Papua-New Guinea

Business Is Booming In Papua-New Guinea

In this and following pages is an exhaustive survey of Papua-New Guinea's lomic potential by leading Sydney economic expert Ray Melrose, who was specially missioned by PIM to make it. The survey is the result of an extensive tour Ylr. Melrose of major Territory centres and of discussions with leading political business personalities both in the Territory and in Australia. PIM presents survey at a time when there is vital interest in the emerging Territory and when investors, and in fact all interested in the Territory's future, must have authoritative rmation at their fingertips.

By Ray Melrose

An unprecedented era of prosperity and dynamic economic development has begun in the tralian-administered Territories of Papua and New Guinea.

This is the clearest revelation emerging from an intensive survey of activity in the major centres he Territory, and an examination of the factors likely to promote or inhibit development in the *s ahead.

Everywhere, spending is rising and business is booming. The big Islands ing companies, established in the area for up to 80 years, are increasing investments in old and new projects. At the same time, big Australian panics like BHP and Appleton Industries are starting new industrial ures.

SOUT to enter the Territory in a big way is the Australia New lea Corporation, a merchant :ing operation that is backed by t of the biggest financial interests Australia, as well as substantial seas capital. rst project of this group is the ling of a substantial headquarters ling in Port Moresby; this will : ollowed by a number of spon i projects aimed at developing resources of the islands, illions of pounds are being ed into development of the rian activities that form the istay of the economy and appear tin to continue to do so for many s to come.

Dpra, cocoa, tea, pyrethrum, palm peanuts and a range of other modities head the list of these ly important products. Some are idy bringing in the bulk of the dry’s export income; all are duled to earn many millions more ie years ahead. jcondary industry, too, is the sub of an intensive development j. Lae is pin-pointed as the site a meat canning industry to lie the produce of a substantially mded cattle industry. A nail

factory and a plant to make steel drums will also be sited there. A drum plant is likely for Rabaul, and a window louvre plant for Port Moresby. These are merely a few of the facilities planned for the Territories.

Recognising that no economic ad vance is possible without adequate means of communication, the Ad ministration is almost trebling its expenditure on road and bridge building. In particular, engineers are tackling the task of providing roads into the Highlands of New Guinea. Here in valleys 5,000 ft above sea level live three-quarters of a million people whose lands are rapidly becoming a rich agrarian province.

Building Activity

Through rugged jungle terrain and rocky mountain passes, an all-weather road is being pushed from Lae deep into the highlands, while another is opening up the valley of the Ramu and still another is being considered to connect remote Highlands areas with the port of Madang.

Other communications are also be ing developed at a fast rate. Lae air

port is being enlarged to take jets, and a new enlarged strip will be in seivice soon at Mt. Hagen, deep in the Highlands. Wharf facilities are being enlarged at Lae and Madang, and a direct cable from the Aus tralian mainland to Madang is now a reality.

Accompanying this widespread de velopment is a rush of new building activity. Commercial and domestic premises are going up at a record rate, and timber yards, cement brick plants, and even sheet metal plants have been established to service the boom.

All this impressive evidence of surging growth and long-term plan ning has emerged against a back ground of uncertainty and doubt that is never very far from the minds of Territory businessmen and residents when they talk of the future.

Their chief concern is for the security of their jobs, their busi nesses, their families and their homes at that still incalculable time in the future when New Guinea becomes a politically independent State.

Everybody agrees that indepen dence is coming, but very few even dare to think seriously of how soon it may come.

Another basic concern is the sus pected though yet unvoiced interest that Indonesia may have in adding the rest of New Guinea to the western half so recently wrested from the Dutch.

The uncertainty caused by these

considerations has deprived the Terri tories of much new private capital and many personnel who have re turned to Australia rather than risk their future. The difficulty of obtain ing first-class staff is a continuing major handicap to the development of the country.

Yet development is proceeding at a pace never before known in the country, primed mainly by the big increase in the amount of funds pumped into the economy by Aus tralia in the past three years.

The assurance that it will continue is to be found in two external factors that are already combining to out weigh practically all other considera tions that have until now guided the progress of the Territories. These factors are: • New Guinea is now virtually the only major responsibility of the Trusteeship Council of the United Nations and thus has become the major target for the Soviet bloc’s propaganda on anti-colonialism. It is inevitable that this must result in continuing pressure on Australia to hasten the day of independence for New Guinea.

• The World Bank survey of the Territory, the report on which was completed some time ago but has still not been published, is expected to recommend a decisive acceleration in the pace of economic development which can only come from a major increase in the amount of money provided for that purpose.

Australia is, of course, not bound to accept the recommendations of the World Bank report and, indeed, may not do so in some of its sections.

But any failure on our part to hasten the pace of development and the im plicit march of independence would be an open invitation to censure and further intervention by the United Nations, which recommended the World Bank survey.

Independence Coming

Thus, this combination of pressures is clearly leading to two sure end results unprecedented economic activity, and independence for the indigenous people. Where it leads beyond that, nobody is quite sure.

But what is sure is that, for many decades to come, the people of New Guinea will need the friendly support and guidance of an economic “Big Brother”.

As in virtually every other na that has achieved independence c the past decade or so, “outsi capital and technological aid will needed for a long time to eni the country to achieve and main a satisfactory standard of living its people. Even Australia is stil that position.

