SUMMIT DIPLOMACY AND STRATEGIC CHOICES

By Francis Hualupmomi
It appears that the domestic politics will affect how PNG interact and make rational strategic choices in the coming regional summit diplomacy in July, 2011. However, this does not preclude its ability to maximize national interest in the competitive playing field.
In the height of political maneuvering of current NA leadership war game at domestic level, three important issues were raised by the sacked former Foreign Affairs and Trade Minister, Don Polye, discerning summit diplomacy at the regional level as reported in Post Courier of 19th July 2011. Polye’s predication begs the question of whether phenomenonal pattern of domestic politics will affect rational decision making in the summit.
As far as regional relations are concerned, these issues are strategically important for PNG to confront the 21st century changing geopolitical power shifting and dynamics – immediate attention by government is absolutely necessary within the context of domestic political tussle.
The first issue at hand concerns the Gillard’s proposal to revisit Manus detention centre, whilst the other two revolve around the ability of the government of the day to participate in the Annual Australia-PNG Ministerial meeting, 44th ASEAN Meeting and 18th ASEAN Regional Meeting to be held in Australia and Bali this July respectively.
Given the magnitude of PNG’s political culture of tension at domestic level, it seems quite clear that the issue of reopening the former asylum centre in Manus province may not likely to take shape as expected. However, this issue may definitely appear on the main agenda in the Annual Australia-PNG Ministerial Forum should it take place this month.
It may be clear on the other hand that the Somare-Abel government may already have a possible response by the projection of the delay. The delay to a certain degree may also give us an indication of possible outcome that either the proposal will be accepted or rejected. The scope of the decision at executive level will depend entirely on the outcome of this meeting or others.
The asylum proposal has been quite controversial in nature due to its failure to produce tangible outcomes which consequently got shut down by Kevin Rudd’s regime. This perhaps could be one of the main reasons which may have shaped Abel’s choice.
However, in the event that this may have popped up in the meeting, the rational choice the government may opt for is to calculate all options available on the table to maximize the optimal preference consistent with national interest.
On the same lane, the ASEAN meetings to be held in Bali are extremely important for PNG given its prominence in Pacific political economy. ASEAN is now the thriving force in global political economy with the Asian tigers and the recent ascendance of China’s rapidly growing economic power.
Interestingly important will be the presence of great power, US, and rising China in the forum meet. In the 21st century, US and China will structurally reshape international relations and global political economy under the US-led liberal order in what is called the Asian century - an argument consistent with Joseph Nye’s dialectics of shift of power from the west to the east.
Now the puzzling question is how can PNG strategically reposition itself in the reconfigured international relations under the framework of ASEAN? Polye has pull the string further by precisely arguing that the indifference in domestic politics may affect PNG’s regional relations and positioning in the forum – one can strongly assume that domestic politics matters in shaping PNG’s regional interactions and positioning.
On the hand, Ano Pala, his successor, has responded with a positive but unclear proposal. It is understood that the Post Courier explicitly reported that Ano Pala and is chief advisor, Michael Mauve, will attend the meeting with no specified meeting proposal. However, it is expected that all is well set for PNG to drive its agenda in the context of national preferences and regional interactions.
The central issue here is how PNG will reshape its size in the forum. With PNG’s elastic wallet given its recent economic performance, it has the economic power to wield some influence in gaining credibility and recognition in the forum. Within the context of economic power maximization, it would rather be a rational choice for PNG to seek permanent status in ASEAN.
PNG cannot afford to lose this important opportunity. Polye’s advice to open some embassies in ASEAN will be a strategic choice as far as national interest is concerned. In projecting the nature of cost-benefit analysis, PNG would stand a better chance to maximize absolute gain. Under the US-led liberal order, although US is economically declining, it will continue to be the regional hegemon providing public good, whilst China’s economic growth will provide an alternative for the region through its hybrid Beijing Consensus.
PNG has caught the ASEAN’s eye already in the Pacific region as the driving economic force given its material resources fundamental in regional political economy and modernization agenda. Should PNG raise the voice of its national anthem in the forum under the framework of gaining permanent status; a possible outcome will be expected.
PNG can wield its economic leverage to shape the decision making behavior of its current investors, for instance, US and China to support its proposal in the forum. The future of PNG’s economic shape and power depends highly on the strategic choices and foreign policy behavior of the current government.
In summative, in the calculus of strategic choice and decision making, it would be wiser for PNG to seize these opportunities in the given summit diplomacy to exercise its growing influence in regional politics. The Annual Australia-PNG Ministerial Meeting is a playing ground in which PNG can opt for better package. In the ASEAN meet, PNG would be better position if it opts for a permanent status – playing the ASEAN card is a strategic choice given the nature and scope of shifting geopolitical geo-economical dynamics.

Korea-Pacific Islands Foreign Ministers Meeting: Reshaping PNG-ROK Summit Diplomacy

By Francis Hualupmomi

The recent concluded Korea-Pacific Islands Foreign Ministers meeting in Seoul demonstrates recent dramatic shift in geopolitics with developing countries assuming central role in regional politics. Pacific region has now become one of the hubs of influence with PNG taking the lead as an important emerging geoeconomic power in the region which has geopolitical and geoeconomic advantages in further transforming the national economy.
The reconfigured geopolitical-economic landscape in the region saw old powers and its allies, and competitors playing an active role in shaping PNG’s international behavior. In recent times, we have witnessed the return of US to its backyard given growing Chinese peaceful influence, and stronger interest from EU, Japan and Republic of Korea (ROK) and Canada, whilst others such as South East Asians – Singapore, Thailand Malaysia and Indonesia - continue to invest in the national economy.
We are witnessing a dynamic geopolitical relation where PNG has become more assertive and a confident important regional player given its growing economic power in the region. Auckland University Pacific Studies specialist, Dr Steven Ratuva, articulated that “Papua New Guinea is the growing economic power in the Pacific because of the mining and the resources there” (The National, Wednesday, June 8th 2011).
It was also reported by the same paper that the recent PNG-EU free trade agreement on fishing industry has invaded and threatened EU markets. Hence, economic power constructs PNG’s international behavior with confidence, reputation and recognition.
According to BPNG (2011), PNG economy grew strongly by 8.0% last year (2010) largely attributed to building and construction, transportation, storage, communication, manufacturing and commerce sectors. This year (2011) it is projected to grow by 9.5% largely driven by a pick up in mineral sector and LNG construction.
The IMF (2011) ranked PNG as 34th fastest emerging economy and 1st in the Pacific region. In comparison to our giant neighbors by world ranking, Australia is ranked 120th with a 2.7% growth rate and New Zealand is ranked 142nd with only 1.5% growth rate.
Interestingly, PNG possess geo-economic and geostrategic potential where cooperation and competition among states will proliferate over the coming years. States interest to have a share in PNG’s resources is both an opportunity and a challenge. However, how to manage different relations among key partners is strategically imperative for PNG.
Structurally speaking, resources influence states behavior expressed in terms of competition, however, the complex web of globalization and interdependence makes it easier for states to mutually cooperate in maximizing absolute gains.
Others may see such influx of multifaceted actors in PNG as a geopolitical game of relative gains. While this remains a structural issue given the nature of global scarcity of resources, one must not dismiss the notion of cooperation.
Deepening interstate relations with key partners are a strategic choice to maximize given national preference to gain highest returns or dividends (utility). PNG needs more strategic partners in driving its modernization agenda in the 21st century. Hence, ROK is no exception.
With positive exploration and discoveries of mining and petroleum compounded with increase in world coffee prices and free access to EU fishing market industry, PNG has once again attracted foreign investments from ROK. ROK is one of the 56 official diplomatic countries which PNG has close bilateral relations.
ROK foreign investment ranges from hydro electricity projects to roads and other infrastructure in the country through its overseas development aid program, KOICA.
The PNG-ROK meeting is declared by the foreign affairs and trade minister, Hon. Don Polye in Seoul, ROK, as successful, one which is reshaping a new dimension in bilateral relations. ROK has agreed to provide investments in strategic economic cooperation which include aviation; clean energy, road and infrastructure; and others which will be strengthened by an Investment Protection Agreement in September, 2011 to promote mutual cooperation in investments and trade.
Through this agreement, PNG and ROK airlines will commence commercial services between two countries and South Korean Green Growth University will assist PNG universities, UPNG and UNITEC, to develop a national green policy. In return, ROK would like to see PNG providing more opportunities for its investment in LNG and other strategic areas of economic cooperation.
ROK is one of the East Asian Tigers which has adopted a state-led development model in the 1960s which PNG can also learn and adopt some key lessons. ROK since 1960s has become one of the fastest high-tech industrialized economies.
Four decades ago, it was ranked among other underdeveloped countries experiencing poverty fuelled by its weak economic structures. Currently, according to Economic Intelligence report (2011) it is among the top 20 world economies or top G-20 economies – ranked 15th in the world by nominal GDP and 12th by purchasing power parity (PPP).
ROK is also an important partner in political and economic cooperation and there is need for PNG to further explore other areas of cooperation consistent with Vision 2050. Indeed, ROK is a less resource-rich small island country which relies heavily on raw materials or resources abroad. This economic need provides PNG some opportunities to gain from its (ROK) investment.
Some strategic areas of mutual cooperation include economic reform in areas of human capital investment in science and technology and low-medium-high-tech industry.

There is also need to cooperate in agricultural and maritime trade and investment. PNG could diversify its trade and economic base with ROK. Trade in agricultural and aquatic commodities is a strategic choice (an absolute gain/win-win situation) for PNG.
In sum, PNG-ROK bilateral relation is strategically important in which PNG will mutually benefit in areas which were not provided by some traditional partners. This is an important opportunity to forge new frontiers in international political and economic cooperation.

Is 2012 AusAid Budget a Rationale Foreign Policy Choice?

