By Jenny Hayward-Jones, Director of the Lowy Institute's Melanesia Program, and Jonathan Pryke, Research Fellow.

While it's managing its response to serious economic challenges brought about by a budget deficit and drought, Papua New Guinea is preparing to host the Pacific Islands Forum leaders’ summit and celebrate 40 years of independence from Australia this month.

These events are meant to be a high point in an important year for Papua New Guinea, entrenching its status as regional leader among Pacific island states and a confident emerging economy. Relations with Australia, an important backer of Papua New Guinea’s regional leadership ambitions and economic growth, should also be at a high point.

Papua New Guinea’s Prime Minister Peter O’Neill is well disposed towards Australia. He visits frequently, and this year he has given speeches in Brisbane and Sydney. O'Neill was the only foreign leader to attend the funeral of former Prime Minister Malcolm Fraser in March. His children are educated in Australia and he has an impressive range of connections here. Many other Papua New Guinean members of parliament also have ties with Australia.

For Australia’s part, Foreign Minister Julie Bishop has close connections with Papua New Guinea. She puts a high priority on all aspects of Australia’s relations with Papua New Guinea, has a genuine love for the country and she has a family member working there, reinforcing her personal connection with Australia’s nearest neighbour. A number of Australian ministers, including Trade Minister Andrew Robb, Environment Minister Greg Hunt, Indigenous Affairs Minister Nigel Scullion, the Prime Minister's Parliamentary Secretary Christian Porter and two parliamentary delegations have visited Papua New Guinea this year alone, adding depth to political connections between the two countries. With the key decision-makers both committed to growing and improving it, the Canberra–Port Moresby relationship should be in good shape.

But Australia–Papua New Guinea relations seem to be troubled in 2015.

This year we’ve seen a diplomatic fracas over DFAT’s decision to establish a consular post in Bougainville; the early departure  of Australia’s High Commissioner Deborah Stokes; Prime Minister O’Neill’s declaration that all foreign advisers working for the Government (the vast majority of whom are Australian) should depart Papua New Guinea by the end of the year; harsh ad hominem attacks on former Treasury official Paul Flanagan and journalist John Garnaut for writing about the budget crisis; the controversy about Australian-employed security officers at the Manus Regional Processing Centre avoiding investigation for an alleged rape by departing for Australia; and a ban on Australian poultry imports and a range of vegetables (mostly sourced from Australian suppliers).

Taken together, these incidents could appear to be a rolling calamity for the bilateral relationship. Indeed, given DFAT Secretary Peter Varghese’s remark at the Lowy Institute last week that 'more than any other single relationship, the state of our relationship with Papua New Guinea is seen as a barometer of Australian foreign policy success', Australian diplomats have reason to worry.

We've had a number of conversations with young Papua New Guineans and with Australians interested in Papua New Guinea in recent months who are worried that bilateral relations are poor and are having a negative impact on the country. We tell them that it's worth remembering that things have been worse, both for Papua New Guinea and for the bilateral relationship. The macro-economic and governance crises of the 1990s created a number of frictions in relations with Australia. The infamous 2005 shoes incident involving Prime Minister Michael Somare at Brisbane airport had long-lasting repercussions for the bilateral relationship that were much more serious than any of the current discord in diplomatic, aid and trade relations.

There will likely always be bumps in the Australia–Papua New Guinea relationship. Even with the best of political stewardship on both sides, there will be unpredictable elements (and individuals) creating problems that are not easily solved and give rise to wider discontent. The Australian Government’s dependence on Papua New Guinea to run the Manus Regional Processing Centre as a key plank of its asylum seeker policy acts as a further constraint on foreign policy options.

But if Australian foreign policy success is to be measured by the state of our relationship with Papua New Guinea, it would seem a deeper and more strategic approach to managing it is required.

Photo courtesy of Julie Bishop MP.