Australian government has known for 25 years that mining will not deliver benefits for PNG people

Australia’s political leadership has spent decades promoting large-scale mining in PNG while carefully suppressing advice from experienced civil servants warning that the extractive industries will ‘not deliver lasting development for the majority of PNG’s population’.

Recently revealed Australian Cabinet documents from 1988/89 [see below for some key quotes] reveal the Department of Foreign Affairs and Trade advised the Australian government that the agriculture sector should be the focus of its assistance as it provides for the livelihoods of 85% of the population and “is central to the country’s long-term political stability”.

In a deceit of monumental proportions successive Australian governments have not only ignored the advice of their own bureaucrats, pouring millions of dollars of aid money into supporting the extractive industries and starving the agriculture sector of funds*, they have conducted a widespread campaign of deception to convince PNG’s political and business leaders that mining will deliver lasting prosperity.

The history of PNG over the last 25 years reveals just how right the Australian bureaucrats were in 1989 and how divisive and destabilizing the mining industry has been for PNG.

As DFAT predicted in its advice to the Australian Cabinet, the expected wealth from the mineral boom has not ‘generated self-sustaining development for the population at large’, mining and oil developments have had ‘little effect on employment’ and much of the investment has been spent on ‘capital equipment purchased outside PNG’.

While international mining companies, who former Australian Prime Minister, Kevin Rudd, says ‘own’ the Australian government, have made billions of dollars in profits from mines like Panguna, Ok tedi, Porgera, Misima and Lihir, the standard of living for people in PNG, as measured by the United Nations, has actually declined.

Just as crucially for PNG, the mineral boom has helped the spread of endemic corruption, as much as 50% of PNGs annual budget is stolen every year, created a deep and widening divide between a small elite of super-rich nationals and the rest of the population, and led to a dysfunctional one-party political system with no accountability or credible opposition.

Australians love to tell PNG that the country is a ‘basket case’ and the people uneducated, ignorant and corrupt – but the truth is that Australia, by intentionally imposing a development model that it knew would destroy PNG while delivering large profits for its own companies and people, has destroyed a vibrant and diversified tropical paradise with an enormously strong and rich cultural, social and political history.

* For example, the Australian government is currently funding expansive efforts to reopen Bougainville’s Panguna mine, while less than .005% of its aid contributions to the island go to agricultural projects 

Key quotes from the Cabinet papers include:

“Notwithstanding the stereotype, ‘cargo-cult’ mentalities endure. There is a sense that the good times should come to PNG, without concerted effort or preparation; expectations, fueled by stories of untapped mineral wealth, are high and PNG’s political leaders are playing to this myth”.

“There is however little likelihood of the expected wealth from the mineral boom generating self-sustaining development for the population at large”.

“The difficulty for PNG is that mining/oil developments have few linkages to the rest of the economy and, being capital intensive, have little effect on employment (less than 1% of the total workforce). Additionally, although hundreds of millions of dollar may be involved, much of it is spent on capital equipment purchases outside PNG”.

“The agricultural sector will continue as a focus of Australian assistance.  As well as being the most important economic sector, it provides a livelihood for about 85 per cent of the population and is central to the country’s long-term political stability”

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Filed under Australia, Environmental impact, Financial returns, Papua New Guinea

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