Apec meeting

THERE has been ongoing publicity of Apec in the media.
It should about Papua New Guinea’s preparedness and successful hosting of lead-up meetings.
Skeptics in the views’ section should appreciate the fact that it is PNG’s turn as a member to fork out money and host an Apec summit like others have done once or twice before. The challenging fact is that PNG has not fully reformed its own economic regime to realise the theme of harnessing inclusive opportunities. PNG as a late comer needs to think outside the box.
One hurdle for PNG as chair is to moot a way forward.
This is in light of Apec members like the US, which is putting brakes and taking stock of free-trade pacts to ensure its domestic employment and manufacturing business interests prevail.
That aside, the first and foremost is that the forex market structured by the Bank of PNG is not providing confidence for new and existing investors in the non-extractive sector.
The mere existence of such speculative fear over the past three to four years, and continues to be the case, is causing more net outflows of foreign exchange, thus putting pressure on the kina.
Temporary intervention by World Bank or Bank South Pacific to inject hundreds of millions of US dollars into the system will not help in the medium to long term.
Serious questions should be asked as to whether it would be optional for companies to operate US currency bank accounts and should companies pay hefty fines for not repatriating export earnings in full within 60 days.
Should BPNG trade gold bullion as a buffer over US dollar shortfalls?
Secondly, the taxation regime is not conducive to grow the capital market or induce inflow of capital into non mining investment. All companies, whether SME or large, are subject to the same regime, thus it is a disincentive to reinvest.
Most SMEs will close and restart after three years of operation in vicious cycle due to 35 per cent corporate tax on their operating funds as taxable income.
The last point is that the country needs to grow the main entry ports (sea and air) to accommodate inflow and outflow of goods and services under a liberal visa-on-arrival regulatory regime.
For instance, Jackson Airport needs to be upgraded and expanded to accommodate more aircraft to bring in more people to spend foreign exchange here.
The opportunities already exist in our extractive resources sector and much has to be mapped for other depressed sectors if the theme of APEC is to be realised.

Observer
NCD