Papua New Guinea at 13: future bright, but problems remain. Prime minister seeks stability, way to handle growing prosperity

Dark, tattooed women in grass skirts dance and hoot to the beat of lizard-skin drums. Fighter jets scream past after the official speeches on Independence Hill. Church services are in full swing nationwide. Today, all of Papua New Guinea is in the throes of celebrating 13 years of independence. But this former Australian colony is likely to have even grander celebrations two or three years from now.

``This could soon be the one of the richest countries in this part of the world,'' says Albert Hilton, partner in charge of Papua New Guinea (PNG) operations for the international accounting firm, Coopers & Lybrand.

Two of the three largest gold deposits in the world are here. Within the next 18 months, some $2 to $3 billion in mining-construction funds should be flowing into the country. High-grade oil was discovered in 1986 and exploration continues. This South Pacific nation also has abundant agricultural, fishing, and forest resources.

What more could a new prime minister want?

Rabbie Namaliu took office in July as PNG's first prime minister with a graduate degree. This is a rarity in a country with perhaps 30 percent of population literate. Mr. Namaliu is widely described as a cautious pragmatist and a man of integrity.

But despite the El Dorado outlook, Namaliu faces at least three major hurdles.

His priority is to establish political stability.

PNG's politics are Byzantine to outsiders. It's a nation of 700 different languages, four major regions, and as many as 12 different parties in parliament.

Namaliu's target for reform is the parliamentary no-confidence motion - the very path he took into power. (Namaliu was the third of PNG's four prime ministers to used this tactic.) A new prime minister here has only six-months grace before a no-confidence motion can bring him down. This ongoing threat, combined with slim coalition majorities, means that the prime minister is preoccupied with holding onto his numerical edge in parliament, rather than with running the country.

Namaliu wants to change the Constitution to extend the no-confidence grace period to 12, 24, or 30 months.

``Without these changes, our democracy has little chance of survival.... The vote of no confidence has replaced the vote of the people,'' Namaliu said last month in his first policy statement.

Next on Namaliu's hit list is burgeoning crime. The ``law-and-order problem'' was underscored this week by the near-fatal stabbing of a Port Moresby judge by a gang of youths. Razor-wire fences and bars on windows are common on middle-class houses in the city. PNG police and Army troops have just begun a three-month operation to rectify the problem.

The youth unemployment and crime problem, says Justice Minister Bernard Narokobi, is related to the rapid transformation of PNG society. ``In the 13 years since independence, our people have gone from the village huts and caves to skyscrapers. They have gone from communal clan existence to highly individualized communities. The concept of individual ethics, of Western law where one man is guilty of an offense, not the whole clan, has thrown people off balance.''

The final item on the new prime minister's agenda is to prepare for the coming economic boom. In a few years, oil revenues alone could cover half this year's budget of $1.6 billion. ``First thing we have to do is keep the politicians from spending it on unproductive assets,'' says a senior government official.

It has been proposed that an offshore investment ``Fund for Future Generations'' be established for non-renewable resource revenues. Only dividends would go into the government purse; the principle would stay in the fund untouched.

Namaliu, if he can stay in office, must look to ways of keeping the boom under control. Typically, wages shoot up and the agricultural sector is ruined. Namaliu must also get a handle on job creation. As he put it recently, ``We are soon to become a rich nation with a very large number of poor people.'' The mineral resources boom will provide plenty of tax revenue but little in the way of long-term employment.

Still, after 13 years, PNG has greatly reduced its dependence on Australia. Aid from its southern neighbor has steadily declined from about 65 percent to just 18 percent of the current PNG budget. Over the last five years, PNG's economic indicators surpassed every other non-oil-producing developing country in the world.

PNG's potential regional influence has not been lost on the United States, which is taking small steps toward closer defense and aid ties. The Japanese are offering more loans and aid money to PNG. And in August, PNG granted - somewhat controversially - the Soviet Union's request to open an embassy here. -30-{et

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