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Chapter | Agriculture & Fisheries from The Report: Papua New Guinea 2019

Prime Minister James Marape is intent on putting agriculture, forestry and fisheries at the forefront of the government’s development agenda, with an eye to boost downstream processing of farmed resources. As attempts to galvanise the sector spur the development of Papua New Guinea’s key crops and catches, reforms are under way to ensure the country maximises the potential of its rich soil and biodiversity. The government is also taking steps to increase PNG’s self-sufficiency in food production. Furthermore, PNG must promote agricultural development and encourage its population to participate in reaching this goal. Efforts should be channelled towards structural reforms aimed at improving the ability of state institutions to work with the private sector. Solving issues of landownership will improve investor confidence and encourage domestic and international players to support PNG’s potential for agricultural development. This chapter also contains an interview with Graham King, General Manager, Hargy Oil Palms; and a viewpoint from Goodwill Amos, Former Managing Director, Papua New Guinea Forest Authority.

Chapter | Construction & Real Estate from The Report: Papua New Guinea 2019

Papua New Guinea’s hosting of the 2018 APEC Leaders’ Summit proved to be something of a catalyst for the construction sector. Although the authorities had to mitigate the shortage of high-end hotels in the capital city by hiring cruise liners to accommodate international delegates attending the event, a host of construction projects were launched to meet the other infrastructure needs of the summit. Similarly, while the completion of PNG’s flagship liquefied natural gas project, PNG LNG, in 2014 ended the boom witnessed in the real estate sector, the momentum provided by increased construction activity between 2008 and 2014 continues to support the market. The commercial real estate sector in the capital Port Moresby has undertaken some notable projects in recent years. Meanwhile, a number of housing projects are under way, and a culture of homeownership has taken hold. This chapter also contains an interview with Ken Richardson, General Manager, Strickland Real Estate.

Chapter | Transport & Logistics from The Report: Papua New Guinea 2019

The quality of a destination’s transport infrastructure is key to attracting foreign investment. In Papua New Guinea this is an area with room for improvement. The poor condition of roads, ports and airports has raised the cost of doing business and rendered a number of sectors of the economy increasingly uncompetitive. Because of this, inland transport costs currently account for 10-15% of the on-board price at the port. Since potholed roads and poor connectivity can cause delays in fresh farm produce reaching the market on time, transport infrastructure also impacts the agriculture sector. Therefore, supermarkets in Port Moresby are stocked with imported fruits and vegetables, while many varieties produced in the Highlands go to waste. This chapter also contains an interview with Alan Milne, Managing Director, Air Niugini.

Chapter | Energy from The Report: Papua New Guinea 2019

Although Papua New Guinea relies mostly on fuel oil and diesel to generate electricity, it holds an abundance of gas, geothermal, hydro and solar energy potential. If exploited sustainably, PNG could not only meet its domestic energy requirements, but also supply reliable, cost-competitive power to its neighbours. The extractives industry is the highest consumer of energy, at 45% of the total, followed by transport (40%), and agriculture, residential and commercial activities (15%). Although crude oil production is set to decline, liquefied natural gas output is expected to double to 16m tonnes by 2024, provided the planned expansion and development projects go ahead. The temporary disruption in oil and gas production as a result of the earthquake that struck in February 2018 was offset by a rise in international oil prices over the year. The government expects oil prices to average $57-66 per barrel between 2019 and 2022, while LNG prices are to remain steady at $9 per 1000 cu feet. This chapter also contains interviews with Hiroshi Hosoi, CEO, JX Nippon Oil & Gas Exploration Corporation; Wapu Sonk, Managing Director, Kumul Petroleum; and Peter Botten, Managing Director, Oil Search.

Chapter | Mining from The Report: Papua New Guinea 2019

The mining industry is one of the main pillars of economic growth in Papua New Guinea. In 2017 the sector accounted for 29% of GDP and generated 86% of export revenue. Gold and copper account for the majority of mining export revenue, respectively comprising 76.8% and 13% of total sector exports in the first five months of 2019. The mining industry also remains an important source of job creation, employing more than 20,000 individuals and indirectly supporting another 45,800 people. Mining in PNG is closely tied to demand from China. Therefore, if China’s imports of key commodities fall in response to its trade war with the US, it will adversely impact mining in PNG. The political environment may also affect sector investment. Prime Minister Marape has signalled a more cautious approach and intends to acquire greater financial benefits for PNG from the extractive industries. This chapter also contains an interview with Jerry Garry, Managing Director, Mineral Resources Authority.

Chapter | Capital Markets from The Report: Papua New Guinea 2019

Papua New Guinea has made strides in recent years to expand its capital markets and promote liquidity. However, the performance of the country’s stock exchange – which changed its name to PNGX Markets in July 2019 – has been affected by a series of economic disruptions. The 7.5-magnitude earthquake that struck PNG in February 2018 contributed to a contraction in economic activity for most of the year, following steady growth in 2017. Extractive industries suffered extensive damage, but fears of a recession had dissipated by the end of 2018 as macroeconomic recovery led to an uptick in market activity for the last few months of the year. Political unrest after the resignation of long-serving Prime Minister Peter O’Neill in May 2019 generated concern over future investment. However, the new government, led by Prime Minister James Marape, is now in a position to strengthen the national economy through the capital markets. This chapter also contains an interview with Anthony Smaré, Chairman, Nambawan Super.