NDO PACIFIC GEOPOLITICS, Will Peter's Gamble Pay Dividends?


In 2001, when a Waigani insider (you know those types that hop from one politician to another within the corridors of power) complained that Australia was taking PNG for granted, I found validity in that sentiment. He had a cure too:
“The next PM should ignore Australia, flirt with China and wait. Australia will come begging”. I was scared.
18 years later I see the fruits of that sentiment. But it could come at a price.
Peter O’Neill took power in 2011. Soon global commodity prices plummeted. A protracted corruption allegation followed with an economy headed south. But O’Neill had a government to run, election to win and tenure to protect (with gloomy Economic Forecasts). With that backdrop, O’Neill went to bed with the Chinese (literally). The rest is history….well about to be!
Beijing, flush with cash and hungry for world dominance spoiled O’Neill with all and sundry through its signature Belt and Road Initiative (BRI). O’Neill knew 8 countries (Montenegro, Pakistan, Mongolia, Maldives, Lao, Kyrgyzstan, Tajikistan and Djibouti) were sinking in debt and their sovereignty threatened by the shackles of BRI when he committed to the deal. (These are facts. Google it.) Closer to home, Tonga is in hot water under this debt-trap diplomacy.
Through the BRI China provides infrastructure loans to countries on China’s terms. O’Neill’s APEC 2018 ambitions were funded through the BRI. Following that, O’Neill penciled in a State Visit for President Xi Jinping on the eve of the APEC meeting.
At a time when the US and China are in a tussle for geopolitical dominance in the Indo-Pacific, it appears O’Neill’s team deliberately themed APEC Port Moresby all things Chinese. Knowing Moresby would drown in a sea of red, Donald Trump skipped the annual talkfest. But sent Vice President of the United States (VPOTUS) Mike Pence with a clear message:
“we don’t drown our partners in a sea of debt. We don’t coerce or compromise your independence….We do not offer a constricting belt on a one-way road.”
“ Do not accept foreign debt that could compromise your sovereignty. Protect your interests. Preserve your independence. And just like America, always put your country first.”
Aware of China’s dominance in APEC Port Moresby, the US secretly lobbied its allies and ring fenced China, effectively exposing O’Neill’s ignorance of global politics. US showed its muscle by thawing China’s momentum in APEC Port Moresby. Mike Pence was one step ahead of XI and O’Neill. This has bearing on local Politics. I’ll explain in a moment.
Btw, USA foresaw China’s eagerness to dominate APEC 2018 and pushed back successfully. China’s frustrations are the subject of social media rumors.
While O’Neill’s gamble earned us a K3.6 billion US-backed electricity initiative, PNG will now come under immense positive scrutiny from Canberra and Washington in a lot of arrears.
Now to local politics. Peter’s paradise is in perils. Our government is gullible. Low on cash reserves, a flat lining economy, more deficits budgets, a deepening health crisis, to name a few.
The timing of President Xi’s State visit on APEC eve alone could either be the masterstroke that could guarantee Peter O’Neill 3 more years as PM or seal his fate when the Vote of No confidence (VONC) clause in the Constitution kicks in 3 months from now.
China and America both make and break governments. Come February 2019, billions will be in play. At the APEC, USA came late, ordered the control tower to shut down Port Moresby airspace for up to an hour for the VPOTUS to land at Jacksons, brought their own customs clearance equipment, overrode our systems and process and chose themselves where to park their 2 Vice Presidential planes. They disarmed all the PNG close protection security detail earmarked for the VPOTUS and transported the VPOTUS on SUVs they secretly brought to Moresby. USA still has the means and the systems to covertly undermine the sovereignty of nations when they want to. China will rise to the occasion.
The VPOTUS’ language used at the APEC Summit is indicative that USA will likely up the ante in regional geopolitics going forward. President Xi will not back down either. O’Neill just wanted to get Australia’s attention, not Washington’s wrath.
USA and its allies have a lot at stake here. The Exxon led PNGLNG project eyes a second train using existing infrastructure. France’s Total led Papua LNG is on course for Project Agreement in 2019. O’Neill’s thirst for Beijing bucks locked us into the BRI debt trap.
Something the west treats with suspicion. In the words of VPOTUS Pence:
“We’re well aware; some are offering infrastructure loans to governments across the Indo-Pacific and the wider world. Yet the terms of those loans are often opaque at best. Projects they support are often unsustainable and of poor quality. And too often, they come with strings attached and lead to staggering debt.”
Here is the loaded part. Our government is hiding the staggering loan figures inside the books of State Owned Entities. The intent is to give PNG’s debt watershed a feel good story by keeping it outside the National Budget. Our government’s limited revenue raising ability means our economy cannot sustain any more BRI loans. It cannot borrow beyond its ability to repay. Unfortunately, we may have crossed that threshold. It’s in Australia’s interest that PNG doesn’t become Little China. China’s BRI invests in strategic assets in beggar countries. America will not let China possess strategic assets in these waters. That is the outlook.
A secure and safe Australia is an effective security buffer for the US’ west coast. Any strategic military installation by China here is a threat to America. O’Neill and Co are flirting with China in matters central to US’ security.
It will be a heavy 3 months for O’Neill.
Regional geopolitics will be sure to meddle in our domestic politics. China is here to play. They have nothing to lose, but everything to gain.
China cares less if O’Neill peters away or clings to power. China’s money will work with the devil they know and the devil they don’t in equal fashion.
Peter’s Xi show on APEC eve will pay dividends. Australia will lift its game in the pacific and the USA will chime in like never before. Will O’Neill survive to reap the rewards or will his foreign policy gamble became his Achilles’ heel? We shall see come February 2019.
For now, the mud slingers and the guns slingers are locked and loaded. No one is prepared to fire blanks. No one wants to miss. It will be a super feisty 3 months going forward. Let the Waigani games begin!
At day’s end, there will be only one winner….Papua New Guinea!
Enjoy this one fellas!

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