PNG still tough place to do business: Study

DOING business in Papua New Guinea remains difficult, according to a recent survey of the business sectors in 183 global economies.
From its ranking of 102 out of the surveyed 183, PNG has slumped six places from its former slot at 96.
The survey showed that PNG is not easy place to do business compared to most of its East Asia-Pacific neighbours.
However, despite PNG’s poor rating in the survey, the International Finance Corp (IFC) and the World Bank say “there is room for a change”.
The World Bank’s senior strategy adviser for the Doing Business project said from Washington via a video link yesterday that change would result from being “consistent, comprehensive and committed to reform”.
Dahlia Khalifa said economies such as PNG that had  not performed well now could do better, provided implementation was done using long-term, viable strategies. 
The adviser pointed out that economies such as PNG can pick up the pace by strengthening business regulations to make them more efficient to help increase opportunities.
 “To do well, there needs to be focus on not just one area but a broader scope to improve ratings,” she said.
Peter Cusach, IFC country coordinator in PNG, said that “PNG had not done so well in reforming the standard of business environment which resulted in its current ranking …”
He spoke to the media shortly after the video link conference with World Bank officials in Washington.
However, he said work was already underway to set up more open dialogues between the business sector and the Government to improve PNG’s current business climate.
Mr Cusach said the only area that PNG had made an impact, out of 10 indicators relevant to the life cycle of small-to-medium-sized domestic businesses, was that of enforcing contracts.
This aspect was made possible due to the introduction of a specialised commercial track by the National Court in 2007, which has become fully operational to improve contract enforcement, he said.
In PNG, it was said that the enforcement of contracts cost around 110% of claims that are taken to court, Mr Cusach noted.
He said the country has proven to have outstanding indicators on enforcing contracts which measure the efficiency of the judicial system in resolving a commercial dispute.
The effects of the financial crisis in the past year which led to the global economic downturn had left firms around the world with a tight year, Mr Cusach noted.
However, despite the many challenges in 2008—09, more governments have implemented regulatory reforms aimed at making it easier to do business than any other year since 2004.
Meanwhile, Penelope Brook, acting vice-president financial and private sector development at the World Bank Group in a statement, said “business regulation can affect how well small-and-medium-size firms cope with the crisis and seize opportunities when recovery begins”.
“The quality of business regulation helps determine how easy it is for troubled firms to survive difficult times, how fast local entrepreneurs will start investing again and how quickly new business can get started.”
Doing business, however, does not measure all aspects of the business environment that matter to firms and investors.
For example, it does not measure security, macroeconomic stability, corruption, skill level, or the strength of financial systems.