By Francis Hualupmomi in China
The 2012 increase in Australian Aid Budget for PNG raises an interesting question: Is it a rational foreign policy choice?
In international relations, Aid is perceived as one of the most effective soft power foreign policy tools to win hearts and minds of people in a given state of interest by the big power. In this logic, Aid is designed and deployed to either weaken or to strengthen a state depending on the nature of the interest of donor. For instance, in some states in Africa, although there are continuous aid donations from former colonials yet development remains less progressive. This can also be said to PNG with AusAid. Aid therefore, is highly questionable in many developing countries.
According to Joanna McCarthy Australia will donate $520 million in Aid to PNG next year, making it the second biggest recipient. Development Policy Centre also noted that this will be an increase from $4.3bn in 2010-11 to $4.8bn in 2011-12–or from 0.33% to 0.35% of GNI (Gross National Income). Although Australia is still trailing behind other OECDs countries in Aid, it promised to continue increase the figure beyond 2012 given the positive prediction of economic growth from 2012-2016.
The focus of AusAid in PNG expressed in terms of its goals and objectives is to achieve Millennium Development Goals (MDGs) through good governance and reducing poverty focusing on strengthening health and education sectors. Whilst this may sound positive in PNG, whether it will be translated into tangible outcomes remain an issue and challenge.
This raises an important question, is AusAid a development tool or politically engineered foreign policy tool aimed at pursuing Australia’s own national interest in the region? These questions can help us calculate Canberra’s intent and motive and its policy implications behind increase in Aid. It is interesting to note that although the trend of Aid has increased annually PNG remains an undeveloped and often blended as a failed state since independence. If Australia’s Aid is generous why do PNG continue to experience development problems?
From observation, since independence with Australia’s development assistance under different political regimes nothing has really changed much in PNG’s development and modernization agenda. Socio-economic landscape remains worsening until recently given poor socio-economic such as health and education indicators, poor higher education socio-economic infrastructures, poor economic infrastructures, corruption, etc.
Moreover, with changes in geopolitical landscape in the Pacific region, especially with the rise of China and its influence in the region, Australia is caught in between the thin red lines. China’s presence and its influence has greatly affected the island nations especially PNG, Fiji and others through its soft power diplomacy. China is the second largest aid donor after Australia in the region. China offer soft or unconditional aid to finance development in the region. PNG is the biggest recipient of Chinese Aid. There is positive effect of Chinese Aid on PNG’s socio-economic development.
Politically, Australia is not only under pressure from Washington over Chinese regional influence but is worried and in fear that it is slowly loosing its peripheries in the region. This is the most immediate conundrum facing Australia in the region. This could suggest that Canberra’s increase in Aid is only a geopolitical competition against China in the region.
If this is the intent and motive behind the increase, this may have policy implications.
First, should PNG development situations continue to be positively affected by other donors than Australian Aid there could be a tendency of shift in policy behavior. There is a feeling of mistrust on Australia’s development assistance. Political leaders and elites may shift preferences to other donors such as China, EU, etc, should they perceive AusAid as an impediment to socio-economic development progress.
Second, history has shown that geostrategic competitions have structural implications in the economy. The more a state spends on relative strategic competitions there is a tendency of it to collapse. The economy might be affected increasing social chaos and poverty. The competition between US and Russia during Cold War shows that strategic competition, for instance, on Mutual Destructive Weapons led Russia to unwise spending on armaments and consequently its collapse.
Given this conundrum in Aid, what should Australia do? Australia should be mindful in playing Aid card in geopolitical competition. Australia should also consider how it could cooperate with other big important partners in aid diplomacy in the region. A cautious and constructive Aid management strategy is necessary to avoid clash of national interest. Should Australia is not careful enough this could be a waste of tax payers’ money and loosing of grip on its major conventional peripheries in the region.

Who Should Supersede Grand Chief Somare?

Francis Hualupmomi, in China
With Prime Minister (PM) Grand Chief Sir Michael Somare officially being declared medically unfit in maintaining and continuing National Alliance-Coalition(NA) leadership until next election, the question one might ask is who will supersede his leadership? I provide a prediction premised on observation.
It is quite difficult to predict Sir Michael’s successor given the complexity of NA’s coalition make-up, however, from observation we can only construct some most-likely scenarios.
The current NA-Coalition government under Grand Chief Sir Michael Somare over the years has had several leadership competitions among coalition political parties based on regional politics.
From evidence gathered, leadership tussle is between Highlands’ regional camp and Momase Camp, whilst Southern and the Nuigini Islands regional camps seem moderate and bandwagoning.
From this constellation, we can assume a common pattern that Highlands and Momase camps will compete for leadership. We expect three political factions within Highlands regional bloc, the O’Neil’s group, and a split in Enga between current acting PM, Sam Abel’s group, and former deputy PM leader and highlands hot candidate Don Polye’s group. The other highlands political leaders may most likely bandwagon these three groupings depending on their most given preferences.
Given highland’s complex political culture, we expect that a split in Engan groupings would most likely shift alliance to Southern Highlands group. In Southern Highlands, the most likely hottest candidate will be Peter O’Neil. However, that does not dispute a change in Engan politics. Should Engan MPs unite we expect a different scenario. Don Polye would be most likely to assume leadership than Abal.
On the other side of the coin, the Momase camp may also face the similar political competition. We expect a split between Patrick Pruaitch and Arthur Somare. Although both leaders are highly competitive, Arthur may assume leadership for three major reasons. First, Arthur will be most likely preferred over Pruaitch to maintain Grand Chief’s Legacy. Second, Arthur has played an important role in political economic development by bringing ashore many high impact projects such as LNG and public enterprise reforms while serving several ministerial portfolios. Final, Arthur’s leadership may attract NA support in honor and recognition of Grand Chief Sir Michael Somare.
In the middle camp, we have Nuigini Islands and Southern camps, both of which do not possess potential candidates for the leadership. In Nuigini Islands camp, we expect Paul Tiensten to command bandwagoning with Momase camp. In Southern camp, there is a vacuum for possible PM contender after the defection of former deputy Prime Minister, Sir Puka Temu, to Opposition.
Given this political situation, we expect two possible scenarios. First, both camps may remain faithful with Momase camp in fear of loosing leadership to highlands region. Second, there will be a split within the camps between Pro-Somare and pro-Pruaitch factions. Although there is possibility of defections of MPs in coastal regional bloc to highlands regional bloc this may less likely to occur.
From the situational analysis, we can draw some conclusions. First, a possible political instability within NA-Coalition is inevitable. Second, we expect some unexpected leadership shift in highlands regional camp with new faces should there be a stalemate in leadership between Enga and Southern Highlands. Third, we expect split in Momase regional camp, however, it is most likely that Arthur may possibly assume leadership. Fourth, we also expect a split between Nuigini Islands and Southern regional Camps; however, it is most likely that both will support Momase camp.
This leaves us with four most likely possible candidates: Arthur; Abal; Polye; and O’Neil. In projecting a rough prediction, we expect Arthur Somare to reign should there is stalemate between highlands regional MPs. However, should highlands regional MPs unite, we expect Don Polye to assume leadership.

Political Economy of China’s Economic Reform: Lessons for PNG Vision 2050

By Francis Hualupmomi
In this article, I draw some interesting lessons from China’s Economic Reform. I hope it provides some insights to drive Vision 2050. Today, China boasts the second largest world economy superseding Japan in 2010. China’s remarkable economic success was driven by its post-Mao economic reform. The question is: What factors stimulate its economic success? Is there a lesson for PNG?
China’s Economic Reform and Its Characteristics
Reform
Sacks and Woo (2003) accentuate that China is now in the midst of three historic economic transformations and transition from a planned economy to a market economy, economic development from a largely subsistence peasant economy to an industrialized economy with a modern service sector, and economic globalization from autarky to an important node within the global production network. The economic reform of China begins in 1979 under Deng Xiaoping. Deng pursued an “Open Door Policy” from Mao’s “Isolation Policy” employing a hybrid model of socialist free market. The reform focuses on international trade and privatization of all state-owned enterprises.
In 1990, six special economic zones were established including Shanghai Pudong zone specifically designed for attracting foreign capital. The government supported agriculture through creation of contract responsibilities. In this special arrangement, farmers could sell their commodities abroad with an aim to finance China’s modernization agenda.
Between late 1980s and early 1990s, the focus was on creating a pricing system using dual tracking system and increasing the role of state in resource allocation. The government diversified the market economy of private enterprises and foreign capital by reducing state monopoly. The market economy was left to invisible hands to influence economic pattern in driving the economy.
By late 1990s, the government focuses on reforming unprofitable state enterprises and banking system insolvency. State-owned enterprises and banks underwent a rapid transformation promoting effectiveness and efficiency. In the beginning of 21st century under Hu Jintao, focus was on domestic economic development to ensure a harmonious society.

