Author: Ronald May, ANU
It was an eventful year in Papua New Guinea in 2019. What happened was not so much a change of government but a convoluted change of leadership from Peter O’Neil to James Marape. In early statements, the new Prime Minister spoke of a ‘change of direction’ and a commitment to ‘take back the economy’, which he said was ‘bleeding and struggling’. He also spoke of a wish ‘to diversify Papua New Guinea’s [foreign] relationships’. Marape described his government as ‘pro-investment and pro-business’ but looking to shift focus from mining and petroleum to agriculture.
At the beginning of 2019, O’Neill appeared to be ensconced as prime minister of Papua New Guinea, though the opposition had given notice that it would submit a no-confidence motion. But when Parliament met in February, it voted to adjourn for three months. This motion was moved by the then finance minister and leader of government business, James Marape.
However in April, O’Neill and Marape had a falling out, primarily over the signing of a US$13 billion liquefied natural gas (LNG) agreement with foreign venture partners. Marape said that his advice had been ignored and resigned from the People’s National Congress (PNC) — the major partner in the coalition headed by O’Neill — and together with a number of coalition members of Parliament (MPs) joined the opposition.
When Parliament met again on 7 May, coalition MPs won a 59 to 50 vote for a further adjournment. During the following weeks there was a series of sometimes odd manoeuvres by O’Neill to hold on to power, but on 29 May O’Neill resigned triggering a parliamentary vote for a new prime minister.
Following O’Neill’s resignation, Marape and his renegade supporters moved back to the government benches and Marape became the coalition government’s nominee for prime minister. In a final bizarre twist, opposition leader Patrick Pruaitch nominated O’Neill — who first accepted but then withdrew — and then voted for Marape.
Marape — who left the PNC and joined Pangu Pati, becoming its leader in October — is now heading a somewhat larger coalition. Marape’s 32-man cabinet announced in June includes 21 ministers who had served under O’Neill. Interestingly, it also includes two opposition MPs — Kerenga Kua and Bryan Kramer — who had been amongst O’Neill’s strongest critics and had not voted for Marape.
One of his first acts was to initiate a review of the recent LNG agreement with international partners and in July Marape made a state visit to Australia for talks that covered trade and investment, the closure of the asylum centre on Manus, the proposed Manus naval base, support for action on climate change and possible financial assistance from Australia. It was reported that Marape was seeking an AU$1.5 billion (US$1 billion) loan to ‘stabilise the economy’ and that he had sought China’s assistance to refinance the country’s substantial national debt.
The following month, a PNG–Australia Ministerial Forum was held in Port Moresby, after which it was announced that Australia would provide a concessional loan of AU$442 million (US$310 million) through Export Finance Australia to help re-finance debt and support an economic reform agenda. Although denied by the Australian government, Australia’s action was widely seen in the context of its ‘step up’ to counter China’s influence in the Pacific.
Following a cabinet reshuffle in September, incoming treasurer and former opposition MP Ian Ling-Stuckey accused the O’Neill government of mismanagement and said that Papua New Guinea was in an ‘increasingly fragile fiscal position’. Around the same time, Mekere Morauta joined the government ‘to assist in its economic recovery plan’. Facing a record deficit of 3.5 billion Papua New Guinean kina (US$1 billion) and a debt-to-GDP ratio of 39.8 per cent, the government introduced a supplementary budget in October which cut expenditure by almost 1.5 billion kina (US$440 million).
The government continues to face major issues of service delivery and governance more generally, reflected in ongoing problems in the health and education sectors.
Shortages of medicines in hospitals and aid posts are a long-running concern. There are continuing reports of rural aid posts being empty or closed, urban clinics without medicines and the underfunding of Port Moresby General Hospital where the local population outnumbered doctors by a ratio of 17,000 to 1. It is also claimed that medicines have been stolen from regional distribution points and sold on the black market.
In the education sector, there are reports of teachers not receiving pay and allowances. In November, the Secretary for Education, Uke Kombra, was arrested on misappropriation charges arising from a contract of 4.4 million kina (US$1.3 million) with a supplier to provide education materials which were never received.
But perhaps the most significant event in Papua New Guinea over the last year was the referendum on the future status of Bougainville, held from 23 November to 10 December. Bougainvilleans voted overwhelmingly in favour of independence, but the popular vote does not decide the issue. Following the 2001 Bougainville Peace Agreement, the constitution requires that the national government and the Bougainville government consult over the results of the referendum. A final decision on the issue will be made by the National Parliament. Dealing with its outcome is likely to present a major challenge for the national government in 2020.
Ronald May is an Emeritus Fellow of the Department of Pacific Affairs, The Australian National University.