£25M. Budget Hand-Out Confuses

Issue For P-NG Investors

By R. W. Robson

Although few people have been encouraged to put money into Papua-New Guinea recently, except on the most easily removable terms, the Territory is full of beckoning opportunities if one forgets politics. Now Australia’s flamboyant, 1963-64 Budget gesture complicates the issue for those in doubt.

AUSTRALIA’S annual gift to the dual Territory has been raised from £2O million (1962-63), to £25 million in 1963-64. With PNG’s own commercial earnings of, say, £l5 million, that means that P-NG has a possible £4O million per annum to spend, if it wants to spend.

Actually, it is more than that. A good many millions being disbursed by Australia in New Guinea under non-Administrative headings like Army, and Civil Aviation—are not included under “Territories” in the annual Budget, Papua-New Guinea now is probably the world’s most richly-endowed small Territory.

As seen through the trader’s spectacles, £4O million a year is a lot of money; and a very large propor tion of it, in one form or another, goes through the commercial strainer, for the benefit of private enterprise in P-NG and Australia.

Much of Australia’s £25 million, of course, is paid away to the army of well-paid, comfortably-circum stanced public servants now main tained in P-NG. Some of that money

goes South, to maintain dependants, and swell insurance and savings bank funds. But the greater part of it is spent right there m the dual Tern tory, to provide thousands of public service personnel with food, shelter and amenities, A To An Ar ™V , to ta^e c ?u C that a l? iy °f public servants there is another army of traders, shipowners, caterers, builders, butchers, bakers and candle stick-makers a numerous, prosper ous > and on £ J he whole ophnnstic community of Europeans and Chinese, J^ 1S so * ld phalanx of private enter prise serves also the needs of the growing lines of primary producers, jf there is reluctance to engage in the long-term enterprise of coconut planting—the life of a palm is some 70 years> 3nd God knows w h a t will have happened to plantation owner ship only two or three decades hence —there is eagerness to produce cocoa, coffee and peanuts and similar quick and profitable crops, besides timber and beef.

Official statistics limp far behind

the needs of day-to-day summaries; but it can be taken as certain that, despite the fears of outside investors, more and more planters are produc ing more and more.

And there is another healthy, non official community, the sight of which greatly cheers the trading classes.

This is the steadily growing com munity of native producers.

They are slow to learn, stumbling, uncertain of their course; but the over-all picture is beyond doubt.

More and more natives are planting more and more acres of coffee and cocoa and similar crops—and using the proceeds to establish a higher standard of living. That, in turn, means a greater demand for consumer and capital goods of European origin.

More Trade For years, there has been no doubt about the profits to be made in P-NG.

Very comfortable earnings have travelled South to assist the balance sheets of Australian corporations.

Accumulations of impressive size have been transferred to Australia by the Territory’s Chinese merchants, to re appear in substantial brick-and-mortar assets in Brisbane, Sydney and Mel bourne.

Many, many millions of taxpayers’ money which left Australia for use in taming the noble savage, returned inevitably to Australia through the complex processes of trade, as dividends for shareholders, savings banks deposits, blocks of flats.

Already more and more salesmen from Australia, Europe and Asia have been carrying their sample cases into Papua and New Guinea, and more overseas people are examining the Territory investment “opportunities”.

Obviously, this new £25 million shot in-the-arm will further stimulate P-NG economy, already pulsating strongly under production growth and social improvement.

Surely (argue experienced observers] here is a place that literally calls for investment.

The Political Angle But then, alas, we must turn for a look at the political angle. Only fools can ignore that, nowadays. And the whole picture is changed.

Since World War 11, untimely, upsurging nationalism has overthrown established law and order in a score of countries, and thousands of pro perty-owners have been callously robbed of property worth hundreds of millions of pounds. Netherlands Indies, Egypt, Cuba, various nev States in Africa, West New Guinea—

ihe list is a long one, and of very similar pattern. Can Australian New Guinea escape?

Ten or 15 years ago, Australian individuals and corporations invested their money without hesitation in Papua and New Guinea, Overseas capital placed there confidently even since World War 11, in land and trading and industrial enterprises of many kinds, totalled scores of millions of pounds.

Today, three ugly pictures, any one of which, alone, is likely to scare off investors, hang over Port Moresby’s front door. They are: • Australia has submitted to a United Nations crash-plan, under which the almost completely illiterate and untrained native community of New Guinea is being forced to accept self-government within five years.

Australia, under UN pressures, has given various assurances to the natives that they will be “free” to run their country as they wish, within a few short years; but has given no similar assurance of security to the numerous European interests which have made substantial investments in the country. • Indonesia appears on Australian New Guinea’s borders as an increas ingly aggressive, arrogant and irre sponsible nation. None knows where it is heading. Indonesian people, as people, are not frightening; but there are 100 million of them, and under unpredictable Soekarno, they could become the spearhead of the south wards thrust of the countless hordes of Red Asia. Of all the South Pacific countries, New Guinea is nearest to Red Asia, and vulnerable. • A recent decision by the P-NG Supreme Court placed all non-native land titles—hitherto regarded as un assailable security—in jeopardy. The decision is being appealed against; but a long time must elapse before the situation is cleared. Meantime, the outlook regarding New Guinea securities is under a cloud.

There are trading opportunities galore in Papua and New Guinea today. But people wishing to invest in private enterprise there cannot be blamed if they do not allow their money to go deep into the country’s economy; but keep it in a condition easily negotiable, ready for quick withdrawal, if political and allied de velopments should challenge the Aus tralian authority.

Events of the past five years, in Africa, Asia, the Caribbean and else where, bristle with examples of how private interests can be sacrificed to political expediency.