Papua New Guinea To Become A Failed State?

According to a recent report by the Australian security think-tank The Kokoda Foundation, Papua New Guinea (PNG) faces the very real threat of becoming a "failed state" by the year 2020. Author of the report, and head of the Foundation Ross Babbage, had this to say about the prospects of PNG descending into an "every man for himself" mentality:

What would be required for that sort of outcome to emerge would be serious deterioration within the society of Papua New Guinea – a further deterioration of personal standards, you know, a lot more crime on the streets, external influence growing, the economy in serious problems, and more corruption and lack of professionalism in the Government and total system.

So that the local people would lose faith completely in the local system. And in fact you'd have a, almost a broken back state. You'd have a moving back to a sense of tribalism, right across society, every man for themselves almost. That would be pretty catastrophic.

We see some troubling elements in Papua New Guinea when we look at it right today, but if we're looking to 2020 timeframe, it's really a very important security interest for Australia that we don't see a substantial further deterioration.

Reference - ABC

This report coincides with efforts by the Australian and PNG Governments to resurrect the Enhanced Co-operation Program, which allows Australian police officers to patrol in PNG and which stalled in May after being ruled unconstitutional by the Supreme Court of PNG (Reference - The Australian).

The consequences of the Government of PNG losing control and a subsequent descent of the nation into a failed state would pose an enormous security risk for the entire South-East Asian region, in my opinion. PNG gained independence from Australia in 1975 (Reference - Wikipedia), and Australia stills sees itself as responsible in many ways for the well-being of PNG. If nothing else, our northern neighbour serves as an effective barrier between Australia and the rest of SE Asia. This concept was horrifically demonstrated during World War 2, when some of the fiercest hand-to-hand fighting of the War took place on PNG between Australian, American and Japanese forces. If PNG were to become a failed state, what impact might this have on Australia's regional security? Would our Government be forced to occupy the nation in an effort to restore order? There is a recent precedent for such an action, with Operation: Anode, in which Australian forces were deployed to the Solomon Islands to restore order and prevent that nation from becoming a failed state. Would a similar, though significantly larger, response be required in PNG?

If the answer is yes, which I think it must be, would this lead to a possible conflict with other SE Asian nations? Many of our neighbours have expressed concern at Australia's increasing willingness to throw its weight around in the SE Asian region. Malaysia, for example, threatened to block Australia's entry into the Association of South East Asian Nations (ASEAN) unless Australia agreed to first sign a non-aggression pact, called the Treaty of Amity and Cooperation (Reference - ABC). Similarly, SE Asian nations have expressed concern over Prime Minister John Howard's statement that Australia would make unauthorised, pre-emptive strikes on terrorist groups within SE Asian nations if he felt that Australia was under the threat of imminent attack and if the host nation was unable or unwilling to act to prevent such an attack (Reference - ASEAN News Network). Indonesia has also voiced its concern over the move. If Australia were to occupy PNG militarily, even for the right reasons, what might the reaction be from neighbouring SE Asian nations?

Finally, might Indonesia seize the opportunity to annex PNG for itself? Indonesia annexed West Papua, renaming it Irian Jaya, in 1969 after outbreaks of regional violence. If the eastern half of the island descended into chaos and anarchy, would Indonesia offer to occupy the nation with its own troops to restore order? Might this lead to a confrontation if Australia made a similar move, or acted to prevent Indonesia from doing so? Either step could potentially result in, at the very least, heightened tensions between the two countries and could potentially lead to armed conflict.

I would be interested in hearing other member's opinions on this matter. Will PNG become a failed state? Should we in Australia act to prevent this? How do we do so, without antagonising our neighbours? If PNG does collapse, do we then occupy the nation to restore order? What if this leads to a clash with Indonesia? Let me know what you think.