China’s push into PNG has been surprisingly slow and ineffective. Why has Beijing found the going so tough?



Peter Parks/Pool/EPA

Ian Kemish, The University of Queensland

Chinese activity in Papua New Guinea was not the only factor behind Australia’s Pacific “Step-Up”. As a former high commissioner to PNG, I know it followed serious deliberations about Australia’s overall strategic imperatives in the region.

But China’s engagement with our nearest neighbour was in the minds of many when Prime Minister Scott Morrison announced the foreign policy initiative in November 2018, pledging to

take our engagement with the region to a new level.

Chinese President Xi Jinping was about to make a state visit to Port Moresby, before joining other world leaders at the APEC Summit there. China had been busy repairing roads and constructing an international conference centre in the PNG capital ahead of the meeting, along with a six-lane highway leading to the parliament.

A Chinese hospital ship had just conducted a well-publicised “humanitarian mission” to PNG. And Prime Minister Peter O’Neill had recently signed up to the Belt and Road Initiative, fuelling concern that PNG’s growing financial exposure to China might be converted to Beijing’s strategic advantage.

Xi Jinping was the first Chinese leader to visit PNG when he arrived for the APEC summit in November 2018.
Mick Tsikas/AAP

Xi then used the opportunity of his state visit to pledge an additional US$300 million in concessional loans to the country.

Several Papua New Guinean friends commented then that none of this activity would be of lasting benefit to the struggling developing country. But it certainly captured public attention, and suggested a renewed strategic intent on China’s behalf to boost its influence in the region.




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Recent setbacks in China’s outreach

Eighteen months later, China is still looking for ways to engage with PNG, motivated by interest in both its abundant natural resources and key strategic location. But these efforts sometimes seem uncoordinated, and Beijing has suffered some significant setbacks.

China has been surprisingly slow to respond at critical moments. For instance, PNG officials became frustrated with bureaucratic stalling in early 2019 as they sought to follow up on Xi’s promised loan, and Australia ultimately stepped in to supply the required A$440 million.

Canberra also outmanoeuvred Huawei’s bid to lay undersea high-speed internet cables to PNG and the neighbouring Solomon Islands.

And this year, China has not sent any meaningful signal of solidarity to PNG since the onset of COVID-19 – just proforma PPE donations. Western institutions like the IMF are instead stepping in with emergency financial assistance but, so far at least, China has been nowhere to be seen.

Anti-Chinese sentiment flares up

The recent experience of China’s Zijin Mining Group points to another constraint – the anti-Chinese sentiment that sometimes lurks below the surface in PNG.

The PNG cabinet decided in April not to renew the gold mining lease held jointly by Zijin and Canada’s Barrick Gold at Porgera in the Highlands region. Prime Minister James Marape announced Porgera would instead transition to national ownership.

A letter from Zijin Chairman Chen Jinghe to Marape was then leaked. Chen warned if Zijin’s investment was not “properly protected”, he was

afraid there will be significant negative impact on the bilateral relations between China and PNG.

This provoked visceral anti-Chinese sentiment and praise for Marape’s stance on social media in PNG. Speculation last week the government was looking to sell the mine to another Chinese group sparked a further wave of anti-Chinese feeling – this time critical of Marape.

The tone of some of these messages brought to mind the violent attacks against Chinese and other Asian small business owners at past moments of economic hardship and local tensions in PNG.

A Chinese store owner taking shelter during anti-Chinese protests in PNG in 2009.
ILYA GRIDNEFF/AAP

Zijin is not the first Chinese resource company to face difficulties in PNG. In 2004, China’s Metallurgical
Construction
Company (MCC) secured the agreement of then-Prime Minister Michael Somare to buy the Ramu nickel mine in Madang province.

The company learned quickly that an agreement with the head of government is not enough. MCC did not plan adequately for engagement with landowners, provincial authorities and environmentalists, and inflamed local tensions by using imported Chinese labour.

MCC spent almost two years in court pitted against these groups, to its substantial cost.




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China is not giving up

PNG can be a hard place to operate. As the Australian government and many businesses and NGOs have found, success requires sustained effort with multiple stakeholders.

