Papua New Guinea is told to study Indonesia, mistakes included

Papua New Guinea has set itself a target: an economy worth 200 billion kina, about A$64 billion, and a million new jobs. Writing for the Lowy Institute's The Interpreter, Serena Sasingian and Hilman Palaon say the country should stop looking only south to Australia and start looking west. Indonesia can show PNG what is feasible, they write, and Australia can help make it durable. The World Bank already groups Australia, Indonesia, Malaysia and Peru together as PNG's "aspirational peers", the countries it could realistically catch up with.

What they want copied is a list of ordinary machinery, built for a country of scattered islands and hundreds of languages, which is PNG's problem too. School operational grants, known in Indonesia as BOS, that send money straight to each school with reporting rules attached. Cash payments to poor families on condition the children stay in class and get their health checks. Puskesmas, the community health centres that cover villages nowhere near a hospital. Village Funds, which hand a budget to the village itself to spend on small projects. Extension officers and cooperative credit for farmers. The Palapa Ring, the fibre-optic backbone built with private partners to reach places no company would have wired on its own.

The authors do not sell this as a success story. Indonesia has also made plenty of mistakes, they say, and that is exactly why the lessons are useful. They point to nickel downstreaming, the policy of forcing ore to be processed at home instead of shipped out raw, as the clearest case of both the gain and the risk, and warn PNG that pulling minerals out of the ground is not the same as building a broad economy. The two countries share an 820 kilometre border. Their defence ministers met in Port Moresby in December 2025 with Australia, and a PNG-Indonesia Joint Ministerial Commission sits in Jakarta in September.

Why it matters

For once Indonesia is the country being copied rather than the one being graded, and that buys quiet influence next door. Watch the September commission for something concrete: training deals, advisers, or work for Indonesian firms across the border. Notice too which programmes made the list. Village funds and cooperatives are the same tools that draw complaints at home about money that does not arrive, so if they cannot be made to work in Kalimantan, they will not travel well either.