Trade & Investment
From The Report: Papua New Guinea 2017
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The international position of Papua New Guinea has improved in recent years as the country continues to benefit from a number of positive trends. A stabilisation in commodity prices, strong output from the country’s major projects and an end to the El Niño drought have brought major trade indicators back into line. A lack of US dollars and the weak kina have helped as well by boosting exports and lowering imports. PNG’s balance of trade remains at or near a record high, while the current account has been positive for a number of years following a long period in the red. Prospects are good for keeping the totals at the right levels and also seeing possible improvements across the board.

This chapter contains interviews with Clarence Hoot, Acting Managing Director, Investment Promotion Authority and Steven Ciobo, Minister for Trade, Tourism and Investment of Australia; and viewpoints from Gerry Brownlee, Minister of Foreign Affairs of New Zealand and Shamshad Akhtar, Executive Secretary, UN Economic and Social Commission for Asia and the Pacific.

Articles from this Chapter

Overview

Looking up: Stable commodity prices continue to boost export market, while reforms promise to accelerate investment
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The international position of Papua New Guinea has improved in recent years as the country continues to benefit from a number of positive trends. A stabilisation in commodity prices, strong output from the country’s major projects and an end to the El Niño drought have brought major trade indicators back into line. The lack of dollars and the weak kina have helped as well by boosting exports and lowering imports. PNG’s balance of trade remains at or near a record high, while the current…

Interview

Streamlining procedures: Clarence Hoot, Acting Managing Director, Investment Promotion Authority (IPA), on easing business regulations
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Interview: Clarence Hoot How can small and medium-sized enterprises (SMEs) play a greater role in developing key sectors within the wider PNG economy? CLARENCE HOOT: From a global perspective, evidence clearly shows the importance of SMEs in any economy. In PNG there is a lot of space for these enterprises to play a greater role in economic development, simultaneously improving the livelihood of the population. We are dealing with a number of small landowner groups in rural areas, and have identified…

Interview

Increasing cooperation: Steven Ciobo, Minister for Trade, Tourism and Investment of Australia, on enhancing future trade and development
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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…

Analysis

Policy shifts: New acts and reforms having a mixed impact on the country’s business climate
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While Papua New Guinea has a free and open economy, it is also a place where it can be exceedingly challenging to do business. General conditions are difficult, and some areas of administration and law can cause things to progress at a slow pace. The US State Department’s 2016 Investment Climate statement noted that the country “appears to have a liberal investment approach”, but then goes on to detail the many issues that make the country less open than it first seems. The situation…

Viewpoint

A promising partnership: Gerry Brownlee, Minister of Foreign Affairs of New Zealand, on the future of trade relations with Papua New Guinea
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Viewpoint: Gerry Brownlee PNG has all the potential in the world; it has almost 10m people, an abundance of natural resources and sits at the geographic crossroad between the South Pacific and South-east Asia. In many ways both the opportunities and challenges that PNG faces are characteristic of the wider Asia-Pacific region. It is therefore fitting that PNG will host APEC in 2018. With the leaders of the world’s largest economies visiting, this major international forum will provide PNG with…

Viewpoint

Clearer picture: Shamshad Akhtar, Executive Secretary, UN Economic and Social Commission for Asia and the Pacific (ESCAP), on the path to sustainable development
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Viewpoint: Shamshad Akhtar While Papua New Guinea continues to account for the lion’s share of output among the Small Island Developing States (SIDS) in the Pacific region with 60%, concerns remain that modest economic growth could have a knock-on effect on the country’s capacity to achieve sustainable development in the long term. The latest figures indicate that a slowdown in economic expansion in PNG— from 9.9% in 2015 to 2.5% in 2016 — was largely due to subdued global commodity prices…

Analysis

Trading relations: The country embraces free market principles while maintaining international trade deals and agreements
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Papua New Guinea’s market is remarkably open in terms of trade. Over the past two decades the country has gone from being a high-tariff jurisdiction pursuing 1970s-style goals of protection and import substitution, to one that embraces free market principles. The tenets of the Washington Consensus were accepted and implemented in a phased approach over several years. The country remains open and, so far, the rates hold. However, in recent years questions have been raised about the liberal…