Official Web Site of the Prime Minister of Papua New Guinea

Grand Chief, Sir Michael T. Somare, GCL GCMG CH CF KStJ
Prime Minister of Papua New Guinea
Statement at the World Leaders Forum, Columbia University, New York

Date: 21st September, 2006


Distinguished guests, ladies and gentlemen. Today, we are here to consider the challenge of 'environmentally and socially sustainable economic growth.' My objective at this forum is to outline some of the challenges we face in Papua New Guinea, talk about some of our successes and failures, cover some of the steps we are taking, and then open things up for some dialogue with you!

The difficult balance between economic growth and environmental sustainability has befuddled rich and poor nations alike. Sadly, there are no easy answers! But, there is indeed cause for optimism and hope! Why? Well, this is Columbia University in the City of New York! As it is written: to whom much is given, much is expected! If I can get you really thinking, then maybe together we can change the world! But, of course, I would be happy if we just start with my small corner of the world – Papua New Guinea!

Introduction: First, let me talk about why this matters to me. As you know, I led Papua New Guinea to political independence in 1975. Over the past 31 years, we have forged an unblemished record of free and democratic governance. Of this, I am particularly proud! However, from an economic standpoint, we are still struggling! Let me be candid, if the economic and environmental frameworks are not corrected, we will find it difficult even to meet our targets for the Millennium Development Goals.

Let me remind you, this is not idle academic debate, lives are on the line! The challenge is clear to me as I view the end of my political career, I must leverage our democratic freedom toward economic freedom! Specifically, I am committed to reach beyond political independence such that my citizens will find economic independence within their grasp!

PNG Overview: As always, I must tell you quickly about Papua New Guinea. There is no other place like it on earth. Of course, as Prime Minister, I say that with great pride! Again, let me defend my position: The second largest island in the world, with 5.5 million people; a constitutional monarchy with a parliamentary democracy now celebrating 31 years of independence. The island of New Guinea has the world's third largest rainforest, after Amazonia and the Congo. Papua New Guinea has 832 living languages (languages, not dialects), more than any other country in the world. Papua New Guinea has approximately 200 species of mammals, 750 bird species (including 90% of the world's Birds of Paradise), 1,500 tree species, 20,000 species of higher plants and is considered to be florally the richest island on the planet. Overall, Papua New Guinea harbors more than 7 percent of the planet's biodiversity. However, while we have been endowed with breath-taking natural beauty and cultural diversity, such gifts also carry unique challenges.

Global Challenges: As Prime Minister, I am challenged to question how economic development is best achieved. While we are indeed a 'resource rich' nation, international finance and trade regimes appear purposefully aligned against us. Most often, after the international corporations have come and gone, we find ourselves with our natural resources depleted, no money left to show for it, and find only an environmental wasteland of smouldering ruin.

People ask: 'if this is your country, why can't you change this cycle?' Let me outline our challenge by taking you through a couple of examples: Forestry: Tropical hardwoods are exported from my country at about $70 per cubic meter of round wood, according to the ITTO. Through our export levy of 20%, only $14 per cubic meter remains on shore. Those same tropical hardwoods are imported into the US at $700 per cubic meter, and sold as untreated veneer for about $2,300 per cubic meter in New York City.

Mining & Energy: My country has rich deposits of gold, copper, oil and natural gas. But the legacy of our "old-world" administrator's law and finance frameworks effectively means that natural resources belong to those who have the finance and technology necessary to exploit rather those that own. The net effect is that my Nation and people receive between 5%-15% of the market value of those resources, with the banks and shareholders residing within industrialized nations keeping the balance. We argue this is neither fair nor sustainable! How can we build and enforce regulatory structures, staff our departments with highly qualified personnel, and build necessary business infrastructure when we capture less than 10% of the value of our resources? Rubbing salt into our wounds, the remaining 90% is often used to dance around our laws, build up trade barriers, and to set "conditions" for our access to international financial resources – funds that are often generated through the exploitation of OUR natural assets. Then, if we don't play the 'game', international investment is withheld from us and dropped upon some other unsuspecting developing country in Africa or Latin America. The time has come for this centuries-old archetype to be forever purged!

Environmentally and Socially Sustainable Economic Growth: For developing countries like mine, economic growth is almost entirely based on natural resources. Further, if such growth destroys the natural environments that provide those resources, economic progress will be short lived. On the opposite side of the coin, if environmental sustainability can only be achieved by slowing or halting economic growth it will not succeed. There is no political will to stand still, nor should there be! We need to adopt a new approach to stabilizing the human environment. For this reason, Papua New Guinea has decided to focus efforts on the implementation of MDG 7 and the practical recommendations of the UN Millennium Task Force on Environmental Sustainability.

Specifically, we are implementing a program of environmentally and socially sustainable economic growth by means of a sector-by-sector analysis of the ecological, economic, and social components of development. We seek the creation of policies that will return the greatest economic and social benefit to our citizens. We are reviewing forestry, energy, fisheries, agriculture, etc. Therefore, we hold that a pragmatic vision of sustainable development is a process of administering a portfolio of assets, natural and otherwise. We must manage each component of the resource portfolio well while transforming one form of asset into another at maximum residual value. At the same time, we seek to promote financial incentives to support the preservation of the forests, the rivers, the coral reefs, the mangrove estuaries, and the species within them that year after year renew the ecosystem goods and services that form the foundation of our future economic growth. Environmental sustainability must guide our collective path forward!

Conclusion: In summary, we do not ask for "handouts" from the developed world to solve problems created by the decline of our natural environments. Instead, we seek to lead the world toward a new paradigm for environmentally and socially sustainable economic growth. We are making good headway on multiple fronts: Papua New Guinea has attained macroeconomic and fiscal stability as a result of better policy coordination, stricter implementation of structural reform, as well as prudent financial and economic management. Our economy is growing, interest rates have fallen, and the exchange rate has been stabilized. Further, our foreign exchange reserves are at an all time high. However, we are challenged to elevate our level of development! As such, the benefits of environmentally sustainable natural resource extraction should remain largely in our countries. In so doing, we will create the basis to sustain our natural environments now and forever. We seek to place our National destiny in our own hands. We invite you, some of the world brightest minds, to join Papua New Guinea in this noble endeavour.

MT SOMARE, GCL GCMG CH CF KStJ
Prime Minister
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