Govt praised for fixing forex issue

By CLARISSA MOI
Many local manufacturers were not able to meet demand last year due to lack of foreign exchange availability, says PNG Manufacturers’ Council chief executive officer Chey Scovell.
He said the foreign exchange situation improved at the end of last year.
Scovell said the sovereign bond, and directions from the Government for local businesses to address the foreign exchange shortage with interventions from the Bank of PNG was another example of it following through on its
word to support growth in our economy.
“Due to the nature of needing inputs to add value, and having and maintaining large factories to process them, manufacturers require access to foreign exchange to source that which can’t be supplied locally,” he said.
“Manufacturing and downstream processing is, by nature, very capital-intensive.
“Relatively speaking, there are no cheap start-ups as there are in the service sectors.
“Because of the high entry cost, and the high operational costs, manufacturers are more adversely affected by instability – changes in markets and changes in policies.
“2017 and 2018 were really years in which industry was again called on to trust the Government, but unlike most past years, the trust was rewarded and we saw a turnaround.
“2017 and 2018 were stable for manufacturers.
“The national Government, through two successive budgets, provided support to local industry by halting the tariff reductions, and in some cases returning some tariff lines to the low and intermediate levels.
“As a result of this, local manufacturers have been able to compete a little more fairly against the flood of imports which were being undervalued.
“The flood now is in new manufacturers.”