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Papua New Guinea: A Tale of Disorder and Development

Deputy Editor/Oceania Analyst

Internally, Papua New Guinea is a mess. Widespread corruption, rioting public servants and police officers, a vote of no confidence, failing infrastructure, minimal state oversight over the majority of the country and a well organised secession movement from what was once one of the country’s most profitable regions all would lead one to the assumption that Prime Minister Marape is, in every regard, not enjoying his job. But, curiously, while the country may be spiraling into increasing chaos internally, its external relations are stronger than ever. Why is this? And how are the chaotic events within Papua New Guinea informing the nation’s foreign affairs?

This article aims to analyse the ways in which Papua New Guinea’s problems inform the nation’s foreign relations, and how these foreign relations are informed by the changing geopolitical landscape of the Pacific region. While Japan, Taiwan and other nations do provide developmental aid to Papua New Guinea, this article will focus on its relations with the region’s three major players: Australia, the United States and China. Furthermore, the reasons for Papua New Guinea’s newfound engagement will be explored, examining the degree to which the country is really the master of its own fate.

Firstly, let us look at the challenges Papua New Guinea faces in order to provide a backdrop for the nation’s foreign affairs. Papua New Guinea’s state is much smaller

than a map would suggest. Beyond urban centres state oversight is extremely limited, in part due to the challenging geography but also because of the incredible degree of diversity within the country. It is thought about 839 living indigenous languages are spoken within the country, many of these only having a few hundred speakers. The state’s oversight is so limited that in December 2022, in response to a study by the UN Population Fund that suggested the nation’s population was underestimated by 7.6 million people, Prime Minister Marape confessed that he wasn’t sure of the country’s population, saying that he thought it had around 11 million inhabitants as opposed to the 17 million found in the study.

Marape also saw off a vote of no confidence in February 2024, but the mounting aforementioned problems of corruption, limited infrastructure and civil disorder are thought to be a death knell for the prime minister. Adding to all of these problems, on March 23rd 2024 a 6.9 magnitude earthquake hit the north-western province of East Sepik, destroying thousands of homes and killing more than 10 people. In essence, Papua New Guinea is a mess, and the state lacks the capacity to do very much about it.

Marape’s increasing international engagement may seem counter-intuitive given the quantity of problems he faces at home, but for Papua New Guinea foreign engagements are often a means of cultivating investment in the key areas needed to provide stability. A good example of external engagement being motivated by a desire to create some sort of internal cohesion can be seen in the May 2023 signing of the Papua New Guinea-United States Defence Contract Agreement, forging closer ties with the world superpower in part to sure up the nation’s lackluster military. Following this, a bilateral security agreement was signed with Australia in December 2023. While these could in part be ascribed to Marape’s efforts, it is perhaps more useful to see these as attempts by foreign parties to shore up Papua New Guinea’s security for their own ends. For Australia and America, security agreements provide a tangible measure of engagement and support with Papua New Guinea while also fighting back against the growing influence of China in the region, which in 2022 signed a defence agreement with PNG’s neighbour the Solomon Islands, much to the horror of western powers. They also can pave the way for potential future military projects, such as the joint Australia-US naval base in Papua New Guinea’s Manus Island.

These agreements are not without ambiguities, however, as the US defence agreement in particular was a source of some controversy within Papua New Guinea where it was seen as placing the country in the middle of the simmering tensions between China and America. Marape moreover urged the US to invest more in trade and development between the two nations as opposed to just security and politics, indicating some dissatisfaction is evident even at the highest level of government. So at least in terms of security arrangement Papua New Guinea seems to have clearly chosen the West over China. When it comes to developmental aid, on the other hand, the picture is less clear.

Papua New Guinea is in desperate need of developmental aid, and many nations are keen to be the ones to provide it. Australia provides 48% of the aid received by PNG, thereby maintaining its position as the country’s most significant supporter. But, increasingly, China and the China led Asian Development bank are getting involved, with the former providing 11% of the developmental aid given to the country and the

latter 15%. What is particularly interesting is the way in which China is spending this money. While the belt and road initiative is notorious for ‘debt trapping’, in which developing nations are provided loans with high interest rates that cause the nation to suffer a significant debt burden, China is increasingly moving away from loans as a means of providing developmental aid and spending more on straightforward grants.