Chinese companies are not giving up. China Mobile reportedly looked at taking over domestic mobile carrier Digicel earlier this year, and Shenzhen Energy is persevering with its stalled US$2 billion “Ramu 2” hydro power project, given initial approval by the O’Neill government in 2015.

Industry sources report the current government, eager to announce employment-generating projects, is considering moving to implementation stage after some hesitation.




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A deal has also recently been signed allowing PNG seafood exports to China.

China has every right to pursue investments in the region, and PNG is entitled to diversify its external links. Beijing will likely make further advances, but on current form these will likely be more opportunistic than strategic.

Australia should engage China positively in PNG, consistent with its bilateral interests in both Port Moresby and Beijing. It should also build confidently on the advantages that flow from geographic proximity and a long, overall positive relationship with its friends across the Torres Strait.The Conversation

Ian Kemish, Former Ambassador and Adjunct Professor, School of Historical and Philosophical Inquiry, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Destitution on Australia’s hardening border with PNG – and the need for a better aid strategy



Visiting women from the South Fly selling their crafts in an informal market on Boigu Island in the Torres Strait.
Author provided

Mark Moran, The University of Queensland

Less than four kilometres from Australia’s northernmost islands in the Torres Strait lies the South Fly District of Papua New Guinea.

If you’ve ever heard anything about this borderland region – wedged between Australia, Indonesia and the Fly River in southern PNG – it’s likely about protecting Australia from disease, illegal migration, drugs and gun smuggling.

However, the story of the South Fly District is much more complex. It is a story of chronic underdevelopment and growing frustration with a border management regime that favours some PNG nationals over others and ever-tightening restrictions on trade across the Australian border.

Over the past four years, researchers from the University of Queensland visited 35 South Fly villages and five Torres Strait islands to better understand the relationship between the two sides of the border. The findings were just released as a book, Too Close to Ignore: Australia’s Borderland with Papua New Guinea and Indonesia.

A map of the South Fly District in southern PNG and neighbouring Torres Strait Islands.
Author provided

Extreme poverty on the PNG side

The World Bank has set the international poverty line at A$2.70 per person per day, but the median income in South Fly villages is less than half of this. Worse still, basic goods like flour and sugar are twice what people pay in remote areas of Australia, and the cost of fuel is A$3–4 per litre.

PNG is often described as having a dual economy, with mining and other foreign investment driving the main economy with money, and subsistence gardening underpinning the other. Subsistence activities (growing only what is needed for survival) remain essential in rural areas where more than 80% of people live.

But cash is also desperately needed for basic food items, health services and schooling. People are constantly looking for markets, but they face formidable obstacles due to the remoteness of the region and high transportation costs.

Now, the hardening of the Australian border is proving to be another barrier, too.

A South Fly Village house with an improvised door (scavenged from the Torres Strait).
Author provided

Hardening of the border

To stem any threat of coronavirus, cross-border travel with the exception of medical emergencies has been banned since mid-February, more than a month before PNG’s first confirmed case.

But even before then, a complex border management system was fuelling frustrations.

Under the Torres Strait Treaty, residents of 14 nominated “treaty” villages in PNG have been allowed to cross the border, so long as they have a pass signed by a Torres Strait Island councillor.

Passage is limited to traditional purposes only, which is interpreted by Australian authorities to exclude commercial trade. South Fly residents, however, still seek to barter across the border for cash and goods. This trade is critical to their economic survival.




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For PNG residents, the Australian government approach to border management relies on a hierarchy of haves and have-nots — those villages with treaty status, and those without.

As non-treaty villages can’t cross the border, they sell their goods to treaty villages, who then on-sell them into the Torres Strait. The treaty villages guard their privileges, informally helping to manage the border.

But the treaty villages themselves are now also struggling to trade, as the Australian Border Force (ABF) and Torres Strait Island councillors have, in recent years, asserted more control over the border.

By not issuing passes, the councillors limit the numbers of days for visitors and even issue total bans to entire villages. They do so to protect their limited resources during times of water shortages, to prevent the spread of infectious diseases or viruses (like COVID-19), or as punishment for overstaying on previous visits, fighting or other breaches.

The Australian government relies on the councillors to be informal frontline defenders of the border. ABF officers have also imposed harsh restrictions on those who do manage to cross, including limits on access to ATMs for PNG visitors trying to collect remittances from extended families.

