ADB: PNG’s rich-poor divide must be reduced to eradicate poverty and boost growth

ADB

PORT MORESBY, PAPUA NEW GUINEA (5 December 2012) – While Papua New Guinea (PNG) has maintained its position as one of the fastest growing economies in Asia and the Pacific in 2012, the gap between rich and poor is increasing.

“Remote and rural communities in PNG remain cut off from economic opportunities due to poor roads and lack of reliable, safe shipping services, as the gap between rich and poor grows wider,” said Xianbin Yao, Director General of the Asian Development Bank’s (ADB) Pacific Department said at a special year end ADB event in Port Moresby. “Economic growth must be accompanied by a narrowing of inequality to ensure future prosperity in PNG.”

The ADB event provided updates on ADB projects and programs in Papua New Guinea and discussed potential challenges and opportunities that will be faced by the PNG Government and development partners in 2013.

“ADB in partnership with the Government of Papua New Guinea is rehabilitating critical roads and bridges to help promote the safe and efficient movement of people and goods around the country which will result in improved service delivery,” said Marcelo Minc, Country Director of ADB’s Papua New Guinea Resident Mission.

Openness to trade will also be a key ingredient in PNG’s future prosperity, the forum was told. By connecting PNG’s local producers to domestic, regional, and global markets, trade will help fight poverty, boost the economy, raise living standards and improve access to basic services.

The forum heard,PNG’s private sector has more than doubled over the past seven years, largely due to the combination of sensible monetary and fiscal policies and structural reforms in financial services, telecommunications and aviation to boost business investment and encourage economic diversification.

The recently released 2013 National Budget foreshadows a significant scaling up of funding to priority sectors of health, education, law and order, and infrastructure. In line with its current PNG Country Partnership Strategy (CPS), ADB aims to work together with the PNG Government to implement its planned infrastructure investments (including support forroad, seaport, and airport rehabilitation and improvement; community water transport; and renewable power generation), private sector development, and regional cooperation. The CPS also commits ADB to helping the government deliver rural primary health services.

 ADB and the Government of Australia through the Microfinance Expansion Project is strengthening industry regulation and increase the capacity of Nationwide Microbank to deliver a wider range of financial services and products to rural areas, with a focus on lending to micro and small enterprises, and especially to women, who struggle to access credit and income-generating opportunities.        

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2011, ADB approvals including co-financing totaled $21.7 billion.

Agreement to extend Ok Tedi mine soon to be finalised

By Alex Heber in Australian Mining

Ok Tedi mine landowners in Papua New Guinea are expected to make a decision on the mine’s future by the end of the week.

Ok Tedi mine

OK Tedi Mining CEO Nigel Parker announced on Tuesday at the PNG Mining and Petroleum Investment Conference in Sydney that the agreement to extend the life of the Papua New Guinea mine will be finalised shortly, Australian Network News reported. Parker said seven of the nine community groups who represent 100,000 people downstream of the mine in the Fly River Catchment in PNG’s Western Province have already signed the agreement to continue gold and copper production for another eleven years.
Parker added that he expects the remaining two groups affected by the mine to sign this week.
"It has been an absolutely exhilarating process in the last three weeks," he said.
"I have personally signed on the company's behalf those agreements and the people are extraordinarily happy with Ok Tedi Mining Limited, with the continuation of the mine.”
Recently three MPs have called for the closure of the mine, citing the site poses both health and environmental risks, Parker said this seems to be at odds with what the communities want.
"The communities definitely wants the mine to continue, and are unequivocal about that," he said.
"I am sure the elected politicians have the communities at heart, and if they do get reports coming through of unidentified medical issues I am sure they would react, and possibly that is why they are reacting so much.”
Plans to extend the OK Tedi mine life were announced as PNG mining Minister, Byron Chan told the conference the O’Neil government plans to reform the country’s mining industry.
Chan said the PNG Government will ensure benefits from the mining industry will be delivered to the local people through a wide-ranging reform program.
"We want to make sure people are committed, companies are committed, everyone is committed to the project and not just holding licence and playing on the stock market," he said.
"There are some companies that have been playing that game for far too long."
The proposed strategy will halve the maximum size of exploration leases and reduce the limit the number of licences an individual can hold to 10.
Just on Tuesday Australian Mining reported the PNG government was attempting to dampen miners’ fears ahead of its mining tax review as concerns about increased nationalisation in the country surfaced.
PNG prime minister Peter O'Neill used the conference to speak to miners before implementing any changes to the regulations, stating that they will not be left out of negotiations during the review.
"It is not going to be out there to deprive the investors who are investing in these projects.
"We understand very well that they are there for a return for their shareholders," he said.
"But equally I am responsible for the return to my own people and my own country."