This perhaps can be explained by the scale of backlash against loan-based financing. After all, China ultimately doesn’t want to make enemies out of these nations by flooding them with debt, but would rather foster positive relations thereby gaining influence on the global stage. Since 2016 China’s overall development financing in the Pacific region has been falling, partially because of the transition away from loans but also due to a new policy direction for the BRI. In November 2021 Chairman Xi Jinping outlined a new stage in the Belts and Roads initiative in which investments in large infrastructure projects were to be replaced with ‘small and beautiful’ projects of international co-operation instead. This shift in policy has meant that China has decreased their overall spending on developmental aid from $40 million per project on average from 2013-2019 to $5 million on average from 2020-2021 while also garnering support from the nations they are investing in. In Papua New Guinea this policy is having a marked effect on local perceptions of China.

By encouraging Chinese companies to invest in local businesses in early 2022, constructing hospitals, setting up student exchange programmes to Chinese universities, a goodwill visit by a Chinese naval vessel in 2023 and opening direct flights from Guangzhou to Port Moresby in December 2023 China has very clearly demonstrated a commitment to friendly relations with Papua New Guinea while actually spending very little money.

In contrast to China, Australia has been spending far more money and garnering very little support in response. Perhaps as a result of the new Chinese investment strategy Australian financing is shifting towards investment in infrastructure rather than human development, possibly because infrastructure has a greater tangible benefit for the majority of citizens. Australia also granted a massive $466 million loan to PNG in 2021, which perhaps indicates a more cynical approach being adopted by the country. Is Australia therefore possibly adopting a method resembling China’s old model of loan-based financing while China is adopting a method resembling Australia’s grant based one? Well, no. Australia’s massive loan to Papua New Guinea was intended to support the nation’s government prop up its budget, and has a fixed interest rate of 2.5%. While Australia’s increasing use of loan-based financing is a notable change in policy, it is mostly due to the progressively spiraling dire situation in Papua New Guinea and a response to the possibility that China will take up the role of primary supporter if Australia doesn’t.

Foreign developmental aid is not without controversy in Papua New Guinea. Outsourcing essential government projects to foreign powers has inevitably provoked some backlash, especially when these projects are centred around resource extraction. In these cases, the optics of foreign powers mining away the physical wealth of the country are especially bad. But Papua New Guinea lacks the state power to make the most of these resources without foreign investment. Furthermore, foreign investment is particularly problematic considering the aforementioned corruption problem. While Australia’s investment is largely very specific and conditional, Chinese investment is

certainly not, meaning that corruption may be shored up by China’s money, rather than undermined.

This is really the greatest qualm that can be levied against the modern Chinese foreign development strategy: amorality. Debt-trapping, a practice certainty framed as an ‘immoral’, has been undermined by research showing that China has never seized assets from any country and have been pragmatic in restructuring existing loans. But, rhetorically, the idea of Chinese developmental aid being a sort of ‘Trojan horse’ with Chinese workers coming into developing nations, building cheaply made Potemkin villages, and then leaving, is an appealing one to Western audiences, especially so given that Western development is framed in moral terms: whereas Chinese developments are cheap and dodgy Western ones are reliable and benevolent. As Papua New Guinea shows, that isn’t quite fair. But it is indeed fair to criticise China for backing and financially supporting corrupt governments, as is it fair to do the same to Western powers. And while it is likely true that developmental aid is more significant to China’s geopolitical ambitions, it is only of note because these ambitions are seen to challenge the Western norm.

But why should developing nations support the West if they don’t get much out of it? China’s use of developmental aid is largely positive for developing countries like Papua New Guinea if for no other reason because it has caused developmental aid to be understood as vital to maintaining a position of global importance. Moral binaries about the subject are not simply reductive, they actively harm our ability to understand geopolitical reality on its own terms.

In conclusion, Papua New Guinea’s newfound international engagement appears to be less a product of the concerted effort of the country’s government but more due to the

changing nature of geopolitics in the region due to China’s growing influence. Looking at the Lowy institute’s pacific aid map indicates that the moral language often framing discussion of developmental aid is misleading and fails to adequately consider the positive or at least ambiguous implications of China’s growing influence on the global stage. For smaller powers like Papua New Guinea the money flowing from China is more than welcome, although some criticism is inevitable when it comes to any foreign developmental aid. It seems that China’s strategy of ‘small but beautiful’ projects of cooperation is doing wonders for its reputation, and makes the Western approach look decadent and antiquated, irrespective of the actual positive impact of either approach.


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