Papua New Guinea’s Peter O’Neill survived last Friday’s vote of no confidence, the first since his turbulent term as prime minister began in 2011. With Parliament to now adjourn until August, O’Neill looks set to remain prime minister until next year’s June election. This would make him only the second prime minister in PNG’s history to serve a full term in office.

A casual observer of Papua New Guinea will note that with 85 members of Parliament voting in support of O’Neill, more than three quarters of the total, he holds a majority that would be the envy of most modern democracies. However, the numbers hide the much more fractured reality of PNG politics. High profile defections, including three former prime ministers, combined with bloody student boycotts and ongoing worker strikes, show the gloss has clearly come off the PM, once heralded as the voice of an emerging generation.

How did it come to this? How did a man who controversially wrested power from founding father Michael Somare in 2011 and then went on to win the largest majority in PNG’s history, marginalising the opposition to only four seats (less than 4% of parliament), find himself in the fight of his political life just three years later?

For me, it all boils down to two interconnected issues: economic management and corruption.

The state of the economy

When O’Neill came to power, PNG was entering the construction phase of its largest ever natural resource project, a US$19 billion LNG project that was expected to transform the nation's economy. Anticipating a dramatic surge in government revenues once the project came on line, the government made bold expenditure commitments including free education, free healthcare, a massive decentralisation program, and commitments to hosting major events including APEC 2018 in Port Moresby. The promises of PNG’s newfound wealth from the project also emboldened the prime minister to make a dubious deal to acquire a stake in PNG’s largest company. O'Neill thought he could have it all, and had commodity prices remained at historic highs he may well have been proved right. But that’s not the story of PNG’s fourth resource boom.

In previous posts on the Interpreter I have detailed what happened next but, in short, the dramatic fall in commodity prices combined with record deficit spending left the government in an untenable fiscal situation with an overvalued exchange rate putting the private sector under significant strain. Revenue collapsed by 10% in 2015, instead of increasing by 10% as expected, leaving the government scrambling to slash the budget while protecting major expenditure items, resulting in a major shift in expenditure allocations that slashed the budget for essential services.

It is easy to see how all of this could have broken better for the O’Neill government, and the PNG economy was certainly hit by the global downturn at the worst possible time. But the government has not done itself many favours in the way it has responded to its sudden and dramatic reversal of fortune. This has not gone unnoticed.


Corruption is often synonymous with development, particularly in natural resource dependent countries like Papua New Guinea that have a strongly entrenched system of cultural patronage. In this context it should not be surprising that corruption is rife in PNG; the nation currently ranks 139th in a list of 163 in the Corruption Perceptions Index. Corruption predated O’Neill’s tenure in PNG and he made bold claims about how his government would stamp it out by establishing and empowering an independent corruption taskforce. The ABC’s recent account of the tragic shooting by police of students boycotting classes recounts how far O’Neill’s stance on corruption has changed as the spotlight was directed towards him.

It’s impossible to say whether corruption has become worse under O’Neill’s leadership, but his active role in the subversion of the independent and police corruption task forces and abuse of the court system has created a perception of impunity in the country’s highest office. Corruption has become the rallying call for broader dissatisfaction at the state of PNG, which goes far beyond the actions of the prime minister.

We’ll never know how different the state of PNG would have been under a Somare (or any other) government emboldened by the natural resource boom. Changing the country’s leader now will also not change the country’s fortunes or necessarily improve adherence to the rule of law. As Bal Kama concluded last week, the important question is not who will be prime minister, but rather who is fit for the office.

Would all of this have been different if services were still flowing and the economy was the darling of Asia, it was expected to be? That is one of the greatest ‘what ifs’ of O’Neill’s first elected term in power.

Where to from here

There is clearly a deep dissatisfaction with how Prime Minister O’Neill has responded to the allegations against him to date, and the energy with which he has disputed these claims has no doubt distracted him from the task of managing PNG’s weakened economic position. But who could have done better? Even after this vote the opposition is still a marginal force in parliament, and no alternative leader has emerged with a platform for change.

Legislation prohibits no confidence votes in the 12 months leading up to an election, so the people and the opposition will no doubt be turning their attention to voting in change at next year’s election. A dissatisfied civil society and disenfranchised student body will help embolden the opposition and perhaps see some new voices emerge in the campaigning to come. But sitting MPs have substantial financial advantages to remaining in power. Money politics will certainly be put to the test, and it will make for an interesting election campaign. Unfortunately, it will also no doubt distract from governing the country. June 2017 looks very far away.

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