Papua New Guinea’s Prime Minister Peter O’Neill has embarked on an ambitious plan transform the standard of living of his people from one of the lowest in the Asia Pacific region to one in the middle ranks.
ABC Radio Australia
So far the high economic growth of PNG’s resources boom has not been translated into better schooling, health services and job opportunities for Papua New Guineans.
Unless this happens soon PNG risks going the way of other developing nations, such as Nigeria, where resource development is a curse rather than a blessing.
This year the O’Neill government has increased spending on health education and law and order by a staggering 50% and he plans to spend 6 Billion US dollars on improving infrastructure over the next five years.
It’s a once in a lifetime opportunity that other Pacific nations may face now they are starting to do business with big mining companies.
In Port Moresby, Prime Minster O’Neill spoke in-depth to Pacific Beat about the changes he is implementing.
Our reporter Jemima Garrett began by asking him if PNG has the capacity to do so much so quickly.
Speaker: Papua New Guinea’s Prime Minister Peter O’Neill
O’NEILL: Yes I think we have the capacity but we have not been able to apply ourselves. Many agencies are over-staffed but under-worked, and that is why we are now pushing the leadership of many of these organisations like the Works department, like all the other relevant infrastructure building departments to step up. And of course have to enter into a program in partnership with many contractors and private organisations, private companies that are able to deliver these projects on a timely basis. So there’s a mix of contractors, both international and local, we know that there is no capacity within the country, so many of the projects have been given to international companies to bring in the better technologies and better workmanship on many of the projects.
GARRETT: How will you keep corruption out of the picture?
O’NEILL: Corruption as you know it’s a battle that’s not going to be resolved in one year or one single day for that matter. It is a state’s program and we are now focussed on prioritising the way we conduct our business in the most transparent way. So all the projects have been advertised and have gone through a rigorous procurement process that will enable some level of transparency in itself. We are also now focussing on corruption being with special taskforce like the taskforce sweep, we have now expanded on their support, including budgetary support, we put 20 million extra to go out there and recruit more people and recruit more investigators that will help them prosecute offenders. Of course Attorney General’s office is working on a much stronger ICAC, Independent Commission Against Corruption, and then we are going to present this year, we’re committed to presenting that this year to parliament. And we will then transfer all the agencies and functions of corruption into that organisation so it becomes truly independent and I’m certain that that will deter the practice of corruption in the country.
GARRETT: Where will you be looking for loan funds for all these projects?
O’NEILL: There are mixed sources in which we are looking for funding. Our traditional partners including AusAid and of course the two international institutions like IMF, World Bank and ADB. But the processes take a number of years to finalise and that is the only setback that we see. We have an increasing population, growing economy, some of the major projects going towards the end of their construction phase and which will cause a lot of people to be out of jobs. And there’s an urgency on our part to ensure that the infrastructure work starts now so some of these people who are skilled are not leaving the country to look for jobs elsewhere, but will return to build the country. And that is why we believe that sourcing funds from places like China, NZ Bank is one of them, we’re going to the international market for loans on raising bonds, that is a prospect opportunity that we are working with Treasury to look into. And of course there’s enough liquidity within our own financial systems here in Papua New Guinea that can be able to also fund the deficit that we are proposing to carry.
GARRETT: You’re looking to reorganise Papua New Guinea’s mineral and petroleum and gas assets, and also to change the way the Sovereign Wealth Fund is structured. What do you say to people who are concerned about the transparency and accountability involved with these changes?
O’NEILL: I think people are unnecessarily concerned and expressing views without any proper facts before them. In fact where we are structuring will enhance transparency and accountability. We don’t believe that it will diminish that at all. I understand people require that of any our governments to do that. People forget that we are the ones who passed the legislation to establish Sovereign Wealth Fund for the first time in this country. We are trying to restructure all these organisations so they are responsive to making sure that state-owned are run in a commercially viable proposition, and that it provides the returns through the state and ultimately the people who are the shareholders of these enterprises. And that these businesses conduct themselves and report themselves to parliament and publicly in a timely manner, so the reporting structure is not there. So we are improving on the processes of management of these companies. So I don’t see why people are jumping to conclusions that it will not be transparent and accountable. I think the legislative structure that we are proposing will be very good for the country and good for the state-owned enterprises.
GARRETT: What consultation will there be on the legislation for the Kumul Holdings, Kumul Mining and Kumul Petroleum?
O’NEILL: There will be public consultations and we want to encourage that and when we put it through parliament there will be a debate on the issues and we’ll encourage it. In fact we are encouraging people to debate but debate on facts, don’t make assumptions that are not true. We have to learn from our mistakes from the past. We’ve had all these organisations and state-owned entities parking funds in some strange accounts all around the world where none of our citizens ever visited. We don’t know what has happened to those funds. Now we are saying that it must be managed in the country publicly, but reporting must be done on a regular basis so people are aware where their assets are, where their funds are and they report through a structure that we are proposing.
GARRETT: We’re talking here about 20 billion dollars worth of funds and many developing countries have seen leaders pillage national assets in the past. How are PNG’s assets protected from future leaders who might take a sort of Mr 10 per cent approach?
O’NEILL: That is why we are putting it through a legislative structure so that no government, no single politician, no single leader will individually control these assets. It will be done through parliament, the entire parliament will be responsible through the nation. These people are mandated and trusted people and that is the reason why they get into parliament in the first instance. If we cannot trust them, who can we trust? We cannot place all these assets in unmandated people to run it for us thinking that they are the only ones who are the honest citizens of the world. So I think it is important that we give due respect to the people’s decisions, in fact our electorate’s decision, that they’ve given us leaders to set a direction for how we manage their assets on their behalf. And as I said we are learning from the past, it’s no different from how Temasek, which is a Singapore investment company for Singapore government, how successful that has been with no resources whatsoever. We’ve got a lot of resources and we’ve got nothing to show for it. So I think all in all everyone is on the right track, we’re all trying to protect the interests of our country. But I think there must be some genuineness, some honesty in the manner in which we debate this issue, rather than an emotional one because there’s a pursued view that something will go wrong because politicians are in charge. In fact politicians are not going to be in charge. In fact the board of trustees will be the senior leaders of our country that at one time or another has been entrusted by the people to run this country. And I’m certain they’re concerned about their legacy, they’re concerned about their own standing with respect that they are countrymen and women and they will do the right thing and they will do it within the legal structures that we set on how their behaviour should be in managing that trust. The management and the respective boards will be all independent. We are going to get the best talent that is available to manage our petroleum and gas resources, we are going to get the best talent as available to manage our mining interests and all the other companies. These are technical fields that we leaders don’t have expertise in but we must employ the right people and independent people to do so