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



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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.

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After APEC, US-China tensions leave ‘cooperation’ in the cold



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US Vice President Mike Pence with New Zealand Prime Minister Jacinda Arden. PNG Prime Minister Peter O’Neill, Japan’s Shinzo Abe and Australia’s Scott Morrison were among the leaders of the 21 economies making up APEC.
AAP/Mick Tsikas

Nick Bisley, La Trobe University

United States Vice President Mike Pence’s remarks at the end of this year’s summit season just about blasted the word “cooperation” out of the APEC acronym. Amid ill-concealed US-China tensions, it had already been looking out of place.

Pence unveiled US plans to help Australia and Papua New Guinea – APEC’s host this year – expand a military base on Manus Island, which is in PNG. In September, Australia had already announced funding for an upgrade of the facility.

Former Australian foreign minister Gareth Evans famously declared in 1993 that APEC was “four adjectives in search of a noun”. As one of APEC’s founding fathers, he could be forgiven for getting the parts of speech slightly wrong.

But 25 years on, “cooperation” is looking doubtful. The Asia-Pacific Economic Cooperation forum set sail in Canberra in 1989. Two former prime ministers, Bob Hawke and Paul Keating, lay some claim to its parentage. APEC has grown to boast 21 member economies (where China, Hong Kong and Taiwan are listed as separate member economies).




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APEC is part of summit season in Asia in November, and the one closest to Australia’s heart, given its origins in Canberra. Three other big set pieces are also held within this week each year and bring all the key players in the region together, ostensibly to talk about advancing cooperation, community building and grappling with common problems. Two others relate to ASEAN, the grouping of 10 South-east Asian nations – its annual summit, and the ASEAN Plus 3 meeting where they bring in South Korea, Japan and China. Then there is the East Asia Summit, which comprises the 10 ASEAN members, plus Australia, China, India, Japan, New Zealand, South Korea, the United States and Russia. These talk-fests give states and economies, great and small, the chance to advance a broad-ranging positive agenda.

But the many handshakes, photo ops and positive sounding joint-statements could not mask the reality of hardening US-China geopolitical competition. It is a cruel irony that a group of meetings created to advance cooperation became the platform for what amounted to a very public drawing of lines of great power competition.

Feelings were mixed when it was announced US President Donald Trump would go to Europe for the centenary of world war one’s truce this year, instead of Asia’s summits. The signal sent that the president does not prioritise the region is unmistakable.

Prime Minister Scott Morrison mixes exotic dress with his passion for rugby league team the Cronulla Sharks in his APEC diplomacy.

During his visit, Pence put on a stern face on US policy, and in his speech to the APEC CEO Summit he reinforced the United States’ wish to build a relationship with China, based on “fairness, reciprocity, and respect for sovereignty”. In earlier comments to the Hudson Institute he accused Beijing of stealing military blueprints, “and using that stolen technology, the Chinese Communist Party is turning ploughshares into swords on a massive scale…”.

Washington now sees itself in full spectrum competition with China for regional and global influence. Pence portrayed China as an aggressive and almost imperial power with a malign regional vision. In contrast, he emphasised that the US wanted to protect an open and rules-based system of genuine partnerships. He underscored the long-term nature of this commitment.

The problem, both for Washington and its partners, is that this new muscular approach to China is, as yet, not fully resourced, and does not align the military aspects with trade – notwithstanding the Manus announcement.

Trump’s economic nationalism jibes badly with the interests of its partners and its long term regional strategy. A free and open Indo-Pacific sits uncomfortably with America’s economic nationalism, imposing tariffs on allies and pleas for multilateral approaches being summarily dismissed.

New Zealand’s Jacinda Arden and Canada’s Justin Trudeau share a laugh as Scott Morrison and other APEC leaders look on.

At the same CEO summit, Xi Jinping gave a rare major address outside of China. Like Pence, he sought to lay out a vision for the region that presented China as a force for economic openness, integration and development.

Continuing the themes first articulated at Davos in 2017, the unstated but obvious point of contrast was with America. Xi also rebutted criticism of the Belt and Road Initiative, declaring it was neither a trap nor a geopolitical gambit but an “open platform for cooperation”. But as with his earlier efforts to paint China as a defender of economic openness, the claims remain unconvincing.

Hosting APEC in PNG was fitting, given the south-west Pacific has become a key site of US-China competition. The Manus announcement, along with another that a group of Western allies would collaborate to drive a massive electrification project in the country, gives a concrete sense of what this means for the region. As in the Cold War, when Soviet-American rivalry led to bidding wars in the developing world, today China and the US are competing for influence in the form of infrastructure and development funding.




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If the speeches laid down rhetorical battle lines, APEC’s conclusion showed the consequences of this competition. For the first time in the grouping’s history, APEC members were unable to agree on the wording of a final communique. While a new Cold War is not yet here, this is another worrying step toward a serious rift in the global economy and geopolitics.

The biggest loser of the summit season is probably ASEAN. Founded in 1967 to wall off the newly independent states of south-east Asia from Cold War competition as the Vietnam war escalated, the grouping’s principal purpose has been to ensure the region does not become the wrestling mat of great power competition. It had been crucial to ensuring this goal was met in the Cold War and its aftermath. Events of this past week show it is finding that much harder to achieve as the geopolitical temperature rises.

