Policy Brief: Australian Assistance to Papua New Guinea

By Brad Underhill

Attention: The Minister for Foreign Affairs, Senator the Hon Marise Payne

Purpose

This paper proposes a reassessment of the means by which we offer assistance to Papua New Guinea, in order to counter risks posed by the increased Chinese presence in the Pacific. Moreover, given the recent change of Prime Minister in PNG, and his warning of a general re-assessment of all long-standing relationships, it is clear that our influence is under threat. We need to reconsider, not only the manner of how we deliver aid to PNG, but the underlying reasons and motivation for such aid.

Background

Historically, Australia has regarded PNG as either a security barrier or security threat. The late nineteenth century colonial ambitions of European powers in the Pacific so alarmed the Australian colonies that they pressured Britain to take control of the south-east portion of the island in 1884. In 1914, in one of the first military actions of World War One, Australia seized control of German New Guinea. By 1921, Australia had secured New Guinea as a Class ‘C’ mandate from the League of Nations; consolidating Australia’s long-held ambition to control the entire eastern section of the island and create a security buffer against outside threats. The Japanese invasion of New Guinea in December 1941 reinforced in the minds of Australians the strategic importance of PNG. Unlike imperial powers motivated by economic and geopolitical gain, Australia has never valued PNG as an important economic resource. It is the location of this land mass so close to our mainland that motivates and underwrites Australian policy towards PNG.

Native carriers "Fuzzy Wuzzy Angels" are shown bringing wounded troops into an advanced American dressing station in the Buna area
Native carriers “Fuzzy Wuzzy Angels” are shown bringing wounded troops into an advanced American dressing station in the Buna area

Prior to the-Second World War, the Commonwealth made minimal financial contribution to PNG: New Guinea received no financial assistance and Papua only £42,000 per annum. There was a radical change in the ambition of Australian policy for PNG following the end of the war. The government promised a substantial boost to spending, which preferenced the socioeconomic advancement of Indigenous Papua New Guineans. The aim of this policy was to further bind PNG to Australia; grant money and Administration officers became indispensable to the raising of living standards. Australia benefited by creating a stable and peaceful island to govern, providing an ideal platform to maintain PNG as an effective security barrier.

During the first few decades of PNG’s independence, from 1975 until the turn of the 21st century, Australia gave aid as unconditional budget support; the money was spent by the PNG government on education, health and infrastructure. Over the course of the 1990s, budget support converted to targeted program support often to NGOS. In the aftermath of the 9/11 terrorist attack and the Bali bombings, Australia adopted a more robust and interventionist approach; what Sinclair Dinnen, a senior research fellow at ANU, describes as the ‘progressive securitization of Australian development assistance’. In practical terms, there was a direct insertion of Australian personnel, and a focus on ‘whole of government’ support, consistent with international practice in relation to aid to so‐called ‘fragile states’.

Contemporary Implications

Australia remains the dominant donor to PNG; in fact, there are very few countries where a single bilateral donor is so important. A 2007 OECD report gave the ratio of Australian to total aid at above 80%. Following historical convention, we continue to choose where our aid will be spent; we offer technical or security expertise where it best suits Australian needs.

AusAID Director General congratulates graduate from the APTC, Port Moresby
AusAID Director General congratulates graduate from the APTC, Port Moresby (2010)

Consistent with both its colonial and post-9/11 policy aims, Australia’s foreign policy set out in the 2017 White Paper continued to focus on security of the Pacific region. The rhetoric is similar, the white paper argues development programs are more important to Australia than they have ever been, providing a ballast against instability by advancing economic reforms, improving governance and countering violent extremism. Today the foreign threat, as perceived by Australia, is Chinese influence on the region, but in this context I suggest the reaction is much the same as 1944 with the Japanese, or the Communist threat of the 1960s, or terrorism from the early 2000s- they are regarded as a foreign threat to regional security and Australia will actively push back against such action.

Recommendations

PNG Prime Minister James Marape
PNG Prime Minister James Marape (Post Courier)

On his recent elevation to the prime ministership of PNG, James Marape encouraged continued strong relations with Australia, but warned of a shift away from reliance on traditional partners. Marape, who comes from the energy-rich Hela province, is concerned that financial returns from natural resource contracts are not equitably distributed and believes PNG should be looking further abroad, modelling its resources policies on Indonesia and Malaysia. The threat of China to Australian influence in PNG has become increasingly obvious as China dramatically increased aid spending, but with a different approach to Australia.  Instead, China offers both untied aid, similar to Australia’s original post-independence support, and signature infrastructure in addition to concessional loans.  These forms of aid are more appealing to the PNG government for the measure of autonomy it provides them.  Now is an opportune time for Australia to rethink the relationship based on Eurocentric assumptions of expertise in development, and instead ask the Papua New Guineans how best we can help them.

  • A 2018 Deakin University study found praise among a broad section of PNG leaders for the unconditional nature of Chinese aid.
  • The most important change to aid policy would be a move back to untied budget support instead of direct intervention in the guise of program support. The government should incorporate comprehensive reporting indicators to ensure effective use of grant aid. Importantly, the assistance will be directed where Papua New Guineans most want it, not just as a response to the Australian desire for strategic security.
  • This change of direction would affect a shift in the quality of the Australian/PNG relationship; effectively leaving China behind. While China generally focuses on large infrastructure projects, which garner prestige for itself and sponsoring politicians, PNG continues to be beholden to the wishes of a foreign power. By changing policy direction, by becoming more collaborative, Australia would provide an opportunity for Papua New Guinea to become the sole arbiter of where to best spend and direct the assistance we provide.

Brad Underhill

Brad Underhill is a PhD candidate at Deakin University. He was awarded the 2016 Bowater Trust medal (Deakin Business School Graduate of the Year), and 2017 the Vice Chancellor’s prize for his Honours thesis titled ‘Co-operatives in Papua New Guinea: Economic and Political Development or Colonial Control?’.  In 2018 he commenced a PhD at Deakin University on a Postgraduate Research Scholarship. His thesis is titled ‘The New Deal on the Ground in Papua New Guinea’ and is assessing how successful Australian colonial planners were in designing and implementing post-war colonial development in Papua New Guinea. The research project plans to emphasise the Papuan New Guinean perspective of the impact of post-war development on their lives.

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