Australia is PNG's oldest friend: Carr

By Eoin Blackwell,

 AAP Papua New Guinea Correspondent

Senator Carr Bob Carr was gifted with a live pig during the second day of a four-day trip to PNG.

PAPUA New Guinea has no better or older friend than Australia, Foreign Minister Bob Carr has told villagers in the remote highlands home of his PNG counterpart Rimbink Pato.

Senator Carr, on the second day of a four-day trip to Australia's closest neighbour, made the comments to a crowd of about 1000 people in Mr Pato's home village of Wapenamanda.
"Our relationship is changing. Australia respects the independence; we respect the role of PNG; we work together in RAMSI; we work on Fiji; we work on people smuggling," Senator Carr said.
"The future holds a great promise for PNG and no other country wants you to prosper more than your old friends, Australia.
"Old friends are the best friends and you have no older friend or better friend than Australia."
Australia provides about half a billion dollars in development aid to PNG annually.

Senator Carr was also echoing comments he made the day before in nearby Mt Hagen, saying he expected PNG's international status to rise under the leadership of Prime Minister Peter O'Neill.Mr O'Neill is due back in PNG on Wednesday after wrapping up an Australian speaking tour in which he decried the media's coverage of PNG as harmful and hurtful.
Shortly after becoming foreign minister, Senator Carr drew the ire of some PNG politicians when he said Australia would organise sanctions against the Pacific nation if it cancelled the 2012 elections - an issue being hotly debated at the time.
This trip marks Senator Carr's second visit to PNG since he was a union official in 1976, and his first since becoming foreign minister in March 2012.
While in Wapenamanda - set deep in a lush valley surrounded by moss green mountainous terrain in Enga Province - Senator Carr toured parts of a primary school where a temporary library and teacher's meeting rooms have been named in his honour.
But in perhaps the truest sign of friendship in PNG, Senator Carr was gifted with a live pig, roughly the size of a Vespa motor scooter, after being carried into Wapenamanda along with Mr Pato on a grass and balloon decorated sedan chair.
He quickly gifted the pig back to the villagers, joking that Australian customs officials would not allow him to take a live swine back home.
Returning to Port Moresby on Wednesday, Senator Carr also paid a visit to Bomana war cemetery on the city's outskirts to lay a wreath at the cenotaph.
Bomana is the final resting place for more than 3000 Australian soldiers killed in PNG in World War II.
On Thursday, Senator Carr will join Immigration Minister Chris Bowen, Trade Minister Craig Emerson and Home Affairs Minister Jason Clare in Port Moresby for the 21st Australia-PNG ministerial summit.
The forum will canvass issues such as PNG's sovereign wealth fund, progress on the Pacific agreement on closer economic relations, and a new economic cooperation treaty between the two countries.

Read more: http://www.news.com.au/breaking-news/world/australia-is-pngs-oldest-friend-carr/story-e6frfkui-1226530711243#ixzz2EEtaqlGu

PNG conference makes the right noises

by Mike Foley

Papua New Guinea’s developing resources sector was on show in Sydney this week, with a record 1,400 delegates rolling up to the biennial PNG Mining and Investment conference.

  

Prime Minister O'Neill.

