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PNG GAS DEVELOPMENT CONFERENCE
CAIRNS 15 & 16 JUNE 2011
“RELATIONS BETWEEN
AUSTRALIA & PAPUA NEW GUINEA
IN AN AGE OF OPPORTUNITY”
ADDRESS BY W.S (BILL) CUMMINGS | CUMMINGS ECONOMICS, CAIRNS
YALI’S QUESTION?
“Why is that you white people developed
so much cargo & brought it to New
Guinea, but we black people had little
cargo of our own?”
Quote from “Guns, Germs & Steel” - A Short History of the
Last 13,000 Years - Jared Diamond, Vintage Press 1997
Cummings Economics / JUNE 2011
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Cummings Economics / JUNE 2011
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TROPICAL ZONES
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Cummings Economics / JUNE 2011
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PART OF THE TROPICAL LAG
PAPUA NEW GUINEA SUBSTANTIAL POPULATION (6.7 million)
LOW INCOMES
TROPICAL AUSTRALIA HIGH INCOMES
FEW PEOPLE (1.2 million)
SMALL FRAGMENTED ECONOMIES WITH
STRONGER LINKS TO SOUTHERN METROPOLITAN CENTRES
THAN BETWEEN THEMSELVES.
Cummings Economics / JUNE 2011
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FRAGMENTATION OF AREA OF NORTHERN AUSTRALIA
AND NEARBY AREAS TO THE NORTH
-6
DIFFERENT NATIONAL ADMINISTRATIONS
AUSTRALIA, INDONESIA, EAST TIMOR,
PAPUA NEW GUINEA, SOLOMON ISLANDS,
FEDERATED STATES OF MICRONESIA
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A CHANGING WORLD, A NEW PERIOD OF INDUSTRIALISATION
EQUIVALENT TO INDUSTRIALISATION OF EUROPE & NORTH AMERICA
LATE 1800’S / EARLY 1900’S
THAT SET OFF EUROPEAN SETTLEMENT IN NORTHERN AUSTRALIA
AND
MISSIONARY ACTIVITY AND COLONIAL ADMINISTRATION IN PNG.
A MASSIVE CATCH UP EXTENDING WHAT OCCURRED IN
JAPAN, KOREA & TAIWAN TO CHINA & INDIA
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COMING AT A TIME WHEN
HAVE
.
A TIME OF A DIMINISHING LAG IN TECHNOLOGY
SUITED TO THE TROPICS.
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233,327
143,436
117,332
69,964
100,000
72,687
93,332
150,000
148,414
209,175
164,070
250,000
200,000
Region
217,089
City
300,000
271,119
COMPARATIVE CENSUS COUNT POPULATIONS ACROSS
NORTHERN AUSTRALIA
50,000
(1
)
(2
)
Q
ai
rn
s
C
w
ns
vi
ll
e
Q
ld
ld
(3
)
N
T
To
ha
R
oc
k
ar
w
in
m
pt
on
ka
M
ac
D
Q
ld
ld
y
Q
ar
a
Pi
lb
rl
ey
/
im
be
K
(4
)
(5
)
(6
)
0
Scope: Cities defined by relevant ABS City Statistical Sub Divisions.
Note (1): Cairns Region defined as Far North Q’ld Statistical Division plus Gulf Shire areas of Carpentaria, Burke and Mornington of North West Statistical Division.
Note (2): Townsville Region defined as Northern Qld Statistical Division plus Hughenden to Mt Isa area of North West Statistical Division.
Note (3): Darwin Region defined as the whole of the Northern Territory.
Note (4): Rockhampton Region defined as the Fitzroy Statistical Division plus the Central West Statistical Division based on Longreach.
Note (5): Mackay Region defined as the Mackay Statistical Division alone.
Note (6): Kimberley and Pilbara Statistical Divisions.
Source: Cummings Economics from ABS Census data.
