In 2018, then Shadow Minister for Treasury and Finance and current Treasurer Ian Ling-Stuckey stated that Papua New Guinea was a fragile state because of the government’s failing economic policies. However, then Prime Minister Peter O’Neill refuted the idea, saying that PNG was not fragile.
Is PNG a fragile state? This is the question we try to answer in our new Devpolicy Discussion Paper.
State fragility can be assessed across three distinct, but interdependent dimensions: state legitimacy, capacity and authority, as well as economy and resilience. Fragile states exhibit deficiencies across one or more of these.
PNG exhibits a number of dominant features that have shaped a particular form of state fragility. The state has limited capacity and authority; political instability had been prevalent; and the economy had not delivered to expectation.
While variations can be observed across different sectors, overall, the PNG state has limited capacity, falling short in delivering essential services, such as health and education.
Geography and institutions in PNG, in particular, have contributed to this. Its archipelagic landscape, social fragmentation and the legacy of highly centralised institutions inherited from the colonial era have proved to be challenges for forging a national identity, effective state institutions, and effective public administration reform.
In addition, a high level of crime in major cities and prevalent low-level violence indicates low state authority. While the ratio of police to the population at Independence was 1:380, it is now around 1:1404, which is well below the United Nations recommended ratio of 1:450.
The decade-long armed conflict in Bougainville was the most intense in the Pacific since World War II. While the conflict has subsided through a political settlement, prospects are uncertain. The transition of Bougainville to an independent state or one with greater autonomy will have major ramifications, not only for it but also for other resource-rich provinces.
As far as the PNG economy is concerned, it has four dominant features. These are the existence of a large informal sector, heavy natural resource dependency, significant inequality, and high poverty. Even though PNG is a resource-rich country, successive governments have not converted the mineral boom’s economic benefits into effective development outcomes, and high levels of poverty and inequality exist.
On the legitimacy front, despite improved political stability since 2003, a recent challenge to replace Prime Minister James Marape indicated a possible return of instability. From Independence until 2002, no prime minister was able to complete a full five-year term in office, while between 2002 and 2019, no prime minister was able to complete a second term.
On the positive side of the ledger, despite persistent political instability, democracy itself has survived a half-century in PNG. Local communities exhibit resilience, offering informal social safety nets through the wantok system, helping to prevent starvation and encouraging reciprocal cooperation. While the former may be because of societal diversity and the consensual nature of decision-making embedded in communities, the latter can be credited to the reciprocal nature of cooperation at the community level.
So, is PNG a fragile state? In our Discussion Paper, we conclude that PNG should be classified as a “stable-fragile”. By this, we mean that despite being a fragile state, democracy in PNG has survived, the state has not collapsed, and communities exhibit great resilience.
What of the future for PNG’s fragility? We project two negative scenarios, one positive and one uncertain.
One negative scenario is that violence increases in both intensity and scale. Another negative scenario sees more regional fragmentation. Bougainville opts for independence and other provinces follow suit.
There is also a positive scenario, with incremental reform and a crackdown on corruption. Infrastructure improves. Resource dependency declines. With increased economic activity, there is less violence. This leads to a more competitive economy and more diversification.
The uncertain scenario emerges from consideration of the end of PNG’s non-renewable resource wealth. As it declines, the economy will be less resource-dependent. This can be interpreted in both a positive and a negative way. The positive one is that the state will become less of a prize. More entrepreneurs will emerge. Symptoms of “Dutch disease” and the “resource curse” will reduce. However, the loss of revenue will also mean less stability.
PNG is a young country. Its modern history has only just started to be written. While the country can now be characterised as stable-fragile, from a longer perspective it is undoubtedly still in transition.
Read Nematullah Bizhan and Emmanuel Gorea’s Devpolicy Discussion Paper “A weak state and strong microsocieties in PNG” here.
This research was undertaken with the support of the ANU-UPNG Partnership. The views are those of the authors only.
I would love the term “fragile state” never to be applied to PNG again. The real fragile states are in East and Central Africa, where war and other emergencies are an order of magnitude more serious.
Thanks Nematullah and Emmanuel for exploring such an important question! The article opened with a reference to a 2018 Parliamentary question asked by then Shadow Treasurer, now Treasurer, the Hon. Ian Ling-Stuckey. Following is a new link to the question that was asked – this is done for reasons of public transparency as such questions are hard to access on the public record (and so I had to add it to my own website) http://pngeconomics.org/2021/02/pngs-descent-to-a-fragile-state-can-it-recover-again/.
The question indicates the basis for the current Treasurer’s claim that PNG had descended back to fragile state status in 2014 were World Bank and ADB indicators of “fragile situation” countries. The source materials and analysis were included in the question (which is provided to the PNG Parliament’s speaker) and are included in the link above.
One particularly interesting element of the background analysis, arguably not explored fully in the Devpol analysis, is the dynamics of such a status. PNG had climbed out from being a “failed state” during the year’s 2007 to 2013. It then fell back into that failed state status by 2014. This was driven mainly by a fall in measures of economic management during the O’Neill years according to the analysis of the World Bank and ADB. Since 2020, the listing has been simplified. PNG is still in the listing as a “High Institutional and Social Fragility” country http://pubdocs.worldbank.org/en/888211594267968803/FCSList-FY21.pdf.
Hopefully, improvements in economic management backed with continued friendly foreign support will allow for one of the positive scenarios in the Devpol analysis.
[Disclaimer: The author currently works as Principal Economic Advisor to PNG’s Treasurer Ian Ling-Stuckey]
Dear Paul: Thank you for your insightful remarks and further clarification about the then Shadow Treasurer’s statement in 2018. We truly appreciate such a level of engagement with our analysis and hope to learn more in the future. We’ll build on our study and look forward to further interactions.
To add some clarification about our approach, while the World Bank and other Fragile States rankings are useful, in our paper, we assessed state fragility across five dimensions: state legitimacy, capacity, security and conflict, economy and resilience. We didn’t use the term Failed State in our analysis because it was abandoned as it was largely seen to be politically offensive. The Failed State Index, for instance, was changed to Fragile State Index in 2019. Other sources also use the term fragile state.
Also, PNG’s achievements have been remarkable in some areas, such as sustaining democratic institutions and community resilience, which we argue in our paper. We, too, hope that a positive scenario prevails in PNG.