“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

Meet Mal Menaringmanu, known to many as HRH Charles, Prince of Wales.

During his brief visit to Vanuatu on Saturday, Prince Charles was greeted by one of the most lavish displays of kastom seen on these shores, arguably since his mother Queen Elizabeth visited on the royal yacht in 1974.

Hundreds turned out to see the Prince as he arrived at the Chiefs’ Nakamal in Port Vila.

Accompanied by Malvatumauri president Chief Seni Mau Tirsupe and welcomed by dozens of high ranking chiefs, the Prince walked on red mats laid the length of the roadway from the gate to the entrance of the nakamal itself.

On arriving outside the nakamal, Prince Charles presented the president of the Malvatumaturi with gifts.

The gifts given in return by the chiefs of Vanuatu were quite literally priceless. Chiefly titles are not bestowed lightly, and carry obligation as well as honour. To bestow a title on even a royal prince is something to be done with care and consideration.

The prince was dressed in chiefly regalia before the ceremony could begin.

Kastom clothes
Pentecost Chief Viraleo, leader of the Turaga kastom movement, bedecked the Prince with ornately woven kastom clothes. Although these clothes are normally worn over bare skin, the Prince was allowed to retain his suit and tie.

A leaf of the local namele palm was placed in the back of the Prince’s attire. The namele leaf is accompanied by extremely strong tabu. It is a sign of chiefly authority, and is present on Vanuatu’s coat of arms and in various other official insignia.

The mere presence of a namele leaf in a doorway or gate, for example, is enough to bar anyone from passing unless they have chiefly authorisation.

The Prince was then led to the side of the nakamal, where he was presented with a nalnal, a customary club and sign of authority.

Under normal circumstances, a newly designated chief would be expected to use the club to kill at least one pig. Although pigs were present at the ceremony, their sacrifice was omitted in recognition of the Prince’s stance against animal cruelty.

Chief Tirsupe and the Prince then shared a coconut shell filled with kava, an intoxicating beverage made from a plant thought to have derived in Vanuatu. It is a popular drink throughout the Pacific islands, and is a necessary part of many kastom ceremonies.

Prince Charles then received the name of Mal Menaringmanu. The name was chosen to reflect his high rank in the world. The name is derived from three words:

Symbolising chiefly authority
“Mal” refers to men in leadership position, it represents a bird, which symbolises chiefly authority.

“Manareng” or “Menareng” means a very high chief residing in the mountain of a king.

“Manu” means ‘people’.

Taken together, the title, according to the Malvatumauri council of chiefs, is “more than just a high chief. It is a name that reflects authority that is wise and unwavering and whose roots are as old as the mountains, and whose mandate… stems from a higher existence….”

A nearly unprecedented gathering of high chiefs from across the country was present for the event, an honour extended only to few.

Once the ceremony was complete, the entire delegation accompanied the Prince in an exuberant, uproarious procession led by kastom dancers from Tanna and other islands.

The procession led the Prince down to nearby Saralana Park, where a crowd of thousands stood by to welcome the Prince.

His first words of greeting, spoken in Bislama, or Vanuatu pidgin, were met with a resounding roar from the crowd.

Celebratory dance
Meanwhile, a massive kastom dance was unfolding. An estimated 200 men and women from Tanna performed a celebratory dance in the field, while another group performed a kastom story immediately below the stage.

At the end of the dance, Prince Charles was presented with a gift from a chief from one of the Tanna communities that claims Philip, the Duke of Edinburgh, as one of their own.

An honour guard of youth in kastom attire lined the front of the stage.

The Prince of Wales’ stay in Vanuatu was brief, but it was an occasion that will be remembered for some time to come.

The Prince Phillip followers achieved another coup before the day was done. In his final minutes before his departure, the Prince had a one-on-one encounter with JJ, who hails from Yakel village, at the heart of the Prince Philip community.

He passed on a message from the community to Charles’ father, and asked Charles to pass on a walking stick, to aid his return to Vanuatu some day.

Dan McGarry is media director of the Vanuatu Daily Post Group.

Article by AsiaPacificReport.nz