Political climate steadies

 By GYNNIE KERO

PAPUA New Guinea’s political climate has stabilised after being tagged as a major factor affecting the country’s business community in the past decade, Prime Minister Peter O’Neill said.

Speaking at the launch of a survey report at a breakfast yesterday, he stressed that doing business in PNG was not easy for investors.

The publication The Challenges of Doing Business in Papua New Guinea is an analytical summary of the 2012 business environment survey by Institute of National Affairs (INA) and the Asian Development Bank.

The report said when the normal risks of doing business were compounded by political risks, investors demand higher returns and shorter payback periods.

Law and order, infrastructure, government business relations, effect of government regulations and policies and political uncertainty reportedly affected 70% of businesses in 2012.

O’Neill said the government would work with the private sector to address its needs.

He reassured the private sector the government appreciated its efforts to grow the economy and recognised it as an important partner in nation-building. 

“Political stability is important for any country as it gives certainty to businesses. “The government took office in less than 18 months … the power of political stability has returned to office and I think we can do more in the next few years.

“The challenge is for us (government and private sector) to address issues together, build growth of economy and lift living standards of our people,” O’Neill said.

He said reforms were vital, hence the government had established the Sovereign Wealth Fund (SWF) to secure the promising revenue from PNG’s oil and gas sectors. 

“We have also reformed the budget process to have multi-budgeting projects, where quality projects are carried out over a longer period of time. 

“We are also embarking on tax reviews for fairness on our investors, making PNG conducive for investment”.

O’Neill said the government was committed to rehabilitating existing infrastructure, with assistance from recognised financial institutions that promoted economic and social progress in the region.