Papua New Guinea. In March, Prime Minister Julius Chan
resigned from his post. His case was preceded by his alleged
willingness to hire foreign mercenaries to strike a
rebellion on the island of Bougainville that threatened his
position and the entire economy of the kingdom. According to
has some of the world's richest gold and copper mines, and
disputes over its control have occurred since the late
1980s. Despite Parliament's support for Chan, an angry crowd
made him quit along with the Deputy Prime Minister and
Minister of Defense. Parliament appointed John Giheno as
prime minister for an expedition minister.
In June, Julius Chan returned as prime minister after an
investigative commission found no "binding evidence" for his
alleged hiring of mercenaries.
Following the June parliamentary elections, Bill Skate
became the new prime minister for a three-party coalition in
the 109-head parliament. Shortly thereafter, peace talks
began in various rounds with the warring parties at
Bougainville. Australia and New Zealand as mediators.
After a prolonged drought, the government announced in
September that a national accident had occurred with more
than 50 dead and 700,000 people affected. The drought,
described as the worst in 50 years, was attributed to the
effects of the El Niņo weather phenomenon.
In July 1997, the government and separatists from
Bougainville signed an agreement in New Zealand on
definitive ceasefire, demilitarization of the island and
transfer of UN peacekeeping forces. Australia pledged funds
to rebuild Bougainville.
In late 1997, the government resumed mining operations at
Bougainville. The drought in several parts of the country
led to extensive forest fires and also affected the
production of coffee.
In February 1998, 13 timber companies closed as an
indirect consequence of the stock exchange and financial
crisis that erupted in 1997 in other parts of Southeast
Asia. That led to the loss of 4,000 jobs.
In July 1999, Parliament called on Skate to resign as
prime minister. The reason was that he had established
diplomatic relations with Taiwan, which in return would give
Papua 2.5 billion. US $ in mixed credits.
The leader of the People's Democratic Movement and former
director of the National Bank, Mekele Morauta got 99 votes
in parliament against just 5 and was named new prime
minister. Mekele declared that the agreement with Taiwan was
immediately terminated. It had drastically worsened
relations with mainland China.
In compensation for the lost Taiwanese credits, Mekele
declared that negotiations with the IMF would be initiated.
The country's economic situation was very severe, with
inflation exceeding 20% annually and a large budget
From June 15 and two weeks on, general elections were
held in the country. Acc. observers were talking about the
most important election since independence because it was
the first time since independence in 1975 that a president
had run his entire term. Otherwise, the country's political
history has been marked by instability and violence. As the
country's infrastructure is poorly developed and there is a
lack of proper connections to rainforest areas and mountain
areas, the electoral process was spread over several weeks.
The election was also characterized by the fact that some
places took a very long time before the polling stations
were opened and stolen polling stations were also reported.