If there were any doubts, Asia’s summit season confirms that the region has entered a new phase. Great power competition is now Asia’s most important dynamic. Even though the set piece theatre is about community building and cooperation, the reality is that China and the US have irreconcilable visions for the region and its future.

The only question is how much they are willing to pay to prevail in the contest for Asia’s future.The Conversation

Nick Bisley, Head of Humanities and Social Sciences and Professor of International Relations at La Trobe University, La Trobe University

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

At APEC, Donald Trump and Xi Jinping revealed different ideas of Asia’s economic future



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Prime Minister Malcolm Turnbull (front left) joins other world leaders for the APEC summit in Danang, Vietnam.
AAP/pool

Nick Bisley, La Trobe University

Donald Trump has just attended his first APEC leaders’ summit following bilateral state visits to Japan, South Korea, China and Vietnam. After the NATO summit and G20 earlier in the year, in which he displayed his inexperience and lack of affinity for multilateralism, many feared the worst.

But the comfortable rapport he established with leaders like Japanese Prime Minister Shinzo Abe, Chinese President Xi Jinping and South Korean President Moon Jae-in, as well as the less formal structures of APEC, meant there was no repeat of the northern hemisphere summer.

APEC was established in 1989 with the leaders’ summit added in 1994, with an ambition to drive economic co-operation and in particular trade liberalisation across the region. While it has been modestly successful in the unglamorous area of trade facilitation – involving largely regulatory streamlining to make the business of international trade smooth – as a co-operative framework it has not achieved any major outcomes.

So when looking at APEC, the real interest is not on the grouping’s economic policy process, but what occurs on the platform that the leaders’ summit provides, as its convening power remains impressive. What did we see in 2017?

Once again, APEC was a forum for discussing a non-APEC trade agreement. The TPP had regularly figured in previous meetings, and this time the 11 remaining members met to try to craft an agreement without the US. Canadian Prime Minister Justin Trudeau failed to attend one of the meetings, but it does appear that the 11 have salvaged some kind of a deal.

A string of meetings occurred on the sidelines. Of greatest interest was Trump’s conclave with Russian President Vladimir Putin, mostly focused on relationship-building, particularly important given the slate of new leaders in the club. New Zealand Prime Minister Jacinda Ardern, Moon, Hong Kong’s chief executive Carrie Lam and Taiwanese President Tsai Ing-wen were all making their debut.

Despite the evidently warm personal relationship that Trump has developed with Xi, the smiles and diplomatic tourism in Beijing are the pleasant facade of what has become a more overt competition for influence in the region. At the 2017 iteration of the meeting Gareth Evans famously described as “four adjectives in search of meaning”, this was plainly in sight.

At keynote speeches to the APEC CEO summit, Xi and Trump laid out their views on the region’s future. Trump’s speech was the second setpiece, following Rex Tillerson’s speech at CSIS in October, which outlined a belated US strategy to the region. The US aims to sustain a “free and open Indo-Pacific”, and Trump’s focus at APEC was on the economic dimension.

Continuing the themes raised in his UN General Assembly speech of September in which Trump declared he expected all countries to pursue their own interests first, he continued his walk away from core principles of its economic engagement of the region. In the past it had pursued large scale multilateral agreements, initially chasing a big free-trade agreement of the Asia Pacific, and more recently the TPP.

Trump said very plainly that there would be no more big agreements, and only bilateral deals based on strict and fairly narrow ideas of reciprocity. The other notable element was a direct statement that the US would no longer put up with predatory practices of other countries, such as IP theft, subsidies and not-enforced trade rules. While he did not name China as his main concern, he didn’t need to.

Trump’s effort to reconcile US rhetorical commitment to an open economic order in the region with his mercantilism stood in contrast to Xi’s approach. Xi painted a picture that seemed much more in keeping with the longer-run trends in Asia’s economic order.

Xi repeated the promise made at Davos that China was committed to economic openness. More specifically, he said China would seek to make economic globalisation more open, inclusive and balanced.

Interestingly, he said China would uphold regional multilateralism as the best means to advance the region’s common interests that were “interlocked”. He also presented the “Belt and Road Initiative” as an open mechanism that would help advance regional connectivity and even, somewhat surprisingly, described it in fairly economically liberal terms.

To be clear, Xi’s speech was a declaration of what China would do – whether it actually follows through is an open question. Nonetheless, Xi presented a China that would lead an open and inclusive economic order, in some ways as a defender of the status quo. Trump, in contrast, seemed to break with that tradition. Trump’s economic nationalism was on display, and he encouraged others to follow his lead.

Quite where this leaves the region is unclear. We still have to wait to see whether the two speeches of the “free and open Indo-Pacific” becomes an actual strategy. US policy remains hindered by a lack of resourcing in key branches of government.

The ConversationEqually, we have to wait to see what China will actually do. But make no mistake, at APEC 2017, the region’s two biggest powers presented clearly different visions of the region’s economic future.

Nick Bisley, Executive Director of La Trobe Asia and Professor of International Relations, La Trobe University

This article was originally published on The Conversation. Read the original article.