Simple "economic potential" what if here.
What if a United New Guinea island had emerged at the end of decolonization?
What sort've level of economic development might we see , and could it potentially compete with its Oceania neighbors?
You are going to have two issues with this.
1)West and East Papuans don't get along per say,it's why for example Papua New Guinea supports Indonesia over West Papuan rebels.
2)Why would Indonesia give up West Papua? Papua New Guinea gained independence in 1975, which was also when Indonesia invaded East Timor, something that Australia supported at the time and I don't really see Indonesia giving up West Papua because of an Australia against their invasion of East Timor.
With that said,if this did somehow happen,I feel a unified Papua might be either be in civil war with both sides wanting to leave or would basically be barely any more successful then the current Papua New Guinea.
Thanks for your answer.
I think if we can find a way to politically mitigate ethnic tensions, maybe through confederation as @trurle pointed out, I think a stable united island it's still tacitly feasible.
At that point though, what sortve of development is plausible? I've been trying to look at statistics on arable land, which I know there isn't a ton of, but maybe the other local resources (fishing?) could help jump start an economy?