Monday, October 1, 2012

Ties with PNG too crucial to be neglected


By JOSH FRYDENBERG

JULIA Gillard was in New York last week on a much hyped UN Security Council campaign.

Multilateralism is the dominant theme. But, closer to home, key bilateral relationships have been left to languish.

While it is now well known that Indonesia, China and India have all been left off the Prime Minister's itinerary, there is another important country that receives scant attention.

Papua New Guinea is our most immediate neighbour, one of great strategic importance.

Since becoming PM, Gillard has not visited PNG, while her Foreign Minister, Bob Carr, clumsily created a diplomatic incident with his condescending language over a potential delay to PNG's local elections.

Carr threatened that should there be any delay Australia would have "no alternative but to organise the world to condemn and isolate Papua New Guinea".

Such a heavy-handed approach was not only disproportionate, but was severely damaging to the relationship we must seek to build with PNG as a trusted ally and friend.

Port Moresby's disdain for Carr's comments were evident when Australia's high commissioner was called in for a dressing down by Foreign Minister Ano Pala, leading Carr into a humiliating retreat. Our government must do better. PNG is far too important to our national interest.

Covering nearly half a million square kilometres, 600 islands and 700 different languages, PNG is home to 6.9 million people, nearly half of whom are under the age of 15.

With its population projected to reach 10 million within two decades, PNG already makes up 70 per cent of the population of the South Pacific.

Two-way trade with Australia was $7 billion in 2010-11, making PNG Australia's 15th largest export market and Australia PNG's single largest export and import market by a remarkable factor of three.

Nearly half a billion dollars of Australia's aid budget gets directed to PNG each year, making Australia the largest contributor to the country and representing Australia's second largest bilateral commitment after Indonesia.

And, perhaps most significantly, as an external territory of Australia till 1975 we have a special responsibility for PNG's wellbeing.

There could not be a better time to elevate the bilateral relationship given the significant political and economic changes in PNG currently underway. How Australia engages the new leadership under Prime Minister Peter O'Neill will be critical.

In the words of former defence analyst Hugh White, "there is little any Australian leader can do to help unless they have real standing within PNG themselves - unless they really know the players in PNG and are known and respected by them".

This is the test. Can we build trust and familiarity with each other? We must, and it can start by Gillard making a visit to Port Moresby. It is not just political change that has come to PNG, its economy is also undergoing a rapid transformation.

This is due in large part to the $15bn LNG project undertaken by Exxon Mobil, with substantial involvement from Australian players Santos and Oil Search.

The nation's GDP has already doubled over the past four years, with some projections that GDP will continue to grow by a further 20 per cent year-on-year.

How this new revenue stream is spent and saved will be critical in alleviating the widespread poverty that still exists in PNG.

With 40 per cent of the population living on less than $1 a day, 12,000 children under five dying every year and the average time spent in school just over four years, the task facing the country's leadership is enormous.

Capacity building within the public service, particularly the Treasury, will be crucial given the policies and priorities that will need to be put in place.

Australia can play a very constructive role here.

Our aid program rightly targets health, education, infrastructure and law and order, but we should also be providing more chances for bureaucrats from PNG to spend time working with and learning from their colleagues in Canberra.

My colleague, opposition spokeswoman for foreign affairs and trade, Julie Bishop, has led this call for greater exchanges. Julie has shown a deep interest, visiting PNG twice in the last year. Her initiatives have the potential to make a difference.

So, too, does the Coalition's support for the Pacific Agreement on Closer Economic Relations Plus negotiations, which are currently under way.

It is more than three years since this move to facilitate greater free trade came out of the Pacific Islands Leaders Forum. It's high time the government did more to kick the talks along, as it will be countries such as PNG that have the potential to be real beneficiaries of closer economic integration in the South Pacific.

Finally, if we get the economic and political settings right between Australia and PNG there will be an important strategic dividend, too.

Earlier this year Australia's longest serving foreign minister, Alexander Downer, said that "when John Howard was prime minister he used to say that his greatest foreign policy worry was that PNG would descend into political chaos".

Transnational threats such as pandemics, drug trafficking, people-smuggling and terrorism all pose a greater risk to Australia if our neighbours are unstable.

Unfortunately, today the deterioration in our key relationship with PNG means we carry less diplomatic weight and our ability to shape outcomes is also diminished.

Given the challenges both countries face on the strategic, economic and political front, this is not where we want to - or should - be.

Josh Frydenberg is the federal member for Kooyong

This article was first published by The Australian newspaper