PNG PM SOMARE NEEDS A TOUCH OF MAGIC

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By Mark Forbes

PORT MORESBY, Papua New Guinea (August 8 2002 - The Age)---Puri puri -- magic and myth -- permeate every aspect of life in Papua New Guinea, including politics. That much was clear this week inside parliament's Haus Tambaran, a chamber modeled on a Sepik spirit house, when the country's pre-eminent son rose again and was elected Prime Minister.

When Sir Michael Somare, the nation's founding father, was last elected prime minister in 1982, torrential rain drenched a parched Port Moresby. Locals credited "The Chief's" magic.

This time, his third stint as leader, they only had to look to New Britain province for portents when the supposedly dormant Mount Pago volcano erupted, spewing clouds of smoke and ash, but leaving surrounding villages untouched.

The son of a colonial-era policeman, Somare inherited the traditional name Sana -- "fighter and peace maker." There is no doubt this spry, diminutive 67-year-old will need as much of these qualities as he can muster to fulfill his colleagues' predictions of returning the nation to the optimism and spirit he forged by leading it to independence in 1975.

When he meets Australian Prime Minister John Howard next week, Somare will emphasize the bond with PNG's former colonial master. Somare knows Australia's ongoing support is vital if his nation is to be rescued from economic and social catastrophe.

In turn, Howard will demand that structural and political reforms continue, if he is to keep pumping more than AUD$ 400 million (US$ 212,160,000) a year into the struggling nation. Strategically, Howard is desperate to avoid the disintegration of Australia's nearest neighbor and has signaled any additional assistance would be tied to reforms.

Questions hang over the effectiveness of Australia's massive aid program -- just look at the AUD$ 10 million (US$ 5,304,000) AusAID spent to ensure a fair election, and the fraud and carnage that followed.

Despite PNG's dependence on Australia, which provides about 20 percent of its revenue through aid, Howard can expect a more feisty relationship with Somare than with his favored predecessor, Sir Mekere Morauta.

It was Somare, a staunch nationalist, who persuaded Gough Whitlam to bring forward independence, a move now seen as a critical mistake in PNG's development. Indeed, Somare's ideas have sometimes backfired: as foreign minister in 1992 he wiped AUD$ 300 million (US$ 159,120,000) off the value of PNG resource stocks by demanding a drastic reduction in foreign control of mining firms. He also has close links and business dealings with Taiwan, but has already moved to reassure Australia that PNG's one-China policy will remain.

Somare was thrown out of the highest office after a no-confidence vote in 1985, after a period of instability and indecisiveness, so doubts remain over whether such a consensus politician has the strength of leadership to steer his nation through the sort of troubled times the country is experiencing today.

Even his National Alliance party considered dumping the chief before this week's vote. "It's a great thing to prove a point," Somare said after the session. "I am not out, I am still around."

After being out of power for so long, Somare admitted he was on a steep learning curve. "After 27 years coming to do the same job you have to adjust and change yourself, but I've got good lieutenants," he said. He foreshadowed a team-driven approach.

"I do not profess to be an economist, lawyer or accountant," he said. "My role as Prime Minister is to facilitate, encourage and use the best experience."

Somare said priorities were to stabilize the economy and reverse a ballooning budget deficit, and to deal with street crime and systemic corruption.

Head of PNG University politics department James Chin believes the tasks are almost insurmountable.

"There is no good news on the horizon," he said. "The economy is in such deep paralysis the new government basically has no policy options. There appears to be a consensus among the PNG political elite that this is the last chance."

Dr. Chin said major public-sector cuts, along with an economic "savior" project were necessary. By the end of the decade almost every major resource project in PNG will have dried up, oil production is declining by 20 per cent a year and the ravaged Bougainville copper mine is unlikely to reopen.

There is only one immediate prospect -- a proposed gas pipeline to Queensland worth an estimated AUD$ 7 billion (US$ 3,712,800,000). But Premier Peter Beattie announced last month that a key client, a new power station in Townsville, would instead use locally produced gas generated from coal. Somare has vowed to pursue the project, but questions the level of Australian support, with proposed new gas fields in the Timor Gap another potential competitor. Meanwhile, project partner Mobil has said it will walk away if it cannot sign more prospective customers by the end of the year.

The local Chamber of Commerce president, Michael Mayberry, said businesses were closing, share values were plunging and foreign investment was fleeing.

"We are close to becoming another Argentina," he said. Only rapid action would halt a descent into economic collapse, he said.

A confidential briefing to the incoming government this week revealed a massive blowout that will necessitate urgent mini-budget cuts. With falling revenues and a pre-election spending spree, including subsidized school fees for all, the balance sheet has plummeted into the red.

Bank of PNG governor Wilson Kamit has revealed he warned the Mekere government in May and again in July that monetary stability was under threat. As the kina reached a record low, a new budget severely cutting spending was imperative, he said.

"The high level of expenditure to date is unsustainable," he said.

Australia wants the bloated public sector to be pruned, but there is also a desperate need for more infrastructure spending. The Highlands Highway, the road through PNG's resource-rich central provinces, is almost impassable. Gangs blockade the route, robbing the few vehicles brave enough to travel a road with potholes so deep they could hide a standing man.

Pogera gold mine manager Ken Midson warned last week the mine had only three days of supplies left and would soon have to lay off 600 workers if the highway was not reopened. Along the highway, banks and foreign-owned supply stores have closed because of looting.

Somare has promised to tackle matters of law and order, but the problem appears out of control. Robbing and raping, raskol gangs rule large parts of Port Moresby. In the Highlands, drugs and political power plays have funded an arms race that has literally left police cowering inside locked stations.

He has also promised an anti-corruption commission, but the presence of colorful figures such as Bill Skate -- a self-proclaimed raskol gang "godfather" -- in his coalition is cause for concern. During the campaign, several MPs were charged with fraud, including the then finance minister, Andrew Kumbakor, for misappropriating tens of thousands in gaming funds. One provincial governor contested the poll from his jail cell -- finishing third.

To tackle these issues, Somare will need political stability to hold together an unwieldy coalition of 13 parties and 20 independents. He has a breathing space of at least 18 months, as new laws prevent no-confidence votes during that time.

But questions over the integrity of the poll could undermine the regime, and fresh elections called in six fraud-ridden Highlands provinces may spark further violence.

The leading candidates in these polls pose a legitimate question -- how can the electoral commission rule out their polls due to fraud while declaring many others?

Winners have been announced in seats where most votes were destroyed or hi-jacked at gunpoint. Some hijacked ballot boxes were later returned and counted, with thousands of votes for one candidate and none for the others.

In Chimbu province more than double the number of votes were cast than the number of eligible voters.

In Enga -- where armed men blew up three containers full of ballots -- Governor Peter Ipatas was elected, despite his son being filmed filling out hundreds of ballots in his father's name inside the polling booth. One failed candidate, prominent local journalist Frank Kolma, said the experience had left him drained and empty.

"You don't pay, you don't get votes, that is the rule in PNG politics," he said.

With all these impediments, along with a looming AIDS catastrophe, an overstretched health system and the region's highest infant mortality and lowest life expectancy rates, the father of the nation will need all his magic to save his troubled child.

Mark Forbes is The Age diplomatic correspondent.

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