Upfront investments vital in growing B’ville’s tax base

The National Business

THE investments that are necessary to grow the tax base for the Autonomous Bougainville Government (ABG) require large investments upfront, according to a report by the National Research Institute (NRI).
The report Increasing Revenues for the Bougainville Government, noted that the investments also require capacity to plan, budget, execute and monitor the public investments: Bougainville falls short on each of these requirements.
“And absent such large and lumpy investments early, Bougainville will not be able to acquire fiscal independence,” it said.
“ABG will need foreign funds and expatriate expertise to create the conditions for a transition to economic independence. Bougainville will need visionary leadership and considered support from the PNG Government. There is hope on both these fronts.
“Bougainville is rich in natural resources and can use that to attract foreign investments for technology transfer, capital injection, employment generation, market access and exports.
“Several water fishing nations are already operating in Bougainville waters.
“Attracting a foreign investor to engage in onshore tuna processing, as undertaken in Wewak on the mainland and across in the Solomon Islands, has the potential to generate much needed formal sector employment.
“Richer still are the known mineral deposits that have the potential to attract foreign investment.
“But that would be tricky given the history of Bougainville Copper Ltd, and the issues of the compensation for the environmental damage done and compensation for the decade-long conflict.
“Leadership and planning is necessary to navigate these obstacles to restarting the mine, that could boost revenues for the budget and provide returns to the people who ultimately own the resources.”
The report noted that to attract foreign investments, Bougainville should address:

  • IMPLEMENTING land administration systems and town planning;
  • IMPROVING security of contracts, including to land titles, mining leases, and to future income arising from private investment; and,
  • LOWERING sovereign risk with regard to investments in Bougainville vis-à-vis the rest of PNG.