Somare's predecessor Morauta had gained renewed international aid and loan support for PNG, maintaining especially close ties to Australia, whose assistance and investment continue to be crucial for PNG's economic survival. Some regional analysts fear that PNG's economic collapse could lead to interior secession movements, indigenous terrorism, or the use of PNG as a terrorist base, which would be a security issue for Australia, perhaps leading to Australian military intervention. Australia was seen as backing Morauta in the 2002 election, and Australia's prime minister John Howard was considered unenthusiastic about Somare. One of Somare's first acts as prime minister was to host a visit by Howard, with a joint press conference in which a friendly relationship was emphasized. However, by November 2002, aid from Australia, the IMF, and World Bank, was being frozen in order to make sure that Somare's government followed through on severe budget cuts. Somare contrasted the freeze with funding of the previous administration: "The Australian government went out to support Sir Mekere's (Morauta's) last budget before the elections and without the concurrence of the World Bank and the IMF."
A particular source of friction between the Somare and Howard governments has been Australia's use of Manaus Island in PNG as a "Pacific Solution" detention center for foreigners seeking asylum in Australia. Somare has criticized this strategy, stating that Australia is making PNG a "dumping ground for refugees." As conflict between Indonesia and indigenous Papuan separatists continued on the western half of the island of New Guinean, Somare tried to maintain friendly relations with Indonesia. He aligned PNG with Indonesia and against Australia in opposing 2003's U.S.-led invasion of Iraq (in which Australia participated.)
PNG has had difficulty balancing competing relations with Taiwan and China. Prime Minister Bill Skate proposed a deal in 1999 which would have traded diplomatic recognition of Taiwan for a substantial loan, a gesture which brought on trade sanctions from China. Morauta was quick to repudiate Skate's concept in favor of continuing a strict policy of official relations only with China, not with Taiwan. Somare seemed to favor more formal trading relations with Taiwan and sent a trade delegation (which appeared to have included his son, Arthur Somare) to Taiwan in November 2002, prompting protests by China.
As far as international relations is concerned Somare has learnt from past mistakes and improved his diplomatic ties with strategic economic powers especially, in Asia region. Somare now recognise one China policy. As a result massive Chinese investment rapdily increase. For insatnce, Ramu Nickle and Cobalt Mine, International Conference center, etc. Somare is an anti-Australia although he maintains close ties with her. This is evidenced in him supporting Fiji and Solomon Islands as a 'big brother' in Melanesian context in the recent diplomatic warfare.
Somares's regime was able bring political stability and economic growth in the last 8 years. The economy is now growing at 6.5 percent comapared to past as a result of design and deployment of economic instruments through strategic maneuvering consolidated with successful execution of some of Mekere's reforms.
The political and economic stability has attracted more diversified foreign investors in mining and petrolieum sectors so as construction industries. High impact projects such as LNG are expected to boost the economy to grow by 8.5 percent in 2014. Unless there is political stability we will see the trippeling economic effect to modernise and transform the society.
Bougainville conflict is one fruit of this political setbacks where leaders of this good-for-nothing PNG had exploited us for their good and their big-brother, the Australians and British.
Our leaders must not take sides but have a common vision for the nation inorder for us to successfully move forward.