Cummings Economics / JUNE 2011
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DEFENCE, MINING, TOURISM, PRIMARY
DARWIN REGION INDUSTRIES
TOURISM, PRIMARY INDUSTRIES, DEFENCE,
CAIRNS REGION MINING
DEFENCE, MINING, PRIMARY INDUSTRIES,
TOWNSVILLE REGION TOURISM
MACKAY REGION MINING, TOURISM, PRIMARY INDUSTRIES
ROCKHAMPTON REGION MINING, PRIMARY INDUSTRIES, TOURISM
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TROPICAL AUSTRALIA COUNTS OF AUSTRALIAN
TROPICAL AUSTRALIA
BUSINESSES,
JUNE 2007
Counts of AUSTRALIAN BUSINESSES, June 2007
No.
25,000
23,286
20,000
16,074
15,000
14,778
15,840
13,734
10,000
5,000
4,194
2,283
2,301
Cummings Economics / JUNE 2011
Q
M
ac
/M
ac
ka
y
Rc
tn
/F
i tz
ro
Nt
y
h
W
es
t/C
tl
W
es
t
Cummings
Economics
Tv
l /N
Q
Ca
i rn
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FN
in/
NT
Da
rw
Ki
m
be
rle
y
Stat
Division
Pi
lba
ra
0
Source: ABS Data.
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TONNAGES SHIPPED THROUGH PORTS, 2009/10
Million Tones
DARWIN REGION
21
CAIRNS REGION
22
TOWNSVILLE REGION
10
MACKAY REGION
99
ROCKHAMPTON REGION
79
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AVIATION SECTOR - NORTHERN CITIES COMPARATIVE
PASSENGER STATISTICS, 2009/10
Domestic
International
Regional
Total
Cairns
2,795,344
427,380
327,104
3,549,828
Darwin
1,191,208
207,825
169,974
1,569,007
Townsville
1,281,367
Nil
237,002
1,518,369
Rockhampton
510,435
Nil
246,969
757,404
Mackay
720,946
Nil
196,292
917,238
Source: Cummings Economics from Department of Transport & Regional Services data.
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GEOGRAPHICAL BACKGROUND
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REGIONAL STRUCTURE OF PNG
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LAE LEADS
MANUFACTURING & PORT
MOVEMENTS
PORT MORESBY LEADS
GOVERNMENT SERVICES &
AIR LINKS
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PNG ECONOMY
THE ECONOMY OF PNG –KEY STATISTICS
Population
6.6 m
Area
463,000 sq km
Gross Domestic Product – 2010
US$8.8 bn
GDP per capita
US$1,345
Source: Aust DFAT fact sheet.
GDP BY INDUSTRY SECTOR, 2008
Agriculture, forestry & fisheries
Petroleum, mining & quarrying
Construction
Community, special & personal services
Wholesale/retail trade
Manufacturing
Finance real estate & business services
Transport, storage & communications
Electricity, gas & water
Other
K7,500 m
K5,414 m
K2,240 m
K1,804 m
K1,368 m
K1,278 m
K648 m
K440 m
K361 m
K500 m
Source: PNG National Statistical Office & Department of Treasury.
RECENT GROWTH: 2007 6.5%, 2008 7.2%, 2009 6.2%
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MONETARY ECONOMY
PNG MONETARY GDP ABOUT $10 bn
for 6.7 m PEOPLE
(cf) CAIRNS REGION GDP $12 bn
for 300,000 PEOPLE.
(cf) AUSTRALIA GDP ABOUT $400 bn
for 6.7 m PEOPLE.
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PNG ECONOMY
INTERNATIONAL TRADE SECTOR
RATIO TO GDP – EXPORTS 83%, IMPORTS 62%
LARGE IMPORT OF SERVICES
AUSTRALIA - 47% EXPORTS, 43% IMPORTS
OIL, COPPER & GOLD - ABOUT 60% OF EXPORTS
FINANCES & DEBT - RELATIVELY SOUND:
BANK OF PNG RESERVE ROLE
AUSTRALIAN BANKS ACTIVE
GOVERNMENT DEBT - 30% OF GDP
EXTERNAL DEBT – 26% OF GDP
TOTAL EXTERNAL EXPOSURE (DEBT & EQUITY) – 47%
DEBT SERVICE TO GDP – 12%
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LOCATION OF MINERAL DEVELOPMENTS IDENTIFIED EARLY 2010.
