Papua New Guinea: more to Australia than just another point on a star

If the huge resources revenues have failed to materialise, and there are no more public assets left to plunder, what will happen to PNG's vast patronage system? 

Australia hasn’t noticed the cracks appearing in the government of its closest neighbour and biggest aid recipient, and that’s dangerous.

When Tony Abbott was trying to steer the conversation away from Bronwyn Bishop, he called a press conference to argue that the Northern Territory should become our seventh state. With desperate times bringing desperate measures, the Prime Minister canvassed the idea of altering his beloved flag. 

"If the Commonwealth star was to be a seven-pointed star rather than a six-pointed star, that's hardly a massive change," said the Prime Minister, explaining how the territory could be represented alongside the six federated states. 

 

One problem with the Prime Minister's attempt at national distraction was that the big star beneath the Union Jack already has seven points. It's been that way for more than a century, since 1908, when the six states made room for the territory of Papua.

The bigger problem that Abbott unwittingly exposed runs much deeper than ignorance about his flag. He demonstrated that what is now the proudly independent nation of Papua New Guinea has been expunged not only from our sphere of moral and strategic responsibility, but also from our memory. And that's a dangerous thing to do to our closest neighbour and biggest aid recipient.

It was only in December that Foreign Minister Julie Bishop was worrying about how PNG would cope with the "huge revenues" that would soon be flooding in from resource projects. Last week, however, the PNG Treasury admitted that those rivers of revenue have not arrived. 

The country's GDP is growing faster than that of any other country, at more than 11 per cent, with vast natural gas reserves coming on stream.  But falling resource prices and myriad other problems mean its budget deficit is on track to double to 9.4 per cent of GDP this year, according to the PNG Treasury's mid-year update.

"This is a frightening document," said Paul Flanagan, a former Australian Treasury official who's now an independent expert on PNG government finances at the Australian National University.

Flanagan, with his analysis of how the PNG government has no choice but to slash spending, struck a political nerve. And so did I, when I reported Flanagan's analysis and made the comparison with Greece. If the huge resources revenues have failed to materialise, and there are no more public assets left to plunder, what will happen to PNG's vast patronage system?

PNG Prime Minister Peter O'Neill issued a statement to say both Flanagan and I were deliberately spreading "misinformation". He reportedly went further in an interview, saying I was "spearheading the attack" on PNG as part of a "vendetta" to avenge my father, Ross Garnaut, who he'd previously barred from entering the country.

The Prime Minister is usually less colourful, but more effective, when directing his attacks at members of PNG officialdom and civil society who are still fighting to preserve what is left of their country's governing institutions.

One reason why the six colonies on the Australian continent first came together to talk about federation, in 1883, was that they wanted to push the French and Germans out of the South Pacific. Right up into the 1960s there were serious discussions about making the territory of Papua New Guinea Australia's seventh state, but the idea could not be reconciled with the White Australia policy and heavily protected labour market.

In the 1970s Port Moresby was home to a generation of civic-minded Australians, including my parents, who were working with bright local graduates to reconcile modern democratic institutions – particularly the rule of law – with 850 tribes that each spoke a different language. But much of this shared history, geography and responsibility disappeared from the Australian national consciousness after PNG achieved its independence in 1975.

Occasionally our leaders rediscover geography and launch a costly intervention to save a failing state. Mostly, however, to the extent that they think of the South Pacific at all, it is as a holding pen for unwanted refugees.

My father continued to make a contribution, including by chairing the unexpectedly profitable Ok Tedi mine and PNG Sustainable Development Program, which BHP Billiton had bequeathed on trust to the people of PNG. O'Neill banned him from the country in November 2012 after taking issue with his public comments. 

In July 2013 O'Neill agreed with Kevin Rudd to massively expand the Manus Island detention centre. Two months later, in September, he passed legislation to expropriate what was then the country's most profitable mine and its second-largest development program, although he's had great trouble getting past the formidable new chairman, Mekere Morauta, to gain control of $US1.4 billion in long-term development funds.

When American political scientist Francis Fukuyama arrived in PNG a few years ago he "began to wonder how any society had ever made the transition from a tribal to a state-level society". Conversely, he wrote in the introduction to his recent tome, The Origins of Political Order, that what he saw in PNG also prompted him to ask "why seemingly modern systems often reverted" to primitive roots.

So far, Australia has managed to get by with leaders who revert to tribalism by showering patronage upon favourites, preferring transactions over principles, and wrapping themselves in the national flag without a thought for what it represents. Our core institutions, as Bronwyn Bishop belatedly discovered, are stronger than individuals.

PNG has not been so lucky. Its 8 million citizens need their southern neighbours to stand with them to reinforce the national institutions that earlier generations on both sides of the Torres Strait worked so hard to build.

John Garnaut is Fairfax Media's Asia-Pacific editor. Illustration Andrew Dyson