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.
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