ADB: Crime and graft restrain business

Business, Normal

The National, Wednesday February 26th, 2014

 DESPITE improvements in the business environment over the past decade, law and order and corruption have remained the most severe constraints to doing business in Papua New Guinea, new analysis from the Asian Development Bank (ADB) has revealed.  

Responses  from  130  firms  surveyed  by  the  PNG  Institute  of  National  Affairs  (INA),  confirmed that  crime  and   measures  needed to prevent  it  contributed heavily  to business costs in PNG. 

Law and order was found to be the most pressing issue for business which was its highest priority for reform. 

Most of the businesses surveyed reported they had been victims of crime and now  employ  private  security  guards  and  other  measures  to  protect  themselves.  

Confidence in law enforcement was low, the survey showed. 

The analysis was undertaken by ADB’s Pacific Private Sector Development Initiative (PSDI) and was captured in a new joint ADB/INA publication – The Challenges of Doing Business in Papua New Guinea – which was released yesterday. 

“The  survey  confirms  that  the  business  environment  has  improved  since  2002,  but  doing business in PNG remains extremely challenging,” Dr Andrea Iffland, egional director of ADB’s Pacific  liaison  and  coordination  office, said.

“Further efforts to improve the business environment will help create a foundation for sustained, inclusive, and diversified economic growth.” 

Business owners believed government services had improved since 2002 but suggested major reforms were needed to make services better. 

Deep reforms by the government resulted in the most noticeable improvement in the business environment, according to those surveyed. 

The Institute of National Affairs (INA) had found more than half of all businesses surveyed were concerned about the stability of rules and regulations.  

ADB believed closer consultation with the private sector on planned reforms would help allay these fears and improve the environment for business and investment.  

The  survey  also  found  that  poor  quality  transport  and  power  infrastructure  was  a  major  concern  for  business  owners.  

PSDI recommended reforming state-owned enterprises and more broadly including public-private partnerships (PPPs) to help to address these concerns.  

PSDI   is   a   regional   technical assistance facility co-financed by Australian Aid, the New Zealand Aid Programme and ADB.