The National, Thursday 20th September, 2012
THE experiences of all state-owned enterprise (SOE) in Pacific countries participating in the Asian Development Bank study provided some very clear lessons for Papua New Guinea.
These countries include Fiji, Republic of Marshall Islands (RMI), Samoa, Solomon Islands and Tonga.
The lessons for PNG are:
n Sustained political commitment is vital to successful reform;
n Continued financing of poorly-performing SOEs does not restore their profitability, and often creates negative performance incentives;
n There is a clear link between weak governance arrangements and poor SOE performance;
n The most-successful SOEs are those that operate on strict commercial principles with consequences for poor performance; and
n The private sector has the capacity to invest in SOEs and to deliver community service obligations (CSOs), and should be given the opportunity to do so.
“Through their participation in this benchmarking study and the ensuing high-level dialogue, Fiji, PNG, the RMI, Samoa, Solomon Islands and Tonga have recognised that successful SOE reform requires SOEs to adopt governance and accountability structures that most closely mirror those arrangements found in listed private sector forums,” the report said.