Gordon Peake says time will tell how well the government in Bougainville is able to capitalise upon the cocoa boom. Photo: World Bank/Alana Holmberg
The surge in cocoa prices around the world is having a dramatic impact in the autonomous Papua New Guinea region of Bougainville, and an aid project has played a key role.
The world price of cocoa is up dramatically after crop failures in much of West Africa boosted other producers.
For Bougainville, whose cocoa trees were old, tired and ignored by the end of the civil war, what was needed was the lift provided by aid donors through the Bougainville Partnership.
Someone involved in the Partnership was academic and advisor to Pacific Governments, Gordon Peake, and RNZ Pacific asked him about the programme.
(The transcript has been edited for brevity and clarity.)
Gordon Peake: Bougainville has been a major beneficiary of this world rise in cocoa prices. And you know that saying, success has many parents, large amount of credit for this must go to Bougainville farmers, but also to donors themselves, the World Bank and an Australian, New Zealand initiative called the Bougainville partnership. It took a calculated risk, way back in 2015/2016 to decide to invest in cocoa, and all the benefits of that investment are being reaped in Bougainville over the last 12 months.
Don Wiseman: What was the nature of the support?
GP: The nature of the support had various different dimensions to it, but the major banner initiative of it was a set of grants that were given to cocoa farmers in Bougainville.
Bougainville has had cocoa farmers for over a century, ever since the time of the Germans who first started planting cocoa seeds, but Australia and New Zealand and the World Bank invested in giving grants to cocoa farmers that enabled them to be able to buy seeds and good quality seeds that would result in good quality cocoa.
DW: Seeds that could avoid the impact of the cocoa beetle?
GP: That's right, there's something called the cocoa borer that had just wreaked havoc upon the Bougainville cocoa industry. This is like a tiny little grub that spreads like a virus and it really decimated the industry.
The donors came in and they invested in these more resistant strains of cocoa seed. That meant that there was less chance of it succumbing to this borer. I don't think it is 100 percent bulletproof in any way, but it really helped strengthen the quality of the Bougainville cocoa product. The results are being reaped in the tills of Buka.
DW: Bougainville is now the biggest producer of cocoa and PNG. Is that right?
GP: I believe so. It's certainly a large producer of it. But I don't think I could swear on a Bible and tell you that it's that it's the largest producer.
DW: Tell me about the impact of all this money coming in. What's it doing?
GP: You can see the impacts of this in any number of ways in Bougainville. At the superficial level, you can see that the shelves of shops in Buka, the administrative capital, are empty because people are buying consumer goods. There's money going into school fees, into a building boom in Bougainville. So, you can see there's evidence, signs of consumption, cars are being bought, etc. There's a kind of mini economic boom that's going on in Bougainville.
DW: And no doubt the government's reaping some GST tax.
GP: Well, hopefully. One of the challenges throughout Papua New Guinea is tax collection. Anyone that is paying tax in Bougainville will be kind of be boosting the government coffers there. It's quite a complex arrangement, because the money is collected by the Papua New Guinea Department of Revenue, and then it's remitted back to Bougainville as well.
I think we don't know how much the government coffers are being bolstered by this. One would hope by a significant degree because Bougainville needs all the economic support that it can get as it tries to move forward on its on its aspirations to be the next independent nation in the world.
DW: It needs a viable economy. And as far as the government's been concerned, it was going to be built around the reopening of the Panguna Mine. There's been talk for years about developing agriculture and horticulture and so on. Do you think this is the sort of thing that will turn a few more heads?
GP: I think we both remember as children, the story of Charlie and the Chocolate Factory. I don't think it's the equivalent of like the silver chocolate bar that you win that grants unlimited riches and unlimited wonders, but certainly it must help with it. As you say there's been discussions about opening the mine for as long as I've been involved in Bougainville. As long as you've been reporting on Bougainville. That is the most likely, that is the sort of the largest potential economic factor in Bougainville.
But this cocoa investment that Australia, New Zealand and the World Bank made is paying off presently, and must surely be bolstering Bougainville economic position, which was in a pretty rickety state for a long time. The government in Buka depends largely upon grants from the government in Papua New Guinea, so it depends on grants from the place where it's trying to extricate itself from. So, anything that gives an extra set of money, and their own coffers, is surely welcome.
What I will say is that countries all over the world have really struggled, or places all over the world have really struggled to kind of capitalise on these commodity booms as well. I think time will tell how well the government in Bougainville is able to capitalise upon this boom that really came out of came out of nowhere. It came out of the fact that there's a been a crop failure in large parts of West Africa, which has meant that there's less cocoa on the market, which has boosted the price of cocoa. I think time is going to tell as to whether they are able to capitalise and compound this windfall has come to them.
DW: So, a good news story. But will the Bougainville Partnership continue to make an effort here?
GP: I believe so. Aid is always going in phases. And my understanding from looking at the issue and reporting on the issue is that Australia and New Zealand, this Bougainville Partnership is continuing to invest in cocoa, continuing to invest in commodities in Bougainville, and I think that's a really good thing.
It's also a good thing because often it's easier to point to where there are failures in aid, or where there are missteps in aid, or where the development dollar doesn't appear to be eventuating, very much. I think this is something to be celebrated and something to be remarked upon, that this is an aid success story, a relatively unheralded aid success story as well.