Opinion & Commentary
Economic malaise in PNG is deep, and growing steadily
The recent ruling by the Papua New Guinea Supreme Court that the immunity essential for Australian police operations in Papua New Guinea was unconstitutional demonstrates that at least one state institution still functions. But while the ruling was no doubt welcomed by the politicians, public servants and their ''big men'' associates who fear exposure of corruption, it is a disaster for ordinary Papua New Guineans whose living standards have not just stalled but deteriorated in the face of rising crime and violence. The Australian police had only been in place for a few months, but they were already starting to have an impact on the raskols in Port Moresby and on security in Bougainville. Their withdrawal as renewed bilateral negotiations try to find a way around the latest legal impasse means yet another delay in addressing the chronic law and order problems that consistently rate as the number one concern for investors, business people and citizens.
Political scientists talk about the difficulties of governing ''divided societies'' like PNG, with its thousands of tribes and clans and over 800 languages. But the deeper-and growing-divide is between the tiny elite minority who continue to enrich themselves at the expense of the vast majority. Papua New Guinea is two nations. Policies followed since independence 30 years ago have given rise to a wealthy elite that educates its children well, often in Australia , so that they can succeed their fathers in parliament, public office and business. They live in large airy houses protected by razor wire, travel abroad on official and private business, take well-remunerated positions in international organisations, and enjoy holidays overseas where they invest their income. When they become ill, they travel to Queensland for treatment. The rest of Papua New Guinea's 5 million people live in villages (85 per cent of the population) and in shanty township settlements. This second Papua New Guinea is hemorrhaging.
After 30 years of consistently higher population growth than economic growth, nearly every social statistic indicates that living standards are abysmal. Health care barely exists, particularly for women. Maternal mortality rates are among the highest in the world. HIV/AIDS threatens to engulf a third of the labour force in ten or 15 years. Less than half of school-age children are in school, and those who are emerge barely literate in a common language such as Pidgin, let alone English. This lack of literacy makes a mockery of elections and democratic processes. The Enhanced Cooperation Program could be a catalyst for change. But it can only succeed if it is accompanied by growth policies that tackle the deep economic malaise that is both a cause and effect of government dysfunction and the breakdown in law and order. Growth will bring jobs and rising incomes so that raskols will have an alternative to crime, ''ghosts'' can be removed from the public service, and corruption can be prosecuted in the courts.
A handful of Papua New Guinean parliamentarians and other public commentators are trying to lead a debate about the desperate need for high and sustained growth to bring decent livelihoods to the villages and townships, and unity, self- confidence and pride to their country. They are aware that Papua New Guinea would have to grow by at least 7 per cent a year to repair the social and economic damage of the past 30 years. But such growth rates cannot be achieved with current policies. National income growth for 2004 was 2.6 per cent. Population is officially growing at 2.26 per cent a year, but real population growth is almost certainly 2.5 per cent a year or more. These population and growth figures mean no per capita income growth and thus no rise in living standards for the tenth consecutive year. Thus, despite high mineral and agricultural export prices, and despite Australia's increased aid of up to $500 million a year, the Somare government is failing to deliver even a minimal improvement to its citizens.
Only the PNG Parliament can initiate the growth policies that will raise living standards for the long-suffering second Papua New Guinean nation. The Enhanced Cooperation program was thus intended to support the efforts of the beleaguered minority of reformers in Parliament committed to change, for restoring some semblance of law and order is essential to the process of economic reform. Worldwide experience demonstrates that declines in corruption and improved governance do not normally precede, but follow, growth. This has not only been the experience in East Asia, but also in other developing countries as disparate as Botswana and Chile. Worldwide experience also demonstrates that aid can only be effective in countries with strong growth policies. Only if Papua New Guinea abandons the policies that have resulted in 30 years of population growth ahead of income growth can Australian aid be effective and will the lives of Papua New Guineans improve.
Emeritus Professor Helen Hughes is a Senior Fellow, and Susan Windybank is the Foreign Policy Research Director, at the Centre for Independent Studies. Their report ''Papua New Guinea's Choice: A Tale of Two Nations'' was released last month. ww.cis.org.au
