By PHILIP DORLING
PAPUA NEW GUINEA is trapped in ''Ponzi politics'' being practised by deeply corrupt politicians who have enriched themselves on resource revenue and Australian aid , according to US diplomatic reports.
Australian government officials are reported as saying generational change in PNG politics following the departure of founding father and former prime minister Sir Michael Somare was a ''false hope'', and the PNG government was a ''totally dysfunctional blob''.
The damning assessments of political and economic life in Australia's nearest neighbour are contained in confidential US embassy cables leaked to WikiLeaks.
In a November 2008 briefing, the US embassy in Port Moresby noted that resource revenues and Australian aid have served ''more to enrich the political elite than to provide social services or infrastructure. There are no large-scale local businessmen, but numerous politicians are relatively well off.''
PNG is Australia's largest recipient of foreign aid and in 2011-12 will receive more than $480 million from the country.
Anxious to avoid diplomatic offence, Australian government ministers and officials rarely talk openly about corruption and maladministration in PNG, preferring to speak of ''strengthening governance'' and helping ''institution building''.
However, the leaked cables from the US embassy in Port Moresby provide grim assessments of PNG's chaotic political system and failing public administration. In May 2007, in a cable titled ''Ponzi politics'', the US embassy presented a damning pen picture of PNG politics.
''Steeped in traditional magic and innocent of modern economies, PNG's citizens prove easy marks for Ponzi schemes which proliferate throughout the country,'' the embassy said. ''Now it's election time … and the politicians are dusting off their bottles of snake oil. Viewed from afar, or from a national perspective, it's an appalling spectacle of disregard for governance.''
It went on: ''If all politics is local, politics in PNG - with 830 languages, myriad cultures and thousands of clans - is Tip O'Neil (sic) on steroids … Though this government, and the current crop of leaders on the national scene, have presided over a steady, nationwide deterioration of services - closure of health centres and schools, collapse of effective policing and a steady rise in violent crime - little mention of this can be expected during the campaign to come.''
In the run up to the 2007 election, the US embassy reported that ''the pork has hit the fan'' as Sir Michael reallocated ministerial portfolios. One promoted minister was described as ''the government's chief bagman for the corrupt forestry industry''. A former health minister was ''mostly remembered for his insistence that he was just a politician and therefore could not be held responsible for the fact that the country's hospitals had run out of medicines while his ministry was still flush with cash''.
The report gave a damning judgment on the Somare administration's commitment to law and order: ''The single most pressing problem facing PNG is the almost total collapse of the police force. So it is doubly disappointing that the effective [Police Minister Bire] Kimisopa was pushed aside. The portfolio has little control over expenditure. But his focus likely discomforted Somare and his cronies for the same reasons they worked to scuttle a large-scale Australian package which threatened to dramatically improve police performance.''
The leaked US cables are ambiguous about Sir Michael's financial interests and their effect on political decisions and public policy. However, they noted a ''strange'' shift in PNG government policy that potentially increased its financial exposure in legal action being taken by Bougainville residents against company Bougainville Copper. ''Given the way things are done here, the general suspicion is that PM Somare has been given a financial incentive to reverse the previous government's position on the case. Certainly, it would be very typical of Melanesia if what the government saw as in its nation's interest also redounded to the individual benefit of its leadership. It is worthy of note that Paul Nero (sic, Nerau), a plaintiff and the current PNG [consul-general] in Brisbane, is very much a Somare man.''
The US cables confirm that, privately, Australian officials have no illusions about the state of the PNG government. After a mid-2007 discussion on political and economic developments with Australian high commission staff in Port Moresby, the US embassy reported: ''One Australian analyst described generational change as a 'false hope', while other Australian officers described the PNG public service as a 'totally dysfunctional blob' that is great at planning but appalling at implementation.''
Speaking to the US embassy in September 2009, the then opposition leader and former prime minister Sir Mekere Morauta lamented the collapse of effective government decision-making.
''AusAID is out of control,'' he said. ''I don't mean that Australia is being naughty. What I mean is that, out of desperation over lack of government direction, they are funding projects of their own choosing. The government cannot truly be said to be in charge of how and where foreign assistance is spent.''
However, as an example of poorly planned Australian assistance, Sir Mekere cited money spent on infrastructure projects such as road-building, new schools and hospitals.
''Our problem is not a need for new infrastructure. At this point, we cannot even maintain the infrastructure we have.''Following a long illness Sir Michael was removed from office, though he is still protesting that his ousting has been illegal. Peter O'Neill, who had served as treasurer in the Somare government, was elected Prime Minister by a parliamentary vote on August 2. He has declared his desire to ''restore open, honest governance''.