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China, Papua New Guinea and Australia’s Backyard Blues

Clever diplomacy rarely involves total commitment or unqualified fidelity to any one state. Treacherous waters require careful navigation, an understanding of shifty and shifting allegiances. The goal for the prudent statesperson is the pursuit of self-interest without alienation. In that regard, Papua New Guinea is proving increasingly interesting, finding itself between playground thugs with varying degrees of form. It has refused to cold shoulder the People’s Republic of China, signing to its Belt and Road Initiative. It also continues to accept the patronising largesse from Australia, a country increasingly hostile to Beijing’s ambitions in the Asia-Pacific.

Last week, the Australian press were particularly excited by “leaked” documents revealing a proposal from Hong Kong registered company WYW Holding Limited to create a “New Daru City” comprising an industrial zone, seaport, business and commercial zone. To this would be added a resort and residential area. In total, the entire enterprise would cover 100 square kilometres. A very PRC sort of thing in terms of massive promise.

The proposal was apparently outlined in a letter to PNG Prime Minister James Marape in April 2020 by the company’s chief executive Terence Mo, containing an “investment and development plan” stressing the development of PNG’s Western Province. It would involve “an agreed Sovereign Guarantee based on a long-term BOT [Building Operate Transfer] contract.”

Daru featured in the news last December, when a memorandum of understanding signed between Fujian Zhonghong Fishery and the PNG government to build a “comprehensive multifunctional fishery industrial park” valued at $204 million was revealed. Daru Mayor Samuel Winggu admitted at the time that the project came with mixed blessings. Environmentally, it might be disastrous for marine life. But China’s presence might be “reluctantly” accepted “because they might come in to provide some form of employment.”

Members of the PNG government are being coy on such matters. The national planning minister, Rainbo Paita, has gone so far as to claim that the government has yet to be presented with the proposal by WYW Holding Company. “We have no plans for any such zones for Western Province.” Paita also insists that the message had not been seen. “If there is a letter, then we have not viewed it yet.” Claims for developing “an economic zone and industrial zone” were simply not true.

This is not to say that offers are not welcome. A spokesman for Marape did tell the ABC that, should a foreign investor wish “to come to PNG with multimillion kina investments, PNG will not stop them … on condition our legal laws are complied with and local Papua New Guineans benefit.”

Australian commentators on the issue of Chinese manoeuvring in PNG are invariably slanted. The heart of the inner patriot beats in agitation at Beijing’s actions. Robert Potter, former ministerial advisor in the Australian government, is full of warning about China’s funding tactics, though admits that a more complex picture is being painted. China might offer funding opportunities to PNG in the form of, say, promises to fund fibre optic connections, 4G towers and data centres. But in doing so, the PNG government has been left owing China’s Exim Bank $470 million for the NBN1 3/4G project and the Kumul undersea cable.

The Australian Strategic Policy Institute, a think tank parked in the Australian security establishment and bankrolled by US sources (among others), is also fretting about the $39 billion super venture and the fishery industrial park. On the latter, concern is expressed that Beijing is “increasing its efforts to undermine our influence in Papua New Guinea.” With its intended location on Daru Island, “the closest PNG community to Australia and only 200 kilometres from the Australian mainland”, the development would “throw Australia off balance” and deplete local fish stocks.

Michael Shoebridge of ASPI is taking the lead in sounding the alarm on the New Daru City project. “Australian policy makers and business leaders with PNG interests would be wrong to be all complacent because of what the proposal shows about Chinese intent in our near neighbourhood, and for the way such proposals might land in the complex of PNG politics.” This language is that of our prized backyard being threatened, the vassal state of PNG easing out of Canberra’s secure orbit.

Shoebridge expresses a view both condescending and impotent, assuming that such Chinese efforts compromise PNG independence while confessing that Australia is powerless to prevent it. Canberra’s sense of ownership, in other words, is waning. In doing so, he shies away from the obvious and insidious point about how long in duration Australia has kept the umbilical cord to that unfortunate state functioning. “The combination is a dangerous mix with real and adverse implications for the region’s security, and PNG’s development and sovereignty.”

Home Affairs Minister Peter Dutton has also discovered the concept of sovereignty, a mighty fine thing, given Australia’s willingness to bribe countries in the Pacific to become surrogates for processing refugees and asylum seekers who would otherwise be processed on Australian territory. To the Nine network, where scrutiny of his actions is minimal, Dutton was concerned that there were “all sorts of sovereignty issues” and “local issues, in terms of landowner and land rights, that I think would provide a significant hurdle.”

