PNG Future Economic Power in Pacific?

Will PNG Become the Next Economic Power in Pacific Region?
Francis Hualupmomi
It is predicted that PNG will possibly become the next economic power in the Pacific region should she play the right game. I attempt to postulate this scenario premised on current political and economic events as it is or may unfold and provide some alternative strategies. These assumptions can be contested.
PNG has seen a steady economic growth over the past 9 years and is predicted to continue grow. That’s a remarkable unprecedented growth largely due to continuous stable political regime and prudent macroeconomic and fiscal management framework.
One of the main reasons why a country may see steady economic growth rests with the kind of political environment and climax created and maintained by a vibrant political regime. A stable political regime is necessary to foster an ideal economic scenario. This however, comes with effective and efficient strategic internal mechanisms, although dynamics of instability exist.
Contextually, it can be said that PNG economy has picked up well since mid 2000 with political shifting from Mekere regime to Somare regime. Mekere regime provided at least an economic foundation for the Somare regime take-off. The healthy economic performance of PNG economy can be alluded to a consistently sound political and economic framework engineered by Somare regime despite internal and external political and economic pressures.
The current government’s economic framework has fostered a conducive environment stimulating healthy economic performance. Despite slow world economic crisis recovery the economy has seen a steady economic growth rate from 5.5 per cent last year and is expected to grow by 8.5 percent this year. With blooming economic potentials being or will be economized PNG is expected to see another Asian miracle in the region sooner. Four important economic potentials underpin this prediction: LNG; Hydrology; geothermal; Carbon Trade and New Mining.
Geo-economically, the LNG is on of the biggest global energy projects, which is projected to boost PNG economy by about 11 per cent when it is fully economized in 2014. This will be interestingly similar to current Chinese economic growth rate.

More significantly, the LNG project will further be boosted by the carbon trade, geothermal energy, hydrology project from Southern Highlands to Australia and new mining operations such as Ramu-Nikko, Freda Mine, undersea bed mining and others.
In the context of globalised regional economy orientation and constituency PNG should strategically play an important role through strategic maneuvering in a US-led liberal order to achieve its national goals and objectives. Three economic regimes are strategically important for PNG to maximize absolute regional gains – accuracy in economic calculation is necessary.
First, PNG should focus on how it should strategically maneuver in regional regimes in economic liberalization (globalization). While it assumes economic power through domestic economic signals it should map out how it will strategically position herself in its export-led strategy in Pacific Island Forum (PIF) and Melanesian Spearhead Group (MSG). It should take active role in influencing outcomes of ‘rules of game’ to maximize absolute gains. Failure to do so may result in continuous entrapment, abandonment and exploitation by big powers.
Second, PNG needs to build a nexus between Asian regimes to synergize its export-led strategy. In recent times, Asia is the centre of gravity attracting economic potentials. With China as the second largest economic power, bridging Asian market economy is a strategic step in harmonizing PNG’s economic wealth. ASEAN is an important regime which PNG must penetrate and participate in economic activities.
PNG must also exploit market opportunities in APEC. The APEC provides more region-wide market linkages which PNG can market its economic potentials to attract and maximize absolute gains. Should this is perfectly executed high economic returns will be attained to build economic power.
Clustering economic potentials and exploiting market synergies in Asia seems possible with heavy expansion of US and Chinese investment in the region. The US hegemonic role and rising China in the region provide yet an ideal economic environment to exploit opportunities. Power politics provides public good that can assists economically potential states such as PNG.
If these assumptions are right PNG is expected to be economically powerful and will assume some prominent roles in international relations of Pacific region. It will be an interesting historical time when PNG rises with rising China under US-led liberal order. However, this depends on the cost of political governance. Maintaining the current regime with improvement in governance mechanism is necessary.
Francis Hualupmomi studies a Master of Arts in International Relations at the Institute of International Studies, Jilin University, China. He can be reached on hualupmomif@hotmail.com