PNG visitors are no longer able to sell their goods or avail themselves of medical services to the extent that they once did, either.

Border management trumping aid assistance

This system has some kind of logic for border control, but it makes no sense when it comes to other issues, like health.

Australian aid assistance in the South Fly District is largely limited to the capital Daru and the 14 treaty villages. In these regions, Australia has funded a world-class response to tuberculosis, including a hospital in Daru and health centre in Mabuduan, a treaty village.

The primary health system in the rest of the district, meanwhile, is grossly understaffed and under-resourced. People from South Fly villages often travel to health clinics on the outer Torres Strait Islands, where clinicians adopt a humanitarian position for medical emergencies.




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If patients have TB, they are sent back for treatment at the Daru hospital. But the health system’s transport is extremely limited, and most PNG residents can’t afford the exorbitant cost of fuel for private dinghies.

When they can raise the money to travel to Daru, they are often accompanied by family members and stay in squalid, overcrowded housing, where they run the risk of further spreading or catching TB.

One of the Daru settlements where many visitors from South Fly Villages stay.
Author provided

Normalise aid spending for greater impact

Despite the long history of reciprocal relationships between the South Fly and Torres Strait, a hardening border is worsening destitution and on the PNG side and exacerbating the security threat to Australia.

And as the Australian border hardens, the Indonesian border beckons, where trade in mostly dried fish products has been long established. Compared to the Australian border, the PNG-Indonesia border is relatively porous, and illegal border crossings and overfishing are pervasive.

Allowing commercial trade across the PNG–Australian border would certainly help. For example, the crab trade has been dominated by Chinese store owners in Daru, who buy up everything until stocks are depleted to sell onward to Singapore.




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Building a crab fishery in the South Fly could be a profitable enterprise for Torres Strait Island businesses, with live exports sold to restaurants in Australia, and better prices paid to the PNG women who traditionally catch them. Australian quarantine officers in the Torres Strait Islands could control catch size.

Expanding the bilateral aid program to benefit all the villages in the district, not just treaty villages would also help.

The current money needs to be dispersed more evenly for greater impact, according to the principles of aid effectiveness and population health, and not play “second fiddle” to border management.The Conversation

Mark Moran, Professor of Development Effectiveness, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Explainer: the medevac repeal and what it means for asylum seekers on Manus Island and Nauru



Jacqui Lambie has made a secret deal with the Coalition government to secure the repeal of medevac.
AAP/Lukas Coch

Alex Reilly, University of Adelaide

After much negotiation, the government has secured the repeal of the medical evacuation law – known as “medevac” – after making a secret deal with Senate cross-bencher Jacqui Lambie.

So what does this mean for those held in offshore detention?

Understanding the numbers

The number of refugees and asylum seekers in Nauru and Manus Island peaked at 2,450 in April 2014 (1,273 on Manus and 1,177 on Nauru) and has been dropping ever since. As of this week, about 466 asylum-seekers and refugees remain offshore – 208 on Papua New Guinea and 258 on Nauru.

Of the nearly 2,000 who are no longer in offshore detention, 632 have been transferred to the United States, 17 died in detention, mainly due to suicide, several hundred have been deported after their claims had been rejected, or after returning “voluntarily” with financial assistance from the Australian government. Of these returnees, 33 have been reported dead.




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In addition, the majority of those who are no longer on Nauru and PNG have been transferred to Australia for medical treatment. Prior to the Medevac law, 1,246 people had been transferred to Australia for medical reasons, including accompanying family. “Less than a handful” of these were returned to Nauru or PNG. The most recent return was on April 15 2018.

The number of medical transfers jumped dramatically from 2017-18, when there were 35 transfers, to 461 from July 2018 to the passing of the medevac law in February 2019. Since then, a further 288 were transferred under the earlier system of approvals.

According to Senates Estimates, between March 2 2019 when Medevac became law, and October 21 2019, 135 refugees and asylum seekers from Nauru and PNG have been transferred for emergency medical treatment under this process.

Why has there been such a focus on medevac?

The primary failure of the policy of removing asylum seekers to Nauru and PNG for processing has been the inability to find permanent resettlement options for those who are found to be refugees under the UN Convention.

