Home Cover Story The poorest nation in the Pacific will host its richest economic get-together

The poorest nation in the Pacific will host its richest economic get-together

APEC Haus will be constructed on reclaimed land at Ela Beach in Port Moresby.

This weekend, 21 world leaders will make their way to Papua New Guinea for the Asia Pacific Economic Cooperation (APEC) summit, an event marked by controversy and questionable fashion photo ops.
The Pacific region is quickly turning into a contest for influence aligning China against everyone else.
China is winning for now, but impoverished nation’s like Papua New Guinea often come out the loser.
The Asia Pacific Economic Cooperation Leaders’ Summit or APEC, if you’re feeling a little lost amid the proliferation of global get-togethers is the one where all the leaders line up afterward in colorful shirts, looking — as some commentators have quipped — out of place.
Usually that’s APEC’s key takeaway — how out of place everyone is in the Pacific.
This weekend, 21 world leaders will make their way to the faraway host of the annual APEC summit, an event often mired in controversy.
This year, that diplomatic jostle will take place in Port Moresby, the dilapidated capital of perhaps the regions most resource-rich, yet poverty stricken state, Papua New Guinea (PNG).
PNG is the poorest nation of the entire 21-country APEC bloc and its crime-riddled capital, beset by health challenges and institutional corruption, is the fifth least-livable city in the entire world.
The summit’s timing could certainly not be more interesting for struggling APEC nations keen to make the most out of the emergence of a sudden race for influence.
In just the last week, the Pacific’s simmering struggle for aid, loans and what is being termed “debt diplomacy” has suddenly gone on the boil.
Superpowers jostling for position
China, Australia, Japan and the US have all thrown down the gauntlet in the stampede to embed themselves in regional infrastructure projects and aid funding.
On Thursday, Australia pledged $3 billion in what has been called Prime Minister Scott Morrison’s “Pacific Pivot.”
On Friday, that pivot segued into a trilateral project as China pushed for cooperation and not competition in the Pacific.
Over the weekend, as Vice President Mike Pence makes his circuitous way to Moresby (via Cairns) he is reported to be carrying the prototype of America’s Indo-Pacific strategy, rumored to be based on $60 billion in regional assistance.
Kyodo News of Japan reports the $60 billion announcement is a bid to diminish China’s rising influence through the extension of its One Belt One Road development strategy.
The final piece of the Pacific puzzle, Japanese Prime Minister Shinzo Abe will this Saturday, fly into Port Moresby’s Chinese-built Jackson airport to share his two yen at the APEC summit.
Likewise, Abe will be visiting friends and striving to bind new allegiances to counter China’s successes in the Pacific, from the South China Seas to Fiji.
So, with new acquaintances to make and money for sale, Port Moresby’s flourishing corruption and eye level impoverishment will be the more than appropriate backdrop for the 21 world leaders’ awkwardly iconic fashion shoots that traditionally close out the summit.
Chinese President Xi Jinping has a head start
In fairly contrasting optics, Xi will arrive and stay in Moresby for a full state visit, the first by any Chinese president.
The US President Donald Trump isn’t attending at all.
But Pence has decided that rather than stay in Port Moresby at all, he will fly in and out of Cairns in Northern Australia, a 180-minute commute.
During his historic stay, Xi will attend the APEC Economic Leaders’ Meeting from November 17 to 18 and he will also meet the eight leaders of the Pacific Island countries that have diplomatic ties with China.
Xi will then continue on to Brunei and the Philippines shoring up relations there, according to Chinese Foreign Ministry spokesman Lu Kang.
China has also responded to concerns of its growing debt diplomacy in the region.
“China has no intention to touch the cheese of any country, instead China is committed to make the pie of cooperation larger,” Chinese vice minister of foreign affairs Zheng Zeguang said on Tuesday.
“No country should try to obstruct the friendship and cooperation,” Zheng said when asked about the expansion of Australian aid in the Pacific.
Then in a fairly extraordinary opinion piece published on Wednesday in the Papua New Guinea Post-Courier, and addressed to the people of PNG, Xi Jinping spoke of the “rapid growth of China-Papua New Guinea relations is an epitome of China’s overall relations with Pacific island countries.”
The president said that first off China and the islands “need to bring our strategic trust to a higher level.”
“China will stand firm with Pacific island countries and all other developing countries. Following a policy of pursuing the greater good and shared interests under the principles of sincerity, real results, amity and good faith, China will enhance solidarity and cooperation with Pacific island countries, support their development, and help narrow down the development gap between the North and the South.”
“China will work with Pacific island countries to build a new type of international relations and a community with a shared future for mankind.”
However welcome the intent, the goals are not so easy to kick in a region beset by inequality, poverty and corruption.
To the chagrin of most observers and a small contingent of striking workers, PNG Prime Minister Peter O’Neill has gone on a bit of a wild spending spree ahead of the summit.
With a tight budget, some workers downed tools when Maseratis began arriving in numbers at Jackson International airport, brought in for the leaders.
