been well and truly thrown down by the events of last Wednesday.

At the moment Papua New Guinea is being run by criminals. There is no other way to describe the politicians in charge.

They may not have been charged, arrested and convicted but by any other definition they are criminals. There is little difference between them and the underworld mafia in other countries.

In fact, their corruption, greed and plundering of the public purse while their people suffer makes them much worse than any of those mafia dons. At least those men look after their own people. The politicians of Papua New Guinea can’t be bothered.

There are foreign businessmen, and no doubt local businessmen, who are weighing up their options right now. They are planning their exit strategies in case things get worse.

Conversely, there are carpetbaggers, conmen and fraudsters eyeing Papua New Guinea as a potential new playground, just as they did before they set sail for Vanuatu and Solomon Islands.

If you thought the big companies in Papua New Guinea were bad wait until these darlings arrive.

It is make or break time in Papua New Guinea.

Let’s hope it is not the latter.

Comments

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Johnny Blades

Vanuatu's Lands Minister Ralph Regenvanu, a key mover behind the new government's current efforts to bring about political reform through major constitutional amendments in a bid to address long-running governance chaos, says that as they negotiate these reforms, PNG's situation is at the forefront of their thinking. They look at what's happening in PNG as a warning sign.

Chris Overland

While I agree with Phil's analysis, I think that his comments apply much more broadly.

The neo-conservative ideology which now dominates economic thinking across the world, has undoubtedly lifted more people out of poverty than at any previous time in history. China has been especially successful in doing this.

Simultaneously, it has also created severe and growing disparities in wealth within and between nations, by concentrating economic and political power into the hands of a relatively very small class of political, bureaucratic, corporate and managerial "elites".

Other than at least some of the politicians, few of the members of this new class are able to be held accountable for their actions, via either elections or the application of the law.

This is an extremely dangerous development: history has demonstrated the undue concentration of economic and political power invariably leads to its abuse.

Thus, the actions of Mr O'Neill and his cabal of supporters fit easily within this wider picture.

PNG's flawed democracy means that they cannot effectively be held to account for their actions and the significant level of control they can exert over the electoral process means that they have a good chance of manipulating events to stay in power.

Think about how Robert Mugabe or Hugo Chavez or Fidel Castro have entrenched themselves and their successors in power.

So what of the future for PNG and the world at large?

The boom and bust nature of unfettered capitalism is a well proven phenomenon and nothing has changed that can or will prevent this pattern from repeating itself.

What has changed is that a combination of the undue concentration of wealth in the hands of a few, serious regulatory failure on the part of governments and the implementation of vast new technologies designed to make the world's financial system more "efficient" (i.e. unimpeded by either pesky regulators or any prudential constraint), will ensure that the next crash is of truly cataclysmic proportions.

In my assessment, it is already far too late to prevent this from occurring. The evidence for the looming disaster is everywhere: it is just a matter of time.

In case readers think that I am just a stupid catastrophist, I urge you to ask yourself a few simple questions, such as: how come the injection of at least $US5 trillion in "quantitative easing" by various central banks has made no discernible difference to economic growth?

Or, just how does it make any economic sense for the Bank of Japan to require depositors to pay it to hold their money?

Or, how can it be sustainable for a house in Sydney to have an average cost equal to 12 times average annual earnings?

Or, just how exactly is the Chinese government going to deleverage its economy to reduce its current debt mountain from 250% of GDP to something sustainable?

These are, I humbly submit, not trivial questions to be answered by simply saying that the market will somehow, miraculously, pull itself back into equilibrium without any serious economic damage occurring. History show quite plainly that such a facile answer will be totally wrong.

If I am right, then PNG will simply become some of the collateral damage, along with many other countries as well, including Australia.

It would be naïve to think that PNG's political, bureaucratic and business elites, who have conspicuously failed to manage prosperity well, will somehow "muddle through" an economic calamity. They won't.

Harry Topham

PNG appears to be at a crossroads.

Unless the current brood of PNG politicians face up to their responsibilities and start behaving in a more statesman like adult manner then the current unrest in Moresby could spread outwards.

Once people become emboldened by the actions of courageous protestors and the word spreads it is most likely that the unrest may spread throughout the whole country.

If such a scenario develops then the thin blue line of protection maybe stretched well beyond its capabilities to contain further civil unrest.

If this occurs will the politicians then have to call upon the assistance of the Defence Force to maintain the status quo?

One can only hope that commonsense will prevail.

`Robin Lillicrapp

Maybe the scenario you describe will also drive out the loggers and carpet- baggers as they see fleeing prospects of wealth making.
The prelude to that happening is awakening the public mindset: a job presently undertaken by a vocal student movement.
With parliament out of action till August, it may work in the student's favour to confront local members on their home turf, if they dare present themselves to scrutiny.

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