Call for more reforms to improve PNG private sector

 MORE reforms are needed to develop PNG’s private sector, an economist says.

Paul Holden from the Pacific Private Sector Development Initiative (PPSDI), a technical assistance programme funded by Australia, New Zealand and Asia, said the rapid growth of PNG’s economy, which resulted in higher incomes, was only going to a small part of the population while the private sector struggled to improve in the socio-economic structure.

Holden said policy reforms needed to be implemented to ensure that benefits from the rapid growth of the country’s economy was distributed widely to develop the sector. “Growth benefitted from macroeconomic stability and low volatility in output and, since 2009, was powered by a large amount of investment in the natural resources sector,” he said.

“Recent government policy statements acknowledge the need for reform, highlighting the importance of enabling the private sector to promote growth. But past policy moves have not always reflected this goal.”

Holden said an assessment of PNG’s private sector by PPSDI had identified reform priorities such as reducing the role of the state through privatising state-owned enterprises and utilising public private partnerships, and implementing the new collateral reform framework to improve access to finance, and enhancing the legal and institutional framework for competition to ensure that the economy is competitive.