International trade, investment ministry aims to remedy jigsaw puzzle of development

The new International Trade and Investment Ministry is keen to market PNG’s non-extractive sectors as a foreign direct investment since it’s inception, writes The National’s editorial director Frank Senge Kolma as an insight on the new Minister Richard Maru, and his intentions to replace aid with trade and grow a broad-based economy driven by micro and small-to-medium enterprises.

A BURST of enthusiasm accompanied the announcement by Prime Minister James Marape that there was a new International Trade and Investment Ministry.
The new Minister Richard Maru wasted no time, travelling to many parts of the world to sell PNG as a destination for foreign direct investment, mostly in the non-extractive sectors of agriculture, manufacturing, fisheries and marine resources, tourism and banking and financial services.
At home, he established the new International Trade and Investment Department, and introduced laws to establish the National Trade Office.
Maru wanted to replace aid with trade and grow a broad-based economy driven by micro, small-to-medium enterprises.
He wanted to grow these within the confines of clearly demarcated special economic zones (SEZs) which would be free from encumbrances and with the supporting infrastructure, utilities and attractive government incentives including areas which would be established as free trade zones.
The Government identified 17 sites special economic zones and Free Trade Zones (FTZ) – see box 1.
Although the concept of industrial parks and SEZs have been on and off Government books for the last 30 years it was not until this year that the concept suddenly emerged forcefully into the light under the will and machinations of Maru.
Maru, it must be said, has been behind the development and launching of the country’s first National Trade Policy (2016) and the SME Policy and Master Plan (2017), and would have been privy to other concepts such as the PNG Economic Corridors, Economic Hub Cities and Connect PNG as a Member of Cabinet in the past and current cabinets.
In recent weeks, Maru has brought together stakeholders to an SEZs summit, hosted an economic and trade forum and launched information guides for the export, trade and investment sectors.
The long awaited Gold Bullion Policy was launched to cap a week of feverish activity.
We are encouraged by the enthusiasm and the zeal that Maru brings to these projects but we are reminded that we have been similarly captivated by past concepts which have emerged from time to time from Government.
After the initial burst of enthusiasm, there has always tended to be very long periods of gestation until the good ideas have just faded out of public consciousness and have often been abandoned. This happened with Grand Chief Sir Michael Somare’s Eight-Point Plan in 1973 which emerged as the five National Goals and Directive Principles in 1975 as the preamble to the Constitution and in many National Public Expenditure Plans and in Medium Term Development Plans through the ’70s, ’80s and ’90s, in Vision 2050 and the Green Revolution both launched in 2008, the PNG Development Strategic Plan in 2011 and more recent plans which will be detailed further in this discussion.
If development were a jigsaw puzzle, the human factor of finding the right pieces and fitting them in their right places, is the missing element.
In all of these, we have not seen the connectivity and synergies between current and past projects and policies and programmes, between agencies and departments with similar and complementary roles and responsibilities.

Coordinating these are necessary for a holistic, whole of government approach.
Who does the connecting and the networking and coordination is the lynchpin that will hold the policies together and is most often the difference between success and failure.
To Connect PNG, we must begin by connecting laws and regulations to policies and use policy to plan and design programmes and coordinate all of these across the entire Government sector.
Only a holistic approach can ensure that limited resources are not spent on isolated or unrelated concepts which in the end appear as white elephants with no connectivity or synergies.
Under the PNG Development Strategic Plan (2010-2030), the Government introduced the concept of Economic Corridors for integrated development and broad based growth.
An economic corridor is a region in which the Government provides a well-planned zoning system, a comprehensive and effective network of transport infrastructure and utilities and access to quality education and health services.
Within these corridors, businesses are able to operate at low cost and under well designed incentives, thereby encouraging foreign and domestic private sector investments.
Upon closer examination, it is a bigger area than a special economic zone but the purposes of both are not dissimilar.
The government at the time identified 10 regions that it categorised as economic corridors (See box 2).
These corridors were to be complemented by central hubs in four major cities which were to specialise in certain types of economic activities.

Port Moresby was to be the commercial centre, Lae would continue its role as the industrial hub, Kokopo was to be developed into a tourism hotspot and Mt Hagen as the beating agricultural heart of the country.
The O’Neill cabinet gave its blessing for the hubs concept in 2014.
In each city essential infrastructure including roads, bridges, hospitals and ports were to be redeveloped.
Much of this occurred under the two terms of the O’Neill government between 2015 and 2019.
The economic corridors and central hubs were all to be connected by an extensive national road network and bridges.
In our time under the Marape government, this concept has come to be called Connect PNG.
It is uncertain today whether or not the Economic Corridors and the Central Hubs concepts exist alongside the SEZs and FTZs and how they relate to each other.
The government needs to clearly spell out how all of these fit into the Medium-term Development Plan (4) which is overdue for launch and how they dovetail into the PNG Development Strategic Plan or Vision 2050.
There needs to be coordination between agencies and departments as well in this.
Planning invested in the Department of Planning.
The Department of Commerce and Industry is the lead agent in all matters of economic policy and programs with a host of commercial statutory authorities such as the Small Medium Enterprises Corporation, Investment Promotions Authority incorporating the Company Office, and National Institute of Standards and Industrial Technology.
The Internal Revenue Commission, PNG Customs Service, the PNG Immigration and Citizenship Service Authority, the Labour and Industrial Relations Department must all be involved in all matters of trade and investment.
The new departments of International Trade and Investment, the National Trade Office, the ministries of Coffee and Oil Palm must each contribute to these policies and plans in a complementary way and not impede or duplicate roles and responsibilities.
The departments of Transport and Works and Implementation are central to the development of infrastructure.
Utilities such as power, communication and water suppliers are central to all business plans and projects.
Lands must acquire and make land available, a most difficult undertaking.
The cost of electricity at about 90t/kilowatt hour is the highest in the region and needs to be cut in half to make PNG attractive to businesses.
With the best will in the world, achieving this is often most difficult to achieve.
Just recently, this newspaper reported that Connect PNG projects identified by the Department of Works and Highways were delayed by the Authority to Pre-commit Committee (APC) and not the National Procurement Commission.
Until the story emerged, we did not even know there was such an entity as APC, but it has been in existence since 1995 when it was established under the Public Finance (Management Act).
Under the National Procurement Act, an APC certificate is compulsory before commencing any procurement.
It is this kind of intra-agency and inter-departmental networking and coordination that is critical to the survival and to the successful implementation of a government policy and project.
The deteriorating standards of transport infrastructure, the security threats and the declining availability of goods and services and high costs impact Papua New Guineans in both urban and rural settings.
Whereas in the past, a mother could carry vegetables or coffee produce to the nearest road expecting to be driven to the market, today, she is guaranteed no transport or very high costs of it, a high risk of accident or of being robbed and worse.
The sick cannot be assured access to clinic or hospital and children cannot access schools or attend them at a tremendous cost to them, including personal injury or death.
Government tries to minimise these difficulties faced by the people with its policies and programmes but the biggest danger to successful implementation is to be found in the simplest of reasons – in the lack of coordination, collaboration and cooperation.
Fix that and the rest of laws, regulations, policies, programs and implementation should fall into place in the jigsaw puzzle that is development.

Frank Senge Kolma is The National’s editorial director