“When we don’t have any of these copper and gold mines anymore, where are we headed?”

This quote is by Jerry Garry, managing director of PNG’s Mineral Resources Authority (MRA).

According to Garry, mineral resources from large mines (both current and pipeline) will be exhausted in 40 years. Oil and gas will also eventually run out.

This should be a wake-up call for Papua New Guinea.

First, it is just over a generation away.

Second, PNG is overly and increasingly dependent on the mining industry for exports (80 percent of total export revenue) and economic growth.

The resources sector was only about 10 percent of the economy at independence in 1975, but is about 25 per cent today.

Third, despite a long history of mining in the country, socio-economic development is still lagging, as highlighted by poor performance in health, education, governance, and law and order.

Indicators languishing
The country’s human development indicators are languishing against compararable economies, and we are unlikely to achieve Sustainable Development Goals by 2030, or Vision 2050’s ambitious goals.

Last, the country has made little progress over the years in diversifying and expanding the economic base to enable broad-based, inclusive and sustained economic growth and development.

The government and its policymakers understand that the mining industry is capital-intensive and, given its enclave nature, has few linkages with the rest of the economy besides the jobs it creates and the contracts it provides to local landowners.

The main contribution the industry makes should be the transfer of resource rents to the government through royalties, taxes and profits (where the government has an equity stake).

But this is where the problems start.

First, the contribution of the resource sector to government revenue has been underwhelming — less than 10 percent in recent years.

Second, it is incumbent upon the government to deliberately and sustainably invest the resource rents in the rest of the economy, including through infrastructure development, strengthening of governance and institutions, as well as building human capital by investing in sectors such as health, education, water and sanitation.

Billions lost to corruption
“This has not happened consistently across the country, with billions of kina lost to corruption and mismanagement.

Third, and underlying these two problems, PNG seems to be subject to the “resource curse”, which is when a country is unable to successfully translate proceeds of its abundant natural resources into gainful economic growth and development outcomes for its people.

No one can dispute that PNG’s resource rents have not produced commensurate development outcomes for the country and the people.

There is a large body of literature on PNG which attests to this situation.

Understanding the problems is one thing, but what matters is addressing them. And given the ominous warning by the MRA, actions are needed fast, and now.

Prime Minister James Marape has embarked on a process to increase the proceeds of natural resources to national stakeholders, though how successful he is remains to be seen.

The more fundamental challenge facing the newly elected Marape-Rosso government is to diversify the country’s economic base and to promote the non-mining economy.

Bold step needed
The new government has taken the bold step of allocating new ministerial portfolios to coffee, oil palm and livestock.

However, this is more a symbolic step than anything else.

If we really want to encourage coffee growers, what is needed is better roads and security, neither of which a coffee minister can deliver.

Deliberate and sustained policy interventions are needed to lift the country and the people out of the resource curse, and forge a development pathway that is ultimately driven by sectors such as agriculture, fisheries, forestry, tourism and manufacturing, including downstream processing of the country’s agriculture, fisheries and forestry products.

To boost these sectors, the overvaluation of the exchange rate needs to be corrected.

This will address the problem of forex rationing, which is hurting businesses, and in the long run will improve agricultural exports by fetching higher prices for farmers/exporters.

This is important policy ammunition used to fight the Dutch disease associated with the resource curse.

Diversification options
Diversification would also include tapping into the country’s abundant renewable energy sources, such as hydro, geothermal and solar, to improve the reliability, affordability and coverage of electricity.

Initiatives to build capacity within key government departments and agencies, such as the treasury, central bank, national planning, health, education and the MRA, will be important, as well as investment in research and academia to support public policy.

Also needed are structural reforms to modernise and improve the efficiency of the country’s state-owned enterprises.

This has been on the agenda of successive governments, but it requires commitment and sustained effort to ensure that the policies and reforms are implemented.

There is only a handful of resource-rich countries in the world — including Botswana, Norway and Australia — that have fought off the resource curse and achieved broad-based economic growth.

The citizens of these countries enjoy a higher level of living standards, because their governments made deliberate policy decisions to invest the proceeds of their mineral and oil resources to support other productive sectors such as agriculture and the services sector.

Mid-course correction
They have also strengthened their governance to support growth and development.

What will we in PNG have to show for when our gold and copper as well as our oil and gas are exhausted?

We need to make a significant mid-course correction to our country’s development pathway now, through deliberate and sustained policy actions.

We must turn the proceeds of our country’s abundant natural resources to building the non-resource economy.

