By GYNNIE KERO
IMPOSING widespread investment restraints on foreign business will not generate local business, warns economist Paul Barker.
Barker, the executive director of the Institute of National Affairs, was referring to three bills tabled in Parliament last week relating to business regulations.
In particular, the business community is concerned about the bills to amend (repeal) sections of the Investment Promotion Act to remove its oversight of any foreign investment, a franchise bill and the Foreign Investment Regulatory Authority (FIRA) bill.
The business community is also concerned that members were not consulted despite their continued commitment to work in cooperation with the Government.
Industry members wrote a letter to Prime Minister Peter O’Neill last Thursday to express their concern.
Yesterday, Commerce and Industry Minister Wera Mori told The National that the reaction from the business community was “expected”.
“We all have an obligation to ensure that micro to small medium enterprises also thrive,” he said.
“We (State) will not take away business from those already established (big businesses). But it (bill) will provide an avenue where SME and micro SME can be fostered. This is the reason why the bill was introduced.”
But Barker said the bill could frighten off not only new foreign investors but also current ones “just when they’re so needed to generate broader-based economic activity and create much-needed jobs”.
“Imposing widespread investment restraints on foreign business won’t generate local business,” he said.
“This might just replace a small number of foreign-owned, or majority-owned businesses by PNG-owned businesses. But it won’t increase the number of businesses and jobs out there, which is what PNG needs right now.
“As it stands, it really looks like a recipe for creating uncertainty, fuelling potential corruption and making some individuals wealthy from fire-sales or extortion. Particularly, it’s sending the message out that PNG is closed for business.”
O’Neill is expected to meet business leaders at a business breakfast in Port Moresby this week.
Barker said other “losers” would be the Government “in terms of undermining investment and therefore future revenue from corporate and employee tax if businesses and jobs are not generated”.
“The losers are also the consumers and other businesses that risk losing the services and some level of competition provided by existing and potential foreign investments.”
By GYNNIE KERO