When the colonial powers – Australia, the United Kingdom and France – exited the South Pacific (apart from New Caledonia) one of the standouts was in every case the foundations for robust parliamentary democracy they bequeathed to the newly independent nations.
With the notable exception of Fiji where democracy was sadly derailed by military coups, parliamentary democracy has largely survived, with imperfections.
However in the last year or so the fabric of robust parliamentary democracy in just about all our regional neighbours is at best under pressure.
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That is really troubling for regional stability – and for the genuine "Australian national interest". In these troubled times political stability and representative government are critical.
Robust parliamentary government is arguably the strongest bulwark against China's expansion and influence across our region.
Sadly, the true state of democracy in the South Pacific is largely ignored by the Australian media. Reporting is infrequent and when it does occur not always accurate.
In this contribution I want to update readers on the position in our region as frankly as I can in the hope it might alert our leaders to the alarming state of parliamentary democracy – and the potential for it to worsen even more.
I begin with Papua New Guinea. It has been my privilege to have advised a number of PNG leaders since my first engagement with our closest neighbour in 1978. For most of the time since, parliamentary democracy in PNG has been robust. It has been far from perfect but it has underpinned national unity.
Today parliamentary democracy in PNG is effectively "on hold". The national parliament has only met for TWO days this year, and is currently suspended until August. While the pandemic has been blamed, in reality the parliament has been in recess to avoid a motion of no confidence being moved against Prime Minister Marape before the national election in mid-2022.
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However, a recent by-election in the urban electorate of Moresby North West raises real concern about just how free and fair the 2022 elections will be. The by-election process was a debacle. There are numerous allegations of serious malpractice some of which have been substantiated.
Sadly, if an urban by-election cannot be conducted without serious malpractice what hope is there for the conduct of the national elections across PNG next year? Rolls have not been updated, boundaries have not been amended to reflect population changes, and the capacity of the Electoral Commission to manage a nation-wide election in which there will be twenty or more parties and several thousand candidates is very questionable.
With the Covid virus still spreading across Papua New Guinea, and low testing and vaccination rates, the influence the virus will have on robust election campaigning across 112 electorates is a serious issue.
But another issue is going to be the potential for serious lawlessness during a robust campaign. It has happened in previous elections. I sense it will be an even greater threat in 2022.
Parliamentary democracy in PNG has been a remarkable success story in terms of the peaceful transition of government after national elections and votes of no confidence in Prime Ministers.
But that is going to be really tested in the next twelve months because of the Covid impact, an economy in serious trouble and declining living standards for the majority of the eight million men, women and children of Papua New Guinea.
Our next closest neighbour is Vanuatu. Democracy in Vanuatu was not as easily implemented because the islands had a split colonial administration – British and French. However, after a difficult beginning, democracy has largely thrived in Vanuatu – until recently.
Parliamentary democracy has been shaken by the recent "removal" from parliament of the Prime Minister and his MPs. This is now being contested in the courts and whatever the outcome parliamentary democracy in Vanuatu will continue to struggle.
The state of parliamentary democracy in Fiji is always fragile given the lingering impact of two military coups. Today the elected government is under enormous pressure because of an explosion in Covid-19 cases, and a comparatively high death rate.
The Fiji economy is very dependent on tourism. With no tourists for 18 months, and potentially none for at least another 18 months, living standards are declining rapidly and the view is the government has not managed the pandemic or the economic consequences well.
But the parliamentary democracy Fiji acquired at independence remains under pressure because of the impact of military coups.
In The Solomon Islands, parliamentary democracy on the surface looks to be reasonably stable. But there are pressures, partly due to the SI government decision in 2019 to shift its diplomatic relations from Taiwan to the Peoples Republic of China. The largest province, Malaita, strongly opposed the shift, bringing to the surface tensions with the national government and opening the way for breakaway movements to flourish.
