PNG: Business leaders set to discuss life beyond mineral boomPublished by MAC on 2006-05-15
PNG: Business leaders set to discuss life beyond mineral boom
15th May 2006
Senior Government and business leaders from Papua New Guinea are meeting in northern Australia for the 22nd Australia-PNG Business Forum. Representatives from prominent resource, banking and agricultural companies are among the 250 participants in Cairns to discuss the business climate in PNG. The Forum comes as PNG enjoys a boom in the mineral sector, which has helped to boost the country's economic growth.
However, the Australian government and other independent bodies still identify corruption as a major obstacle to the country's prospects. The two-day Forum will cover law and order issues, along with the best way forward for emerging industries.
Presenter/Interviewer: Emily Bourke
Speakers: Frank Yourn, Australia PNG Business Council
YOURN: The major significance of it is that it draws together Australian business and Papua New Guinea and Australian officials to talk about the economic relationship between Australia and Papua New Guinea. This is a longstanding relationship, there's a huge amount of Australian investment in Papua New Guinea and, of course, Papua New Guinea values that. There're also exports from Papua New Guinea to Australia.
There are good opportunities in Papua New Guinea at the moment for Australian companies. The economy in Papua New Guinea has been travelling quite well over the last three to five years.
And so, what this conference does is bring people together with a range of expert speakers which gives them an opportunity to hear about those opportunities.
BOURKE: What would you hope that business leaders and policy-makers walk away with at the end of this summit?
YOURN: Well, there's a range of issues which we think people will bring out, some of them are related to fiscal issues, some of them are related to labour mobility issues between Australia and Papua New Guinea and some of them are to do with the investment climate in Papua New Guinea.
Law and order is always an issue and of course that has a big economic impact as well.
BOURKE: Looking at some the challenges and difficulties for Australian investors in Papua New Guinea, could you outline some of them?
YOURN: Well, I think one of the things about doing business in Papua New Guinea, as in any country, is that you've got to take time to get to understand the environment and you've got to learn to know the people that you're dealing with, And that's true if your doing business in Asia.
I think a lot of people doing business in Papua New Guinea and the Pacific can fall for a trap of thinking it's just like doing business in Australia, because what I call the "corporate streetscape" looks very similar: you've got Australian banks, you've got Australian insurance companies, you've got a whole range of very similar commercial enterprises operating.
But the important thing for Australians doing business in Papua New Guinea is to take some time to learn about business in Papua New Guinea, develop the right contacts and let people become comfortable and confident that you're a person that they would want to do business with.
BOURKE: Papua New Guinea is surely enjoying the minerals-commodities boom at the moment and yet this may start to decline as early as this year. What's your take on that?
YOURN: Well, I think Papua New Guinea has benefitted from the commodity prices over the last three to five years. But it's also very important not to underestimate the value of the strength of economic and fiscal government in Papua New Guinea. The Reserve Bank of Papua New Guinea has managed each part of the economic process very well.
The government, especially the core economic ministers, have had a good stable policy approach over the last three to five years. The commodity prices have been a big help, but it's important to understand that the policy framework in PNG has also worked well and the budget discipline has worked well over the last three years.
So, PNG is better placed now than it might have been previously to deal with the decline in commodity prices, but it still needs to do more to diversify its economy beyond resources and one of the things we'll be talking about here is some of those alternatives, like agriculture.
BOURKE: If the minerals, if the commodities decline begins, where else can PNG look for its revenue?
YOURN: I think Papua New Guinea has fantastic potential in agriculture. Papua New Guineans are great agriculturalists, they've been doing agriculture for millenniums and it's a matter of turning that skill into a commercially viable business and that can be done through developing small-scale agriculture and across the whole country that can be a very significant industry.
I think it's very difficult for Papua New Guinea to develop a manufacturing industry because the skills-base is relatively low and there are a lot of logistics difficulties with doing business in Papua New Guinea. But agriculture I think has got really possibilities for the future in Papua New Guinea.