Graft impedes SMEs growth

 CORRUPTION is the biggest impediment to the growth of the small-to-medium enterprise (SME) sector in Papua New Guinea, a survey has revealed.

Institute of National Affairs director Paul Barker said that there were many instances when SMEs had to deal with corrupt public officials and employees just to get through the red tape that was delaying the processing of their business papers.

He said corruption as a result of government red tape must be addressed once and for all.

In a study, the Business and Investment Environment of PNG highlighted other deterrents as law and order, poor state of transport and energy infrastructure, inflation, political and regulatory uncertainty, poor state of telecommunications infrastructure, unavailability of skilled labour, high interest rates, cost of inputs and the exchange rate.

The study said the government had given lower priority to better access to business information, problems dealing with small and dispersed markets, handling of goods and service tax (GST) and enhanced access to markets.

These impediments were concerns that troubled the SMEs more than the presence of larger or overseas-owned businesses, the study said.

Barker said the PNG-owned businesses and SMEs were sharing the same concerns.

He urged the government to focus on its core priorities and in doing them honestly and effectively.

Barker said: “It (SMEs) requires that corruption is addressed and processes made fair and transparent so that SMEs do not have to deal with demands by corrupt government employees or officers, whether they are Lands staff, visa staff (if seeking to hire an overseas manager).”

He said that small business worries over the possibilities of their land or forest resources being given away to favoured parties.

“It also requires that police and other judicial entities are on the ground providing law and order services without favouring certain sectors such as the few major extractive industries, which hire police service for their projects. 

“The SMEs, engaged in frontline businesses such as tourism and hospitality, are more at risk than the big businesses, which operate with their own security and therefore don’t need police assistance.”