SME plan to affect growth: Lecturer

The National, Friday July 22nd, 2016

THE small-medium enterprise (SME) policy will reduce competition and hamper economic growth, an economics lecturer at the University of PNG says.
Win Nicholas, lecturer in economics at the School of Business and Public Policy  at UPNG,  highlighted the policy in a presentation that was released by the Development Policy Centre in Australia.
He said the policy would not improve welfare as well in PNG.
Nicholas said the policy was wrongly seeking business development through protectionist policies.
“Protectionist policies are also likely to cause the prices of domestic goods and services to increase and depress foreign investment,” he said. There would be potential loss of skilled employment, training and foreign exchange earnings as foreign business interests diminish.”
Nicholas said the SME policy had aimed at protecting locally owned businesses but  would limit physical, financial and human capital inflows.
Nicholas said the policy would also disadvantage current foreign businesses and provided a disincentive for future foreign investment in the country.
“Many PNG businesses may possess the required resources like land and ideas to do business, but they are limited with respect to funding and skills. This is where foreign participation can be crucial.”
He said the policy was “anti-foreigner, discriminatory and contradictory” to the Government’s interest