Types of Business Enterprises Reform
There are four main types of enterprise reform that stimulated China’s economic success. The first is the privatization of state-owned enterprise managed by the Bureau of Managing Council. In this new arrangement, workers do not own shares but only receive salary based on performance. The Bureau employs mostly Chinese western-graduate nationals and homegrown nationals to manage the enterprises with an objective to give confidence to their own nationals.
Second, the stock companies were converted from state control to private control. In this arrangement, enterprises earn some shares whilst the rest go to state. Managers are also legally allowed to hold some shares.
Third, the government promoted a market-oriented private business protected by the government. All Banks provide low interest loans to variety of business to facilitate economic modernization. Final and last is the conversion of foreign fund enterprises (joint ventures and wholly foreign-owned enterprise).
Special Chinese Characteristics of the Economic Reform
The Chinese economic reform constitutes some distinct characteristics which play an important role in driving the economy.
• State-led policies
• Decentralization of state powers to different individuals, groups, and business in decision making and management of the market economy
• A socialist free market
• Development of special economic zones
• Diversification of state banks to meet private business needs at a low interest rates

• Employ highly educated nationals
• Combination of chinese characteristics and modern management skills
• Encourage modern management and technological innovation
• Chinese are great learners and hardworking – Work to live philosophy
• Non-state led enterprise reform
• International trade focusing on agricultural areas as the economic base
• Convert state-owned entities into private business or enterprises


Success of the Economic Reform
The reform was successful for over 3 decades. The outcome from three processes of economic transformation was astounding proving a sustainable average annual GDP growth rate of 8% from 1979–2011. Industrialization, open organization and internationalization extremely drive the shift towards market economy.
Since the reform in 1979 the economy has grown rapidly. In 2004, China was ranked 6th in world economy. The GDP per capita was about US$ 1267. In the same year, the IMF reported an increase in GDP by 9.5% up to US$ 1.647 trillion. In 2011, China’s economy is expected to grow by 8% despite slow recovery in 2008 economic crises (Mussa, 2010).
The reform overwhelmingly attracted foreign investment, for instance, in 2004, 45% export was produced by foreign funds and enterprises. China was ranked as the third biggest trading country after US and EU. More than 20% of foreign trade came from china as reported by IMF.
Interestingly, free market under invisible hand had played an important role in the economy. In 2001, the central command was replaced by market and economic forces with entry of China in WTO. Decisions were decentralized. Chinese management of business was also successful with a combination of Chinese culture and modern management skills. Chinese were more eager to learn by experience and apply management innovation and technological innovation.
What are the Lessons for PNG?
Drawing from significant lessons in China’s economic reform, PNG can drive Vision 2050 by:
1. Diversifying the market economy into special economic zones:
• Agriculture as the backbone of international trade in some highlands and coastal regions
• Encourage more banking system through the country, more ICT Business, competition in state-owned enterprises and stock markets
1. State playing an important role in creating a conducive environment for economic take-off through sound economic policies
2. Combine indigenous knowledge with modern innovative management skills and technological skills
3. People being eager to learn and hardworking – PNG must strive to ‘work to live’ rather than ‘live to work’

Revisiting Manus Detention Diplomacy

Francis Hualupmomi
Last week Australia’s Immigration secretary Andrew Metcalfe and Pacific parliamentary secretary Richard Marles had quietly travelled to Port Moresby to revisit the closed Manus detention center raising heated controversy in Australia and PNG. Whilst the ‘Manus Detention Diplomacy’ may obviously not be in PNG’s national interest, it however, may also be used as an opportunity to maximize outstanding national interest should government favors it.
It appears obvious now that the struggling Labor government is contradicting its own manifestos and perhaps compromising national interest by returning to Howard’s ‘hands on’ policy in the region – a slap in the face of its constituencies. Even Gillard contradict herself during campaign in emphasizing East Timor and Malaysia as an alternative choice. Manus detention centre as a Pacific solution under Howard’s regime was dismantled by former Prime Minister Kevin Rudd in settling rough diplomacy with Pacific Islands especially PNG.

Since end of colonization, Australia continues to exercise “hands on” and “ignoring politics” in her external relations with PNG. Canberra continues to assume PNG as its colonial periphery to exploit and impose what it perceives as a testing ground. Australia has an attitude problem in dealing with not only PNG but the rest of the Pacific island countries – she has not learnt her mistakes, for instance with Fiji.
Meanwhile, several political issues remain unsolved between PNG and Australia until Kevin Rudd’s regime. Gillard has misunderstood Labor’s policy towards PNG which Rudd has set in precedence. Australia-PNG bilateral relations under Howard regime was a mass, a repeat of it will not be in the best interest of Australia’s tax payers and PNG government. Most Australian feels that Gillard is too pushy and incapable of handling internal pressure of flooding of unwanted refuges.
The proposal of revisiting Manus detention centre has advantages and disadvantages. PNG government may expect incentives if it accepts the proposal. Whilst the choice of refusal of proposal is in national interest, PNG however, may think of employing it as a leverage to influence policy outcomes with outstanding bilateral issues.
An advantage is that Manus local economy will be serviced by investments as a part of the promise package. PNG may use this proposal as an important opportunity to push for equal regional trade agreements discerning Temporary Workers scheme and others. There is no logic in Canberra being too ignorant in honoring this trade proposal yet ‘telling us what to do’. PNG cannot be blinded by this conservative attitude. If Gillard thinks PNG is a dumping yard, she is probably constructing a mistake as PNG is no longer a sleeping pill let alone her rise in the region. The government should strongly push for Australia to reconsider the scheme and other trade agreements. More so, PNG should negotiate for support on sinking atolls problems in Manus.
Politically, Canberra has continued to calculate NA under Somare-led regime as militant given his past radical anti-colonialism sentiments. Controversially, the politically motivated Motigate saga compounded with other governance issues led by civil societies and the current proposal suggest that PNG should advice Gillard to embrace a “hands off-policy”.
As far as Australia’s national interest is concerned, Gillard should concentrate in dealing with changing dynamics of geopolitical shift in the region. With global shift in power from the West to East with the rise of China constructing a new reconfigured multipolar system, instead Canberra should be playing the Pacific cards to win hearts and minds of PNG. Australia is slowly losing PNG – this is the greatest concern and conundrum. PNG by now is very assertive in its regional approach and has some form of economic power to influence policy outcomes should Australia fail to honor her commitments.
Treating PNG as colonial backyard may not work for Australia. Australia should by now pay some respect for PNG as the leader of Pacific islands nations. One may argue the Pacific archipelago is no longer Canberra’s conventional playing ground. With changing pattern in Pacific politics, Pacific is a contestable theatre where non-zero sum game once pursued by Canberra will be trade-off with new wave of interdependence. Hence Canberra may expect different political outcomes in PNG diplomacy.
On the contrary, in essence, Manus province at the first instance may not service the policy. Manus is also facing the dilemma of sinking atolls which PNG should pay close attention to. Whilst this is the major issue in the island nations, there is an escalation of social discontent and fear among people with Islamism migrants with respect to terrorism and religious fundamentalism. Some argue that there could be a sense of disparity in living standards between refugees and local populous in Manus.
Dealing with refuges from Asia, especially boat people and Middle East has been a problem in Australia. Australia has had a hard time managing it. This trend will continue and Gillard has to deal with it adequately. Given coming elections, this will be a test for her and the Labor party. Australia’s tax payers are counting on her leadership in dealing with soft and hard politics.
More so with late recent death of Osama Bin Laden, it may also be postulated that Australia may find herself in dark shell pondering the infiltration of refuges as potential threats. Increase in Muslim asylum seekers only proliferate threat perception.
The approach under which it (detention centre) has been processed earlier suggest lack of less coherence and pure ignorance as evidenced in the way Australian foreign officials behave towards PNG’s officials. Nonetheless, Australia’s push to have PNG as a regional facility centre is a slap in the face. PNG should refuse in total such scheme as it only paints Australia’s conventional interventionist (neocolonialism) approach.
In my view, Gillard proposal is not in the best of interest of PNG. This is an internal problem which Canberra, as the middle power, has the capacity to deal with it. PNG cannot be used as a dumping ground for exercising external policies. However, should PNG consider this proposal, then it must strongly push for Australia to accommodate PNG’s national interest.

Human Capital and Power Projection: Economic and Strategic Choices

By Francis Hualupmomi
Human capital is one of the most important factors in power projection in a world driven by knowledge-based economy. For PNG to project power in the region given its current economic growth rate, economizing human capital in strategic positions will incur high dividend returns.
It appears that the most important events coinciding with the current economic boom are human capital development and national security. Theoretically, economic and military are the most important intertwined factors in projecting power of the state and its co-existence in the international system govern by ‘rule of the jungle’. Economic and military are both opposite functions of state. That simply means military protect economic wealth and economic wealth build military power, hence projecting power of the state. However, this does not preclude the role of internal security (Police). Police also play an important supporting role in national security.
There are several important scenarios projected in human capital development, however, in this article I intend to focus on economic and strategic (security) scenarios consistent with current economic boom and Vision 2050.
PNG is currently experiencing an economic boom as a result of an unprecedented mining and petroleum activity compounded with construction industry, which will continue in the next 30-50 years. There is also a growing global demand of energy supply by industrialized countries, especially in Asia and Europe consolidated with high domestic demand for human capital in particular, blue collar supply. In my projection security personals and diplomats in the mining and petroleum industry are also important in the next 5-10 years.
The LNG projects and other mining projects will be the engine of economic growth which will require a comprehensive massification of human capital. It is forecasted that a supply of 50,000 human capital within the first 5 years is necessary to develop and operationalise the high impact projects coming on stream. Specialists are required to implement these projects. Specialized fields in science and technology should be the driving force.
With PNG gaining prominence in global market economy, international political economy of trade will become important. In a world of complex interdependence driven by positive zero-sum and non-zero sum games, PNG needs specialized trained diplomats to strategically position its national interest in geoeconomic markets. In addition, strategic thinkers will play an important role in analyzing geopolitical and geostrategic implications in positioning our interest in global market economy.
There is also a need to protect economic benefits in the LNG projects and other mining projects over the coming years. Recently, the Japanese government warned PNG to beef up its security system in order to maximize the opportunities projected from mining and petroleum projects. Protection of economic wealth is necessary to sustain the current continuous rapid growth.
However, the current situation is that there is ‘deficiency’ in human capital supply in these specialized fields. In a state of defunct, both public and private universities and colleges lack capacity to meet demand and supply due to lack of past governments support. There is weak security system to protect the economic benefits – “A new garden without a fence is vulnerable to wild animals”. The LNG projects and other mining projects depend on thinkers and implementers. In order to project power in the region some strategic choices have to be made by the government:
Economic scenario
1. Upgrade public universities and technical colleges;
2. co-opting few private institutions in consistent with international quality assurance best practices;
3. design designated specialized science and technological programs as national projects with the assistant from external sources;
4. establish cross border training and education partnership with key institutions;
5. Increase international scholarships in research, science and technology in prestigious colleges and universities;
6. industry alliance – government through Office of Higher Education coordinates graduates placement in industries;
7. establish diplomatic corps training centre in University of PNG (UPNG) or Public Administration College or a separate entity managed by Foreign Affairs and Trade; and
8. international training in diplomacy in strategic countries.
Strategic and Security Scenario
1. Modernize defence force capacity and capability through increase of defence personal ratio and modernized assets with precision to mend and fend of real or potential threats;
2. establish an Institute of International Security and International Studies (ISIS) designated in providing timely and quality policy advice to government. This could be either situated within UPNG or National Research Institute or a an independent entity of state;
3. introduce military cadet program in secondary schools and existing national high schools;
4. establish and continue to maintain security and strategic ties with key regional partners in capacity building;
5. modernize police force;
6. reintroduce police program in universities;
7. reintroduce direct Police Cadet Training with focus on University Graduates’ and;
8. National Intelligence Organization should be strengthened and modernized.
Although it may be an expensive exercise, in the long run will it pays a massive dividends in return.
In sum, PNG can project power in the region if it can utilize its economic wealth to increase investment in specialized human capital in science and technology and build strategic and security capacity and capability.

