ADB: Crime and graft restrain business
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.