Structural reforms still seen as driver for growth

STRUCTURAL reforms is as vital as ever for private sector growth in Papua New Guinea, says the International Monetary Fund.
The statement from the fund’s 2017 staff report on PNG highlighted several areas of concerns in the private sector, with foreign exchange noted as the most pressing one.
“The main impediment to private sector development is macroeconomic policies,” the report said.
“The main obstacle to business activity and investment are difficulties in obtaining foreign exchange. This is adversely affecting both current activity and the willingness of parent companies to continue investing in PNG.
“Macroeconomic policy uncertainty more broadly is also having an adverse impact on employment and investment.
“Regarding structural impediments to development, law and order issues, including contract enforcement, insolvency resolution, corruption and security are all identified as business obstacles.
“Inefficient government bureaucracy slows setting up businesses, obtaining building permits, and even paying taxes.
“Outside of the main cities, lack of basic infrastructure, including roads, electricity, and telecommunications, are major obstacles to development.”
IMF’s executive director commented on the report and in a statement encouraged reforms in the non-resource sectors.
“Directors encouraged the authorities to implement structural reforms to strengthen Papua New Guinea’s non-resource sectors,” the statement said.
“They noted that key elements of the development strategy needed to include measures to ensure that Papua New Guinea benefits more substantially from its natural wealth.
“Directors welcomed improvements in macroeconomic statistics, but encouraged further efforts to improve data completeness, timeliness and accuracy.”