Associate Professor Glenn Banks (foreground) at the Porgera gold mine, Papua New Guinea.

PNG’s ‘paradox of plenty’ outlined in UN report


Transferring massive mining industry profits into improving the health, education and wellbeing of a struggling population is a key challenge for Papua New Guinea, says the author of a new UN report.

Glenn Banks, an associate professor in Development Studies in Massey University’s School of People, Environment and Planning, was lead author of the Papua New Guinea National Human Development Report 2014: From Wealth to Wellbeing: Translating Resource Revenue into Sustainable Human Development, for the United Nations Development Programme (UNDP).

In it, he identifies the “paradox of plenty” and the “resource curse” as a features of the PNG economy, which is leading the world in economic growth rates with predictions it will increase by 20 per cent next year. Meanwhile, nearly half the population is living at or below a ‘basic needs’ poverty line.

The report reviews the state of human development in Papua New Guinea in terms of the three pillars of sustainable development – economic, social and environmental. It examines the ways in which the extractive industries have contributed – positively and negatively – to these related but distinct pillars.

“While there have been some measurable achievements in terms of improvements in human development (increases in life expectancy, per capita income and educational achievement), many of the indicators are less positive,” the report states. “Despite 14 consecutive years of economic growth, there has been little change in poverty levels in the country. In fact, the level of inequality in the country has increased.”

Dr Banks, who been closely involved with the Pacific nation for more than two decades as a development researcher, says the 109-page report highlights the significant opportunities from an economic boom based on the mining of gold, silver, copper, cobalt, nickel, crude petroleum and natural gas.

Mining and oil production has reaped US$60 billion since independence 40 years ago. But 40 per cent of PNG’s seven million mostly rural population – scattered in rugged, jungle territory across 600 islands and where more than 800 languages are spoken – live on less than a dollar a day.

In other key indicators, 25 per cent of children do not attend any form of schooling, and PNG ranks in the bottom 10 countries for gender equality, with two out of three women having experienced gender-based violence over their lifetime.

While large scale mine and oil production has underpinned a number of health and education developments, it has also “sparked civil strife, caused massive environmental damage, arguably distorted the economy, and brought about a range of negative impacts on communities,” according to the report.

Dr Banks says better governance and public service delivery, as well as more effective, inclusive policies are among policy options that would address these problems. Appointing a mining ombudsman and an independent grievance mechanism to resolve conflicts of interest between indigenous landowners and mining corporations are also key options put forward.

“There are a lot of grievances [in relation to mining], and local people don’t have a lot of recourse – there’s no formal mechanism,” Dr Banks says. Their grievances include not receiving compensation for land use, to inhumane treatment by local security forces such as burning down of villages, and murder and rape at mining sites not being properly investigated.

He is keen to point out positive developments, like the contribution of some mining companies to local health and education projects. “The issue here is that the mining company’s initiatives are not always well integrated with local government planning initiatives. So you end up with ad hoc and unsustainable services.”

He coordinated a small team within the UNDP office who consulted widely over an 18-month period with mining corporates, government departments, non-governmental organisations and UN agencies. The last such report was 16 years ago. “We’ve based our policy options on existing mechanisms and proven international examples,” he says.

The UNDP project is an example of the policy work in the Pacific that an increasing number of Massey researchers are involved in, says Professor Regina Scheyvens, co-director of Massey's Pacific Research and Policy Centre, which was launched last month.

The release of the report was widely covered in PNG’s news media, prompting approving comments from government and NGO representatives, and even a congratulatory tweet from UNDP head, former New Zealand Prime Minister Helen Clark.

Is Dr Banks optimistic the report will have an impact on PNG’s future?

“As we say in the report, it’s success will be measured by the actions it sparks. We’ve already had good feedback from within government that they are interested in talking further with UNDP to put into place some of the ideas the report proposes.”

“There are also other indications – new policies and regulations, and new ways of operating by the government and by the companies – that suggest that this resources boom will produce more positive development outcomes that PNG has had in the past,” he says.

The positive economic forecast for PNG will undoubtedly involve New Zealand, he says. “With PNG the fastest growing economy in the region next year by a long way, this means more New Zealand businesses will be looking that way. There are already significant numbers of Kiwis living and working over there.”

But our interest should go beyond business, he feels. “If we as New Zealanders – living in a Pacific nation as we like to think of ourselves – are really concerned about poverty and hardship among our Pacific neighbours, then there are more poor in Papua New Guinea than the entire population in the rest of the Pacific.”

PNG is the second largest recipient of New Zealand aid, with around $20m spent annually in the country from our aid programme.

Read the full UN report here.

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