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LOCATION OF
EXISTING MINERAL
OPERATIONS
NORTHERN QLD
AS AT EARLY 2010
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VALUE OF MINERAL PRODUCTION
TROPICAL QLD
NT
PNG
FREEPORT
Total
cf WA
Cummings Economics / JUNE 2011
$30bn
$4bn
$11bn
$7bn
$52bn
$92bn
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PNG MAJOR NEW MINING DEVELOPMENTS
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ADVANCED MINERAL
PROJECTS
NORTHERN QLD AS
IDENTIFIED EARLY 2010
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SECOND WAVE
FOOD, FIBRE
THIRD WAVE
TOURISM
WE CAN EXPECT MAJOR GROWTH THROUGHOUT
THE AREA OVER THE NEXT DECADE
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IMPLICATIONS FOR RELATIONS BETWEEN AUSTRALIA & PNG
FIRST POINT
ALTHOUGH GAS & MINING WILL BRING A MAJOR
BOOST IN GOVERNMENT FINANCES
NEED ASSISTANCE FROM AUSTRALIA &
OTHER INTERNATIONAL AGENCIES
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FUTURE TASKS
EDUCATION: ONE THIRD OF POPULATION OF SCHOOL AGE
PRIMARY SCHOOL ENROLMENT
(cf 1990)
REACHING GRADE 5
Male
Female
59%
50%
(71%)
(59%)
60%
HALF A MILLION CHILDREN 6 – 12 YEARS NOT ATTENDING
SCHOOL
DROP OUT RATES HIGH.
GRADE 8 EXAM RESULTS:
 LITERACY – 40%
 NUMERACY – 39%
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HEALTH SYSTEM
PROVIDERS – GOVERNMENT, CHURCHES, MINES & SMALL OTHER
PRIVATE - CHURCHES 60% RURAL AREAS - FREE OR SMALL CHARGE
FOR OUTPATIENT VISITS.
CURRENT PLAN A “BACK TO BASICS” APPROACH
- AID POSTS BECOME COMMUNITY HEALTH POSTS
- HEALTH CENTRES
- DISTRICT HOSPITALS DOCTOR
- PROVINCIAL PUBLIC HOSPITALS
- SPECIALIST REGIONAL HOSPITALS
- PACIFIC MEDICAL CENTRE (TERTIARY – FULL TEACHING)
DISEASES
- PNEUMONIA, MALARIA, TB, DIHORREA, MENINGITIS.
- HIV/AIDS INCREASING (34,000).
- RECENT CHOLERA OUTBREAK
- ORAL CANCER (BETEL NUT CHEWING)
- PREVENTATIVE ACTION HYGIENE, EDUCATION.
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PNG ROAD SYSTEM
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SECOND POINT
EXPLOITING NEW OPPORTUNITIES WILL LEAD TO PNG STRENGTHENING
RELATIONS WITH MAJOR TRADING PARTNERS OTHER THAN AUSTRALIA
BUT
SAME UNDERLYING FORCES IMPACTING ON NORTHERN AUSTRALIA.
GROWTH RELATIONS BETWEEN NORTHERN REGIONS & PAPUA NEW GUINEA
WILL SUPPLEMENT, EXPAND & DEEPEN THE STRONG LONG-TERM
RELATIONS BETWEEN AUSTRALIA & PNG.
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CLOSER INTEGRATION OF
REGIONAL ECONOMIES VERY
IMPORTANT FOR DEVELOPING
HIGHER LEVEL MANUFACTURING &
SERVICE INDUSTRIES.
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INCREASED AIR SERVICES
INCREASES IN SHIPPING LINKS
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PNG OPPORTUNITIES IN NORTHERN REGIONS
TIMBER, COPRA & PALM OIL KERNEL
STOCKFEEDS
PNG’S MANUFACTURING BASED ON LARGE
POPULATION & LOWER WAGES
MINERAL TO PROCESS IN NORTHERN
QUEENSLAND
GAS
ELECTRICITY
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WHERE NORTHERN REGIONS CAN HELP
SKILLED WORKFORCE
HEALTH
EDUCATION & TRAINING
RESEARCH
SPORTS
TOURISM
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PNG GAS DEVELOPMENT CONFERENCE
CAIRNS 15 & 16 JUNE 2011
“RELATIONS BETWEEN
AUSTRALIA & PAPUA NEW GUINEA
IN AN AGE OF OPPORTUNITY”
www.cummings.net.au