High cost bugs SMEs

Business, Normal

The National, Tuesday July 2nd, 2013


THE HIGH cost of doing business in Papua New Guinea is the biggest impediment in growing the small-to-medium enterprises (SMEs) sector, Manufacturers Council of PNG chief executive officer Chey Scovell says. 

Scovell told participants at the SME summit in Madang yesterday several factors that contributed to that were labour, factory, transport, utility, taxes and law and order.

“Well maintained transport infrastructure is essential for the efficient flow of produce to markets and for the flow of consumer goods and services to village communities,” he said.

“The decline in the quality of PNG’s transport infrastructure has had a major adverse impact on service delivery and the capacity of Papua New Guineans to earn cash incomes. 

“Increased transport costs arising from deteriorating infrastructure are reflected in reduced smallholder returns for cash crops and increased prices for basic consumer goods such as rice and tinned fish.

“In terms of doing business, these costs are important because they determine where we conduct business, where we start our business and where people choose to come and work.”

Scovell said a “number of surveys revealed that law and order problem stands out as by far the greatest impediment to doing business in the country”. 

“This (law and order) is more than infrastructure, governance, regulatory and urban land issues.

“A significant percentage of business revenues are consumed by law and order problems. 

“Most businesses in PNG spend 5% to 30% of their total expenditure on security.”