Having ruled out resettlement in Australia, the government has scrambled to find other countries to take in the asylum seekers. In 2016, then-Prime Minister Malcolm Turnbull was fortunate to find President Barack Obama open to a resettlement arrangement, which he subsequently convinced Donald Trump to honour.

But this has been the only option on the table. There was an aborted deal with Cambodia, and a small number have been resettled in Canada through private sponsorship. The government inexplicably refused an offer from New Zealand to resettle 150 refugees each year, concerned they could then enter Australia via New Zealand.

With limited prospects for resettlement, and the mental health of those on Nauru and PNG always vulnerable and quickly deteriorating, medical transfers have been an important strategy. The increasing number of people transferred for medical reasons is a result of the escalating medical emergency.

Prior to medevac, transfers were at the discretion of the minister. When the minister refused a medical transfer to Australia, people were forced to challenge the exercise of the minister’s discretion in the courts.

After protracted legal actions, Australian courts routinely ordered the minister to transfer people for urgent medical treatment to fulfil Australia’s duty of care to people in offshore places. Medevac replaced this cumbersome process with a medical assessment by two doctors that was reviewed by an independent health advice panel. The minister maintained the power to refuse a transfer on security grounds.




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Now that the medevac law has been repealed, people will once again rely on ministerial discretion for a medical transfer. One would expect that most, if not all, of those remaining on Nauru and PNG will eventually make an application for a transfer. This is because spending up to six years in these places with limited facilities, and an indefinite timeframe for their detention, will eventually undermine the mental health of even the most robust of those who remain.

Recent figures released by the Department of Home Affairs suggest there are currently 418 applications for a transfer out of the remaining 466 people remaining offshore.

The tragedy is that these applications will not be assessed on purely medical grounds, and are likely to be long and protracted.

Repeal of medevac and the end game for offshore detention

The government’s repeal of the medevac law will do little more than delay transfers of the last remaining refugees held offshore. We may never know the conversations between the government and Jacqui Lambie, but perhaps she was persuaded that there was value in the government maintaining its uncompromising line on asylum seekers arriving by boat, while medical transfers continue unabated.

The majority of those now in Australia as a result of a medical transfer live in alternative places of detention while they access medical treatment. In time, the only realistic option is to grant these people a visa to stay in Australia. This should happen quietly, while the government maintains its firm but unrealistic line of no one ever being resettled in Australia.

These people can then become part of the Australian community, adults can find work, children can go to school. If this happens, there will be no resumption of boats arriving from Indonesia, and we can be rid of the blight of offshore detention.The Conversation

Alex Reilly, Director of the Public Law and Policy Research Unit, Adelaide Law School, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Bougainville has voted to become a new country, but the journey to independence is not yet over


Anna Powles, Massey University

The Autonomous Region of Bougainville, a chain of islands that lie 959 kilometres northwest of Papua New Guinea’s capital, Port Moresby, has voted unequivocally for independence.

The referendum saw 85% voter turnout during three weeks of voting, with 97.7% of voters choosing independence from Papua New Guinea over the second option, which was remaining, but with greater autonomy from PNG. As the Bougainville Referendum Commission stated, the numbers told an important story, reflecting the support for independence across genders and age groups.

It’s a momentous event, not only because it could a new country, but also because the referendum marks an important part of a peace agreement signed almost 20 years ago. The 2001 Bougainville Peace Agreement ended the deeply divisive nine year conflict (1988-1997) that lead to the deaths of approximately 20,000 people, or about 10% of Bougainville’s population.

The referendum, however, is non-binding. The ultimate outcome will be determined by a vote in Papua New Guinea’s National Parliament following negotiations between the Papua New Guinean government and the Autonomous Bougainville Government.

But as former President James Tanis said to me hours after the result was announced:

we survived the war, ended the war, delivered a successful referendum, what else can now stop us from becoming a successful independent nation?

China’s interest in Bougainville

For the broader region, an independent Bougainville has a number of implications. Firstly, it sends a strong signal for other self-determination movements across the Pacific, including in New Caledonia which will hold a second referendum for independence in 2020.

There are also geopolitical implications. The referendum has taken place during a period of heightened strategic anxiety among the Pacific’s so-called traditional partners – Australia, New Zealand and the United States, as well as the United Kingdom, France and Japan.

