Steven Ciobo, Minister for Trade, Tourism and Investment of Australia: Interview

Steven Ciobo, Minister for Trade, Tourism and Investment of Australia

Interview: Steven Ciobo

What infrastructure initiatives are required in Papua New Guinea to foster economic development and enhance trade with Australia?

STEVEN CIOBO: PNG’s economic growth potential is impacted by geographic and service delivery challenges. Additional physical and social infrastructure is required to address these factors. However, the successful construction of the $19bn PNG LNG project demonstrates that investors can overcome obstacles such as PNG’s rugged and remote topography.

Australia is working with PNG to address infrastructure constraints and boost inclusive economic growth. In 2015 we jointly agreed to implement the PNG Private Sector Development Framework to identify investments to help reduce costs, reduce risks and increase economic productivity. The framework is focused on four pillars: the business-enabling environment; rural development, markets and trade for agricultural goods; innovation and partnerships with private sector; and financial inclusion. By 2017 we aim to allocate 50% of the bilateral aid budget to infrastructure projects, and 30 % of aid to specifically boost trade and private sector activities.

What specific areas have been earmarked for development as part of Australia’s aid plans in PNG?

CIOBO: Through our aid partnership arrangement, Australia and PNG share five priorities for development cooperation: health, education, law and justice, transport and governance. Our overarching goal is to improve living standards for all people in PNG.

In health, we work together to strengthen the primary health care system, improve maternal and child health, and reduce the burden of communicable diseases. In education, our shared focus is improving quality, technical and vocational education and training, and improvements to the education system and management. Law and justice partnership priorities include improving capacity in core agencies and the police, and addressing family and sexual violence. Our cooperation in transport focuses on improving land transport, aviation and maritime safety and security, and the performance of coordinating agencies. Our governance partnership is working to support future leadership, decentralisation and a new economic partnership between the two countries.

How can Australian investors contribute to the diversification of PNG’s economy?

CIOBO: Australia is the largest foreign investor in PNG. Our investment is worth A$18.4bn ($13.9bn), double our investment in Indonesia. So we are already a major contributor to the economic development of PNG. Our investment in services in PNG are significant, not just in the banking, finance, insurance and legal sectors, but also in mining, oil and gas, power, water, health, ICT and general consulting.

On the services front, there are significant unrealised opportunities for PNG to capitalise on its significant potential in the agriculture and tourism sectors. With the majority of PNG’s population living in rural areas, agriculture is fundamental to inclusive economic growth in PNG.

Coffee production in 2016 was strong, and there is obviously potential for the increased production of cocoa and other agricultural products. Because of its topography and logistical challenges, PNG requires improved infrastructure to overcome supply chain issues that are hindering the effective development of its agriculture sector. Australia’s extensive experience in developing agricultural supply chains could benefit PNG considerably.

The country is also home to a rich culture, pristine beaches and lush rainforests. The Australian government has recently funded a study into the economic benefits related to cruise ship tourism in PNG, which considers both the opportunities as well as the challenges for further development.

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The Report: Papua New Guinea 2017

Trade & Investment chapter from The Report: Papua New Guinea 2017

Cover of The Report: Papua New Guinea 2017

The Report

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