Where that “Big Brother” aid come from is the chief concern Australia. Big Business, having s the position up, appears to Y made an almost unanimous decii that New Guinea’s loyalty will with Australia.

Businessmen and Administra officials alike see no sentiment em ing that represents any real dai to the continuing security of j tralian investment in the country.

They believe, and at this stag seems a valid conclusion, that t] is no reason why businesses that 1 served the people for many deci should not continue to do so a independence is achieved.

In only a few of the ne l independent nations has Congo chaos developed or outside im ment been widely expropria Most have welcomed the contim support of foreign capital—Nig is one outstanding example,

tern Samoa is a further example le Pacific. would seem that only incredible and ineptitude could cost us position in New Guinea. We are inched in the country; are de ping it fast; and, at least, have incurred the ill-will of the people. 3 quote a great American Presi , Franklin D. Roosevelt, “We nothing to fear but fear itself” ar that may cause us to falter in efforts, fear that may keep ite capital out of the country, that may denude the country of petent men, fear that may pro administrative decisions that us the regard of the people.

Faith Needed

iese fears, and their conse ces, are the intangible elements will make all the difference to future of New Guinea and our ionship with it as an independent •n. is the conclusion of this survey there is neither room nor any reason for them in contemplat our future in New Guinea. If develop the country soundly, rely, and in concert with the ing abilities of the New Guinean le, we have at least as much ce as any other nation standing close relationship with those le. we do not have faith in this simple precept, then we might as well get out now and turn Ferritory back to the Trusteeship icil. ic survey that led to these con 3ns began with an examination le criticisms levelled at the Aus m Administration, generally by Soviet delegate, in the United 3ns. Reproduced below are ex s that illustrate the general line iese criticisms:

What The Un Says

2 Political Advancement: The y-constituted House of Assembly to real power and is, in effect, “a vithout a kernel”, i Economic Advancement: “Eco c activities are carried out, not he interests of the indigenous le, but rather in the interests Australia and of Australian and gn companies which exploit the al and human resources of the tory.” istead of diversifying the amy, Australia is strengthening nbalanced character by develop only those agricultural crops h do not compete with Australian JCtS.” (Over)

“American, British and Australian companies hold a dominant position in the economy. Foremost among these is the Burns Philp Company, which is an empire controlling 50 large subsidiaries and which, in turn, is part of a group of Sydney monopo lies headed by the Bank of New South Wales, the Colonial Sugar Re fining Co., and John Fairfax and Sons Ltd. Its chief competitor is W.

R. Carpenter, which is financially inter-related with Burns Philp,”

On Social Advancement: “Discrimi nation still exists in the matter of wages, and only 7,000 out of a work ing population of 56,000 are mem bers of trade unions. There is no legislation regulating relations be tween employers and employees.

There is no system of social security.”

On Education: “After almost 50 years of virtual Australian domina tion of the Territory, the people are still illiterate. Reforms just carried out cannot conceal the true state of affairs—that 80 per cent, of the population is illiterate and that 66 per cent, of school-age children are not attending school.”

These extracts are the very latest expressions of opinion on these matters and come from the Report of the United Nations Trusteeship Council for the year ended June 29, 1964, which was published several weeks ago in New York.

Un Will Attack

Supplemented by criticisms that will undoubtedly emerge from the report of the World Bank, they will form the basis of the attacks on Australian administration that will undoubtedly be heard in the United Nations again this year.

The sort of answer that Australia will be able to give to the more im portant (and accurate) of these charges is contained in the detailed sectional survey of conditions in the Territories to be found in the follow ing pages of PIM.

But first it is necessary to look at the probable form of the World Bank report, which is unofficially stated to have expressed severe criticism of some aspects of our administration and to have called for some sweeping changes.

Points Of Bank Report

According to informed sources, some of the main provisions of the report will be: • The urgent necessity for greater emphasis on economic development. • The establishment of some financing organism such as a Rural and Industries Bank to provide

finance for development. • The provision of substantii increased funds from Australia. • Specific industry recommen tions, including proposals for lai scale cattle development in the Ma ham, Ramu and Highlands valleys • The necessity to provide quickly as possible modern, effici roads, particularly linking the Hi lands regions with the north cc of the main island. • A procedure for breaking stranglehold on development that been imposed by the Administrate scrupulous regard for the land ten custom of the New Guineans. It understood that the Bank regards as vital, and recommends a sysl of direct leasing of land from native owners who would be offe the option of buying the capital provements after say 30 years, v the aid of bank-provided finance. • Establishment of an Econoi Advisory Council to advise and ordinate in respect of all matters fecting the economic development the country.

Another proposal suggested some quarters is the establishm of a New Guinea Development Cc mission to handle all matters aff< ing the relationship between the A tralian Government and the devel ment of New Guinea.

It appears likely that the Admii tration will accept most of th recommendations, and many, inde represent merely an amplification i acceleration of projects already un way.

Land Reform Needed

On the crucial matter of land form, however, there appears to some doubt about which way Administration will move. On one hand are the urgent requireme of a development programme tl must be implemented; on the oth the fear of offending the N Guineans on the basic matter of th land rights.

It is a conclusion of this sun that the broad overriding requi ments of the long-term situation c for reform of the land tenure systi and that the procedure outlir above is a fair and equitable one 1 all parties.

It appears that there is no shorts of indigenous owners who would prepared to lease their land on appi priate terms and that this would h< both the individual owners and 1 long-term prosperity of both the selves and their country.