Earlier in the year, United States Secretary of State, Hilary Clinton, warned the US Foreign Relations Committee that the Pacific, and Papua New Guinea in particular, is an arena for growing strategic competition between the US and China.
Despite China's rapidly diversifying interests in the region, the United States has just one major investment in Papua New Guinea - the PNG LNG project.
And the US has alienated key Pacific nations, such as the 8 tuna-rich countries that are parties to the Nauru Agreement.
In Papua New Guinea, an influx of new Chinese investors, some of whom are illegal immigrants, is creating a backlash.
Mr Polye, who as you've heard was sacked this week as PNG's Foreign Minister, following ongoing leadership tussle with acting Prime Minister, Sam Abal.
But in the lead up to next year's general elections he will continue to be a major force in PNG politics.
He spoke with Radio Australia's Pacific Business and Economic reporter, Jemima Garrett, in his parliament house office, before he lost the Foreign Minister's job.
Presenter: Radio Australia's Pacific Business and Economic reporter, Jemima Garrett
Speaker: Don Polye, Papua New Guinea's outgoing Foreign Minister
GARRETT: Don Polye, thank you for joining Radio Australia and welcome to the program.
POLYE: Thank you for giving me that opportunity.
GARRETT: US Secretary of State, Hilary Clinton, says PNG is one of the hot spots for strategic competition between US and China. What are you seeing on the ground?
POLYE: There are two things I'd like to mention here. What Hilary Clinton said probably is true. But we like to see every player play our rules and our standards here in Papua New Guinea, where every rule of law and every rule of business is followed. Secondly, we welcome the competition because its going to be a positive development for Papua New Guinea. In other words, an increase in investment into the country, will definitely boost our business activities and economic activities here. I welcome the competition and look at Papua New Guinea as a strategic place to invest in . However, I would like to make the point that we should work together on a level playing field following all laws.
GARRETT: John Momis, the President of the Autonomous government of Bougainville, has said apart from the PNG LNG project American investment is conspicuous by its absence. In fact, he said there was so little he thought the US had a policy of NOT investing in PNG. How do you respond to those comments?
POLYE: Well, it is quite true to an extent. You look at history. Americans have never invested much in the Pacific region, as a business. Of course they've got military bases up there in Guam, and the Philippines and others. And of course, they had the involvement in the second world war and they came to PNG but after that you come another 20 years and you really would not have seen any American investments here, and the one we have seen is the Exxon Mobil. I think Chevron came in but they went out some years back so really I think this is on a bigger, larger scale but on a smaller scale investments and trade there hasn't been as much as other countries investing in PNG.
GARRETT:Do you think the United States has left too much of the running to Australia?
POLYE: Laugh - I really don't know about that. I can't answer the question. But I think, the US is a big economy maybe they are too big. And they care less to invest. I mean they've got all their businesses, there. They are already a flourishing superpower so they probably 'why should we invest in other countries? We are big already. We have ventured a lot of these American dreams' and so forth. But Australia, I don't think they've come and invested in PNG because of such mind set by US. Australia would naturally be investing because PNG is the closest destination to invest. Even in the colonial days Australia showed a lot of interest in PNG in alluvial goldmining and other activities so traditionally you'll find Australians have always been here -easy for them to invest in a country they have always been familiar with but US, like I've said, maybe they are too big.
GARRETT: Papua New Guinea has also recently walked out of talks to renew the Pacific tuna treaty with the United States because the United States wasn't paying what PNG thought was a reasonable licence fee or willing to offer competitive market access. Are PNG's relations with the US at something of a low point?
POLYE: I don't know I do not like to see Papua New Guinea's relations with the US at a low point. I would like to think that we could discuss those issues on the table. I know there has been some exchange on the media on this, when our acting Prime Minister did make some comment on this issue but I think new can always discuss those things. Come to a roundtable and see how best we can address those issues. I would like to also make, PNG sees US as important in the region, in the Pacific although they did not have a big investment in the country we regard them as very important to the Pacific region. And therefore we would like to see them invest more here and fisheries is one area and I would like to encourage them to relook at the issues that PNG has raised. We are probably saying that because we are applying the same fees to others like Japan. With Japan, for some time pulled out from fishing in PNG but recently, in the last 2 to 3 years they tried to show a lot of interest in investments here. So I would like to think the US and Papua New Guinea should discuss more. Understanding one another better would be the way forward. And I encourage the US to invest more in PNG and in the Pacific because that is what is happening at the moment.
GARRETT: Let's turn now to China, just how much interest is PNG seeing in investment from China, particularly in the resources boom?
POLYE: My view is that China's approach to investments - they just do investments regardless. They are aggressive. Most of the businesses you find, the big companies are owned by the state and they come in a big way. And Chinese business men and women I also see them in a driving to invest here in Papua New Guinea. I think it is also a cultural thing too. I also think it is an issue of standards, and the legislative framework that's in place in the country, as to how you go into business within those frameworks. There is a lot of factors that really drives people but China is becoming a major investor in this part of the world.
GARRETT: Some commentators have suggested that there are now double the number of Chinese citizens in PNG, both legal and illegal, compared to the number of Australians. What is your assessment of the situation?
POLYE: It could be true. I do not have any official report to give you a specific answer on this but what you hear people saying could be true. I have just talked about the asylum seekers issue. In PNG there are people who come in illegally without our systems even knowing about this. That is an area of challenge to me as Minister for migrations, in really coming up with laws. In fact, I am reforming laws now to combat or to address some of those issues so we stop illegal migrants into Papua New Guinea. The point that I alluded to earlier on - we encourage investments in the country but by following the rules. Sometimes unfortunately, the rules are not followed. Illegal immigrants come in because of the incapacity of our own systems in the country, we do not effectively detect them and take necessary actions. So we do admit to some of those shortfalls, on our side, but we would like to also encourage people who come into this country to be responsible. I encourage people who come here to do business in a genuine, honest, and through the legal processes. But those who come in illegally ...by the reforms that I am doing you will find I am getting much tougher on illegal immigrants.
GARRETT: Australia does give substantial aid to the PNGDF but would you like to see more aid specifically to this issue of illegal immigration?
POLYE: Yeah - well illegal immigration is a big area that we can address together. The business in this country must b e on a level playing field. It is unfair for some business who come in to do general business complying with all rules while others just come in to rip-off things and stay out of the legal spectrum and that is not good. We are reviewing the issues. We have a meeting coming up in July this year - somewhere in Canberra or Brisbane yet to be confirmed - but in that meeting we will have to address those issues of immigration, of border security, how we do that because it affects business and most of those illegal immigrants in this country have been Chinese and we'd like to discourage that. And to protect business, I think that is where PNG and Australia and of course others in the region, the Pacific Islanders, Indonesia, Malaysia, all of us should be working together.