Interview: Greyling Park
What role does the postal service play in Papua New Guinea, following widespread use of the internet and global communications methods?
GREYLING PARK: Over the past 10 to 15 years, the internet has really taken off internationally, as well as in PNG, and the massive use of smartphones, laptops and all sorts of technological applications has inevitably had a negative impact on the industry. However, having said that, postal services remain an integral and irreplaceable component of the communications industry in PNG and historically it has been an important force driving the country’s socio-economic progress.
Everybody talks about the fact that as much as 80% of the country’s population still resides in remote areas, but very few institutions have the means to do something about bringing relief to these people, and clearly the postal service is one of them. The postal service does not only deliver letters, but also medicine, phones and other vital items for rural dwellers. Connectivity, or rather the lack of it, continues to be a major stumbling block in PNG and it is not unheard of for people to paddle for days in a canoe or walk through thick forests in order to reach postal branches in areas we cannot reach them via road. Due to the wantok social support system, many people who work in major cities send money back home through the postal service and often that money gets used to pay for essential needs of wantok members, such as tuition fees for schools.
What sort of legislation should be introduced to maintain competition on a level playing field?
PARK: To remain competitive the regulatory environment has to adapt to a new dynamic. Our current pricing structure is based on a complex formula created about 20 years ago, when postal services had a monopoly in this business. Nowadays, competition has mounted, and well-known competitors – both small and large, including multinationals – are a major part of the industry and do not have to obey any price controls. In other words, our revenues have been regulated, but not our costs. Over the years demand for letters has decreased dramatically, while all the costs of power, real estate and workers’ salaries have escalated. That obviously is a recipe for failure. This is an issue that affects not only our industry, of course, but also other sectors over which the government continues to exercise a certain amount of control on economic activities, despite having corporatised some of the state’s assets.
To what extent will the privatisation of state-owned assets in PNG be able to engender a more sustainable business environment, in your opinion?
PARK: Post PNG was corporatised in 1997, but we still cannot decide independently on our pricing structure, so I would say much remains to be done in order to create fully independent companies within the country’s corporate landscape. The same will likely happen in the power sector or in aviation, if Air Niuguini is unable to decide on the most convenient routes prior to corporatisation, which is to take place by the end of 2015.
An initial public offering seems to me the most effective formula for raising capital and responding to shareholders instead of to state bodies, as the two groups often have different objectives and timeframes. Raising capital will allow institutions like Post PNG to invest in technology, such as mail-sorting equipment and a new fleet, while continuing to explore new areas where it can compete with financial service providers, such as the micro-banks and traditional banks that have recently moved into the market.
Improving the management of existing properties and opening agency sites will help maintain connections between the capital and parts of the country that are less appealing to multinational firms. I believe that local companies with knowledge of the domestic market have a lot to offer in PNG, considering the country’s physical and cultural peculiarities, and the work that has been accomplished over the years with churches, schools and supermarkets, which would be wasted if the administration overlooks their role in development.
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