Security Dimension of Transfer of Land Rights: Policy Implications and Strategic Choices

By Francis Hualupmomi
The debate on transfer of land rights from state to landowners by some political elites, elites, landowners and the populous provoke interesting security implications for PNG. Martin Namarong in his recent article “Land: questions of ownership & sovereignty” on April 26, 2011 in PNG Attitude provides us a logical yet most critical analysis on this issue. I expand his scope of analysis focusing on security dimension and its policy implications.
Some critiques observed that land rights which is normatively considered as a natural birth right of citizens given the traditional heritage in Melanesian society is being politically exploited by competing interests. In quest for modernization and economic imperatives state leadership in the governance of redistribution of wealth has been compromised with external interests provoking suspicious and mutual distrust in the society. The proponents of transfer of land rights argue that the state under a social contract to prudently manage national interest, i.e. landownership in resources, on behalf of its citizens appears contradictory and unwarranted to some extent of mismanagement as exclusively witnessed in unequal benefits-sharing in Panguna Mine, followed by LNG and others.
The issue at hand though, as argued by several legalists and politicians is equal distribution of resources between state and MNCs and landowners. Whilst this may sound welcoming for landowners, there are adverse implications to national security of the state should critical thoughts are not well conceptualized.
First, Sovereignty of the state will be compromised and systematically undermined under the Westphalia system. Sovereignty of the state alludes to the notion of legitimacy, the ‘right to rule’ by the ‘rule of law’ through a social contract. State on behalf of the mass through social contract expressed through election is mandated to prudently manage individual interest legally binded as a collective interest. On this premise, the major argument is that state as a ‘rational man’ is the only legal entrusted custodian possessing legitimate capacity and capability to manage natural resources on behalf of the landowners.
Second, we expect a most likely rebellion by landowners given prolong unsatisfactory perceptions on the government’s management of redistribution of resources. several mini scale rebellion against the state and MNCs such as threats of plant closure, clash with security personals (both state and non-state) to name a few since the operation of MNCs in PNG indicate a tendency of proliferation of near future large scale rebellion.
More over, mining and petroleum in highlands region suggest Mercenary-like military-build over time with given aggregate of monitory incentives through loyalties and dividends. The Singirok Gun Summit report proves threatening and worrisome. The full transfer of landownership rights to land owners is a dangerous and most risky exercise. Legitimizing power on the hands of landlords would most likely convert them into power maximisers constructing real threats to state, MNCs and populous.
As situation reached its full peak the worst case scenario is a mini scale foreign military intervention. Energy is an important economic and strategic interest of any state which if under any circumstances is threatened will instruct military intervention to protect its citizens and socio-economic infrastructures. The Sandline crises, East Timor, Libya, Iraq, Kosovo, Georgia, are some cases in point. A large scale clash between landowners and state and private security personnel is yet to trigger. Recently it was also reported that few southern highlanders had clash with G4S security personals.
The landowners lack capacity and capability to manage resources should the rights are legally transferred. In my view, it would be quite impossible for landowners to manage resources. There are a lot of issues associated with this view. First, we expect unwise spending by landowners in inferior good and services, such as gambling and prostitution in expensive corridors in city lights domestically or overseas. Economic implications may include capital flight and at some point inserting monitory pressure on the economy such as inflation, etc. We also expect increasing social problems such as domestic martial affairs, spread of incurable disease and proliferation of prostitution, transnational crimes, etc.
Nevertheless, the call for autonomy is too early and may not be in the best interest of PNG. Such calls will only provide precedence for autonomization by other provinces and regions. Most provinces lack capacity to administer this process. Finally, transfer of land rights may construct a resource bias in development. Some provinces lack resources and monopoly of resources may not be equally distributed in PNG in aggregate terms.
Given these security implications on the transfer of land rights some strategic choices have to be rationally calculated to maximize national interest to avoid unexpected security challenges:
1. Rectify the legal parameters defining the legitimacy of land rights with state still having some legitimacy over management of resources;
2. Borrow Brunei’s model of state-landowner partnership- state should partner with landowners by providing them monitory incentives through loan to establish national companies without external influence. The state-national companies must employ highly qualified expatriates including nationals with full social protection;
3. The state based on social contract as a legitimate custodian should renegotiate for an absolute gain to attain a 50-50% share, .i.e. a break up of state 30%- landowners 30% and MNCs 40%; and
4. Autonomy is not in the best interest of PNG given the lack of political and administrative capacity.
In sum, absolute gain through equal wealth redistribution must be the national interest in resource sectors.

PNG’s Strategic Culture and Its Policy Implications in 21st Century

By Francis Hualupmomi
Since Sandline crises followed by 9/11 PNG’s strategic culture remains static. The prime purpose of the state as a “rational strategic man” in its strategic interaction under the organizing principle of anarchy is to maximize strategic choices in consistent with national preferences – guarantee our security and survival in the new multipolar world.
There is compelling plausible why PNG’s strategic culture remains unchanged and under question or threat. To analyze this strategic scenario, we need to understand PNG’s strategic culture. Three questions worth answering: What is PNG’s strategic culture? Has it changed? What are the policy implications?
Strategic culture is a new concept in strategic studies and international relations borrowed from anthropology, sociology and less on psychology and historicism to understand how culture shapes strategic behavior and outlook of states under different conditions. Understanding strategic culture helps the state to rationally maximize strategic choices. This concept is complex but it can be defined within its own context. For this article’s sake, I refer to it as “shared beliefs, attitudes, ideas, norms, traditions that shape strategic behavior of state over a period of time under given conditions”. In this logic culture is not static but is dynamic, i.e. culture changes under different conditions. Hence, I define PNG’s strategic culture as benign in nature yet remain static despite rapid changes in internal and international environment.
There are several factors which physically and psychologically shape strategic culture: economy, geography and demography, history, culture, generational change, and technology. For instance, through the lens of strategic culture influenced by these factors we can calculate why Australia and PNG Defence Force behave differently or why Australian Defence Force is more advanced than PNG Defence Force? Premise on this definition, I attempt to define factors shaping PNG’s strategic culture in post-Sandline Crises.
First, economy is the most important element in shaping states behavior and outlook. Economy fundamentally influence the way actors may behave in its strategic interaction given the size of its economic power. For instance, a simple analogy of state as an abstraction of a rich man may use his economic power to want what he wants. State A with an economic power can use coercive force or non-coercive (normative) force over state B to want what it wants in consistent with its national preferences. Economy and military cannot be separated. Economic power is the function of military power projection. With economic wealth a state can project strategic capacity and capability. Without economic power a state is weak. For instance, China’s military modernization is shaped by its current economic power. PNG’s economic power can also shape its future strategic outlook in the region.
Second, geography and demography plays an important role in shaping strategic behavior of a state. The size, climate, topography, resources, ethnicity and population are important elements in considering strategic choices. PNG is the second biggest island apart from Australia in the Western Pacific theatre. Its location is geo-strategically and geo-economically important given its territorial and maritime positioning and abundance of natural resources. The nature of geography proliferate internal and external threats such as natural disasters, terrorism, transnational crimes and power competition over resources by big powers and complex ethnic rivalries. Population in a given state also makes a difference in which a state may behave towards others in its strategic interaction. PNG although small in population in world index, may still be the largest populated state in the region apart from Australia. Population determines the strategic capacity of the state.
Third, historical factor helps shape strategic behavior. History constitutes a continuous process of past social events which may explain why a state as a rational strategic man behaves over time, space and distance. For instance, East Sepik and Highlanders are warriors based on historical evidence. The pattern of historical social facts can help us understand why Sepiks and Highlanders are aggressive. Such behavior can shape individual perceptions in leadership to maximize national interests given strategic choices. For instance, based on historical evidence we can calculate why Somare is nationalistic and anti-colonialist or why Chan mishandle Sandline crises.
More over, cultural norms, beliefs and traditions also shape strategic behavior of state. PNG has a complex unique culture with more than 800 different languages and ethnicities which play an important role in shaping its strategic interaction in the international system. For instance, PNG’s strategic behavior can be defined as benign rather than benevolent due to its Melanesia culture of communalism, although some form of real-politic or realism metaphor exist in tribal warfare in different regions. Hence, we can argue that PNG’s non-intervention and non-interference in Fiji coup signifies how cultural norms constraint her strategic reaction. Culture therefore is a strategic constraint in PNG’s strategic interaction in regional politics. Culture also plays an important role in external relations. For instance, by understanding China’s culture we can calculate whether China is or will be a threat in the region. Cultural Identity can also help us construct our common enemy or friend in international relations, for instance, China and US threat perception in the region.

