Big Challenges Ahead for Papua New Guinea’s New Prime Minister

In the final days of May, the eight year prime ministership of Papua New Guinea’s Peter O’Neill came to an end. In a protracted political wrestling match that took many weeks to fully play out, O’Neill eventually lost the confidence of parliament and was replaced by his former finance minister, James Marape. While the threat of a parliamentary no confidence motion in the prime minister had been circling O’Neill for months, the issue came to a head in April with Marape’s resignation from the cabinet, and the process of new alliance forming that it triggered. 

The driver of political instability has been continued discontent fostered by PNG’s resources sector.  Marape represents a parliamentary district in Hela Province in PNG’s highlands, where the multibillion-dollar PNG LNG natural gas project – by ExxonMobil – is located. There has been persistent disgruntlement with the royalties generated to local landowners by the project, and the violence and instability in the area that the project has created. After Marape resigned from the O’Neill government, several other members of parliament from resource-rich provinces followed suit. 

While the concerns over the PNG LNG project have been long-standing, the impetus for this push to oust O’Neill came from a deal signed with France’s Total and its partners for a new $13 billion natural gas project to be called Papua LNG. The agreement reached with the PNG government for this project was again deemed to generate insufficient local royalties. This, combined with O’Neill stating that due to the drop in commodities prices there were insufficient funds to establish a PNG “sovereign wealth fund,” led to further discontent in parliament.

In one of his first statements upon becoming prime minister, Marape stated that PNG laws around resource extraction are “outdated” and needed to be changed. Marape said that he intends to amend the laws to increase revenues for the country from its natural resources. He has yet to provide details about how he will rectify the situation. 

A significant part of the problems linked to these large resource projects arise from political leaders’ conviction that their country’s abundance of natural resources is the silver bullet for PNG to develop a prosperous modern economy. There has been a constant raising of public expectations around these projects – like promises the PNG LNG project would “double PNG’s economy” – that reality cannot compete with. The frustration, disappointment, and anger that develop as promised benefits fail to materialize only inflame long-standing local intertribal tensions, fuel violence, and further inhibit the country’s ability to address its structural problems.

Yet Marape himself immediately fell into this trap in his initial address to the nation as prime minister, where he claimed that he would make PNG “the richest black Christian nation on the planet” within a decade. Yet there are no quick fixes or easy solutions to overcome the lack of basic economic building blocks required for PNG to develop the promised prosperity. Around 80 percent of the country’s population lives beyond the reach of the state, and primary state concerns like infrastructure, law enforcement, education, and health are poor even in the capital, Port Moresby, where the government has a strong presence.

If Marape wishes to improve the lives of Papua New Guineans he will need to not just make hopeful promises, but find a way to break the country’s resource curse and channel any renegotiated royalty deals with these large foreign companies into the basic structural requirements that are essential to the creation of a prosperous society. This will take far more than 10 years. However, it is possible to develop the right trajectory in this period. 

Marape’s other most pressing concern provides the strongest lesson of what could happen if his government fails to construct such a trajectory. October will see the independence referendum for PNG’s autonomous region of Bougainville take place. In the late 1980s, tensions that were derived from the development of the Panguna Copper mine – operated by Rio-Tinto – led to a revolt by the Bougainville Revolutionary Army (BRA) and a subsequent decade-long civil war. If Bougainville votes to leave, other regions of the highly diverse country, unable to see their prospects being improved within the PNG state, may agitate for their own independence. 

Marape has ascended to the prime ministership at a trying time for the continued integrity of PNG. It will be a true test of his leadership to be able to map out a plan that can harness the opportunities that major foreign investment brings, quell the associated tensions, and keep his citizens invested in a shared future for the country.