Page 11 - IB November 2019

Cover Story Cover Story

Once the BRC announces the results, a writ will be returned to the Governor well as temporary access to Australia and New Zealand’s labour markets as a source of
General, signifying a 40-day appeal period. However, a vote for independence does remittances, and to build skills amongst Bougainville’s young people.
not mean it is a foregone conclusion. Under the terms of the Agreement, the vote PNG Minister for Bougainville Affairs, Sir Puka Temu, has cautioned that Bou-
will “inform” post-referendum consultations between the Autonomous Bougainville gainvilleans should understand what “cutting the umbilical cord from Papua New
Government (ABG) and the PNG Government to determine Bougainville’s future. Guinea” will mean.
PNG’s government must endorse the result. PNG’s critical support was given a boost in September, with the approval of a K1
billion (US$295.4 million) facility over ten years, at K100 million (US$29 million)
INTERNATIONAL SUPPORT per annum to stimulate economic activity in the region.
There has been extensive international support for the referendum process. New Announcing the grant, PNG Prime Minister James Marape said economic
Zealand is leading the Bougainville Referendum Regional Police Support Mission independence must come before all else: “Our national government will transfer full
team on the island. The unarmed police mission also includes Australians, Fijians, revenue-raising powers to the regional government and we will assist[in monitoring]
Solomon Islanders and ni-Vanuatu officers amongst its ranks. International election your collections in fisheries, forestry, agriculture and other industries that you Bou-
observers will also be on the ground. gainvilleans may choose to undertake.
Clearly, a smooth referendum is in the interests of Bougainville and PNG’s Pacific “Today is but a punctuation mark in a long story of Bougainville,” Marape contin-
neighbours, and development and trade partners further afield. ued. “Let’s make peace. I am willing to give what belongs to you back to you in the
Australia’s relationship with Bougainville is the deepest, and most fraught. It has context of national unity.”
provided personnel, logistics and finances for several peacekeeping operations there
since 1994. Several Australian companies have signalled interest in renewed and new
mining operations on Bougainville, including Fortescue (the fourth largest iron ore
producer in the world), former Rio subsidiary BCL (Bougainville Copper Limited),
Caballus Mining, ASX-listed RTG Mining Inc and Kalia Limited.
Writing for the Lowy Institute, an Australian think-tank, journalist Ben Bohane
says other regional powers will have a key interest in the referendum and subsequent
negotiations. Last year local media reported that China had offered substantial funds
to finance Bougainville’s transition to independence, in return for the opportunity to
invest in mining, infrastructure and other economic sectors.
“Indonesia, on the other hand, is likely to be concerned at the prospect of a
successful Bougainville referendum lest it create a regional precedent for West Papua,
where significant elements of the population are also agitating for a referendum and
eventual independence,” Bohane writes.
In recent months, South Korean investors have also visited the region, scoping
opportunities.
UK-based organisation, Conciliation Resources and the Bougainville Autonomous
Government state that regardless of the vote, a range of post-conflict challenges re-
main, including ongoing hatred and division in communities caused by unreconciled
violence, entrenched and opposing allegiances unresolved since the crisis, increased
alcohol and drug use, and weaker family units, and that these issues must be resolved
if Bougainville is to truly unite.
Bougainville faces “enormous human development challenges in terms of education
and health” should it face independence, adds Annmaree O’Keeffe, a non-resident
fellow at the Lowy Institute. An estimated 43 per cent of Bougainville’s population
are illiterate, most of them female. And although Bougainville has an estimated
population of 300,000—40 per cent of them under 15 years of age—it only has a
handful of secondary schools.
Similarly, Bougainville has just one hospital, 11 health centres and 24 sub-health
centres, O’Keefe writes, with just one percent of budget expenditure allocated to
health. In comparison, Solomon Islands dedicates 8 per cent of its budget to health,
and that budget is 10 times larger than Bougainville’s.
The National Research Institute (NRI) states that the Autonomous Bougainville
Government’s total 2016 budget was K286 million, but that the budget needs for
an independent Bougainville nation would be two to three times more than that.
Revenue is currently drawn from company and value added tax, customs duties, and
other sources. The shortfall between revenue and expenditure is met by the national
government, although NRI Research Associate, Professor Satish Chand also suggests
that these grants have “eroded the incentives for the ABG to grow its own tax base”
and created fiscal dependence.
Chand suggests the ABG look at access to tuna licensing fees as revenue streams, as

Islands Business, November 2019 11