Trade & Investment
From The Report: Papua New Guinea 2019
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Papua New Guinea’s international profile received a boost when it chaired the APEC forum in 2018, an event that culminated in the APEC Leaders’ Summit in Port Moresby in November of that year. During the meeting, leaders from some of the world’s largest economies congregated in the capital to discuss a host of regional issues. While the business climate is hampered by regulatory obstacles and a shortage of land for development, the high-profile geopolitical event gave the island nation a chance to showcase its maturing economy and areas of untapped potential to more than 20,000 visitors from 21 APEC member states throughout the course of the year. This chapter also contains interviews with Stefano Mocci, Country Manager for Papua New Guinea, World Bank; Stephanie Fahey, Chief Executive, Austrade; Moustapha Magumu, Principal Coordinator for the Pacific Region, European Commission; and Clarence Hoot, Managing Director, Investment Promotion Authority.

Articles from this Chapter

Overview

Over the horizon: Efforts are under way to rejuvenate trade activity by diversifying and forging new global partnerships
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Papua New Guinea’s international profile received a boost when it chaired the APEC forum in 2018, an event that culminated in the APEC Leaders’ Summit in Port Moresby in November of that year. During the meeting, leaders from some of the world’s largest economies congregated in the capital to discuss a host of regional issues. While the business climate is hampered by regulatory obstacles and a shortage of land for development, the high-profile geopolitical event gave the island nation a chance…

Interview

Top priorities: Stefano Mocci, Country Manager for Papua New Guinea, World Bank, on policy measures and infrastructure needs
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Interview:Stefano Mocci What policy measures would be most effective in boosting GDP growth in PNG? STEFANO MOCCI: Since 2003 GDP growth in PNG has averaged almost 5% per annum, driven primarily by resource sector development and government spending on infrastructure. PNG’s largest liquefied natural gas project, the $19bn PNG LNG project that launched in 2008, has driven the most recent episode of growth acceleration. With the signing of the new $13bn Papua LNG gas project, further growth…

Overview

Business Barometer: PNG CEO Survey:
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Port Moresby has benefitted from accelerated infrastructure development in recent years, spurred on by Papua New Guinea’s chairmanship of APEC in 2018. Although there was some domestic criticism related to spending large sums of public money on hosting world leaders in a moment of elevated national debt, 76% of CEOs expect the long-term economic impact of APEC 2018 to be positive or very positive, with only 1% expecting it to have a negative impact. It is hoped that the country’s year in the APEC spotlight will translate into mutually beneficial trade and investment relationships with the region’s major powers going forward. For more information…

Overview

CEOs have their say on the policy: priorities of the PNG government
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While the National Executive Council under new Prime Minister James Marape may have received a healthy sprinkling of fresh talent, the latest political leaders at the helm find themselves facing familiar problems as they attempt to steer Papua New Guinea into its next phase of economic development. According to the results of the latest OBG Business Barometer: PNG CEO Survey, a significant number of C-suite executives believe that solving the foreign currency shortage should be the number-one priority for the government. Some 31% of CEOs who participated in our face-to-face survey chose this option, which means the result is unchanged from a year…

Analysis

Signal of confidence: A host of new agreements following the APEC Leaders’ Summit promise to unlock new growth areas
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Despite being struck by a deadly earthquake in the first quarter of 2018, PNG managed to successfully stage the APEC Leaders’ Summit in November of that year, a meeting which resulted in the signing of a number of trade and investment agreements that are expected to have a significant economic impact. While investor appetite remains subdued as a result of high operating costs, regulatory obstacles and limited land availability, the hosting of APEC led to infrastructure upgrades such as new roads,…

Interview

Supporting role: Stephanie Fahey, Chief Executive, Austrade, on forming strategic relationships with Australia and the Pacific Island states
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Interview:Stephanie Fahey How would you characterise Australia’s relationship with Papua New Guinea from a trade perspective? STEPHANIE FAHEY: When visiting Port Moresby, it is easy to notice the presence of a large number of Australian companies, many of which have been operating in PNG for a long time. Australia’s trade relations with PNG are worth around A$6bn ($4.4bn) per year and Australian companies have some A$18bn ($13.3bn) invested in PNG. More than 4600 Australian companies…

Interview

All together now: Moustapha Magumu, Principal Coordinator for the Pacific Region, European Commission, on trade as a tool for development
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Interview: Moustapha Magumu How do you foresee the Papua New Guinea’s relationship with the EU evolving in the coming years? MOUSTAPHA MAGUMU: Trade relations between the EU and the African, Caribbean and Pacific (ACP) Group of States are based on the Cotonou Agreement, which will expire in 2020. It is set to be replaced by a more comprehensive agreement that is currently under negotiation. Trade cooperation will certainly remain one of the core areas of our relationship with the Pacific. PNG…

Analysis

Go with the flow: Foreign capital inflows rebound following efforts to improve the business environment and diversify economic output
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While economic diversification is expected to improve the business climate and incentivise investment, stakeholders are concerned that possible legislative changes may result in Papua New Guinea failing to reach its potential in attracting foreign capital. Investment Inflows Foreign direct investment (FDI) in PNG has increased in recent years. Total FDI stock amounted to $4.5bn in 2018, with an FDI flow (inward minus outward) of $335m compared to negative $180m in 2017 and negative…

Interview

Fruitful development: Clarence Hoot, Managing Director, Investment Promotion Authority (IPA), on increasing access to finance and investment
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Interview:Clarence Hoot What steps are needed to make Papua New Guinea an attractive destination for investment? CLARENCE HOOT: An important goal for PNG is to make it easier to do business in the country. To this end, there are a number of measures we need to take. The IPA has examined its business processes and developed an online system that can be thought of as a single-window approach to enhance them. Customs is developing a similar system for businesses, and a variety of other reforms…