Trade & Investment
From The Report: Papua New Guinea 2014
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Although lower international commodity prices are impacting the pipeline of projects in the traditionally dominant mining sector, Papua New Guinea’s emergence as a major liquefied natural gas (LNG) exporter in 2014 has attracted global attention, with a second landmark LNG project moving towards a final investment decision in 2016. Construction of the PNG LNG project has increased the country’s profile in recent years, with investment inflows of more than $5.7bn between 2009 and 2013. While Australia remains the largest investor in the country, with $17.86bn in 2013, Japan has been the fastest-growing source of investment in recent years. Changes to PNG’s trade patterns mirror the growing diversity in the sources of inward investment. The country is the largest exporter among Pacific Island states and, with China and the Association of South-East Asian Nations trying to assert their influence in the region, the time to focus on building a stable and integrated trade route within the South Pacific has never been more important. This chapter contains interviews with Julie Bishop, Australian Minister for Foreign Affairs; Andris Piebalgs, EU Commissioner for Development; Carlos Pascual, Former Special Envoy & Coordinator for International Affairs, US Bureau of Energy Resources; and Ivan Pomaleu, Managing Director, Investment Promotion Authority.

Articles from this Chapter

Overview

Regional demand for minerals and resources helps to steady the ship
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In Papua New Guinea’s small economy, trade and investment flows play a determining role in both growth and macro-economic stability. The economy is gradually rebalancing its traditional dependence on its southern neighbour Australia for both trade and investment, leveraging on Asia’s continued appetite for its natural resources. While lower international commodity prices are impacting the pipeline of projects in the traditionally dominant mining sector, PNG’s emergence as a major liquefied…

Interview

OBG talks to Julie Bishop, Australian Minister for Foreign Affairs
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Interview:Julie Bishop What, in your view, are the key priorities in Australia’s relationship with Papua New Guinea, especially in light of the growing trade and investment ties between the two countries? JULIE BISHOP: Australia’s relationship with PNG is one of this government’s highest foreign policy priorities. It is not defined as an aid donor to aid recipient relationship – it is broader and deeper than that, as a relationship that is built on an economic and strategic partnership…

Analysis

Increased cooperation offers mutual opportunities
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Australian Prime Minister Tony Abbott flew into Port Moresby in late March 2014 accompanied by a major delegation of business leaders, with trade and investment on their minds. And, after a busy agenda, he left three days later with an economic treaty and the basis of potentially the most productive relationship Australia and Papua New Guinea have enjoyed in years. Specifics While details of how the economic treaty will actually work to increase trade and investment will not be made public until…

Interview

OBG talks to Andris Piebalgs, EU Commissioner for Development
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Interview:Andris Piebalgs What are the benefits of economic partnership between the EU and Papua New Guinea? ANDRIS PIEBALGS: PNG is one of the few countries in the Asia-Pacific region that has ratified a free trade agreement with the EU. Ratified in 2009, the i-EPA gives PNG products duty-free and quota-free access to the EU, a market of more than 500m people, and preferential access to a variety of European products covering nearly all trade to PNG markets. Indeed, the EU has become PNG’s…

Interview

OBG talks to Carlos Pascual, Former Special Envoy & Coordinator for International Affairs, US Bureau of Energy Resources
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Interview:Carlos Pascual In light of recent changes to its energy production profile, to what extent will the US remain engaged in frontier areas like the South-west Pacific? CARLOS PASCUAL: Our engagements in the South-west Pacific and other parts of the world are based on a number of long-standing shared interests. US petroleum production has grown by nearly 1m barrels per day since 2012, and the country is now the world’s largest producer of natural gas. However, these energy supply…

Analysis

A raft of legislatives changes bring to light the need for transparency
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The Papua New Guinea liquefied natural gas (LNG) investment agreement with ExxonMobil has certainly raised PNG’s profile among global investors. However, while interest has broadened, investors remain cautious of potential policy inconsistencies. Indeed, several government moves over the past year have elicited concern – even if the authorities, backed by ratings agencies, view these as “one-offs”. A number of recent reforms – from amending the Takeover Code to drafting a list of restricted…

Interview

OBG talk to Ivan Pomaleu, Managing Director, Investment Promotion Authority
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Interview:Ivan Pomaleu What new incentives were introduced in the 2014 budget that may attract further investment? IVAN POMALEU: Competition policy and streamlining the regulatory environment are priorities for Papua New Guinea to stimulate domestic and foreign investment. For example, the National Working Group on Removing Impediments to Business and Investments can foster important conversations between the public and the private sector, and raise awareness about the importance of public-private…