Nevertheless, generational change is also considered as important. Perceptions change behaviors with time, space and distance. The way generation thinks and act will affect strategic behavior. New ideas and culture shift perceptions of leaders, elites and ordinary populous in shaping strategic behavior and outlook. We expect clash of strategic thinking between orthodox western based thinkers and new eastern based thinkers, especially Chinese thinkers in PNG (Machiavellian versus Tsen Su). For instance, PNG’s strategic interaction highly depends on new ideas, norms or culture hence we may expect different future outcome, whether PNG will become a realist (belligerent) or liberalist (benign) power in the region is still unknown, let alone time, space and distance foretold.
Finally, since the end of Cold War with the triumph of capitalism over socialism (communism) the world has undergone a complex new wave of globalization driven by transportation, information and communication technology and innovation in technologies. The world has shrunk into a small porous international community. Technology has socially constructed an imagine community of real and potential threats never experienced before, for instance, terrorism, transnational crimes, cyber crime, spread of biological disease, etc. The new reconfigured international security community has extremely shaped how states develop new highly sophisticated strategic capability to project power with precision and speed in military modernization in what is called as “star wars”. PNG located within this new system is more vulnerable to real and potential threats.
Given these strategic factors, I argue that PNG’s strategic culture although has remained static since post-Sandline Crises is more benign due to its own strategic cultural constraint. The state has played a minimal role in securitizing threats perception with changes in internal and international environments. PNG’s strategic culture is still too conservative. What it needs though is to seize the current economic opportunity to rebuild its new strategic culture by modernizing defence force, police force and other state security apparatus. Defence doctrines and structure should be redefined with shift in global power from West to East and diffusion of global power from state to non-state actors driven by globalization and civic demands.
In summative, the internal and external threats suggest new strategic thinking in shaping PNG’s strategic outlook. The lost pride in strategic culture must be restored in a smart fashion. A new-look smart PNGDF supported by well advanced police and intelligence or strategic research organizations is the prime target if PNG is to attain a “harmonious, wealthy, wise and smart nation by 2050”.

PNG LNG Project and its Security Implications in Western Pacific Region

By Francis Hualupmomi
The PNG LNG project is prone to potential real security threats if necessary mechanisms are not set by the government before 2014.
In this edition, I specifically focus on potential real threats from internal and external environments pose to affect PNG LNG projects and western Pacific region. I begin by highlighting a brief background on geopolitics of energy security.
Energy is one of the most important geo-strategic and economic interests of any state to co-exist in the international system. Energy contributes to both economy and military power projection in order for a state to exercise its powers to “want what it wants”. In simple, it guarantees the security of a state to survive. For instance, in 1914, Lord Admiral Winston Churchill of British Navy use coercive force as a means to have control and access to Persian Oil to project strategic advantage over Germany.
In Defence Economics history, world wars and conflicts are fought over “who should own and have complete access” to energy sources. For instance, in World War II, Japan’s attempt to establish Great Asian Sphere of Influence with a strategic motive and intent to have control and access over material resources in Asia Pacific blindly led to invasion of Hawaii.
In modern times, the continuous competition, tensions, conflicts and wars by big powers, especially from West demonstrate the significance of energy. One must know that energy is a scarce resource and states have to compete antagonistically through use of coercive force or normative force to maximize their interests. The Gulf Wars, Libya invasion, Kosovo and Georgia crises, to name a few, are all cases of energy competition.
More interestingly, the fight against western imperialism or sometimes referred to as clash of civilization from terrorist groups mostly from Middle Eastern countries is continuous and will remain for the next century. With developments in transportation, communication and information technology, and innovative sophisticated technologies driven by the complex process of globalization, modern terrorism and transnational criminal organizations have mushroomed with more complex capacity to infiltrate borders to maximize their interests.
Given this historical trend and new developments in security in 21st century, is PNG LNG project safe to project economic power in the region?

From a strategic calculus, the LNG project is highly vulnerable and will attract potential real threats in PNG and western Pacific theatres. Several strategic scenarios are posited. In first scenario, terrorists groups, in particular political terrorism pose a potential threat given the fact that the project is a U.S led. Terrorists’ main target is U.S-allies strategic and economic theatres. The LNG project is no exception. Terrorists employ and deploy smart tactics to destroy strategic points such as physical infrastructures, shipping routes and civilians. In this scenario, we expect Port Moresby, Kutubu, Kopi and Juha Plants as credible threats (see PNG LNG map).
In second scenario, transnational crimes such as piratism, illegal gun smuggling, and illegal immigrants in maritime and continental border is most likely to further proliferate and worsening the scenario. In third scenario, Australia and New Zealand are credible targets of terrorism. Both countries, strong allies of U.S in the region will be targeted by terrorists from Middle East and Asia. As strategically positioned in the map, terrorists groups can use PNG as a strategic transit point via borders to attack Australia and New Zealand.
In fourth scenario, resource owners’ rebellion will continue to expand in scope as their demands are not met by the government and the investors. The Singirok GUN SUMMIT REPORT exposed the existence of gun, especially in highlands region as a potential real threat in the country. We expect a mercenary-like-military to be projected by resource owners to challenge the status quo. The bad side of the coin with resource owners rebellion is a possibility of small scale foreign military intervention should the national interest of the investors and state are under threat. The Bougainville and East Timor Civil crises are classic cases.
In the final scenario, miscalculation by PNG and U.S with potential investors such as China, Japan and other western countries may lead to geostrategic competition. We expect strategic maneuvering of warlike-games and proxy wars to escalate into tensions and conflict, however, grand scale war is unthinkable due to complex web of interdependence. Given these emerging new security challenges, what can PNG do?
• The government should seriously implement the Gun Summit Report;
• Modernize military power capacity and capability power projection;
• PNGDF military doctrines and structures should be realigned;
• Increase maritime, airspace and continental constant surveillance;
• Police capacity should be modernized in smart fashion to deal with these new challenges;
• Strengthen the National Intelligence Organization;
• Resource Owners issue should be managed cautiously; and
• Asia-Pacific Security Cooperative Framework should be strengthened.
Whilst more concentration is focused on economic aspects, security and strategic considerations are necessary to mend and fend off potential real threats. The success of LNG project to transform PNG into a modern middle income economy by 2050 and stability of the Western Pacific region depends on its national security arrangement and positioning.

Is Pan-Melanesian Spearheading Group Concept Viable?

By Francis Hualupmomi, in P.R of China.
The Pacific region has witnessed a new political reconfiguration in the 21st century with regionalism as the strategic roadmap to drive its modernization agenda. The Melanesian Spearhead Group’s (MSG) new concept of constructing a Pan-Melanesian Economic Union signifies the new shift in economic globalization and confirms the rise of developing countries in a U.S-led liberal order. The question worth asking is: Is it viable?
Defining the Concept of Pan-MSG Economic Union within the Conceptual Framework of Regionalism
The concept of PAN-MSG ECONOMIC UNION is one of the species of the overarching concept of Regionalism. In order to understand the new strategic thinking in MSG, explaining regionalism is necessary. Regionalism is a concept driven by globalization. The complex web of interdependence propelled by transportation and information and communication technology (ICT) has shrunk the world into a global community providing both opportunities and challenges to especially, developing countries. In a nutshell, developing countries such as Brazil, China, India, and others have seized globalization as a political and economic means to pursue their national interest through bilateral and multilateral relations or regionalism respectively.
Regionalism may appear in different forms and size depending on the nature and scope of the interest of regional countries. The most common forms of regionalism are economic and strategic regional blocs, for instance, APEC, ASEAN, PIF, and others. The most advanced form of regional bloc is the European Union with its own parliament, constitution and currency. Most regional blocs have also expanded the scope of the concept into Trans or pan regional groupings such as Trans American Conference, Pan African, and others. For the sake of MSG, deriving lessons from developing countries such as Africa and Asia is highly recommended.
Regionalism appears to be one of the most important concepts in driving economic modernization in the 21st century. It was reported on Post Courier on Monday, 4th April, 2011 that the Solomon Island’s Minister for Foreign Affairs and External Trade, Peter Shanel, called on the 18th meeting of the MSG of countries – Fiji, Papua New Guinea (PNG), Vanuatu and FLNKS/New Caledonia – to form a Pan-Melanesian Economic Union. Given the geographic constraints, demographic challenges, lack of economic capacity, economic exploitation by external forces and lack of technological innovation and developments, MSG’s concept sounds viable to facilitate cooperation through economic integration. Today, economic globalization is the operative terminology in which global economies strategically maneuver the playing field to maximize their national interest. For developing economies such as in MSG, reducing systematic and persistent challenges is fundamentally imperative.
With PNG recently becoming the economic engine driving the Pacific economies, the construction of Pan-Melanesian Economic Union will require coherent strategic plans in translating its thoughts. The Minister patriotically, calls for member countries to further enhance their trade and economic interests, attract foreign direct investment and have post-summit dialogue with interested development partners to pursue their interest.
Advantages and Opportunities
The advantages of such an economic union are immense if managed prudently. The Pan-African Economic Community suggests a good case for MSG strategic planners to consider. The concept will enhance collaboration and collective cooperation in economic issues affecting member countries through integration. Small island member economies can cooperate in enhancing their interest with larger member economies. And most importantly, the union will have autonomy in pursing collective interest in major mega regional blocs such as APEC, ASEAN, EU, etc.
Given the history of colonialism and emergence of nationhood, the MSG member countries have seen slow progress of modernization. Both internal and external forces play an important role in shaping their slow progress. In general, governance issues, and overexploitation of resources by external forces through neocolonialism and imperialism remains systematic. The MSG countries cannot be isolated and blindly led astray by these forces. Given the magnitude of untapped natural resources, it is timely that this concept must be fully developed and given prominence. MSG is driving in the right direction to shape regional political landscape with PNG already gaining prominence in global economy.
The MSG bloc can cooperate within or externally to pursue their interest. With PNG being the biggest economy with vast natural resources, other member small economies such as Vanuatu and Solomon Islands can mutually benefit through economic and trade specialization. For instance, with PNG LNG, the MSG bloc can construct a regional Energy Cooperation Agency to safeguard its economies during fuel crises or it can use this agency as a leverage to influence geopolitics of energy summit.
Challenges
While increasingly rapid economic globalization brings ashore incalculable benefits under such an arrangement, MSG must not also ignore the bad sides of it. Since MSG, in my view has not yet matured, given its life span compared to others, managing and financing the union may be an issue. Establishing and sustaining it requires full members’ technical advice and financial support. Developing economies appear to be the losers in most cases with lack of experience. However, this does not preclude the construction of the union. The experience of similar arrangements in other developing countries such as in Asia, South America and Africa proved otherwise. MSG can do it as there is already a shift in power from East to West with Asia leading the way. The 21st century is the honeymoon of developing countries as witnessed by the world yet denied by the West.
Some Strategic Considerations
A concept has already been developed by Solomon Islands Government however it still requires more comprehensive thoughts. In my view, the framework should constitute these key objectives as the driving force:
• Achieve greater unity and solidarity between MSG countries;
• Defend the sovereignty, territorial integrity and independence of its Member States;
• Accelerate rapid political and socio-economic integration;
• Promote and defend MSG Positions on issues of interest;
• Eradicate all forms of neocolonialism or imperialism;
• Diversify cooperation with fast emerging mega regions such Asia with the rise of China, South America with Brazil and Africa;
• Consider Australia and New Zealand as important economic partners with no influence;
• Accommodate China, U.S and EU as key economic partners with no influence;
• PNG should take the lead in providing technical advice;
• West Papua Issue should be comprehensively considered in future; and
• Establish a Republic of Pan-Melanesia in the future to project power if possible.
Conclusion
The concept is timely and PNG should take the lead as the leading economic power in MSG. China, U.S and EU must not be ignored as important partners. Australia and New Zealand should be considered without influence. In order for it to work, MSG must protect its autonomy against external influence. Learning from past experiences from PIF should provide some lessons as the way forward.
The author is a Papua New Guinean currently studying a Master of Arts in International Relations at the Institute of International Studies, Jilin University, China. f.hualupmomi@yahoo.com. The views expressed here are part of author’s scholarly work and does not necessarily represent any organization or person.

