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The Challenge of Papua New Guinea’s Foreign Policy Redirection

Henry Heritage|Pacific Fellow

After securing the confidence of parliament in May 2019, Papua New Guinea’s (PNG) new Prime Minister James Marape promptly announced a shift in the country’s foreign policy. Marape declared that PNG would divert from its traditionally non-confrontational approach to international affairs and would assume a bold focus on forming new partnerships with regional neighbours and challenging historical dependencies.

The conventional approach that Marape pledged to reject is PNG’s traditional reliance on dominant global powers and minimal regional partnership. This position has characterised PNG’s conservative and limited-engagement international attitude since independence in 1975. The importance of this policy reformation is substantiated in the potential value of PNG’s elite natural resources, comfortable workforce prospects and supreme geographic positioning that binds South Asia to the Pacific.

Despite PNG’s valuable natural resources and Marape’s assertion for a foreign policy restructure, PNG has yet to present a clear strategy that would strengthen its international standing or reduce its large aid dependence. Although considered a ‘Global South’ country, PNG has the potential to become a prosperous and influential actor. To deliver on its foreign policy reform, the Marape government must identify a purposeful engagement strategy.

Increased engagement in the Pacific should be a vital component of this reform. With a comparatively large population, advantageous trade routes, and shared cultural and historical ties, the Melanesian and Polynesian neighbours are clear strategic trade partners. The geopolitical benefit of increased Pacific engagement presents clear advantages. Yet, it is a strategy that PNG has never thoroughly pursued, other than minor disaster-relief support and limited South-Pacific trade. PNG has not been committed to seeking the level of regional influence it has the potential to command.

This lack of Pacific engagement can be partially justified by PNG’s immense dependence on Australia, which is worth $607.5 million in official development assistance alone for 2019-2020. The historical aid-dependent relationship has enduringly restricted PNG from developing further economic partnerships. Marape’s new foreign policy direction is unmistakably a declaration that reducing Australian aid-dependence is a principal priority of PNG moving forward.

Attempts to minimise dependence on Australia has traditionally pressured previous governments to engage in imbalanced loans from other states that have resulted in prolonged damage to PNG’s economy. Historically, these attempts to diversify economic alliances have manifested into disastrous mining contracts with foreign companies. Marape’s foreign policy direction has declared that PNG would maintain its intention to reduce its reliance on Australia and continue to look to new options for advancing regional partnerships. However, it cannot be accomplished under the same disproportionate return that PNG has previously surrendered.

Marape’s commitment to selective international investment has been demonstrated recently through the decision not to grant an extension for two significant international Porgera Gold Mine contracts of Canada’s Barrick Gold and China’s Zijin Mining Group. The Porgera mine–which contributes to 10 per cent of PNG’s exports–is an instrumental asset to PNG’s economy. However, these same mines have delivered questionable mining practice and alleged illegal exporting.

The outcome and consequences of cancelling these contracts are still ambiguous. However, the initiative to revert these significant deals exemplifies the critical redirection promised under Marape’s promise to “take back the economy” from foreign corporations. Regardless of the result, this is an important step to reclaiming PNG’s control of foreign investment coming into the nation.

Marape’s ideological focus on a more independent PNG is further complicated by a significant national debt worth approximately 44% of its GDP. This debt has also been exacerbated by the economic shock resulted from a recent COVID-19 outbreak that is pressuring its underdeveloped healthcare system and halting its tourism sector.

Consequently, PNG’s ambitions to defer from its reliance on traditional partners will likely be restrained and gradual in the foreseeable future. This is particularly applicable to PNG’s annual debt repayments to China set to increase to 25% in 2023. In the short term, PNG’s reliance on traditional allies will be critical to support the country through economic trouble with the potential need for government bailouts; a position Marape refutes.

PNG is divided between pursuing its economic independence and attempting to reduce a substantial national debt; a challenge that has developed after years of corrupt governance and neocolonial repercussions. Marape’s promise for foreign policy realignment recognises the bold potential that PNG has as a resource rich and geographically advantageous country with the potential to become a prosperous state and influential international actor. Some progress has been made in forming a foreign policy identity that diverts from the traditionally limited-engagement objective, but the achievement of Marape’s approach is yet to be seen.

Henry Heritage is the Pacific Fellow for Young Australians in International Affairs.


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