PORT MORESBY – Papua New Guinea’s wealth of natural resources can be viewed as the nation’s blessing, providing a lubricated pathway to social development and financial security.

But some see it as a potential curse to the Pacific’s fastest growing developing state.

The Papua New Guinea economy has grown significantly in the past ten years and some estimates say it could reach 20 per cent next year, although a recent slump in commodity prices may cut that back sharply.

But despite the growth, half of Papua New Guinea’s population are still at or below the poverty line.

Associate professor Glenn Banks at New Zealand’s Massey University recently wrote a United Nations Development Programme report on the challenges this poses for PNG.

In it, he identifies the “paradox of plenty” and the “resource curse” of the PNG economy.

The report reviews the state of human development in PNG 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.

Professor Banks told Radio New Zealand’s Dateline Pacific that there have been some measurable achievements with the money coming into government coffers for the nation’s resources.

“The starting point is to recognise that there are some really good initiatives that have begun and in some senses those just need to be reinforced.

“One of the things the report highlighted pretty clearly is that it is down to the government to make a difference. The government is not just the duty bearer but also the institution that receives significant revenue flows from these extractive industries and has the potential to be the institution, really, that turns resource wealth into human development for the poor within Papua New Guinea.”

Dateline Pacific: When we talk about good things being done, they are?

“There are some really good initiatives in terms of improving the quality of aid posts and basic primary education.

“The initiative of the current government to introduce free education across the country at primary and secondary levels is a really important initiative, so that needs to be built on.

“By that I mean actually following up to make sure that the schools actually are there, that they have the resources, that teachers get paid, and improving the systems to build on this free education policy can make a huge difference.

“It’s not going to happen overnight, but in the next decade if it’s done well – and the report suggests small improvements around the margin for improving service delivery.

“If that’s done well, then over the next decade you could see a real transformation in the delivery of health and education to the 85 per cent of Papua New Guineans who live in rural parts of the country.”

Dateline Pacific: Papua New Guinea is awash with minerals, oil and gas, but the extracting of that has always been controversial. There have been huge numbers of problems. You are recommending this idea of a mining ombudsman. How would that work? They do have ombudsmen in a number of sectors that seem to lack teeth.

“That’s true. The existing mechanisms, certainly the grievance mechanisms for these people affected by large-scale mining and oil and gas operations are very limited and it’s very hard for people to get recourse to them.

“There are new institutions that are in the process of being developed. An independent commission against corruption is in the process of being constructed.

“Leveraging off some of those existing initiatives and putting in place a very high level mining ombudsman – given the importance of the sector to the country, having an ombudsman at a very senior level who has the ability to draw on international experience, to draw on legal expertise, human rights expertise and provide a conduit for people to actually bring grievances against the operators, against the state, against other elements in their community and elsewhere – could make a huge difference to the level of conflict around the sector in Papua New Guinea.”

Dateline Pacific: You’ve been involved in Papua New Guinea half your working life. You’ve seen a lot of change in that time and a lot of change just over the last decade. How confident are you that PNG is going to get on top of this paradox of plenty?

“It is difficult, and the international experience says it’s not an easy thing to do. Part of the difficulty is changing the embedded institutions and forms of governance.

“They become very past-dependent, to use the technical academic term, in that they become very stuck in their ways of operating, and shifting that mindset; shifting that way of thinking about the relationship between resource wealth and development is difficult, but there are some really signs.

“Earlier this year the Minister of Planning introduced a new strategy document, and it’s not like PNG lacks a strategy and vision statement, but this one in particular is pushing very hard to drive greater links between resource wealth and sustainable forms of development.

“So it’s a strategy on responsible and sustainable development which is the sort of signal that that provides to, not just external observers and companies but also to people within the country, that the nature of development has to change, the nature of thinking about growth has to change.

“So I think there are signs at a range of different levels. Certainly a number of the companies and the corporations, the things they are doing are starting to scale up from their own operations to really try and address significant health issues.

“For example, there’s an industry body, the Papua New Guinea Industry Malaria Initiative, which is looking at leveraging off existing mining and oil operations and what they’re doing in terms of malaria around their operations.

“They’re trying to scale that up to provincial and ultimately to national levels, working with the Department of Health to essentially try and eradicate malaria in the country by 2050.

“So a range of different initiatives are happening in the private sector, within government and across civil society as well.

“I’m reasonably optimistic that things are going to get better – that Papua New Guinea is going to be able to provide some benefits from this resources boom to the bulk of the population.”