Jenny Hayward-Jones is Director of the Lowy Institute's Melanesia Program and Tess Newton Cain is a Nonresident Fellow at the Lowy Institute.

One of the key announcements at the conclusion of the recent Pacific Islands Forum meeting in Koror, Palau was the appointment of Dame Meg Taylor as the new Secretary-General of the Forum's Secretariat. Much has been made of the fact that she is the first woman to be appointed to that role. But of equal and possibly greater significance is that she is Papua New Guinean.

Though Taylor is not the first Forum Secretary-General from PNG (Noel Levi held the position between 1998 and 2004),  given PNG's population (in excess of 7 million), economy (which continues to grow), and its strategic importance, it has for a long time punched below its regional weight.

However, since the 2012 elections which saw Peter O'Neill returned as prime minister, that situation has changed markedly. While PNG has not given up its hopes of joining ASEAN to forge stronger links with its Asian neighbours, the O'Neill Government has become much more present in the Pacific islands region in terms of investment, development assistance and diplomacy.

PNG pension fund NASFUND is a prominent investor in the Pacific and has formed joint ventures with other pension funds and PNG businesses to invest in hotels in Fiji and Solomon Islands. PNG's Bank South Pacific has pursued an expansion strategy in the region, acquiring banks in Fiji, Solomon Islands and Niue to grow its operations. PNG's BeMobile has acquired a telecommunications licence in Solomon Islands.

PNG has also increased its role as a development partner in the region, supporting more activities and devoting more money.

This has prompted some to ask whether this is appropriate, given PNG's domestic development challenges. However, the PNG Government clearly sees the increased funding as a means of improving its standing and influence among its Pacific island neighbours, so we can expect more activity of this type going forward. In addition to numerous bilateral relationships (think scholarships for students from Solomon Islands and assistance with elections for Fiji), a recent development came at the latest meeting of Pacific Island Forum leaders. A regional package of US$122 million was announced to support the development objectives of smaller Pacific island countries.

In the diplomatic sphere, PNG's activities have been numerous, although it is not clear whether there is an overarching strategy at play rather than a more opportunistic approach.

Of particular significance is the role PNG has played in assisting Australia with detention of asylum seekers. O'Neill secured a realignment of Australian aid to bring it into line with his government's objectives (though this was more about rhetoric than practice, as Australia's aid program was largely designed to support PNG's objectives anyway). In addition, he has negotiated what can be described as a preferential diplomatic relationship with Australia, including a prime ministerial dialogue forum. This is a signal that PNG's relationship with Australia is singular and prominent in both Canberra and Port Moresby.

Elsewhere, PNG has taken a greater interest in the workings of the Melanesian Spearhead Group (MSG), having hosted the most recent Special Leaders' Meeting alongside the 5th Melanesian Festival of Arts and Culture. Within the MSG Secretariat, the recently appointed Deputy Director-General is a PNG citizen, Moelan Kilepak. While the MSG has certainly become more prominent in recent times, high-level and continuing participation by its largest member is key to future growth and influence.

At the 'whole of the Pacific' level, the recent review of the Pacific Plan was led by Mekere Morauta, a former PNG prime minister. More recently, Meg Taylor, a former PNG diplomat, was appointed as Secretary-General of the Pacific Islands Forum Secretariat after intense lobbying by the O'Neill Government.

Not only has this latest development added to the list of indicators of increasing assertion of regional leadership emanating from Port Moresby, it has also served to crystalise an attendant risk: that of diplomatic tension between PNG and Fiji.

Fiji's historical role as a regional leader is well recognised. However, PNG looks to be signaling that regardless of the outcome of Fiji's 17 September elections, Suva should not expect that there will be a return to 'business as usual'. Diplomatic tensions between Fiji and PNG are evidenced in disputes over the Fiji National Provident Fund backing out of an investment in PNG, Fiji's rejection of PNG's High Commissioner as dean of the diplomatic corps in Suva, the absence of PNG's Prime Minister and Foreign Minister from some MSG meetings and Fiji's own Pacific Islands Development Forum, the absence of Fiji's Prime Minister from the MSG leaders' meeting in Port Moresby, and disagreements over the Melanesian candidate for the Pacific Islands Forum Secretariat's Secretary-General role.

Papua New Guinea is perhaps more ready now than at any time in its past to step up to a regional leadership role.  Bolstered by the election of Meg Taylor, PNG will also host the Pacific Islands Forum leaders' meeting in 2015, giving the Government in Port Moresby a rare opportunity to showcase its ambitions.  But it will need to battle a resurgent Fiji, which will be using a newly legitimate status after 17 September to reclaim its supremacy among the island states.

Image by Flickr user AK Rockefeller.