Shane McLeod

From November 17-18, Papua New Guinea (PNG) became the first Pacific Island country to host the annual gathering of leaders from the Asia-Pacific Economic Cooperation (APEC) member governments. That brought a wave of global attention to PNG and a raft of foreign presidents and prime ministers to Port Moresby. At the same time, critics questioned the wisdom of the small, budget-strapped state hosting a massive multilateral event, with all the expenses that entails.

With the benefit of hindsight, Shane McLeod, a Research Associate working with the Lowy Institute’s Australia-PNG Network, helps The Diplomat consider the big question: Was it worth it? McLeod, who previously served as a foreign correspondent with postings in Japan and Papua New Guinea, talks about the potential impact of APEC on PNG’s economy, politics, and foreign relations.

What goals did the PNG government have for hosting APEC, and how well did they succeed?

One of the main goals for PNG in hosting APEC was to showcase the country to the world. And I think they’ve achieved that goal. The event itself ran relatively smoothly. There was a positive feeling about its hosting of APEC and it brought a lot of people to engage with PNG who wouldn’t have otherwise. So on that front I think it’s a success.

There is the broader question of whether a country with as many economic challenges as PNG should be spending its limited resources on hosting an event like this. There were obviously a lot of in-kind contributions from countries like China, Australia, and the U.S. that have offset a lot of the costs. But there has still been a lot of money and government effort that has gone into hosting this event. The test will be whether PNG will, in the short, medium, and long term, be able to realize the benefits of hosting.

PNG wanted to put the digital economy and participation by developing countries in that space as its key theme. Given some of the investments that are coming for PNG and the Pacific out of APEC you would have to say that they have had some success in putting that on the agenda.

Many in PNG criticized the expense of hosting APEC, epitomized by the controversial purchase of Maseratis to ferry VIPs around the capital. Now that the summit is over and the dust has settled, what’s the general attitude toward APEC – was it worth it, in the eyes of PNG citizens?

The Maseratis were very much an own goal. Even if the PNG government is able to recover costs from selling off the vehicles, the look of having such an expensive car brought to the country – by airfreight – to host an event like this was a negative for the organizers. And it’s what people remember, unfortunately.

The question of whether hosting APEC has been worth it can only be answered by looking at the potential impact on PNG’s business and development opportunities, and probably won’t be realized before the medium and long term. The focus on the event meant that there was a lot of attention paid to getting deals moving. You could posit the movement on the next phase of LNG development, and the MOU on the Wafi-Golpu mine project, as things that might not have moved forward without the impetus of APEC.

With APEC over, where does the PNG government turn its focus to now?

Immediately, politics. Prime Minister Peter O’Neill faces the threat of a vote of no confidence in early 2019. But alongside those domestic political considerations, the challenge for the PNG government is to see through the deals announced around APEC, and also work with its development partners to implement the big investments they have promised.

Several notable developments happened on the sidelines of the summit, from the announcement of a collective U.S.-Australia-Japan-New Zealand project to bring electricity to 70 percent of Papua New Guineans to the upgrading of China’s relationship with its Pacific Island partners. What do these developments mean for Port Morseby’s foreign policy moving forward?

There’s a maturing of PNG’s foreign policy as it finds itself able to consider offers from a range of potential partners and make decisions about what is in its interests. Take for example, the MOU signed with China during the state visit ahead of APEC by President Xi Jinping. One can presume there were other options on offer, but PNG has taken a fairly modest approach to potential assistance and wants to ensure that whatever it takes on – e.g. potential concessional debt – is manageable and sustainable.

It’s been able to use leverage to gain some big investments that won’t have a long term hangover – grant funding, for example, for big projects like a military upgrade at Manus Island.

The strategic environment gives PNG more options in how it interacts with other nations. And it has more capacity to ask for what it wants and needs.

It also means a maturation of relationships with traditional partners. Australia’s relationship with PNG is evolving, and the traditional donor-recipient approach isn’t going to work the way it has in the past.

One of the biggest post-APEC headlines was the failure to issue a joint communique – and, as part of that, the tale of the Chinese delegation barging their way into the office of PNG’s foreign minister to demand changes to the document. Is that incident likely to affect the tenor of China-PNG relations, in the short or long term?

The outcome of APEC shouldn’t be a reflection on the host. PNG did what it could to bring the parties to a consensus, but given the position of some of the big powers at the table, that was always going to be difficult. There were tensions around those negotiations, and the incident involving the PNG Foreign Minister’s office was obviously a tough situation. But generally, PNG-China relationships are strong. The fact that President Xi made a state visit and was able to give so much time to PNG politicians means there’s a warm relationship that’s likely to endure.

For a few days in mid-November, Papua New Guinea was at the center of attention for the entire region, and beyond. But what happens as APEC 2018 retreats into memory? How durable is the renewed interest from countries like Australia, China, and the United States?

There seems to have been a mind-shift – led by Australia, and supported by the U.S. and Japan – in approach to the region. The test will be seeing those commitments through.

Those traditional powers are learning they can’t take the region for granted and they need to remain active and engaged partners for countries in the region. They also need to be ready to listen and respond – and that’s because they are not the only potential partners.