Prime Minister Peter O’Neill outlined impending reforms, with legislation to halve the current size of exploration leases and a limit of 10 exploration licences for individual entities.
However, Prime Minister O’Neill, stressing he would work in consultation with resources companies, said he was receptive to the sector’s needs, citing his corporate background.
“The undertaking I give you today is simply there will be no drastic or radical change to laws that exist today and there will be no immediate change.
“We will set up an independent panel to review the concerns that have been already expressed and the resource sector will be fully consulted in this process. We must get the balance right and we will only get it right through consultation and negotiation.”
Prime Minister O’Neill said LNG projects delivering domestic gas supply would be fast-tracked and encouraged resources companies to seek local partners for downstream services.
“We need projects totally focused on our domestic gas and energy needs, including gas capable of driving our rural and regional energy requirements and meeting the energy needs of the new projects that are now about to be developed.
“The challenge I want to issue you today to our investors and those who are thinking of investing in our country is to look at taking on board Papua New Guinean investors and partners from the outset. [PNG] has a rapidly growing number of companies and individuals who have been very successful in their business lives.”
Ok Tedi Mining, which delivers around 15% of the PNG Government’s revenue, said it had secured permission to extend the mine’s life. It told the conference it has signed agreement with seven out of nine landowner groups.
Xstrata’s Frieda River mine told delegates it plans to deliver a feasibility study by the end of the year.
The Conference was packed with presentations from exploration companies plying their wares. Gold and copper plays, the mainstay of PNG mining, dominated proceedings. Marengo Mining, Morobe Mining, Kula Gold, PNG Gold Corp, Gold Anomaly, Highlands Pacific and Harmony Gold all took to the podium.
Outside the gold and copper compendium, presenters included coal explorer Waterford, nickel hopefuls Suckling Resources and Niugini Nickel, polymetallic juniors Goldminex and Quintessential Resources and iron sands pioneer Foyson Resources.

No thanks, not yet: PNG’s ASEAN bid

December 4th, 2012 

Author: Sean Jacobs, Canberra, in East Asia Forum

Papua New Guinea’s dynamic economic growth over the past decade has created an appetite for big-picture trade and diplomatic ties, symbolised by its ongoing attempts to join ASEAN.

But PNG’s requests, which have persisted since it was granted observer status in 1976, have so far been met with a firm but polite ‘no’.
While not explicit, the reasons behind ASEAN’s position are not hard to discern. Even the most cursory glance at PNG’s political history since 1975 reveals a steady catalogue of political crises. For example, it was not until 2007 that a PNG government first navigated the vote-of-no-confidence chicane to complete a full five-year term in office. Crime, too, is cited by some commentators as a further reason for non-accession, implying concerns over civil unrest as opposed to high incidences of burglary and public violence — sullen accolades for which PNG is unfortunately becoming well known internationally.
With a small police force to counter its internal disruptions, and an even smaller military, PNG’s raw strategic benefit to ASEAN also appears slim. If recent antagonisms in the Scarborough Shoal serve as any blueprint for membership criteria, ASEAN clearly requires nations that bring strategic muscle, not baggage. Additionally, the expanded ASEAN member list, despite being good for business, has recently undermined collective decisions. When ASEAN formed in 1967 it had five member states. Numbers have now doubled to 10, naturally creating consensus difficulties, particularly on recent issues such as the Scarborough Shoal.
While ASEAN may not currently be in the business of recruiting new members, this has not stopped PNG from knocking on its door. As far back as the 1980s, former PNG prime minister Sir Michael Somare was pressing for ASEAN membership — a bid he had clearly not abandoned when, in 2009, he approached then Philippines president Gloria Arroyo with a request for accession. PNG leaders of all stripes, in fact, have spent decades on the diplomatic treadmill sounding out support for entry into the exclusive body.
Amid the setbacks, however, it is worth taking stock of what PNG could actually bring to ASEAN. Here, one can note two broad contributions. The first is growth. A little-known fact about PNG is that it has, due to its resource endowment, been one of the fastest growing economies in the world. With strong growth forecast over the medium term, such an attribute would certainly add to, and not diminish, its economic contribution to the important regional body. China, naturally, has taken notice, leaping up PNG’s bilateral trade table to become its second-largest trading partner (but still well behind Australia). Thus, for ASEAN, there may be some sense in fully welcoming PNG into its orbit, rather than leaving the country exposed to greater Chinese engagement and influence — a relationship that will grow considerably in the coming years.
PNG’s second potential contribution to ASEAN is a strong commitment to the principle of non-interference. Over the years, PNG’s political leaders have closely guarded the country’s sovereignty. This was illustrated most recently in August 2012, when former deputy prime minister Belden Namah called for the expulsion of the Australian high commissioner for comments he purportedly made supporting the re-election of PNG’s prime minister, Peter O’Neill. As Namah said at the time: ‘He should be recalled immediately, because he interfered with PNG’s sovereignty, by deliberately trying to influence the election and the process of parliament electing the prime minister’. Whether or not Namah’s comments had any validity, they indicate PNG’s firm respect for sovereignty, not only for its own borders, but also for the borders of regional neighbours. Such a characteristic would, one assumes, be quietly welcomed inside the ASEAN arena.
In highlighting PNG’s potential contributions, however, one must not gloss over some of its recent foreign policy shortcomings. The 2006 ‘Moti Affair’, which resulted in the PNG government providing diplomatic cover to Julian Moti, the Solomon Islands attorney general wanted for questioning by the Australian government, understandably provoked a moratorium on ministerial contact with Australia — its largest aid donor and most reliable partner.
One must also recognise the relative infancy of PNG’s foreign policy and its slow but measured progression. In hearing accounts from the 1980s, for example, when Foreign Minister Rabbie Namaliu used to exchange table-thumps over border disputes with his Indonesian counterpart, it is clear that relations with neighbours have improved somewhat. Indonesia is now reportedly quite favourable to PNG’s ASEAN accession.
More broadly, as PNG grows and looks to expand its reach overseas, the country will need to improve how it articulates its foreign policy. Many speeches by PNG’s leaders or official state documents, which express PNG’s diplomatic and trade intentions, remain unpublished or inaccessible. Together with improving its security situation and political stability, this situation must change if PNG’s ASEAN hope is to be realised. To a semi-informed onlooker, PNG’s ASEAN bid looks very similar to Turkey’s endless audition for European Union membership — slow, frustrating and increasingly uncertain. As a result, when some former PNG prime ministers are now asked about ASEAN membership, they predictably roll their eyes at a seemingly lost cause. But, as they would appreciate, in the realm of international relations, unlikelier things have happened.
Sean Jacobs is a former Australian youth volunteer in the Pacific and has worked with all levels of government in Papua New Guinea.