ASPI also assumes that those sneaky authoritarians in Beijing are playing up to their usual inscrutable form. Why build such a “multi-billion-dollar metropolis in remote Western Province”, to be run by Chinese entities for a lengthy period, not to mention “a fish processing facility scaled for more fish than swim in the waters around Daru”?

It might have made more sense to realise that PNG, precisely in being sovereign, is making its own arrangements. Security cadres in Canberra and Washington take issue with the fact that the natives are showing initiative. Shoebridge even comes close to accusing the country of being a harlot of international relations. “Promises of millions – even billions – of dollars for a remote province are attractive not just for the Moresby government but for provincial leaders who need to deliver funds to local supporters.” The sort of cash, in other words, Australia is simply not interested in supplying.

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  1. Joseph Carli

    It always makes for a comforting feeling..AND..if opportunity presents, to have and then to help in maintaining an impoverished neighbour who you can get to “cut the lawns” for your estate for minimal payment and maximum appreciation.

    I suspect the Papuan people are becomming a tad tired of being “the boy” for the Australian Sahibs..

  2. Joseph Carli

    Personally, I believe the “One Belt – One Road” initiative would be a stabilising influence for the Asia – Pacific region, giving those smaller nations and islands access to markets beyond the savageing of corporate plunderers skimming the cream of their crops and commodities for capital opportunistic markets and returning nothing but a ravaged countryside and impoverished people…at least with another much broader choice of who to deal with, plus secure and confident access to those markets, the governments of those nations may be better placed to bargain with their products…and I suspect the Western ” free-market” based corporations are fearing such a situation most of all…there goes the monopoly!

    One can feel we are heading into a “China Century”..and I for one welcome such a possibility.

  3. Denis Bright

    A well researched article from Binoy wth appropriate comments from Joesph Carli.

    Criticism of BRI investment projects by the federal LNP helps to win all those regional seats and is totally for domestic politics. Criticism of this opportunism has to be carefully constructed as it can back-fire.

    Ironically, it was the Abbott Government which opened our financial ties with China’s Asian Investment Infrastructure Bank (AIIB).

    Our desposits with the AIIB have growth to approximately $5 A billion.

    The AIIB is providing infrastructure which is beyond the generosity of Australia and its allies.

    Check out the work of the AIIB: The projects are all harmless development assistance projects.

    US resources invested in sleezy bars in the Philippines near the old US Clark Air Base. The Chinese government has just signed up to fund the Subic-Clark rail freight line with an offer of $1 US billion announced on 21 January 2021:

    China to fund Philippines’ $US 940m Subic – Clark railway

  4. Andrew J. Smith

    Australia would have more credibility if it could show its own independent policies in supporting all nations in the Pacific region versus echoing US defence/security policy via ASPI and ongoing ideological opposition to regional aid via (Koch AtlasNetwork) CIS Centre for Independent Studies.

    From the latter CIS some years ago, channelling Malthus:

    ‘Per capita income has grown at less than 1% a year in the Pacific during the past 30 years. In some islands it has declined. Population has grown at more than 3% a year. The discrepancy between population and income growth lies at the core of the Pacific’s problems.’

    From The Lowey Institute more recently on the supposed issues of aid to our region, seemingly decided by economic ideology which views aid as waste or an expense:

    ‘The state of Australian aid. Australia’s aid program has been the disproportionate victim of the Coalition government budget savings measures since forming government in 2013. As Fairfax’s Matt Wade reports, while only about 1% of budget expenditure it has made up around 25% of all budget cuts announced by the government for the period 2013-14 to 2018-19. The Lowy Institute’s Jonathan Pryke reports that these cuts have seen Australia tumble in international rankings and left Australia at our an all-time low when it comes to its aid generosity as measured by aid as a proportion of Gross National Income.’

    Bit rich to criticise or warn of PRC when Australia willingly took off its eyes off the ball……

  5. Joseph Carli

    I suspect Aust’s aid programs to the Pacific Islands was always intended to be a “funded to fail” program…after all, where could these “struggling to harvest their crops” farmers in Qld. get their cheap labour from if the islanders could stay with their families and make a decent living at home?

    The LNP robbers have been screwing over the Pacific Islands for decades, knowing there was little competition inthe region to change their advantage………until now..

  6. Joseph Carli

    The conservative forces in Australia have built their own Tower of Babel in a “plain” of Asia-Pacific poverty and want…selling the Aust’ “success story” as the “heaven to aspire for” to those poorer nations while milking them for their commodities and using them as prisons for our responsibility failings and in effect, keeping them poor…and now it is all crumbling, the hand-wringing starts…
    The Tower.