Australia Should Do More for PNG Defence Force

15th March, 2011
Francis Hualupmomi, International Security Analyst in PR China
Australia has done less in enhancing PNGDF’s power projection in post-independence era. With changing pattern in geopolitics constructing emerging security issues and challenges in the region, and international responsibility, there is need to review the current Australia-PNG Strategic/Defence Cooperation.
There is already a shift in geopolitics from the west to the east - rise of China in Asia - and diffusion of power from state to non-state actors. Asia is now seen as the economic cockpit in driving global economy. Given this changing pattern, we expect more challenges in regional security posture. The LNG projects pose potential risks to non-traditional security issues such as terrorism and transnational crimes - piratism, illegal gun trade, etc. The presence of U.S-based Exxon Mobile in PNG projects high security risk from terrorists, for instance, disruption of oil shipment in maritime theatre by terrorists groups. The Vision 2050 and natural disasters also construct uncertain environments, which instruct realignment in military structures and doctrines.
In addition, PNG’s move to participate in international peacekeeping operations under UN demands military power projection. The war torn theatres are highly hostile, which demand smart modernized defence force. PNGDF lacks capacity and capability power projection in this new responsibility.
Given this projected security scenario, what can Australia do? Australia should reconsider reviewing the strategic partnership arrangement, and enhance PNGDF strategic capacity and capability to meet new security challenges. PNG lacks modernized continental, blue water and air power. Continental power should be increased from its current size of 2, 000-10, 000 military personnel. More so, most of the defence force armaments - naval ships and airships - are outdated. PNG needs modernized continental, air and sea power capabilities with high speed and precision to monitor external threats (border-maritime), for national emergencies and development, and UN peacekeeping operations.
Australia should not continue to play neo-colonial cards. PNG’s strategic modernization should not be calculated by Australia as a strategic threat, rather as an important economic and strategic partner in maintaining peace and stability in the region. With China now competing with U.S over energy sources in PNG, Australia’s relationship with PNG may slowly change should less is done. PNG has the potential to shift policy outcomes by using energy as a bargaining chip to gain more where it independently calculates as necessary in consistent with its national interest.

Shifting Dynamics in Sino-U.S Foreign Policy and Global Diplomacy: PNG’s Strategic and Economic Positioning in Summit Diplomacy

It appears that 2011 will be an important year in the calendar of geopolitics with a new look Sino-U.S foreign policy and global diplomacy, one in which that characterizes more focus on high key issues discerning structural power relations than low key issues. An important phenomenon is the rising prominence of PNG in geopolitics given its geostrategic-economic importance in energy resources. To begin with, it is worth elucidating the dynamics of structural power relations for ordinary Papua New Guineans to understand how states interact with each other in the changing pattern of world politics driven by complex process of globalization.
The question worth positing is: how can PNG rationally position itself in the thin red line between the hegemon, U.S and the phenomenal peaceful rising China in the east. The year 2011 is coined by the Chinese Foreign Minister in a week-long National People Congress (NPC) meeting in Beijing this month (March 2011) as the year of Summit Diplomacy rekindling a shifting dynamics of her foreign policy and global diplomacy, in which China will play an active role as a responsible actor in the international community in resolving global issues concerning economic globalization and strategic interactions.
Meanwhile, the late recent high level state visit to U.S by Chinese President, Hu Jintao, appears to be a manifestation of a normal diplomatic process of appeasement eloquently engraving a positive trajectory. In an interesting sense, by way of content intelligence, one could calculate the constellation of security dilemma propelled by relatively increasing fear and mistrust by U.S with the rising preponderant power in the east. The exposition in this structural power relation supposidingly sounds conflicting with China’s growing peaceful influence in global affairs. This is evidently consistent with Hillary Clinton’s late recent strategic concern over China’s growing peaceful engagement in U.S Pacific backyard.
Through the lens of strategic calculus, it seems obvious now with Clinton strongly voicing shifting high budget priority in real-politico than low-politico issues such as humanitarian schemes. U.S is extremely unsettled with Chinese growing peaceful influence in Pacific, especially in PNG, Fiji, Solomon Islands, and Tonga. Interestingly significant, PNG has now been given high prominence and is equated as one of the key economic players in geopolitics of energy with Clinton’s high level state visit in 2010 and its eminence in U.S Congress this month (March, 2011). Clinton has relentlessly observed and mirrored geostrategic-economic essence of PNG given its abundance of energy resources. PNG will become one of U.S core interests in its foreign policy as far as shifting dynamics in real-politics is concerned.
The Pacific theatre will regain international posture as one of the strategic interaction playing grounds. What we are witnessing now is well articulated by Michael Clare, U.S defence analyst, in his new book entitled: Rising Powers, Shrinking Planet, a competition between big and rising powers over world’s remaining energy resources. It is obvious that the stake is high. U.S foreign policy, by the assessment of Clinton’s tone, will be one of a strategic choice combining strategy of containment and a revisit of Eisenhower’s and Carter’s Doctrines. The strategic motive and intent of U.S is clear: containing China’s peaceful access to energy sources and securing and protecting energy source sites and routes against potential adversaries. This strategy may cause tension with China and position PNG in an awkward situation, therefore, a constructive engagement strategy is strategically imperative to ensure cooperation.
Given the constellation of this new emerging security conundrum in the 21st century in the region, a major strategic reconfiguration and realignment in military structures and doctrines and alliances are also shaping strategic policy options. The Bush’s Pacific Year reinforced by Obama’s regime, and Australia’s and New Zealand’s defence realignments with an objective to reconstruct a defensive and offensive system against China and other potential threats will be the strategic maneuvering focus in consistent with U.S core interest. Engaging China in strategic cooperation is a win-win situation for all actors concerned.
Clinton’s strategic concern in the Congress concerning PNG and Pacific region, barks at time when PNG is on air with China in a move to secure a partnership in the high impact LNG project. Although China argues its position is purely on energy security than dollar diplomacy, U.S on the other hand calculates it otherwise. The U.S sees China’s bid as a strategic competition. The more China gain relatively, the more it poses a threat to U.S hegemonic leadership - relative gains matters in U.S foreign policy. U.S should see China as an important partner in energy cooperation.
Intrinsically, China strongly supports a multipolar world with an equal playing field. Although, it still respects U.S global leadership, China is more concerned with persistent asymmetrical structural power relationship. China believes in a harmonious and peaceful coexistence in the international system premised on five norms and principles of her foreign policy. More so, with respect to the disposition of global competition, China strongly discourages discriminatory competition and calls for an equal playing field and articulates that U.S plays an accommodating role for developing countries in international relations. A win-win diplomacy without “upsetting the rules of the great power game” is the bedrock of Chinese smart soft power diplomacy, an approach coined by U.S leading neo-liberalist scholar, Professor, Joseph Nye.
Given the magnitude of dramatically shifting dynamics of Sino-U.S foreign policy and global diplomacy, PNG must play a smart diplomacy to rationally position itself in the organizing logic of great power game. The coming 2011 APEC Summit in Hawaii is highly crucial for PNG to seize the opportunity to pursue its national interest by maneuvering the game. China aims to achieve a win-win situation through the summit diplomacy (means using the G20, APEC, Shanghai cooperation, BRIC and other summits to pursue its interest). This is the opportunity wherein PNG could negotiate an absolute gain package. China strongly encourages a win-win situation between U.S and PNG. A zero-sum game will not be in the best interest of all parties.
More critically, PNG should play a neutral diplomacy to avoid tension between China and U.S. which could jeopardize the trilateral relations. PNG’s role in energy diplomacy has the propensity to construct a miscalculation of tension and conflict in the region. Energy diplomacy between China and U.S must be handled with great cautiousness. PNG as a neutral source partner should treat both as equally important partners through mutual cooperation to avoid future conflict. The LNG project has greater significance than most pessimists in PNG would critically think otherwise without having a concrete knowledge of its dynamics at international political and economic playing field. The LNG projects anchored by the National Alliance Coalition Government has strategically position PNG among conventional key economic players such as the Saudi Arabia, Nigeria, Libya, Venezuela, and others in the global market economy.
In essence, the LNG project could be used as a political leverage to influence policy outcomes in the global market economy. PNG could project a middle power status in the region as long as it plays smart diplomacy between U.S and China. What it can do is to pursue a positive-zero-sum game within the framework of energy cooperation to build and enhance strategic capability as it gain grounds in economic sphere. The LNG project has the potential to develop a highly sustainable modern defensive military force with land, air and maritime power to safeguard economic, border and maritime interests. Security (both conventional and non-conventional) will become a growing need as PNG navigates into uncertain and hostile theatres, especially in international responsibilities under the blue beret and internal and regional non-conventional security challenges.
With increasingly important role which PNG will have to play in the new geopolitics of energy, what it also needs is an intelligent core group of Sino-U.S foreign policy specialists in analyzing and providing thoughtful, quality and timely informative policy options in pursuing its national interest in global diplomacy. PNG needs smart thinkers with adequate knowledge and skills in current shift in international relations. In sum, cooperative diplomacy should be pursued by all parties to ensure a win-win situation.
The author studies a Master of Arts in International Relations at the Institute of International Studies, Jilin University, China. Email address: f.hualupmomi@yahoo.com. Note: The views expressed here are part of author’s scholarly work and does not necessarily represent any organization or person.