There have long been concerns China will seek to curry influence with an independent Bougainville. As one Bougainvillean leader informed me, Chinese efforts to build relationships with Bougainville’s political elite have increased over the past few years.

Beijing’s interest in Bougainville is two-fold: first, it is seeking to shore up diplomatic support in the Pacific Islands region, thereby reducing support for Taiwan which lost a further two Pacific allies this year. And second, to access to resources, namely fisheries and extractive minerals.

Although it will be tempting for many in Canberra, Washington and Wellington to view an independent Bougainville through the current strategic prism – adhering to narratives about debt-trap diplomacy – doing so undermines the importance of local dynamics and the resilience of Bougainville people.

An independent Bougainville navigating a more disordered and disruptive international environment will need nuanced grounded advice, rather than speculation.

The road ahead for Bougainville will be challenging and it will need its friends – particularly New Zealand and Australia.

The much vaunted respective “Pacific Reset” and “Pacific Step Up” policies provide entry points for the kind of genuine engagement and support that Bougainville will require in the coming years.

Celebration with cautious anticipation

Following the result’s announcement, Papua New Guinea’s Prime Minister James Marape said his government had heard the voice of Bougainvilleans, and the two governments must now develop a road map that leads to lasting political settlement.

And Bougainville Referendum Commission chairman Bertie Ahern urged all sides to recognise the result and said the vote was about “your peace, your history, and your future” and reflected “the power of the pen over weapons”. Acknowledging the result is non-binding, Ahern said:

the referendum is one part of that ongoing journey.

And here lies the challenge. The post-referendum period was always going to be one of celebration, cautious anticipation and the management of expectations.

As one of Bougainville’s formidable women leaders told me, there are concerns about security in the post-referendum period as expectation turns to frustration if there are perceived delays in determining Bougainville’s future political status.

What’s more, the negotiations are likely to take a long time, since there’s no deadline they’re required to meet.

There are, however, critical milestones that still need to be hit first. This includes the Autonomous Bougainville Government elections, the first elections following the referendum, so will likely see intensified politicking as politicians jockey for a potential role in building an independent Bougainvillean state.

The Papua New Guinea’s national elections are also scheduled for 2022. The risk in both cases is that Bougainville’s future becomes a political pawn.

An independent Bougainville will face significant challenges and diverse choices.

Not least of which is Bougainville’s economic security and the choices that will need to be made about the Panguna Mine, the gold and copper mine at the heart of much of the conflict, and fisheries, once the new nation’s 200-mile Exclusive Economic Zone is created.

A young nation built on a past mired by the extremes of resource nationalism, Bougainville has difficult decisions to make about how it secures its economic self-reliance.The Conversation

Anna Powles, Senior Lecturer in Security Studies, Massey University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Everything but China is on the table during PNG prime minister’s visit


Tess Newton Cain, The University of Queensland

Papua New Guinea Prime Minister James Marape is visiting Australia this week, his first overseas trip since he was elevated to that office in June this year. And it’s the first time Scott Morrison has hosted an international leader in Australia since he was re-elected as prime minister in May.

This week’s visit has been positioned as the first of what will be an annual meeting between the leaders. It indicates a stepped up relationship, one that adds to Morrison’s growing focus on building personal relationships throughout the region: in Vanuatu, Fiji and Solomon Islands.




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There are many things the two leaders have to discuss, from a naval base development to asylum seekers on Manus Island. But on arrival, Marape was clear that he did not plan to discuss his country’s relationship with China.

Marape restated PNG’s overall position on foreign policy: that of being “friends to all and enemies to none”. But that didn’t prevent the Australian media asking Marape questions about China during a joint press conference on Monday.

One journalist asked if Marape was concerned about potential governance problems associated with increased Chinese investment in his country. His response could not have been more straightforward:

Every businessman and woman is welcome in our country, and the Chinese investors will not receive any special treatment and preference, just like Australian investors will not receive any special favour or treatment.

Many in the Australian media and policy community would like to know much more about the relationship between PNG and China, as they wonder how it will affect Australia’s influence with their nearest neighbour.

Belt and Road Initiative

As we have seen elsewhere in the region, the relationship between PNG and China has become more developed in recent years.

