PACIFIC ISLAND FORUM DOES LITTLE FOR PNG ECONOMY

Commentary

By Brian Gomez

PORT MORESBY, Papua New Guinea (The National, Oct. 24) - Another big Pacific Islands get-together is taking place next week in Nadi, Fiji similar to one that took place in Papua New Guinea last year.

For Papua New Guinean leaders like Sir Michael Somare, this is a great opportunity to meet like-minded leaders from other Pacific Island countries, particularly PNG’s close Melanesian neighbors.

There will be many opportunities to socialize and generally have a good time in between official meetings on the Pacific Plan, concerns about the impact of global warming and other environmental issues.

However, much of the official meetings will be overshadowed by discussions on the Julian Moti affair, including the extradition issue involving Australia and PNG and the continuation of RAMSI in the Solomon Islands.

Australian prime minister John Howard and his New Zealand counterpart, Helen Clark, will also be there as the region’s only two developed economies and contributors of significant aid throughout the region.

The foreign editor of The Australian, Greg Sheridan, signaled in an article yesterday that Howard was going to display Australia‘s "tough new stand" when he meets other Pacific Island leaders.

Many Papua New Guineans will recall that it was another "tough stand" by Howard that resulted in the dumping of a long tradition of having the Pacific Island forum headed by a national from one of its developing member countries so an Australian could become secretary general.

This made a lot of sense for Australia because the Pacific Islands Forum is a convenient vehicle for Australia to call the shots, as it did last year when Howard categorically vetoed a unanimous request from Pacific Island leaders for Australia and New Zealand to consider acceptance of seasonal workers from the Pacific.

On a previous occasion, Howard rejected pleas for assistance to combat global warming after the Australian government had vetoed the idea of becoming a signatory to the Kyoto Protocol.

In terms of per capita production of carbon dioxide, Australia is one of the worst polluters on the planet, but Howard has consistently said he could not back the Kyoto Protocol because it would cost Australian jobs.

In recent times, there have been academic studies done on the value of getting the Pacific Island nations to adopt the Australian dollar as a regional currency and there has been a concerted push for greater regional cooperation through the Pacific Plan.

Unfortunately for Papua New Guinea, the PIF [Pacific Islands Forum] is not much use except from the perspective of a gathering place for like-minded Pacific Island countries.

As a member country with the largest economy and largest population, PNG derives little benefit as a member of this grouping and, indeed, continuing membership will act as a drag on its efforts to develop a sounder and more dynamic economy.

Trade between PNG and most other Pacific Island countries is so small it can barely be measured in many cases.

In a broad sense, all the effort to get Fiji to open up its market to PNG-made corned beef represented a waste of energy and resources.

Many PNG leaders have recognized the importance of cultivating better economic and trade linkages with Asia, as indicated by the "Look North" policy since the early 1990s.

In recent times, former foreign minister Sir Rabbie Namaliu -- he was misidentified in a picture with Sheridan’s article as being Sir Michael Somare -- has said that he would like PNG to become a full member of the 10-nation Association of South East Asian Nations.

But for as long as PNG remains committed to the PIF, such a goal is unlikely to be realized because of the additional costs of having diplomatic representation in all 10 Asean capitals.

The level of PNG exports and investment from each of the five key Asean countries -- Malaysia, Indonesia, the Philippines, Thailand and Singapore -- would far outweigh PNG exports to all other developing island economies in the Pacific.

But the Pacific Island mentality is such that opportunities in many of these countries go begging because Australia, through the PIF and other mechanisms, keep Papua New Guineans and other island nations fixated on largely looking south.

For decades, Papua New Guineans have accepted the view of Australian experts that rice could not be grown in this country.

Yet it is grown throughout Southeast Asia as well as in China, India, Australia and the United States.

At a recent Gawad Kalinga breakfast meeting at the Crowne Plaza, one speaker pointed out that a Filipino youth volunteer, not having heard the "expert view" that rice could not be cultivated in Gerehu Stage VI, initiated a rice project.

Local landowners are now happily looking forward to their first harvest.

PNG has much to learn and gain from closer relations with its Southeast Asian neighbors, especially in its endeavor to promote agriculture.

Malaysia was the pioneer of the natural rubber industry in South East Asia and Los Banos in the Philippine is the home of the "miracle rice" that contributed to big productivity gains everywhere.

Closer linkages will certainly not stop there because companies, especially in Singapore and Malaysia, are investing billions of dollars on commercial opportunities in countries all over the world.

If PNG can attract US$1 billion to US$2 billion annually in corporate investments, one could only imagine the impact this would have on economic growth and on efforts to reduce widespread levels of poverty.

Closer linkages with our South East Asian neighbors will show the way to double-digit annual economic growth instead of the pathetic 3 percent levels we now enjoy.

Take neighboring Indonesia, which continues to struggle because of the impractical reforms thrust on them by the IMF and World Bank soon after the 1997 crisis.

Foreign direct investment into Indonesia was running at US$30 billion a year until 1997.

Between 1967 and 1997, you could call this the golden Suharto era, per capita incomes in Indonesia grew 20-fold.

If that sounds impressive, just remember that Thailand, Malaysia and Singapore did better than that.

It will be to the benefit of every Papua New Guinean if this country learns to run with the "tiger economies" and not spend so much time and effort trying to break down trade barriers for a few containers of corned beef.

Brian Gomez is based in Sydney and is Asia-Pacific editor for The National.

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