Holy Spirit Sisters receive Christmas donation

Sister Jeneatte, Superior Sister of the Holy Spirit Sisters based at Alexishafen in Madang received an early Christmas present made up of medicine, hospital equipment and wheelchairs from Phoenix Pharmacy in Cairns.   

 The presentation was made at the Madang Resort today by Sir Peter Barter, chairman of the Melanesian Foundation (pictured below with the sisters) and the goods will be dispersed to various health services operated by the Catholic Health Agency in Madang and the Sepik, including Timbunke.

 Sir Peter said that for a number of years Gillian Howard of the Phoenix Pharmacy in Cairns had donated medicine and medical equipment to PNG. 

Previously Howard worked at Arawa prior to the coinflict and retains a great deal of respect to the people of Bougainville and PNG.

 "The Kalibobo Spirit has just completed the annual slipping and survey in Cairns, and we were delighted to provide the transport free of charge," Sir Peter said.

"Regretfully,we are not a cargo ship, if we were, the Australians in Cairns would willingly fill a ship with schooldesks, hospital equipment, library books. sportts equipment and other basic items that would improve the quality of life to so many people living in remote regions of PNG  - regretfully the high cost of sea transport to Madang from Australia makes such donations very expensive.

 "I am well aware of the great contribution made by the church health services in remote communities of PNG and I hope that in some ways the medicine and equipment will assist the Catholic Health Services in providing services to the people and making Christmas all the more special. 

" I would also like to thank Phonenix, other donors such as Rita Fenske, Kyle Abela, my Sister Elizabeth who in the past have contributed much needed supplies through their various networking."

Australia immigration minister to visit Manus Island centre

AAP

Immigration Minister Chris Bowen will visit the asylum seeker processing centre on Papua New Guinea's Manus Island this week.
Mr Bowen left Australia today for the Australia-PNG ministerial forum talks in Port Moresby.
But he says the trip also presents a timely opportunity to visit Manus Island.
"Australia is committed to making these arrangements work through close cooperation with the PNG government, Manus province and key stakeholders there," Mr Bowen said in a statement.
"The Australian government appreciates the cooperation of the PNG government in working together on this important regional issue."
The government so far has transferred 47 people - including a number of children - to the Manus Island centre, which Labor reopened as part of the tough offshore processing regime it embraced in August.
The centre is expected to accommodate about 600 people.
Local landowners repeatedly have threatened to protest against the re-establishment of the Howard government-era facility amid demands for compensation for use of traditional land.