Under the previous PNG prime minister, Peter O’Neill, PNG became the second Pacific Islands nation to sign on to the Belt and Road Initiative in June 2018.

O’Neill participated in the Belt and Road Initiate Forum earlier this year, and indicated that he foresaw PNG becoming even more involved in projects for the global infrastructure and trade strategy.

O’Neill resigned in May, and it’s yet to be seen whether Marape will participate in projects for Belt and Road Initiative.




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In any case, one thing Marape has made very clear during this visit to Australia is that he’s looking for opportunities to diversify the PNG economy beyond the resources sector. He is particularly focused on growing the agricultural sector, which will require additional investment in infrastructure to supply domestic and export markets adequately.

It’s not always easy to determine the extent of Chinese aid, investment and loans to countries like PNG. But Sarah O’Dowd, an Australian National University researcher, has calculated that at the end of 2018, PNG owed approximate A$588 million in external debt to China. This represented 23.7% of the total external debt.




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Australia provides the largest amount of aid and investment into PNG in the world. But the perception in Canberra remains that Australia’s influence in its nearest neighbour is being diluted, and that this needs to be addressed for strategic purposes.

Asylum seekers and a naval base on Manus Island

Given the nature and importance of the relationship between Australia and PNG, it’s not surprising this bilateral meeting has been prioritised ahead of next month’s Pacific Islands Forum meeting in Tuvalu. Their meeting allows for Morrison and Marape spend some time getting to know each other before they meet with a larger group of Pacific leaders.

Of the various announcements made on Monday, not much was new. There was a dollar commitment (A$250 million) to last year’s joint announcement by PNG, Australia, New Zealand, the USA and Japan to bring electricity to 70% of Papua New Guinean people by 2030.

There was a passing reference to the joint redevelopment of the Lombrum naval base on Manus island by PNG, Australia and the USA, also announced last year at the APEC meeting held in Port Moresby.




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It’s significant that the PNG delegation includes Charlie Benjamin, who is governor of the Manus province. He has already expressed strong reservations about this proposed redevelopment of the naval base. And he is not alone, with other commentators noting that such a development doesn’t necessarily sit well with PNG’s non-aligned status.

The development also provoked criticism from Beijing, which had apparently been seeking an agreement from the PNG government to develop the site.

Benjamin has a powerful voice, and he made good use of it during his own impromptu press conference on Monday.

He used the opportunity to hammer home what has been the biggest thrust of the PNG message to Australia during the visit so far: the ongoing presence of asylum seekers and refugees on Manus and elsewhere in PNG.

Benjamin has made it clear that the time has come for Australia to “step up” and resettle the refugees in his province to another country.

While Marape may feel he has secured some sort of commitment from Morrison to establish a timetable for bringing this bit of the “Pacific Solution” to an end, the lack of detail about what that timetable is may prove a tricky sell back home.The Conversation

Tess Newton Cain, Adjunct Associate Professor, School of Political Science & International Studies, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

In the post-APEC scramble to lavish funds on PNG, here’s what the country really needs



File 20181121 161615 77annm.jpg?ixlib=rb 1.1
A student does his homework near a solar power kit in remote PNG – apparently charging his phone or looking up something on the internet.
Geoff Miller/University of Queensland

Mark Moran, The University of Queensland

If you set out by dinghy from the northern-most inhabited part of Australia you will make landfall in Papua New Guinea (PNG) fairly soon.

Boigu Island, part of Queensland, is the most northerly island in the Torres Strait. With its own Australia Post outlet, it is less than ten kilometres from the PNG coast, an area known as South Fly District, part of Western Province. (Fly refers to Fly River, a major feature of the area.)

PNG, a country often overlooked by the Australian public, is enjoying the fierce competition among foreign powers for influence in the country after APEC ended in stalemate and heightened US-China tensions. APEC was held in Port Moresby, PNG’s capital, earlier this week.




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For PNG, the attention may well translate to development funds. Already, the US has pledged to work with Australia to upgrade Lombrum naval base on Manus Island, in what is widely seen as a counter to rising influence from Beijing in the region.

Fishermen at Daru, the capital of PNG’s Western Province, pictured in 2006 as local police cracked down on illegal fishing.
Royal PNG Constabulary

But if foreign powers really want to make a difference to PNG, one of the poorest in the region, then funding equipment like telecommunications gear and solar power kits would be widely welcomed. One key benefit would be using mobile phones to transfer money – instead of traipsing long distances to a bank in town.