The other issue of concern to The Solomon Islands is the push for Independence on neighbouring Bougainville. The SI Government is concerned the achievement of independence on its border will encourage breakaway groups in the SI to try and follow suit.
The stability of The Solomon Islands needs to be watched carefully. It is a small nation but one that is strategically located.
Beyond our immediate region, the political position in Samoa remains very tense….and fragile. The formation of a new government following recent elections is before the courts, and parliamentary democracy is effectively "on hold".
And closer to Australia the political position in New Caledonia bears close watching. Recently a pro-independence Kanak President was elected for the first time. An independence referendum will now be held by the end of the year.
It is clear that the government of France is watching developments, as the colonial power, very closely. Australia needs to hope that it continues to do so as there is some evidence Chinese forces are at least "interested" in the future political status of New Caledonia.
The position in New Caledonia was most likely instrumental in the support Prime Minister Morrison received from President Macron during their recent discussions!
In summary, genuine and robust parliamentary democracy in our region has never been under greater pressure than it is today.
Australia must be watching closely and with growing concern We need a stable region, one with the capacity to manage the pandemic with our support, and a region that is vitally important to the Australian national strategic interest!
I sense that finally the Australian Government is more across the real position and the enormousness of the challenges ahead.
But "being across it" is not enough. As I have been advocating via my columns here it needs immediate and substantial action. I will return to what "action" might be required in the future.
Financial fraud in Indonesia is devastating the lives of ordinary citizens. For example, an honorary teacher in Semarang, the capital city of Central Java, has become entangled in an online loan network, Pinjol, to the tune of hundreds of millions of rupiahs. Pinjol is an illegal financial entity.
The teacher had initially borrowed only about Rp.3 million (around AUS$273.50) to buy milk for her children, but her debt ultimately swelled to Rp.206.3 million (around AUS$18,807.71 – a huge amount of money for people in Semarang given the minimum regional wage is only around Rp.2.8 million (around AUS$255.27) per month.
This is not an unusual event, and online loan networks are not the only type of financial fraud scheme currently running rife in Indonesia. Another type is illegal investment. For instance, pseudo cooperatives costing the public trillions of rupiahs have plagued Indonesia for the past decade.
It is sad to say that both illegal financing and pseudo investment are nothing new in Indonesia. According to the Investment Alert Task Force (SWI) , by the end of September 2020 there were around 126 illegal peer-to-peer lending (illegal fintech) entities, 32 investment entities and 50 pawn shops operating without a license from the Indonesian Financial Service Authority (OJK).
Currently, most financial service businesses (i.e., peer-to-peer lenders, pawnshops) are under OJK's rules, but not yet regulated at national or regional levels. Under its rules, OJK cannot impose criminal sanctions in the form of imprisonment or fines. The Law of the Republic of Indonesia No. 5 of 2019 on Formation of Legislation mandates that criminal sanctions are only allowed at the national or regional level.
While banks, micro finance institutions, and financial cooperatives are regulated by national laws, studies in 2018, as reported by the BBC, indicated that even long prison sentences do not actually deter people from re-committing crimes. In addition, especially for economic crimes, long prison sentences for the fraudsters do not re-pay the funds lost by the victims of financial fraud.
Currently, the Indonesian Government and related stakeholders are drafting provisions for an Omnibus Financial Sector Reform Law, and we need to consider adding ultimum remedium articles in the Draft. The proposed articles would mandate that every finance service business and investment activity must obtain a business license. It would be subject to a fine if it operated without a license and would be subject to pay compensation for loss of property. If this obligation is not fulfilled a stiff prison sentence would be imposed, and if a victim had died because of the fraud, the prison sentence would be longer. This change to regulations would give OJK the authority to investigate bogus investment products or illegal financial services and business activities. They could be detected at an early stage, so that necessary actions could be taken to stop them before these "time bombs" explode, or, if victims had already lost their money, there would still be a chance to get it back. These changes to legislation could protect ordinary Indonesians such as the teacher who needed to buy milk for her children and ended up with a terrible debt.