Speaking to the Lowy Institute Mr O'Neill said PNG needs to focus on improving productivity if it wants make the most of those opportunities.
Jemima Garrett was there for Pacific Beat and she joins us on the line.
Presenter: Jemima Garrett
Speaker: Papua New Guinea's Prime Minister Peter O'Neill
GARRETT: Well I think really it is that there's been a generational change in the leadership in Papua New Guinea and that it's ready to make the most of the Asian century. We've seen the Asian Century White Paper recently in Australia. Peter O'Neill says PNG's very much looking in the same direction, but that it won't be easy. He was upbeat about Papua New Guinea's growth over the last decade, and he says when it comes to trade with Asia in the future, he sees two clear priorities; the resources industry and agriculture.
O'NEILL: Helping to meet both the energy needs and the food needs of the region I believe strongly that Papua New Guinea has a very unique opportunity. And the opportunity that I believe I want to assure you that we will not pass up. That brings me to perhaps the greatest challenge that we face as a nation in focussing on these opportunities the Asian century offers. Papua New Guinea has never really focussed on productivity, and especially on government measures to improve productivity. We have been what Australians might call, relaxed and too comfortable when it comes to exporting our minerals and other resources such as forestry. Some may argue that we have been too complacent. What brought this matter really home to me was the revelation by the developers of our first LNG Project where cost blow-outs has been in the billions of kina with our partners Exxon Mobil and Oil Search.
GARRETT: When Peter O'Neill was talking there about cost blow-outs and the need to increase productivity, what he's really getting at is the enormous effort that's going to be put into infrastructure, and also education. The budget passed last week was something he stressed a lot, and really Papua New Guinea needs to put effort into both of those areas to get productivity going. And the skill problem is one of the issues that pushed up the costs on the Exxon Mobil LNG Project, and so is the state of the Highlands Highway.
HILL: Well how did Mr O'Neill see PNG's relations with Asia developing?
GARRETT: Well fast and furious and across the board really with every country. With its land border with Indonesia Mr O'Neill said that that country is his top priority, but relations, particularly trade and investment are expanding with Japan, with South Korea, the Philippines, Singapore, as well as those further afield, such as India and Russia. Of course China is always the issue that people look to and the relationship with China is important he said, but he cautioned commentators not to make too much of it.
O'NEILL: Our fastest growing relationship is with the Peoples Republic of China. Peoples Republic of China today is destined to become the second major trading partner other than Australia, and it is a growing one. There is also bigger increase in investment by China in our resource sector and in our construction sector. As I said next month Ramu Nickel, a partnership between an Australian company and a Chinese company will now take full production next month. We also benefit from donor and concessional funding from China, and I make no apology for encouraging that. We are negotiating a successful process and launch at present, one of the beneficiaries of that project will be the rebuilding of the Highlands Highway and other rundown infrastructures in the country. We have a very strong relationship with China, only based on trade and investment. We are aware of the competing interests that is coming from our partners, traditional partners, particularly the United States increased interest in the Pacific region. We have continued to build that relationship on security, trust and investment over many, many years. But we feel that the security issues that have been expressed by many of our traditional partners is unnecessary. We are following the same path that Australia and New Zealand have taken by increasing our relationship with China on trade and investment.
GARRETT: There are still some concerns about PNG's relationship with China. One has been Huawei, the Chinese telecommunications company, which has won a contract for PNG's integrated telecommunications service. And some people have been worried that that project has had access to sensitive areas like visa applications and tax files, and that PNG government information might be vulnerable. In an interview with me after the speech Mr O'Neill said that he was aware of those problems, acknowledged the problems, but he said he's quarantining the project from security matters.
HILL: Now I hear that the Pacific also got a mention; what did Mr O'Neill have to say about the region?
GARRETT: Yes as it did with Mr O'Neill's speech to the Press Club in Canberra yesterday, with growth in PNG so buoyant, Mr O'Neill see the Pacific benefitting to a certain extent by getting sucked up in Papua New Guinea's slipstream.
O'NEILL: We feel that we have a role to play, we find that we have an increasing growth in our economy that cannot sustain itself without the skilled labour force. And we understand that apart from Australia, many countries like Fiji and Tonga and Samoa have got very good skilled workforce. So we are in the process of lifting up our work restriction legislation to allow Pacific Islanders to come in and work in Papua New Guinea without visas and work permit visas that are expected of them.
GARRETT: Fiji also got a mention, the PNG Prime Minister said PNG saw itself as playing a bigger role in the Melanesian Spearhead Group and other organisations, and he particularly sees his country as having an important role in assisting with the return of democracy in Fiji.
O'NEILL: We believe strongly that we must say engaged with Fiji so that they continue to commit themselves to the timeframe that they have set where they will go to the elections on the 12th of September 2014. I know very well the Pacific way of doing things is that if you do not engage continuously with them of course they change their minds along the way. So we're trying to have that sort of approach being discouraged, and I'm pleased to note that Australian and New Zealand governments are now reengaging at the official level, and that is very encouraging.