No fewer than 85% of PNG citizens live in rural and remote areas, it is estimated – so items like these are capable of making an enormous difference in their lives.

Much talk of infrastructure of late has involved the heavy duty type – ports, rail, military bases and the like. But as we all know, the biggest revolution around the globe is internet access.




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Stepping into remote villages in the South Fly, one is viscerally confronted with the lack of national expenditure or international finances of any kind.

Life in rural PNG has been described in terms of its “subsistence affluence.” The people are friendly and the land is fertile, with reliable rainfall.

But the lack of roads or public transport, and access to cash, means that opportunities for enterprise and employment remain extremely low. Everyone is searching for markets for their produce and crafts, so they can get cash to buy consumables and health services, and pay school fees.

One option for transferring money in these remote areas is via mobile phones.




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Recent research by Tim Grice found that people living in urban centres and rural towns in PNG are already using mobile money to send money to one another.

It is yet to take off in the South Fly but it could do soon, as people are already exchanging mobile phone credits used to top-up their phones.

Across the South Fly, villagers receive money from relatives living in urban centres like Port Moresby – or from Australian relatives in the Torres Strait – through the mail service Post PNG or the “bricks and mortar” Bank South Pacific (BSP) branch in Daru.

Households affected by the nearby Ok Tedi mine receive compensation payments into their bank accounts. The payments relate to extensive environmental damage to the area, especially the Fly River, when BHP Billiton operated the mine. But this could be done via phone payments too.

And then there are public servants or retired public servants, who burn up much of their government pay or pensions just to get to the bank and back. Mobile phone payments would improve life here too.

Paying government salaries and pensions by phone would be far easier

In the South Fly, officials get payments from the PNG government for community work projects. These officials keep careful records of the hours each villager works, but sometimes spend months in Daru, repeatedly asking the district administrator to release the funds. When the funds finally arrive, the elected official journeys home, surrounded by relatives as bodyguards, and hand delivers payments to each worker.

Much of the money goes on transport and accommodation in Daru. Again, this money could be sent via mobile phones.

PNG’s new Ireland province tested the idea of social payments for aged and disability pensions – with great success. The World Bank assessed the idea and said an electronic payment system was needed across the country.

In many South Fly villages, the shared mobile phone is found dangling from a tree or a window, in the one place where reception appears intermittently.

A lack of infrastructure maintenance and coastal corrosion have seen mobile phone coverage in the South Fly deteriorate. Work is underway to replace failing towers, ahead of moves to bring in 3G internet coverage.

A young girl in traditional dress uses a mobile phone as she waits for then Prime Minister Tony Abbott in Port Moresby in March 2014.
Alan Porritt/AAP

Maintaining mobile phone towers is cheaper than building roads

The cost of installing and maintaining mobile phone infrastructure is lower than building roads across river deltas and flood-prone savannah. And the higher the demand for transferring money via mobile phones, the more viable an upgrade to mobile coverage becomes.

International donors like China are increasingly funding infrastructure projects in PNG, though often with strings attached. Australian Prime Minister Scott Morrison just announced an infrastructure financing facility.

Two major mobile network operators, Digicel and B-Mobile, already provide mobile money services in partnership with BSP, Westpac, and ANZ.

Foreign aid could be sent via mobile phones, cutting out the middlemen

Foreign aid could be distributed this way, to a community-based organisation, for example. And cash flowing in means better-off citizens and more economic activity.

Another big potential benefit to all this could be tackling absenteeism among teachers and medical workers. They are often off work travelling long distances to towns to get their pay and do grocery shopping.

But there are risks. Giving the cash directly to people and organisations – where previously it was funnelled through the central government – will fundamentally shift the politics between citizens, leaders, bureaucrats, and international actors, and not necessarily for the better. Some people who may be benefiting from current arrangements may oppose change to protect the privileges they enjoy.

PNG is a place of great complexity, with a development landscape littered with failed efforts. If such changes are made, there will be winners and losers – but surely it’s worth considering new approaches, given how little money is getting to these villages now.The Conversation

Mark Moran, Chair of Development Effectiveness, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.