Global Policy Forum

By Susan Windybank

Papua New Guinea is rich in natural resources. Yet it is facing a very difficult future. The economy has stagnated and the outlook for growth is bleak. Corruption is rife. Law and order have broken down, violent crime rates are escalating, and the government is struggling to maintain authority over parts of its territory. Should this downward trajectory continue, Papua New Guinea could become a "failed state."

At first glance, such pessimism may seem misplaced. Despite the difficulties of governing a geographically scattered and ethnically diverse population of some 800 language groups, Papua New Guinea has remained intact. A peace process eventually brought an end to the devastating secessionist war in its province of Bougainville.

Unlike many postcolonial states, Papua New Guinea has maintained a record of formal democracy since independence from Australia in 1975. Changes of government have been regular and constitutional. But the chaos, violence and fraud that marred the 2002 elections indicate an emerging crisis of governance and state legitimacy.

Australia will not be able to quarantine the consequences if its nearest neighbor falls apart. The two countries are separated at their closest points by a short island hop across the Torres Strait. Papua New Guinea's population is expected to double to nearly 10 million by 2025. Should internal conditions worsen for its people, Queensland - Australia's northernmost state - could become the front line for a potential flood of legal migrants and refugees. They could pose both a health and security risk, given the high rates of AIDS infection in Papua New Guinea.

The fragility of Papua New Guinea also has broader regional security implications. Weak states are easy prey for terrorists and transnational criminals. Although Papua New Guinea has not been identified as a major target for transnational criminal activity, a small but significant firearms-for-marijuana trade across the Torres Strait has already contributed to the corrosive effects of rising crime and violence in Papua New Guinea's major towns and its highland region. This increased availability of, and resort to, arms makes conflict more protracted and difficult to resolve, particularly when warlords and criminals outnumber and outgun police and defense forces.

Grim prognoses for the future of Papua New Guinea are growing, but the worst has not yet happened. It has so far "muddled through" despite severe economic difficulties and political instability. But several trends suggest that each year of "muddling" ultimately reduces the prospect of getting "through."

Living standards and annual per capita income have barely improved in Papua New Guinea since independence. Mining revenues and generous foreign aid have not been invested in roads, schools and health services.

Infant and maternal mortality rates in Papua New Guinea are closer to those of sub-Saharan African countries than to the rest of the Asia-Pacific region. Population growth is high and job creation low. The rising number of unemployed young people, particularly in urban areas, leads to demoralization, feeding crime and civil unrest. The extent of lawlessness scares off investors and tourists, reinforcing a downward spiral in which not enough jobs are created and law and order get worse.

Some doubt about the "muddle through" scenario must also arise from the erosion of the subsistence safety net that has enabled ordinary Papua New Guineans to weather hard times in the past. Crime has spread to the countryside so that gardens and houses are no longer safe from thieves. Villagers are robbed taking their coffee to market. Impassable roads make local trade in goods difficult. The resulting hardship is taking its toll on traditional village life, fueling the movement of people into cities and towns.

For the past 28 years Australia has played the role of disinterested donor, respecting the sovereign right of Papua New Guinea to make its own choices by supporting its development since 1975 with more than $12 billion in aid. But little development has taken place.

Moreover, the nature of aid makes it part of the problem, not the solution. Dependence on donors has enabled Papua New Guinea to live beyond its means; the government postpones the need to tackle problems because it can always be confident that international help will come to the rescue.

A fundamental review of Australian policy toward Papua New Guinea is urgently needed. Conditions must be enforced on how aid is used and dispersed. But even strictly controlled aid is pointless if Papua New Guinea policies do not change. Without progress on basic issues like economic discipline and prosecutions for corruption, no outside help, no matter how well-intentioned, will have an impact on the country's entrenched problems.

The current Papua New Guinea administration is fully aware of the issues that must be addressed. It should be supported in continuing the reforms begun under he government of former prime minister Mekere Morauta and in making the tough decisions that are necessary if Papua New Guinea is to have a sound future.

The writer is editor of Policy, the quarterly journal of the Center for Independent Studies, Sydney, and is co-author of a recent report on Papua New Guinea published by the center.

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