Courting the Asian tigers

IN early February Paias Wingti made his second visit to Indonesia since becoming prime minister in July, 1992. He had also visited Singapore and Malaysia in that period and wants to include several more Asian countries on his overseas itinerary this year.

It is part of his government’s new “Look North” policy, to attract investment and create new markets for exports. “In the coming months there will be an increased drive to get closer to our Asian neighbours,” Wingti said when visiting Indonesia. The new approach, taken right after a run-in with Australian mining companies, may have signalled that Wingti wanted a better deal, and believed the Asians would be the best.

He made this plain when he visited Singapore and Indonesia.

“The state will endeavour to see that the people of Papua New Guinea gain maximum benefit from the development of its non-renewable resources. At the same time the state will ensure investors enjoy a stable investment climate and get a reasonable return on investment.”

Wingti said it would be in the area of economics that PNG stood to reap the greatest benefits in increased relationship with Asia. “Each of the Asian tigers is increasing its industrial base. Not only can PNG learn from their experience, the same industries could be the destination for certain PNG raw materials which cannot be processed

locally.”

The Port Moresby-based Malaysian Business Council welcomed the Wingti government’s initiative. Council president Timothy Lim said, “An increased economic and trade alliance with nations in the Asia region is the right step in the interest of PNG whose economy is young and fast growing.” Lim said the Look North policy should not mean PNG should do away with its traditional and long lime trading, and business partners, it should look actively towards “large supermarket” of countries in Asia.”

At an oil and gas conference in Singapore in January, Wingti made his first attempt to sell PNG to Asian investors. He spoke of the great resource potentials and explained in detail his government’s policy on mining and the country’s lax regime.“We are seeking to create the circumstances which will provide long term stability for your investment in Papua New Guinea. In 1993 we will be looking at ways to create major incentives in oil and gas exploration and development.”

The following excerpts from a newspaper article by Australian Trevor Kennedy, a member of the PNG Holdings Corporation the gov ernment company charged with privatising publicly owned corporations very well summarises the implications of such a move to mining companies in PNG.

“It would be tragic if the current difficulties between some Australian resource companies and the government of Papua New Guinea escalated into the sort of dispute which permanently impaired our relationship with our closest regional partners - but it shows every sign of doing that. While re-orientation of our foreign policy priorities towards the “region” in preference to our traditional tics and markets in Europe is commendable there is a real need to ensure that our small Pacific neighbours are not forgotten in the rush to develop relationships with established and emerging Asian

Tigers.

“At the moment the Australian mining industry, or a section of it, has decided to take on the government of PNG with all the insensitivity and insouciance this sector has brought to the environmental issues and issues involving indigenous peoples worldwide over the decades. Clearly in the current dispute there are rights and wrongs on both sides. The issues are complex and emotionally charged as inevitably, so many issues involved with the land become to the extent to be left to the dispassionate judicial system to resolve.

“Currently the face of Australia is represented most forcefully by a group of major resource companies (which may have the balance of right on their side) of whom the overwhelming perception is of arrogance and greed (and there is at least some evidence that they have overplayed their hand). The danger is that Australians will be perceived to have changed from paternal to patronising, from helper to exploiter.

Already the recent dispute between CRA and Mount Kare landowners, which has dragged in the government and the Porgera partners has reached a crisis point it threatens to poison the relationship between Australian resources companies and the PNG government irreparably. Some leaders took the view that Australians had formed themselves into a tightly knit club, uninterested in the long term future of the country and its inhabitants just bent on exploitation.

“There is no doubt there are vast resource riches which still await exploitation in PNG and the Malaysians, the Japanese, the Koreans, the Taiwanese and the Chinese are aware of it. The preference of the powers in PNG at this stage is to stay with devil they know. It is obvious to them that a major shift in some investment will bring other problems that Australia and other Western investors do not burden them with. But it would be incorrect to continue believing that PNG’s foreign investment will founder if Australian investment dries up. □