Despite more than one-third (37%) of his country according to the UN Development Program living way down below the poverty line, O’Neill decided to welcome leaders with several Bentleys and the extra 40 luxury Maseratis specifically flown in for the meetings.
PNG, which is the one nation (aside from the wayward Australian state of Victoria) signed up to China’s One Belt One Road initiative, has been a key beneficiary of Chinese investment and many of it’s infrastructure projects will be in display in Port Moresby.
Beijing has fixed bits of the airport, had a crack at some transport infrastructure without enormous progress, donated a squad of fire trucks, somewhere near 50 coaches and 35 mini-buses to shuttle officials to and from the a $35 million convention center built with Chinese money by Chinese companies and workers.
Dr. Graeme Smith, a research fellow at the Australian National University’s Coral Bell School of Asia Pacific Affairs told Business Insider that it is likely China has invested somewhere around double the $3 billion it is rumored to have staked in PNG.
To keep its hands clean in a time of added scrutiny, neighboring Australia, PNG’s biggest aid-donor and former colonial power broker, is not providing any direct financial assistance for the APEC summit, but is flexing its security muscle and military ties, providing assistance to the tune of $130 million of APEC’s total costs.
Some 4,000 members of the PNG disciplinary forces and their international counterparts will be patrolling the city for the summit, including 1,500 Australian Defence Force (ADF) personnel supporting PNG’s Joint Security Task Force, with just under 500 of those on the ground in Port Moresby.
For back up, Australia has mobilized up to 16 Super Hornet aircraft to be based near Cairns and three Royal Navy ships are stationed off Port Moresby, accompanied by one helicopter landing dock and several patrol boats.
So who is coming this year?
Almost 30 years old, APEC began in 1989, to encourage tighter regional economic integration for the Pacific Rim.
Most of the 21 APEC members are from this pacific region with the addition of Russia, United States, Canada, Mexico, Chile and Peru, together accounting for 2.7 billion people — more than a third of the world’s population.
Headlining in 2018 is undoubtedly China’s Xi Jinping.
Japan’s Abe, Canada’s Justin Trudeau, South Korea’s Moon Jae-in and New Zealand’s Jacinda Ardern will also be there alongside the new Australian leader Scott Morrison.
While Pence is standing-in for Trump, so too will Vladimir Putin’s proxy, Prime Minister Dmitry Medvedev, fly the Russian flag.
Putting Papua New Guinea on the map
PNG’s Prime Minister Peter O’Neill says he expects $85 million will be spent by leaders during the time of APEC alone and that playing host will put PNG on the map.
O’Neill, whose first move as prime minister was to scrap the anti-corruption body Taskforce Sweep that ushered him into power and then began looking into his own affairs, has allocated around $350 million for the event.
Responding to some of the considerable flak that has come his way, O’Neill says PNG is in fact hosting the cheapest APEC meeting compared to other countries.
O’Neill said PNG is on the cusp of hosting one of the cheapest APEC Leaders meetings in history.
“We were given the green light to host APEC in October 2016 and in the same year, we budgeted ($US7.5 million) K25 million towards APEC.”
That seems unlikely considering the summit’s APEC house centerpiece is thought to have cost $75 million alone.
Stephen Howes, the Director of the Development Policy Centre and Professor of Economics in the Crawford School of Public Policy, ANU says the timing is not so great for a PNG facing mounting debts and rising corruption.
“Excessive borrowing in the boom years has now come back to haunt the government following a collapse in revenue,” wrote in the ANU’s East Asia Forum.
But in the second most rural country worldwide, Howes added that there is a stronger, more damning indicator for how things are faring in PNG.
What has really caught the public’s attention is the return of polio, previously eliminated from PNG about 20 years ago.
“PNG is one of only five countries in the world experiencing a polio comeback.”
“That the other members of this club are the Democratic Republic of Congo, Niger, Nigeria and Somalia — all four wrought by violence — shows the extent of the health crisis that PNG is facing,” Howes said.
“The most recent symptoms of this crisis include the resurgence of malaria and leprosy, and reports of worsening drug shortages.”
Australian freelance journalist Jo Chandler herself contracted drug-resistant tuberculosis while investigating the growing crisis.
So what does Howes expect will come of PNG’s APEC?
APEC he says will deliver a mild economic stimulus, and is expected to be accompanied by a round of “announceables.”
This is perhaps more likely than ever as the four regional pacific powers make their various bids for lasting influence.
“These may come from China or resource projects. Perhaps PNG will get more aid, but any resource project agreements will be ones that were already in the pipeline.
Howes says that it is widely accepted (including by the government) that PNG needs to get a better deal from its resource projects. Rushing agreements so that they can be announced at APEC only weakens PNG’s negotiating hand.
“By the same token though, APEC is meant to be about reform and development. PNG could have used its hosting of APEC to push through important change in a range of critical policy areas. It hasn’t.”
“Whatever happens at the leaders’ meeting this year, in this fundamental sense APEC 2018 is a lost opportunity for its host.”