Report points out govt effort to attract investments, its failures

THE latest report by the Oxford Business Group (OBG) on Papua New Guinea, looks in detail at the country’s efforts to attract investments that can support inclusive growth and boost economic diversification.
The Report: Papua New Guinea 2019 analysed the Government’s ambitions to generate more fiscal and social benefits from extractive projects over the medium to long term, and the likely challenges they would face in implementing changes to the legal framework governing resource projects without impacting PNG’s attractiveness as a destination for foreign direct investments (FDI).
In particular, it focuses on the likely economic multiplier effect of the US$13 billion (K29.8bil) Papua LNG project, which was cleared to proceed last month after a protracted review period.
The publication also highlighted the country’s mining industry, which accounted for almost one-third of gross domestic product (GDP), but remained constrained by regulatory uncertainty and, in some cases, community opposition.
In addition, it charted the public works projects in the pipeline, which, together with social housing initiatives, were expected to help PNG’s construction sector maintain momentum, following the implementation of several accelerated transport infrastructure initiatives for PNG’s year as chair of the Asia Pacific Economic Cooperation (Apec) forum last year.
PNG’s agriculture, forestry and fisheries industries were a key focus in OBG’s report, reflecting the government’s plans to bring them centre stage as it looked to diversify the economy away from a dependence on energy and mining.
The Report: Papua New Guinea 2019 considered the major role that agro-business projects and food processing could play in taking the sector forward, and how special economic zones could help to attract investments in this area.
OBG’s editor-in-chief Oliver Cornock said that while regulatory hurdles and a shortage of land for development continued to present challenges for the country, efforts to highlight the country’s potential to visitors from fellow Asia-Pacific states in 2018 were already delivering results.
“The Apec meetings have given PNG plenty of timely opportunities to forge new global partnerships with businesses from the region and beyond,” he said.
“These new deals are expected to unlock new growth areas and help the country diversify economic output which ranks high on the Government’s list of objectives.”
The group’s regional editor for Asia, Patrick Cooke, added that measures aimed at improving public governance together with other key reforms were expected to further bolster investor confidence.
“While PNG’s abundance of natural resources is already a draw for the international business community, moves to implement prudent fiscal and monetary policies to keep the economy stable will provide investors with additional reassurance,” he said.
“Other issues remain a concern, such as PNG’s high dependence on imports and fluctuating commodity prices.
“However, promising growth forecasts suggest the country has plenty to feel positive about in the coming year.”
The report marked the culmination of 12 months of field research by a team of analysts from Oxford Business Group.
The publication assesses trends and developments across the country, including those in macroeconomics, infrastructure, banking and others.
The report has been produced with the Investment Promotion Authority
Contributions have also been made by PwC and Leahy Lewin Lowing Sullivan Lawyers.