The resulting broad-based economic growth would lift the living standards of the rural majority and the urban poor, and prepare us for when PNG’s minerals and petroleum run out.

Andrew Anton Mako is an associate lecturer and project coordinator for the ANU-UPNG Partnership. He has worked as a research officer at the Development Policy Centre and as a research fellow at the PNG National Research Institute. This research was undertaken with the support of the ANU-UPNG Partnership, an initiative of the PNG-Australia Partnership, funded by the Department of Foreign Affairs and Trade. This article appeared first on Devpolicy Blog, from the Development Policy Centre at The Australian National University.

Article by AsiaPacificReport.nz

By Stefan Armbruster of SBS World News

WARNING: GRAPHIC CONTENT

Papua New Guinea has responded with outrage over the killings of at least 22 people, including two pregnant women, in tribal violence Prime Minister James Marape has called the “saddest day of his life”.

The Post-Courier reported that at least 22 and up to 24 had been killed, after earlier reports said 16 had died.

Marape warned the perpetrators “I’m coming for you” and that they faced the death penalty after the slaughter in his electorate of Tari-Pori.

“Today is one of the saddest day of my life, many children and mothers innocently murdered in Munima and Karida villages of my electorate by Haguai, Liwi and OKiru gunmen,” Marape said in a statement on his Facebook page.

READ MORE: Guerilla warfare – 24 killed in retaliatory attacks in Hela

Health workers told local television EMTV that 16 people died in a 30 minute revenge attack on Monday and “it was difficult to identify the bodies because they were all chopped to pieces”.

Photos of the dead were posted on social media showing their bodies gathered up in mosquito nets.

Red Cross condemns killings
The International Committess of Red Cross (ICRC) regularly provides humanitarian aid after tribal fighting and wants access to the conflict zone.

“It’s quite horrifying, we can’t independently confirm the casualties but these sort of actions is exactly what we encourage all parties to the tribal fighting in the Highlands to completely avoid,” said Ahmad Hallak, head of mission in PNG for the International Committee of Red Cross (ICRC) told SBS.

“In the last year at least I haven’t heard of any attacks that have killed so many innocent bystanders not directly involved in the fighting, it’s definitely concerning and I hope it’s not the start of a trend.

“With the introduction of modern weapons we are seeing more and more the humanitarian consequences that you see in countries that dominate dominate the news, on a much smaller scale, but similar humanitarian consequences.”

Tribal fighting in the PNG Highlands is commonplace but now it is fuelled by tensions over wealth distribution to rival impoverished landowners from the country’s billion dollar resources boom.

“There is a lot of disgruntled land owners who are dissatisfied with the gas agreements, they’re not satisfied with how the government and how multinational corporations have done deals with them,” said Chimbu highlander Bal Kama, a PhD candidate in law and governance at the Australian National University (ANU).

PM warns attackers ‘time is up’
PNG police said it followed the killing of six people in an ambush after a compensation ceremony on Saturday.

“This is not a tribal fight where the opposing villages face each other on field [sic], this is guerrilla warfare,” chief inspector Teddy Augwi told the Post-Courier.

“The relatives of the deceased retaliated outside Karida village in an executed plan, raided and using high-powered rifles shot dead the … people.”

Marape warned the attackers their “time is up”.

“To all who have guns and kill and hide behind the mask of community, learn from what I will do to criminals who killed innocent people, I am not afraid to use strongest measures in law on you,” he said.

“Last week I responded to question on death penalty on the floor of Parliament, it is already a law.”

PNG has not repealed capital punishment though no-one has been executed for decades.

“With this incident the prime minister has made a commitment to see that the death penalty mechanism is put into place, the law has already been passed,” Kama said.

“Whether that’s a good thing or not, that’s a matter for debate, but I think we’ll see some development on that shortly.”

Local authorities in Tari have called for the government to order the deployment of security forces protecting resource mining projects to protect local communities.

“My electorate in Hela Province hosts LNG and power transmission line for Porgera gold mine and since 2012 I have been requesting for more permanent police yet Konedobu police headquarters has not supported me,” Marape said.

“How can a province of 400,000 people function with policing law and order with under 60 policemen, and occasional operational military and police that does no more than band-aid maintenance.

“In memory of the innocent who continue to die at the hands of gun-toting criminals, your time is up, before I had someone else to report to, now I have no one else to report to but the innocent you kill.”

When he was elected in May, Marape promised to make PNG the “wealthiest black Christian nation” on Earth using resource royalties.

