Quality not quantity key to SMEs

Business

The country’s small-to-medium-enterprise (SME) policy should focus on growing small businesses into larger firms and not necessarily on setting up more SMEs, says economist Dr Paul Holden,
He said this during the launching of results of the 2017 Survey of Businesses in Papua New Guinea in Port Moresby this week. According to the survey, a business environment that encouraged investment and entrepreneurship required good quality infrastructure.
The survey found that Papua New Guinea’s exchange rate and foreign exchange allocation as one of the most-significant constraints that businesses faced. The International Monetary Fund pointed to the potential costs in terms of lost investment and growth of this imbalance.
Attempts to defend an overvalued exchange rate had rarely been successful anywhere in the world, the study said.
Corruption was also identified as a major concern. It thrived under circumstances where officials had discretion and where corrupt perpetrators were rarely brought to justice.
Furthermore, some members of the private sector promoted corrupt practices by making irregular payments to gain competitive advantage. Other challenges to doing business in the country included law and order, poor Government services and a lack of stability of Government policies, among others.
The survey indicated that there had been very little improvement in the investment climate since the last study was conducted five years ago.

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