By GYNNIE KERO
PRIME Minister Peter O’Neill says the key to creating jobs lies in promoting investments in the private sector, which is what the Government is doing.
“We can only create job by promoting the private sector. That’s what we are doing – encouraging more investment in the country.”
The National asked him this week what the Government was doing to address the concerns raised in regards to the lack of employment opportunities facing graduates coming out of universities and tertiary institutions.
Some graduates have been, since their graduation ceremonies, sitting at home doing nothing or working in fields other than the one they have qualifications in.
Last week, the Bank of Papua New Guinea said the level of employment in the formal private sector declined by 2.3 per cent last December.
In addition, the level of employment in the non-mineral sector fell by 4.8 per cent last year.
The total level of employment declined by 3.9 per cent, compared to a marginal increase of 0.3 per cent in 2016.
At the Australia-PNG Business forum early this month, O’Neill said the economy “which had been going through the most challenging times” had been resilient.
He expressed confidence that positive growth would be maintained.
Meanwhile, economist and Institute of National Affairs executive director Paul Barker told The National yesterday that the employment situation was “just following the trend set by tight economic conditions, with a squeeze on business turnover and profitability, and downturn in new investment – except in a few activities”.
He said there were some potential major new investment commitments, which would generate
some significant boost to employment.
“But the timing on these decisions would continue to be affected by market conditions and perspectives into the future, including the suitability and perceived consistency of government policies and fiscal and other conditions, including competitiveness with those in other countries for the international investors,” Barker said.
“Clearly other issues, such as law and order and the management of landowner requirements and expectations, particularly following the 2018 earthquakes in the Highlands, will influence some investment decisions and therefore employment prospects.”
He said the Government had also been facing the squeeze with reduced revenue, imposing restraint on expenditure, except in a few areas, such as Apec preparations and some major projects funded from loans or development assistance.
Barker also said the lack of foreign exchange had “imposed the biggest restraint on business and investment, followed by political and policy instability in recent times, concerns over corruption and uncertainty over exchange rates, the poor state of electricity and transport infrastructure, deficient and costly telecommunications and law and order concerns”.
“Clearly, the low prices of some commodity prices in recent years also restrained returns and revenue, but businesses need to be able to see beyond temporary market fluctuations.” Barker said following the construction phase of the PNG LNG project in 2013, there had been no major new investments to drive economic activity and employment growth, stimulate further business and household expenditure, apart from public expenditure.
“This has reminded the Government of the need for a more diversified economy, and has driven the push for the new Medium-Term Development Plan 2018-2022 to focus on inclusive economic growth, to embrace a broad range of industries, including agriculture and downstream processing, and generate broad-based employment and income earning,” he said.
By GYNNIE KERO