  7. Terence Mills

    The real prize that China is angling for is the right to fish in PNG’s territorial waters. The small mangrove encircled, mosquito infested island of Daru may eventually get a shed to store gear but nothing like the processing plant being talked of.

    On modern fishing vessels all processing of catch is done onboard and snap frozen to be offloaded to a mother ship at sea.

    A similar gambit was played by another major regional power to gain access to PNG waters. The promise then was to have a major fish processing plant in Lae – they got a storage shed !

  8. Joseph Carli

    But Terence, you are…as they say…talking of China but thinking of Western capitalism…I would suggest we give a bit more credence to a nation that has a longer archive of civilisation and its needs and a shorter history of colonisation and what it bleeds…Not to deny the needs to feed a large population, but surely the evidence of the rise of China’s citizen’s living standards points to a realisation that bleeding the body-national will only result in the eventual death of that host…a situation unheeded by a rapacious Western Capitalist Democracy…
    I don’t think China is that stupid!

  9. Gangey1959

    @JC How does your last theory stackk up against the prc’s fishing fleet visitation of the Galapagos Islands. Some 300 ships, taking anything and everything that they caught, with seemingly no consideration of the life cycles of their catch, or the other populations which rely on the same fishing grounds.
    It was this faming practice that lead to the american “dustbowl”ie, a patch of productive Earth is farmed until it is DEAD. The prc will do the same to the oceans, until there are no more fish. Yes it sounds extreme, but look at how little time it took the old time whalers to decimate the whale populations “back in the day”.
    The chinese global fishing fleet is out there because there is not enough to catch , for anyone, in the south china sea. So they now go Everywhere. With backup for when anyone tries to say NO!.
    Daru Island will be a kickoff point for their “mother” factory ships, and a refuelling point, and from there the trawlers will have for shorter distances to travel. The Great Southern Ocean is not that far away, ……………

  10. Joseph Carli

    China is not the only nation that has fishing fleets scouring the oceans…many European nations too have such fleets and even Aust’ has or had large squid, tuna and sundry catch boats leaving ports all around the country on any given day…
    By the looks of that big boat in the Chinese fleet, it looked like a rust-bucket and I wouldn’t want to be sailing the southern oceans in it…But then such a large fleet may not necessarily have been a Chinese Govt’ operation, but rather a feral organisation..and many of those boats would have to be supply, factory and freezer ships..
    Anyway..I am posting an article here soon on the OneBelt-One Road initiative…have a read.

  11. wam

    China is being far or not too far sighted in helping the pacific islanders, knowing that global warming will see them settling in australia. Leaving them the fishing rights?

  12. Joseph Carli

    There is this continual overarching suspicion of China that borders on childish paranoia…surely a nation that has some of the oldest farming systems and practices in the world, from forty centuries old, can have also a far-sighted approach to future food sources other than further rapine of the environment?

  13. Denis Bright in Brisbane

    Thanks to ABC News for its coverage of the Pacific Islands Forum.

    “Palau’s President has accused Australia of backing a Polynesian candidate in the close ballot, to preserve its regional influence”

    From Yahoo News (9 February 2021):

    “Australia’s regional influence could be dealt a blow following the splintering of the influential Pacific Islands Forum.

    Five Micronesian presidents have officially quit the forum after a bitter leadership contest.

    The leaders are furious former Cook Islands prime minister Henry Puna won a ballot to become the new secretary-general, edging out their candidate, Gerald Zackios from the Marshall Islands.

    They insist it was their turn to select a secretary-general under a “gentleman’s agreement”.

    Nauru, Kiribati, Palau, the Marshall Islands and the Federated States of Micronesia have all declared they will leave the forum, cutting the number of member nations by one-third.

    “The forum has lost its original intent,” Nauru President Lionel Aingimea said on Tuesday.

    However, the withdrawal process is expected to take about a year, and in a joint statement the leaders said the final decision rested with individual governments.

    Regional experts believe the communique leaves some room to move, and are hoping Pacific leaders breach the divide and reunite the regional organisation.

    The timing of the acrimonious split exacerbates the crisis.

    In the middle of the pandemic, many Pacific island economies are in distress, oceans are rising and China is determined to gain political power and influence.

    Foreign Minister Marise Payne said she could “absolutely appreciate” the disappointment felt by Micronesian leaders.”

    So how did Australia vote in the 9-8 decision?

    How did NZ vote?

    Why the secrecy?

    Today’s news item more than justifies Binoy’s article.

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