Clinton met Prime Minister Michael Somare in Port Moresby. The secretary is on a seven-country, 13-day tour of Asia that includes Vietnam, Cambodia, China and Malaysia, as well as refueling stops in Guam and Pago Pago.
"I'm here on behalf of President Obama and our administration to reaffirm our commitment to our partnership and friendship ... here in the Pacific," Clinton said. " ... We will soon be breaking ground on a new embassy that will symbolize the future."
Clinton said Papua New Guinea "has the opportunity not only to be more developed and provide more benefits for your people, but to become a strong regional leader and a model for reducing poverty and spurring development."
But in order to do that, she said, "there will have to be a commitment to good governance and accountability and transparency, and you're taking steps to plan to do just that. The planning for a sovereign wealth fund is a very important commitment."
Clinton cited the phrase "resource curse."
"Countries with abundant natural resources like oil and gas or gold or minerals, if they're not handled right, can actually end up making a country poorer instead of richer," Clinton said. "I will not name names, but there are countries in the world that started with the same hopes as Papua New Guinea with all of the excitement that I know is in this country because of the resources that were discovered, but they weren't handled right. So 20, 30, 40 years later, people have actually gotten poorer. And I know that will not happen here because the people and the government of this country will do it in the right way."
2014: The Year in Music [PHOTOS]