Momis backs Chinese Special Economic Zone on Bougainville

Bougainville President, John Momis, has gone on Radio Australia to declare his support for plans by the Chinese to build a huge Special Economic Zone on Papua New Guinea's Bougainville island.

Special Economic Zones are fenced enclaves where foreign businesses are given special incentives including tax free status to set up manufacturing industries. SEZs have been heavily criticized in other country's for promoting low wages, poor health and safety standards and environmental damage.

The International Finance Corporation, a division of the World Bank, is currently drafting laws to allow the first SEZs to be declared in PNG - read more.

MOMIS: They are responding to our call for foreign investors to invest in Bougainville to help the Autonomous Bougainvile government (ABG) and the people of Bougainville to develop their huge natural resources and by doing so enable the Bougainvilleans to become beneficiaries of the development of their resoureces, instead of just being owners of the resource. In respone to that, the Chinese have been coming to Bougaoinville to look at a number of potential economic projects one of which is the proposal to set up a Special Economic Zone on the northern tip of Bougainville Island including eventually, I suppose, the building of the Buka Passage Bridge to connect Buka Island with Bougainville.

GARRETT: Some reports say the plans entail a 1.2 billion Kina (AUD$480 millon) investment and the building of a new city. Is that correct?

MOMIS: That was put to the Bougainville Business Association and the ABG. I, personally, am not well informed on the exact amount of money that is required but I know of the fact that they are making a proposal to build a modern township that would attract tourists and other investors to come and invest their money to develop projects such as steel prefab housing materials, hotels and things like that. Because Buka Island and the Buka P assage and the surroundings, which includes the northern tip of Bougainville is potentially a very, very rich beautiful tourism hub of Bougainville.

GARRETT: Special Economic Zones are controversial but you actually asked the Chinese to put a proposal involving a Special Economic Zone. Why?

MOMIS: That is correct. Special Economic Zone has been talked about in PNG. It has been tried in Lae, and a couple of other places, but the government of Papua New Guinea and, I guess others, have not had the expertise nor the capital available to develop them. You need, I presume, a lot of money and I think chinese capitalists, or Chinese investors, would have that kind of money. We would provide as partners the rich resources that we have and negotiate something that would be mutually beneficial. We have engaged, ..the ABG I mean, has engaged an expert from New Zealand who is going to give us independent advice as to how we should go about stiking a win-win deal.

GARRETT: You had one group of Chinese investors last week and I understand another group went over on Saturday. What are you hoping to see come out of that?

MOMIS: Three Chinese came went over last week, one of whom is our representative in China who travels throughout China to potential investors. The other one was the architectural engineer who is looking at the proposed site for the Special Economic Zone; the buildings and so on and so forth. And just a couple of days ago a group went over who are interested in mining and construction of a hydro project.

GARRETT: Turning now to PNG politics, is the current instability in the PNG government affecting Bougainville?

MOMIS: The instability in the government does worry us. We would hope that things would be stabilised and that the commitment that the National government has made to Bougainville, especially in the Bougainville Peace Agreement and the other subsequent commitments such as the K500 million that has been pledged to be given to Bougainvile in the next five years and K15 million that is a requirement of the Bougainville Agreement, would flow to Bougainville, without disturbance, I suppose. And also the good relationship we need to have. The rapport we need to have between Bougainville and Papua New Guinea is crucially important to manage the issues of referendum, issues of Bougainville being given the best opportunity to enjoy in ful its automomy, in order to be ready for the referendum to be held in a responsible way.

GARRETT: There have been reports of severe food shortages on Bougainvile's atoll islands. how is the Bougainville government responding?

MOMIS: I understand that the administration is deaing with the issue. this is a perennial problem that Bougainville has and it is not made easy, in any way, by the fact that the administration has very meagre resources at our disposal to deal with this sort of thing. our budgetry allocation is usually for recurrent activities. I am hoping that the administration will have adequate funding. If they don't have enough then they should contact the National Emergency department, in Port Moresby, to get the extra funding which we need to provide food and make provisions for the people of the atolls.