Farewell the Chief to save PNG from chaos

Michael Somare is not Robert Mugabe, though he's been around as long. He doesn't send North Korean-trained battalions to attack political rivals, or sequester the best foreign-owned plantations to parcel out to cronies. He submits to votes of no-confidence in Parliament, and goes to elections every five years, inviting in journalists like me to watch.

Nor is Papua New Guinea a Zimbabwe. Its economy is robust, with growth heading up towards double digits. It has almost a year's import bills in foreign reserves. It's been stable enough for ExxonMobil and its partners to put $US15.7 billion into a liquefied natural gas project coming on stream in 2014. So it's not a failed state.

Yet after a political career stretching longer than the 36 years since Papua New Guinea became independent, neither Somare nor the state connect much with the country's nearly 7 million people. He and his political coterie are barriers between them and the state's wealth. For this reason, it would be best if this week's crisis ends with his retirement.

Although Somare got his first schooling in Japanese under the wartime occupation of the New Guinea coast, he's very much a creation of us. He went to a high school we ran, taught in primary schools we set up, became a broadcaster in the local ABC network, began his political career in the legislature we set up.

Like many of his political colleagues, he liked a beer, a bet on the horses through an SP bookie, and follows the rugby league. With the help of Bob Hawke at the ACTU, he got local public servant wages up to those of the expats, a heavy burden of expectations. He and the political class slid easily into the assumption that people running the new country should live well, just like the old colonials.

As a result, more and more of national revenues from big enclave mining projects like Ok Tedi, Porgera and Lihir went on the comforts and perks of the political class. The foundations of a broad economy left by the departing administration - the highway from Lae up to the highlands and feeder roads out to the coffee growers, the rural extension services and co-ops, the police service, the primary schools and health clinics, the telecom and aviation systems - fell into decay.

Somare was not solely to blame, nor the worst leader. The country reached its nadir in the late 1990s under the populist semi-gangster Bill Skate. After returning to power for the third time in 2002, Somare, known as the Chief, preserved some of the fiscal reforms made by his predecessor, Mekere Morauta.

But he's been a prime minister happy to surrender the power of the state to vested interests. Somare has long had a contentious relationship with the timber industry, with studies suggesting that 70 per cent of logging is illegal and transfer pricing is rife.

The biggest power in PNG forestry is the logging and palm oil group Rimbunan Hijau, owned by the reclusive Malaysian timber baron Tiong Hiew King, based in the Sarawak river town of Sibu. As well as accounting for half the PNG timber industry through various subsidiaries, it owns one of PNG's two daily newspapers and its main investment bank.

The forestry officials and police supposed to supervise its activities have to travel in company transport for their inspections, and send their children to schools set up by the company.

Now the loggers have been joined by the Chinese: the state metal company that took over the Ramu nickel project, pushing aside labour, land-owner and environmental inspectors the illegal migrants from Fujian grabbing the small enterprise sector and sparking riots in Lae, Popondetta and other towns. A resourceless administration, a complaisant prime minister look on.

The ExxonMobil project is run to scrupulous standards, and it alone will boost PNG's gross domestic product by 25 per cent. The contribution of mining and petroleum to total government revenue could jump from the present 21 per cent to more than 50 per cent by 2018, the Australian National University's John Conroy, an economist, says.

Ordinary people have long been waiting for some of this revenue. In the three months since the then ailing Somare was unceremoniously ousted from Parliament, Peter O'Neill's government began the process with a supplementary budget that put more into development - lower school fees, the health system and police accommodation and vehicles.

His ministers have also further exposed many serious financial abuses under Somare, including irregular loans from public enterprises, suspicious sales from the share portfolio of the national pension scheme, and the diversion of public funds to private enterprises. Somare's son, the ousted (or perhaps restored) public enterprises minister Arthur Somare and a former finance minister, Patrick Pruaitch, a relative by marriage, figure in many of these.

With only six months of the parliamentary term to run, some might wonder what the struggle is all about. It's about what Paul Barker, the head of Port Moresby's Institute of National Affairs, calls the "honeypot" of public funds. Incumbents can easily divert spending intended for, say, a school building, to local power brokers. By the time audits catch up, the election is long past. The discretionary district grants put at the disposal of each MP can be disbursed early to supporters, held back from opponents.

As citizens watch nervously the contest between rival sets of prime minister, governor-general and police chief, church leaders and other senior figures have been trying to broker a compromise, and split O'Neill and Somare from their more hot-headed supporters.

Maybe a mutually acceptable caretaker leader can be found, with strict controls over spending, as the election commission gets on with the difficult job of updating the electoral rolls across the far-flung villages: a face-saving, "Melanesian solution" that pulls PNG out of the deadlock of lawyers, police and perhaps worse resorts. Somare's friends such as Bob Hawke could help by urging him to take a dignified retirement if one is offered.