James Marape says his country must move on from depending on overseas aid to become an economic powerhouse

This article is more than 1 year old

This article is more than 1 year old

Papua New Guinea will be free of its dependence on Australian aid within a decade, the new prime minister, James Marape, has said in Sydney.

He said the first 44 years of PNG as a modern nation had been “filled with so many wasted opportunities and failures”, and pledged “regime shifts” in the resource industry to bring more wealth to the people.

Marape made the comments on Thursday in an address to the Lowy Institute as part of his official visit to Australia.

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“We welcome every support Australia can give, but in 10 years’ time I want to assist Australia helping the rest of the Pacific,” he said. “We want to be participating with Australia looking after smaller island nations.”

In 2019-20, Australia will give an estimated $607.5m to PNG in development assistance.

Marape was recently appointed as prime minister of the Pacific nation after several months of political chaos which resulted in the ousting of his predecessor, Peter O’Neill, whose tenure was marked by numerous scandals including the controversial UBS deal.

Marape spoke of his dreams for PNG to become the “richest black Christian nation on earth”, and welcomed Australia’s commitment to infrastructure support and social partnerships over the nation’s history.

“But I don’t envisage this type of aid donor-recipient relationship to last,” he told the sold-out event, which the head of the Lowy Institute, Michael Fullilove, said had drawn more media interest than any event since the institute hosted Boris Johnson in 2017.

“We will move from an introduced culture of dependency and complacency, where we rely on overseas aid and inward investment alone, to one where we become a vibrant economic powerhouse and are totally economically independent by expansion and diversification of our economic base.”

Marape said PNG had to tweak its resource laws and institutions to bring its share of taxes, equity and royalties to above 50%. Major resource projects have routinely been accused of bringing wealth inequality and sparking major disputes.

“[O]ur people demand change of course for the better because what we have done thus far as a nation has been inequitable and disproportionate to our natural resource extraction.”

He said multinational commercial partners had “nothing to fear” with his election, however. “I have been clear that we will honour existing project agreements that are in full compliance with the laws of PNG… But I have also said that we will be reviewing our existing policies and laws, to ensure that future projects provide greater benefits to our people.”

He said foreign companies which profited “unfairly from our natural resources” or which didn’t adhere to regulations would feel the full force of PNG law.

“Our people have had enough of corruption,” he said, saying the power of prosecution and “all other means” at the country’s disposal will be used. He had told his new cabinet there was “no place for self-interest”.

Marape said a key plank of the country’s future wealth would come from investment in agriculture, saying that PNG planned to “get into coffee in a big way”.

“Someone needs to plant the rice to feed people in Asia. PNG stands ready to prepare our nation to be the food basket of Asia… We have rich organic food in PNG and I want to supply the Asian market,” he said.

Marape also said that he intended for this economic progress to come without the environmental destruction that so often accompanies development.

“This will ensure the present global assets we house in Papua New Guinea, like 6-7% of the world’s biodiversity and also our huge tropical rainforest that continues to contribute to global oxygen supply, is not lost through unsustainable deforestation.

“The world is littered with stories of irreversible environmental degradation, where economically hungry people or nations plunder resources unsustainably.”

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Marape himself is among high-level PNG politicians and figures named in a scathing report on the UBS loan saga, which saw the government improperly borrow $1.239bn from the Australian branch of Swiss bank UBS to buy almost 150,000 Oil Search Ltd shares in 2014.

The decision ultimately cost the country an estimated $420m after PNG had to sell its 10% stake in the company amid a commodity prices slump.

The ombudsman found O’Neill, then prime minister, to have engaged in multiple acts which were “wrong and improper”, including failing to present the loan proposal to parliament as required by the PNG constitution.

The report also said that Marape acted wrongly by approving the payment deed when it was not properly established by law.