Political Economy of Energy Security: Oil Peak and Mitigation and Risk Management Strategy

By Francis Hualupmomi
Oil peak is imminent and has severe political and economic implications in global and national economies. Given this energy security dilemma how can PNG respond to it as far as national security is concerned?
What is Oil Peak?
In economic terminology, Oil Peak is an economic situation in which the global maximum production of oil has reached a point and then slowly declines until it reaches depletion in producing countries. It is quite different from oil depletion. Oil depletion occurs when there is a decline in oil reserves and supply as opposed to peak oil which refers to a maximum point of production.
Oil is a scarce non-renewable resource which if consumed overtime exponentially will reach a maximum point of peak where it will decline either slowly or rapidly depending on the production and consumption rate influenced by the forces of demand and supply. The impact of oil peak has severe implications in the global economy.
Macro Scenario
At macro level, global demand of energy grows by 40 percent between 2007 and 2030, with fossil fuels accounting for more than three quarter of the increase.
Non-OECD countries account for 93 percent of the increase in world primary energy demand and all of the growth in oil demand, which rises from 85 mb/d in 2008 to 105 mb/d in 2030. Demand of oil is surging exponentially in the Newly Industrialized Countries (NICs) or developing countries in particular Asia with China and emerging India. OPEC is and will continue to be the major supplier of conventional and unconventional oil as non-OPEC peaks (OECD/IEA – 2009).
Modernization, industrialization and rapid population will trigger heavy dependence on energy, especially oil. China and India both have seen increase rates of energy consumption respectively to drive their modernization agenda. For instance, China has seen an 8 percent annual growth rate of energy consumption since 2008. Consumption of oil revolves around three main sectors of the economy: transport; agriculture; and industrial system. The most highly energy consumption sector is transportation with heavy consumption of commuters (personal-used vehicles) which consumes a lot of combustion fuels of about 55 percent globally.

Micro Scenario
At micro level, PNG will soon be considered as one of the major oil and gas suppliers come its full economization in 2014 should there is no social disruptions. The life span of the LNG project is projected at approximately more than 30 years sufficient to supply the global economy.
Although some petroleum pessimists predict oil depletion by 2030, PNG will still continue to meet a global demand due to the fact that it was not producing energy at the time of energy forecasting. We may expect a different scenario should and when LNG is in full operation.
In PNG, the transportation sector followed by population and agriculture are the main consumption of energy resource. The transportation sector consumes more than half of the aggregate energy consumption. With increasing population growing at about 2.5 percent annually, the demand of energy consumption will also surge imposing an acute pressure on production of oil.
Although the agriculture sector is a semi-industrial typology which consumes less energy as opposed to other sectors, the modernization drive in PNG will diversify the economy in future to modern agriculture technologies with heavy reliance on energy use. For instance, the conversion of ammonia into fertilizers through the Haber process consumes a lot of oil.
Possible Political and Economic Implications
Oil peak and depletion have severe implications in the global and national economy. First, a surge in oil price could lead to price shock and economic recession. As the oil production reaches its peak it is expected to trigger price increase. The high oil price will construct economic recession which has domino-effects in the global and national economy.
Second, the recession will cause a stiff increase in food prices leading to famine and population decline. As food prices increase, people with less income may face poverty leading to population decline. It is estimated that the world population (including PNG) will decrease by about 2 billion circa in 2050 as a resultant. For instance, people would die of malnutrition. In PNG, this situation may have severe effects in urban centers with ample settlements than in rural areas. Rural areas will face an average effect due to availability of agricultural food crops to sustain itself.
Third, we expect political instability as a result of economic instability caused by peak oil crisis. The government will be under extreme pressure from the public to restore the status quo through policy realignment. This situation may possibly lead to the final effect; social chaos and instability. It is most likely that if the government fails to manage the oil peak crisis, the populace can revolt against the state fueling social violence and disorder.
Mitigation and Risk Management Strategy
Against this backdrop of political and economic implication pose by oil peak in the future it is necessary that the government take a pre-emptive approach by developing a comprehensive Energy Mitigation and Risk Management Strategy.
It is projected that global conventional oil production may expect a decline by 2030 as predicted. The policy package should consider 63 mb/d of gross capacity to be installed between 2011 and 2030. It is viable that a 20 year advancement strategic plan is a safe precautionary security measure a country could take. Oil supply security and response measures can be approached in a two-way strategic approach:
1. The short term oil supply disruptions responses measures include: emergency oil stock draw, demand restrain, fuel switching, standby production and information sharing; and
2. Long term measures (energy policy): diversification of oil imports sources, efficiency of oil use, enhancing fuel flexibility, investment in alternative sources and technologies, removal of market impediments, and dialogue between producers and consumers.
When price increases the government can deploy demand restraint by cutting down on import/consumption through price effect, persuasion and mandatory measures, e.g. voluntary energy use reduction, temporary ban on some energy use equipments such as vehicles, market-oriented approach through auctioning of coupon. This exercise, however, may be very costly which can lead to misallocation of resources.
Fuel switching or a shift from fossil fuel to alternative fuels such as bio-fuel or nuclear energy or unconventional fuel is also important. Alternative energy could be derived from hydro, food crops, wind, ocean, etc to substitute price increase.
The standby oil production and spare capacity also helps during emergency with spare capacity to increase production. It helps as a supplement oil supply and stabilizes market. The standby production should be not less than 2.5 percent.
The emergency oil stocks have advantage by being openly available, more visible and transparent, can affect market perceptions effectively, deterrent to politically and economically motivated disruptions and avoid misallocation of resources through demand restraint.
Information sharing removes uncertainty and minimizes rogue or cheating actors. Key players in energy market can distort oil market price through cheating, hence, sharing of information among political and economic actors reduces security dilemma.
Conclusion
Oil peak is imminent given the unprecedented unsustainable production and consumption of oil globally. Given this pessimistic scenario, it is strategically imperative that the government develop a comprehensive Energy Mitigation and Risk Management Strategy to avoid possible future economic shocks and social chaos.

Ramu NiCo and PNG Economy: A Security Perspective

By Francis Hualupmomi
The US$1.37 billion Ramu NiCo project is one of the first mega foreign investments by a Chinese metrological company to have invested in PNG to drive the national economy. With the current legal dispute between relevant parties, these questions need begging, is the project a security threat to PNG’s national economy? How should relevant parties resolve this issue? We begin with some general observations and provide some thoughtful strategies at the end.

