What is Happening in Papua New Guinea?

Ongoing Chaos in Papua New Guinea

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Papua New Guinea has been plunged into chaos following a protest by security services over salary deductions, which swiftly escalated into a deadly riot with far-reaching consequences. Here the RileySENTINEL team takes a closer look at the unfolding crisis and its underpinning factors

What started as dissatisfaction with security services concerning deductions from their salaries on Wednesday, January 10, led to an unintended and dangerous riot that has led to about a dozen deaths across Papua New Guinea. This has led to the looting of hundreds of shops in the capital, Port Moresby. Some of these were set on fire as gangs took over business centers and the main streets of the city. Within hours, the unrest spread to other major towns across the Pacific state.  

On Thursday, the Prime Minister addressed the country and reassured the population after relative calm in the streets of Port Moresby. The government has declared a state of emergency. He, however, warned that the situation remains tense and urged the public to exercise caution in moving around. He also blamed what he called "deep political influence" for being behind the deadly riots. The United States embassy has issued a similar statement warning of a tense situation despite authorities restoring some order.  

Chinese authorities have particularly expressed their concern about the safety of their citizens in the country. With some 20,000 of its citizens and several business interests in the country, China has urged authorities to restore order and protect the public from harm. Some minor injuries to its nationals have been reported. Australia, one of the closest to the country, has said that therefore there have been no reports of its citizens caught in the violence that started on Wednesday.  

Contributing Factors 

In response to the agitations of the security services that have degenerated into a major security vacuum and chaos, the Prime Minister has pointed out that the salary deductions were a result of an error with the payment system that was going to be corrected. This notwithstanding, the Pacific nation has some underlining factors that have significantly contributed to the chaos and lawlessness in the current situation.  

Firstly, Papua New Guinea is one of the poorest countries in the Pacific region. With some ten million inhabitants and an underdeveloped economy, the country faces significant socio-economic challenges that influence its politics, stability and foreign policy. With an economy worth over $32 billion as of 2023 and huge natural resources, the majority of the people live below the poverty line. Although new investments have poured into the country, these have seldom been reflected in the lives of the people. 

Consequently, the country has a high youth unemployment rate among the states in the region. This has translated to a higher crime rate which ranks among the worst in the world. The country's prison facilities are noted for holding thousands of gang members and dangerous criminals. The security gap that emerged during the protest by the security forces was, therefore, exploited by gangs and some youth to loot and cause mayhem.  

The linguistically diverse country has low literacy levels and a heavily rural population. About 80 per cent of the population lives in rural communities. Low education levels have also meant low-skilled labor in the country. A 2009 report states that Papua New Guinea has about 80% of the population living from subsistence agriculture and "selling crops in domestic and international markets." Poverty is, therefore, a structural problem in the country.  

Politically, the country is a multi-party democracy with numerous political parties and high leadership turnover. The Parliamentary democracy practiced by the country has a Governor-General as head of state and Prime Minister as Head of Government. This means that government is formed by coalitions that take complex negotiations and logrolling to create. This, combined with underdevelopment and clientelism, often makes the politics of the country antagonistic. Elections have been marred by violence and disputes. Consequently, politicians and political groups jostle for the support and political backing of organizations and institutions across the country in ways that often undermine ruling governments. Already, the Prime Minister has blamed the riots on political opponents. His own rise to power has been intriguing.  

Since the riot, there have been calls from at least one parliamentarian for the resignation of the Prime Minister. The argument is that someone must take responsibility for the so-called error that led to the riots--the Prime Minister is expected to do so.  

Furthermore, Papua New Guinea is noted for high corruption rates among officials. The Corruption Perception Index, over the years, has not depicted the country in a good light in this respect. It is spearheaded by blatant nepotism and political patronage by the political class and bureaucracies. This, among other things, creates distrust between the people and the ruling class. Evidently, the security forces could not agree that a reduction in their salaries was caused by an error as claimed by the government--hence the protest and concomitant chaos. For some reason, the security agencies are suspicious that the government might be deliberately deducting money from their salaries to mitigate the result of massive corruption.  

In recent months, the country has faced a plethora of challenges that have been the result of management and corruption. Despite huge resources, the economic status of the country currently and in 2023 has not been impressive. Symptoms of economic difficulties have included massive power and water supply disruptions, especially in urban areas. Rural services in this sector are significantly underdeveloped. There have also been frequent domestic flight cancellations. With the country's poor road conditions, domestic aviation has been robust over the years. However, the sector is currently reeling from an economic downturn.  

Inadequate foreign exchange availability and issues with the banking sector further plagued the country's economy. In 2023, formal employment was reported to have contracted. With the sector accounting for about 10% of the country's workforce, such contractions do not mean well for the economy. Jobs losses in the construction and manufacturing sectors were mainly responsible for this contraction. Observers have questioned job losses at a time when the economy is experiencing growth mainly enabled by natural resource exploitation. 

Foreign Policy Context

Although Papua New Guinea was colonized by Britain and still holds formal or ceremonial allegiance to the King of England (represented by a Governor-General), its foreign policy for the past decades has been dominated by China, the United States and Australia. While Australia's influence has largely resulted from its proximity and advanced economy, for China and the US, there has been a tone of great power competition due to the strategic location of the country. 

When the Belt and Roads initiative of China commenced, Papua New Guinea was among the first Melanesian states to sign a Memorandum of Understanding with Beijing to join it. Initially, states in the region were not certain of their inclusion in the widely publicized Chinese initiative. However, with countries in desperate need of Chinese loans and investment, East Timor and Papua Guinea subscribed to it. Currently, China remains the country's largest merchandise trade partner in the world. This is in both import and export. China also has a huge investment presence in the country with a significant 20,000 of its citizens and many businesses in the country. This notwithstanding, Australia was the largest creditor to Port Moresby as of a couple of years ago.  

The country's resources, which include huge deposits of gold, copper oil and natural gas among several precious metals as well as its location, make it a strategic one for global geopolitics. Last year, news emerged that the United States military had reached an agreement with Port Moresby to access half a dozen sites, including a major naval base, for a decade and half. With US and Chinese interests clashing in the in the Pacific, the agreement could prove consequential to the relations Papua New Guinea has with both countries. 

Riot Implications

Although some calm has returned to the streets of Port Moresby and other major towns, the riot signals the reality of economic challenges in the country increasingly becoming a security threat that could undermine the state. For a developing state with relatively weak institutions, this could have widespread ramifications. It is quite unusual for security personnel the world over to openly protest against governments. Events across the country therefore need close watching. 

The riot also does not paint a good picture for investors who seek to invest in the country. Even though the growing economy (driven by resource exploitation) has attracted investors to the country and will potentially bring in more Foreign Direct Investment (FDI), investors will be cautious in putting their money in an economy where actions by security agencies could spark riots. In the short and medium term, this could affect the inflow of investment. The crisis management prowess of authorities in Port Moresby is therefore critical at this stage. 

Thirdly, the volatility of the situation could also stimulate aid from powers that seek closer ties with the country. As mentioned, the country's geostrategic location and its vast resources make it too important to fail. Consequently, the current crisis could send signals to the capitals of the various countries seeking to increase their presence in the Pacific state to act. This could help turn things around as the country faces liquidity challenges.  

Most importantly, serious reforms are required in the various sectors of the country's economy to help make it a robust one. One of these is the building of more responsive and accountable institutions. This could help reduce wastage and corruption in the system and build public confidence in them. Any effort towards ensuring stability must include people-centered policies that reduce unemployment rates and other structural challenges. Investment in social services and infrastructure would be key to developing an economy that is overwhelmingly rural. 


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