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Politics

Papua New Guinea prime minister returned in chaotic election

Peter O'Neill's government faces economic challenges as deficit widens

Papua New Guinea Prime Minister Peter O'Neill (left) signs his oath of office witnessed by Governor General Bob Dadae in Port Moresby Wednesday. (Photo courtesy of PNG Prime Minister's Office)

AUCKLAND -- Papua New Guinea's Prime Minister Peter O'Neill on Wednesday survived one of the most bruising election campaigns in the nation's 42-year history, promising big infrastructure spending for the mineral-rich but economically troubled nation.

After a month-long election process which saw policemen and rival supporters killed, faulty electoral rolls, corruption allegations and ballot box rigging and kidnapping, O'Neill's People's National Congress returned to the all-male 111 seat assembly in Port Moresby. More than 3,340 candidates were in the running for those seats.

Amid wild scenes, which included two new members claiming a particular parliamentary seat and a power cut, O'Neill, 52, secured his second term in the premiership by 60 votes to 46. Results are still to be declared from five other electorates.

As individual members were elected, they headed to the capital where complex coalition negotiations took place as no party could claim a majority.

The outcome has regional significance as PNG is due to host next year's Asia-Pacific Economic Cooperation leaders' summit. In 2019, PNG is also running an independence referendum for its copper- and gold-rich Bougainville province.

"While our elections are robust, their successful outcome is a demonstration of the strength of our democracy," he told parliament after his victory.

"Yes, there have been challenges in this election, but this has also been the most peaceful elections in many parts of our country."

O'Neill, prime minister since 2011, acknowledged many electoral problems and said there would be a full review to fix them.

He currently only controls 25 seats and his own victory is under court challenge, as are many others which could impact the government's future.

He said the parties had agreed on policies to improve education, healthcare, infrastructure and law and order. "Our people want improved security, and the highest level of good governance and transparency ... We will build and maintain more roads and highways, more hospitals, airports and sea ports, and other public infrastructure."

O'Neill faces major economic challenges, including the construction of a $20 billion Exxon Mobil liquefied natural gas plant, finally completed last year, that had promised to bring huge spoils to the nation. Instead, sliding energy prices saw the 2016 budget deficit widen to 34% of gross domestic product, more than double what it was in 2012.

On Monday, PNG's Treasury released its mid-year economic and fiscal outlook, saying that the debt-to-GDP ratio for 2017 has blown out to 34.5% from 29%. The budget deficit for 2017 had increased to 2.8 billion kina ($880 million) from 1.9 billion kina a year ago.

Former PNG Treasury and Australian Treasury economist Paul Flanagan called the figures "extraordinary" and said that they offered a "damning insight" into O'Neill's mismanagement of the budget.

"O'Neill has a track record that gives him an 'E' for economic management. That is a sad legacy for PNG's future generations," Flanagan said in a blog post on Tuesday.

Following O'Neill's re-election, Jonathan Pryke, a research fellow at Australian think tank the Lowy Institute, said government's fiscal situation is dangerously untenable and that O'Neill had many questions to answer for the conduct of the elections.

But veteran Pacific election observer Jon Fraenkel, a political scientist at Wellington's Victoria University, said although it was clear there had been "major problems with the elections", it appeared most issues were local rather than part of a methodical scheme.

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