Papua New Guinea looks North

Papua New Guinea Prime Minister Peter O'Niell

By BLAISE NANGOI in Sydney (Post Courier, November30 2012)

PAPUA New Guinea will not apologise for its growing ties with the People’s Republic of China.
Prime Minister Peter O’Neill said this yesterday when addressing the influential Australian think tank, the Lowy Institute for International Policy on his second day of a six-day visit to Australia.
Speaking to a packed audience comprising government, business and NGO representatives, Mr O’Neill said China, as an emerging world economic power, was attracting interest from all over the world including the two Pacific giants, Australia and New Zealand.
The trans-Tasman neighbours were engaged in various relations with China to progress their own economic agendas. And it was no different for PNG, whose sole interest in China was trade and investment opportunities.
“Our fastest growing relationship is with the People’s Republic of China (PRC). The PRC is today a major trading partner and a growing one,” Prime Minister O’Neill said.
“There is also PRC investment in our resources sector and in construction. The Ramu Nickel project, a partner (sic) between a major PRC corporation and an Australian mining house, will be in production in 2013.
“We also benefit from donor and concessional funding support from PRC, and I make no apology for encouraging and embracing it,’’ Mr O’Neill said.
Mr O’Neill reiterated that while PNG was looking to building a stronger relationship with Asian power-house economies, it was and would not be at the expense of its traditional allies including Australia and the US.
He noted that while China was now the second largest investor in PNG after Australia, Australia and the US remained the biggest single contributors to project funding in PNG.
“Our relationship with Australia is special and it will never be replaced, but we cannot keep on taking it for granted,’’ Mr O’Neill said.
He echoed similar sentiments at his National Press Club address in Canberra on Tuesday. And he is likely to repeat it several times more as he speaks at several engagements in the next five days.
It is Mr O’Neill reassuring Australia and its other Western allies that PNG is not selling out to China for its support.
It is clear that the US and Australia are concerned about PNG’s increased involvement with China. They see the association as China strategically staking a position in the Pacific for military purposes.
Mr O’Neill picked on that and told his Lowy Institute audience that PNG had no military interest in its relationship with China. It was purely trade and investment.
“Our engagement with Asia pre-dates our independence. But since independence, it has been a priority of every government and every prime minister.
“We share a common border with Indonesia, so our relations with Indonesia have always been given a high priority. They are based on mutual trust and respect. We respect Indonesia’s territorial integrity and Indonesia respects ours. We have strong relations with Malaysia and Singapore, founded on trade and investment and good people to people links as well.
“Our relations with Philippines are also strong and date right back to independence.
“Japan has always been a major trading and investment partner, and we have benefitted from concessional loans and grants and a strong presence in our economy of Japanese companies – now including in the LNG sector.
“We also have good links with South Korea, again through trade and investment.
“We are also developing our links with India and Russia as part of our comprehensive regional and international engagement.’’
Mr O’Neill used as an example the latest PNG-PRC loan arrangement to illustrate the kind of engagement it was seeking in its Look North policy – that is PNG securing aid for impact or priority projects, which it cannot fund under current aid arrangements with its traditional allies including Australia. The funding would be used to finance the rebuilding of core infrastructure to improve the lives of rural Papua New Guineans.
Referring to the proposed K6 billion loan from the Exim Bank of China, Mr O’Neill said it would fund impact projects his Government needed to put in place to drive market accessibility for Papua New Guineans as well as rebuild deteriorating infrastructure.
He explained that while the loan value was K6 billion, PNG did not have to draw down the total value of the loan over the next five years.
“We may not need to. We will only draw down only what we need.’’
Meanwhile, O’Neill is set on getting Australia to align its aid program with the PNG Government’s priority areas.