Some Observations: Security Perceptions
From observation, the Ramu NiCo project issue can be securitized as a non-conventional security issue as far as national security is concerned. The notion of non-conventional security basically refers to non-military aspect and centrally focuses on human security aspect ranging from political to cultural, for instance, human rights abuse, environmental problems, transnational crimes, food security, health issues, etc.
Socio-Environmental Frontier
The current legal dispute between the state and MCC and resource owners revolves around human rights issues and environmental impact. From information gathered, the MCC is being accused of socio-environmental implications posed to constituency of the resource site. The resource owners led by some environmental lobbyists have been on the forefront in discrediting MCC’s operation and its disposal mechanism. The disposal site has been claimed by them as environmentally unfriendly and a health hazard to local populace and bio-diversity.
There also have been numerous complaints raised by the local laborers on human rights abuses perpetrated by the MCC management which led to recent civil violence. This issue, however, has been resolved peacefully through a Melanesian style of soft power diplomacy.
Consequently, although the human rights issue may or may not hold true to some extent, in contrary, the environmental issue appears to have been calculated otherwise as speculated by state’s official position. The government believes that the MCC has been accused by the environmental lobbyist and Media with invalid and misleading information and therefore accounts to misperception by the public.
Economic Frontier
From an economic security observation, the Ramu NiCo is the first biggest investment project by a Chinese company in PNG in an era of economic struggling with boomerang aid and other Multinational Corporations (MNCs). Neither MNCs nor conventional aid donors have invested such a big slice of capital in PNG’s economy since independence. This implies trust and confidence by Chinese investors in PNG’s economy.
It is forecasted that by 2011 the project is expected to produce economies of scale with 31,150 tonnes of nickel and 3300t of cobalt per annum in a high-grade concentrate over a 20-year mine life and is also expected to extend for another 20-30 years. This economic scenario will construct a tripling effect by setting the take-off stage for the full economization of LNG projects in 2014. We expect PNG to become an economic power should these projects compounded with other factors of production are being fully economized without any distortions such as civil disruptions by landowners.
Although, there are some critical political-economic and socio-environmental implications underpinning foreign investment, playing the right card is what PNG needs to attract foreign investors. Diversifying the foreign investment is a strategic move to drive the national economy. The MCC is an important economic player in Asia. With peaceful rise of China as the second key economic player in the global economy, PNG cannot afford to lose MCC. MCC is the catalyst in driving the national economy.
Political Frontier
It has also been observed that the state through the current government has been accused by the environmental lobbyist and Media as being ill-advised in dealing with the issues. The government has been tied down to claims of governance issues with the MCC. More so, the government has been accused of signing significant deals without thoughtful considerations of its implications such as human rights issues and environmental issues. These criticisms are potentially dangerous to foreign investors.
An interesting observation is an emergence of “Cold War” or “Proxy Wars” syndrome. Some political analysts have calculated that competing interests by conventional major players’ quest for natural resources may have politically engineer an environment to contain China’s peaceful rise in the region. In this calculus, major players may possibly strategically maneuver the game by employing non-coercive forces such as lobbyist groups to influence policy outcomes in consistent with their interests.
Cooperation: “Absolute Gain is Necessary”
Confronted with these non-conventional security issues we posit this key question, how can PNG Government-Resource Owner and China-Developer cooperate to gain a win-win situation? Premised on the observation set in precedence, one can argue that PNG and China cannot afford to gain a loss-loss situation. Cooperation through soft diplomacy is absolutely necessary to gain a win-win situation for all parties, i.e. absolute gain matters.
The Chinese government with the developer should reconsider human rights issue with respect to resource owner’s demands in order to maintain its good reputation. A deeper mutual understanding and recognition between the two parties is required to settle the dispute peacefully and isolate future domino-effects.
PNG government on the other hand should pursue a neutral diplomacy between China-developer and resource owners. The government should work closely with Chinese government and the developer to reach a mutually concessional package for the resource owners without jeopardizing the project. It should also consider mediating with resource owners to peacefully resolve the legal battle.
The resource owner as an important beneficiary of the project should reconsider the case seriously with cautiousness. The project has incalculable benefits to transform its livelihood. Most importantly, the resource owners must not be misled by some politically motivated lobby groups. Adequate advisory services should be provided to the resource owner.
Conclusion
The Ramu NiCo is not a potential threat to national economy. In the interest of all parties, a mutually consensual package should be bargained and reached to gain a win-win situation. Legal disputes should be resolved peacefully in a Melanesian style of soft diplomacy.
The Author studies a Master of Arts in International Relations at the Institute of International Studies, Jilin University, China. His specializes in International Security focusing on Geopolitics of Energy Security in Asia-Pacific and Political Economy of East Asia.

Geopolitics of Energy Security and its Implications in Pacific Region and PNG: LNG Project as a Case in Point

The LNG project has geopolitical implications in the Pacific region and PNG. I attempt to explain the link between energy and security and foreign policy; and predict future outcomes with some constructive strategies at macro and micro level.
Energy constitutes both renewable and non-renewable resources but is scarce in nature. Energy security is referred to as reliable and adequate supply of energy at reasonable prices, i.e. energy must be supplied without interruption and must meet fully the needs of the world economy.
The limited composite of energy to meet unlimited needs and wants by states at its disposal constructs a global economic and security problem. States need energy to drive their modernization agenda. Since energy is scarce, the problem of allocating it efficiently becomes a security issue. This economic activity itself constructs domino-effects such as price volatility, terrorism, externality (environmental issue) etc.
Energy is both a commercial commodity and strategic tool employed by states to pursue its foreign policies. States strategically use transnational actors as its agent to secure energy resources externally to produce economies of scale to drive its modernization agenda. The unavailability of energy internally and scarcity of energy externally is both an economic and security problem of state which shapes foreign policy. In developing countries, lack of technological efficiency is a problem in utilizing energy resources, for instance, PNG is energy-rich but lack appropriate technology for down-processing and therefore can only export overseas. Big players in most cases seek energy offshore through bilateral or multilateral agreements or arrangements.
Oil and gas has always been states national interest expressed in terms of power projection (capability and capacity or authority) to co-exist in the international system. States will compete antagonistically to secure and protect its supplier sources, i.e. economic and military modernization of a state depends entirely on oil and gas to guarantee its security and survival. Thus, a foreign policy of any state constitutes national interest with an objective to secure and protect energy sources. The thirst and quest for oil is inevitable. Historical evidence strongly supports this hypothesis that imperialism has been the manifestation of “scramble for resources” in resource-rich nations leading to antagonistic competition, conflicts, wars and cooperation. However, today with complex interdependence war is unthinkable.
With globalization, economic development, industrialization, urbanization, demographic challenges, and military capability build-up and market imperatives, the demand of oil and gas will exceed supply. Intriguingly, the biggest consumers are the most advanced industrialized countries (MAIC) and newly industrialized countries (NIC), which will require more oil and gas to drive their modernization agenda. Today, with peaceful rise of China in the global economy, the demand and competition of oil will be steeper than expected with forerunners such as U.S, India, and others.
According to the latest U.S Energy Information Administration (EIA) on International Energy Outlook 2010, the world energy consumption increases by 49 percent from 2007-2035. Total energy demand increases by 84 percent in non-OECD countries than OECD countries with a 14 percent increase. The total energy use rose from 495 quadrillion British Thermal Units (Btu) in 2007 to 590 quadrillion Btu in 2020 and 739 quadrillion Btu in 2035. Oil and gas has approximately 40-60 years life span which constructs a security dilemma.
However, oil supply will be affected given the current unfavorable conditions in the Middle East. The current oil producing field is declining slowly from 2002 to 2030. This can be attributed to factors underpinning conflicts in Middle East, especially Iraq war, terrorism, religious tensions, and political instability. It is this scenario that may induce a foreign policy shift from main importers such as U.S, China, India and EU to other supplier sources such as the Pacific region.
Implications:
Macro Level: The Pacific region in the southern hemisphere is identified by political-economic powers as the last frontier of resource-rich nations, and in fact PNG is one of these key geo-strategic and economic bases or ‘sphere of influence’ for energy supply in international political and economical relations:
1. Geostrategic/military – shift in foreign policies, alliances and military doctrines and structures. As far as geo-strategic relation is concerned competition and tension between US-allies and peaceful China is inevitable. The US assumes traditional hegemonic power in the Pacific through its deputy sheriffs; Australia, New Zealand, Japan and Britain. The return of US in Pacific since Cold War indicates geostrategic shift to contain China’s peaceful rise.
2. Terrorism- there is possibility of terrorist attack on shipment route/pipeline.
3. Re-emergence of Cold War symptom.
4. Transnational crimes (continental and maritime security) – increasing international organized crimes, piratism, illegal immigrants, gun smuggling, money laundering, human rights abuse and trans-border diseases.
Micro Level: It is postulated that LNG project poses a threat and challenge to national security:
1. Terrorism attack in mine sites and in major urban centers.
2. Transnational crimes (continental and maritime security) – increasing international organized crimes, piratism, illegal immigrants, gun smuggling, money laundering, human rights abuse and trans-border diseases.
3. Price volatility – internal conflict can cause price hike affecting global markets.
4. Rebellion against state and MNCs by disgruntled resources which may possibly trigger legitimacy crises and civil violence/war. The Bougainville crisis is a classical case.
5. State graft by government officials and MNCs in siphoning project money covertly into their empires through illegal means.
6. Mercenary (military-like) build-up by resource owners.
7. Re-emergence of Cold War symptom.
8. Externalities or environmental problems.
Challenge
The government’s aspiration to attain a ‘Middle Income Country’ (MIC) by 2050 and thereby, becoming a ‘Wise, Smart, and Happy Society by 2050 may not be fully released if it does not define energy security comprehensively. This new paradigm shift in government thinking is a grand challenge as a nation state in modernization.
PNG is predicted to see a spiraling economic growth rate of about 11 percent annually come full economization of LNG projects by 2014. Although LNG projects may transform PNG into a MIC at forecasted growth rate similar to China echoed by some economic analysts, its security implications are incalculable. Securitization of energy is strategically and economically vital to assess ‘where we are, where we want go and how we will get there’. This will involve analyzing security at macro and micro level that appropriate strategies can be framed to systematically respond thoughtfully to emerging security threats. Security of the state and individual is absolutely vital to fully realize the vision.
Strategies
To effectively manage this security dilemma, a comprehensive strategic package is needed:
Macro level:
1. PNG must play a smart neutral diplomacy with major players in the region;
2. U.S must embrace China’s peaceful diplomacy; and
3. Multilateral cooperation is necessary, i.e. establish a Regional Energy Agency.
Micro level:
• PNG establish must establish an Independent Energy Authority;
• PNG must develop a National Energy Policy;
• PNG Foreign Policy, Defence Policy and Police Policy must embrace energy security comprehensively; and
• PNG must establish a Center for International Security and Strategic Studies.