Stefan Armbruster is the Brisbane-based correspondent for SBS World News, reporting on Queensland and the Pacific region. This article is republished with permission.

Article by AsiaPacificReport.nz

By Sylvester Gawi in Singapore

I hope you are reading this with ease and a positive mindset to help change the course of this beautiful country of ours – Papua New Guinea. My first time experience here has made me  raise questions about how our economy has been mismanaged over the last 40years.

I’ve come to know this place from reading books, magazines, watching videos, documentaries and even looking it up on the internet.

From the countless travel magazines in secondhand shops in Lae in the 1990s to the LCD screens of the most sophisticated smartphones accessed by almost all school age kids in PNG today, Singapore has literally changed in front of our eyes.

I read with much interest about how Singapore has transformed itself from a small island nation to become one of the most developed countries in the world.

Singapore’s rise to power
Singapore has a rich history of civilisation. It was once colonised by the British empire. During the Second World War it was invaded by the Japanese, and later taken over again by the British after the war when Japan surrendered to the Allies.

The failure of Britain to defend Singapore during the war forced the people to cry for merdeka, or self governance. It 1963, Singapore became part of Malaysia, ending  144 years of British rule on the island.

-Partners-

Since gaining independence from Malaysia on August 9, 1965, Singapore has since progressed on to be the host of one of the biggest and busiest air and sea ports in the world.

Lessons for PNG
Papua New Guinea has some of the world’s largest natural resource deposits in gold, copper, timber and now the Liquefied Natural Gas (LNG) or the PNG LNG Project which is worth US$19 billion.

Papua New Guinea’s GDP per capita in 2017 was US$2401. The highest so far was in 2015 when our GDP per capita was US$2402.

Singapore’s GDP per capita continues to grow annually and it is now US$55,235.

Singapore has been able to made its way to becoming a developed country in just under 53 years of Independence. Its government subsidises housing, medical bills, education, public transport and so on, and increases economic opportunities for middle to low income earners.

It is an island country without any gold, copper, nickel mines, LNG project, organic coffee, timber or any other natural resources. It is a very strategic port of transition where goods and raw materials are brought here first then transported elsewhere across the world.

We also have the Lae port in PNG, which is one of the the most most strategic ports in the Southern Hemisphere. It is where cargoes from across the world transit into the Australia and even the Pacific.

The Lae port and the production line of businesses operating in Lae generates well over K111 million for the national government coffers annually as internal revenue. The Lae port serves as the only seaport that controls import of raw materials and exports of organic coffee, cocoa and other organic products for international markets.

Better roads, schools
We could have better roads being built, good schools, hospitals and life improving facilities for every tax payer in the city. Our SME sector should have fully flourished by now if we have the government putting its paper policy to work.

Squatter settlements and law and order won’t be major impediments for growth and development. People’s mindset would have changed and people’s movement in search for better service delivery would have been narrowed down.

Everyone here in Singapore respects each other despite their color, ethnicity and religion. There is no littering, loitering or even people sleeping on the streets. You will get caned by the police if you don’t dispose your rubbish in the right place.

The Singaporean government has made it its responsibility to ensure every citizen learns to appreciate and look after the environment. There are separate rubbish bins for biodegradable and non-biodegradable. No smoking in public or even spitting as you will be fined and dealt with accordingly.

All this boils down is a need to for a change in attitude in Papua New Guinea. If we change our attitude and start respecting each other and the environment we live in, we will create a good future for our children.

Since we don’t change ourselves, we have kept on voting self-centered individuals to represent our interest in Parliament for the last 40 years.

A politician once told me, he has plans and dreams to reclaim the beauty of the city he grew up in the early 70s. But he added that that dream would only be achievable if the people changed their mindset. Also one member of Parliament won’t make the change happen, it needs the majority to stand up for the people’s needs.

Last generation
“represent the last generation of Papua New Guinean kids who have used a kerosene lamp, a payphone, drank from a Coke bottle and listened to music on cassette players while growing up. We have anticipated so much to change for the better, but we are seeing it the other way around.

Life is getting tougher.

Our politicians should stop coming to Singapore for medical treatment alone, they should start focusing on making PNG become the next Singapore.

A wise man once said, if we continue to tell lies, it will surely become the truth. If the government can fool us for 40 years, they might continue to sell PNG’s resources for their own interest.

Sylvester Gawi is a Papua New Guinean journalist who blogs at Graun Blong Mi – My Land.

Article by AsiaPacificReport.nz