33. Memorandum of Conversation, Washington, June 8, 1973.1 2

Memorandum of Conversation

DATE: June 8, 1973

SUBJECT: Papua New Guinea’s Future


  • Mr. David Hay, Secretary, Australian Department External Affairs
  • John McCarthy, First Secretary, Australian Embassy
  • G. McMurtrie Godley, Assistant Secretary, EA
  • James V. Martin, Director, EA/ANZ

EA - 2 Amembassy CANBERRA - 1
EA/ANZ - 2 Amconsul BRISBANE - 1
IO/UNP - 2 EA/RA - 2

Mr. Hay said he had just been at the Trusteeship Council meeting and had found it a pleasant experience in contrast with former years. Everyone, including the Russians, was extremely cordial because PNG was getting self government this December. The ALP Government had taken a firm line on granting independence at an early date — a firmer line than the people of PNG. The Russians were faintly amused by the fact that Australians were trying to get rid of PNG as fast as possible. Mr. Hay said that although there was not a complete meeting of the minds between the Australians and the Papua New Guineans, there was no real conflict. Both looked to independence and the Papua New Guineans would doubtless be ready by 1975; even if they were not ready, the rushing events would push them. Already it was becoming increasingly difficult from the Australian point of view to look after their foreign affairs and defense interest which, indeed, the Papua New Guineans wished to look after themselves.

In response to Mr. Godley’s question whether the Papua New Guineans would be able to make a go of it, Mr. Hay responded that he was reasonably confident they could. They would have to overcome certain basic problems, including the divisive elements of tribalism and sectionalism. In a way, Mr. Hay said, the tribal jealousies [Page 2] acted as a safety valve to siphon off latent hostilities against foreign industries in the country as, for example, the copper mining company in Bougainville.

Mr. Godley wondered if the Papua New Guineans would seek Australian technical and financial assistance. Mr. Hay said that this was being done at present. The Australian Government put some of its own people into the Papua New Guinean government structure to fill essentially non-competitive jobs, and the GOA paid their salaries. The costs covered by the GOA in such fashion run to $40 or $50 million a year.

Responding to Mr. Godley’s question concerning the anticipated extent of Australian aid, Mr. Hay said that A$120 million was extended in direct aid and some $20-$30 million was extended in military assistance. He noted that the local army was quite good.

Mr. Godley wondered if Australians had had time to provide adequate training through the local military personnel. Mr. Hay answered that promotions had been quite fast and there were already several Majors studying at the Australian Staff College. While they were not fully qualified by Australian standards it was anticipated that they would become qualified in due course and that they were expected to become good leaders.

Mr. Hay noted that the quality of local administrators and business leaders was good, but that the number of good people was insufficient. He referred to Papua New Guinea ministers with whom he had been in New York: Minister Chan (half Chinese) had a high school education and was articulate and sensible; Minister Kavali had had little formal education but had learned much as a warder in a corrective institution. The number of Papua New Guinean students studying on scholarships in Australia was less than 100, but some 300 young administrators were studying at the School of Pacific Administration in Sydney.

Mr. Godley wondered if perhaps the Australians were not moving out a few years too soon. Mr. Hay responded that it would be splendid if the Australians had a little more time but there was no more time. They were forced to accelerate the program of transition and to insure that there would be a number of Australians around within the Papua New Guinea structure. But this could not last forever as locals were already looking over their shoulders and hoping to inherit the Australian jobs.

With regard to the economy of PNG, Mr. Hay noted that the bulk of incomes derives from the plantation economy, but that minerals and secondary industries were growing rapidly in importance. One day beef and cattle would be exported. Seventy percent of the coffee growing was in native hands.

[Page 3]

Foreign investment would be needed but at the moment the Government of PNG was making equivocal statements. They were also looking to Japan for increased investments at a time when Australian investments were flattening out. The Japanese people were pretty well accepted in PNG. They were not alarmed by immediate political prospects and took the long term economic view.

When asked about relations with Indonesia, Mr. Hay responded that the present Indonesian government and the present PNG government will get along all right. There had been problems along the border a few years ago but these had been taken care of. Sooner or later a border regime would be negotiated. Mr. Hay saw no great problems arising and predicted that relations with Indonesia would be good.

Asked if the eastern portion of New Guinea were the richer, Mr. Hay said it was, and noted that it was also more fully populated. PNG would not be an insignificant country locally, and indeed, the Australians would have to readjust to this fact. Whether PNG would regard itself as part of the Pacific or as part of Asia in the future was uncertain at this point.

Mr. Hay said he would like to have the Americans understand that the leadership of PNG was hardheaded and without any preconceived ideological leanings. They were people who thought clearly about their own interests and were easy to do business with.

In regard to a question about the Chinese population of PNG, Mr. Hay said there were only about 10 or 15 thousand Chinese. They were active commercially but caused no problem and would be welcome to stay on after independence.

Concerning political parties, Mr. Hay noted that the Pangu Party and 3 or 4 smaller parties currently form a coalition government. Strangely, he said, there were no major philosophical differences between parties, and the people did not seem to be very happy with the party system. In his judgment differences between the parties would become even more fuzzy, but the inherent lack of differences between parties should not cause a problem within the political situation in PNG.

There were few residual foreign interests other than American business interests. The Germans had phased out long since. There was, to be sure, a considerable international interest, namely the World Bank and, of course, the Australian interests.

He noted that PNG depends for about 50% of its public expenditures [Page 4] upon Australia. Education and public health were largely in indigenous hands although the University at Port Moresby is still largely under expatriate management. With regard to foreign investment PNG looks first to the World Bank, second to Australia and third to Japan.

Foreign volunteers were very welcome though earlier on there had been ministers who were strongly against it. Missionaries had made a considerable contribution to development. Indeed, they were responsible for about one half of all the education that has been provided in PNG. New Zealand, not a source of aid in the past, was now offering some small assistance. Mr. Hay expressed dissatisfaction with the idea of aid coming in bits and pieces from all over. He thought it better for PNG to rely on Australia, the World Bank and Japan.

Mr. Godley asked if thought had been given to setting up a coordinating board to insure the proper funneling of aid to necessary channels. He pointed out that lack of such coordination had caused problems in posts of his previous administration (he mentioned Africa and Laos).

Mr. Hay enthusiastically took up the suggestion and pointed out that Mr. Morrison, the Minister for External Territories, wanted very much to set up a coordinating board and had said so publicly. There was a possibility that it would be established as a unit in the Ministry of Finance. He noted that the planning unit in the PNG government was in the Chief Minister’s office.

With regard to the act of self determination for independence, Mr. Hay expressed the hope that a vote by the House of Assembly would be acceptable. He noted that the Trusteeship Council members seemed agreeable to relying on a vote by the House. His preference for a vote by the House of Assembly rather than a referendum by the whole people was based on the assumption that the majority vote in a referendum would be against independence, at least in the near future. This was because there are 900 thousand highlanders who are reluctant to entrust their future to the lowlanders. Mr. Hay said that the aim of the Government of Australia was to seek a decision in the House of Assembly by a substantial majority representative of all areas of the country; it should be a recorded vote and should be witnessed by representatives of the United Nations.

  1. Source: National Archives, RG 59, Central Files 1970–1973, POL 19 NEW GUIN. Confidential. Drafted by Martin. On May 22, the Embassy in Australia transmitted telegram 2850 about the future of Papua New Guinea. (Ibid., Central Foreign Policy Files.)
  2. Hay and Godley discussed the future of Papua New Guinea.