The economic and financial stresses being experienced in the PNG economy are in part due to the narrowness of the industry base, according to a report by the Asian Development Bank. There is a compelling argument for industry diversification; Chey Scovell of the Manufacturers Council says the focus should be on creating stable employment.
Business Advantage International has announced the date for its next major PNG investment conference. The Business Advantage Papua New Guinea Investment Summit will be staged in Sydney in September 2017.
Climate change is the ‘single greatest threat to the livelihoods, security and wellbeing of the peoples of the Pacific’, according to the Pacific Islands Forum Secretariat (PIFS). But the region is showing leadership and there are opportunities for Papua New Guinea to gain access to climate finance.
The Papua New Guinea government has released its Mid-Year Economic and Fiscal Outlook Report. GDP growth is expected to be weak, tax revenue is lower than expected and public debt is rising above the legislated limit.
The Papua New Guinea authorities should allow the currency to fall to its market level to make foreign bond raisings less risky says economist Rohan Fox. He tells Business Advantage PNG that domestic banks are reaching the limits of their capacity to take on government debt, which is increasing the pressure to raise capital internationally.
There is a growing call for greater protection of Papua New Guinea industry to respond to allegedly unfair international competition. A number of manufacturers tell Business Advantage PNG that most countries have used protectionism to foster their domestic industries and it is time for PNG to do the same.
The Papua New Guinea government faces challenges in managing its cash flow, according to Yurendra Basnett, PNG Country Economist for the Asian Development Bank (ADB). The ADB’s Outlook 2016 paper on the Asian region says PNG’s debt servicing costs are likely to rise.
Papua New Guinea’s debt levels relative to the size of its economy could actually go down if the government increased spending, according to Satish Chand, Professor of Finance in the School of Business at the University of New South Wales. Mounting an argument that goes against conventional wisdom, he contends that as long as the government investment is well managed and receives a strong return, the long term benefits will outweigh the short term risks.
Papua New Guinea’s agriculture export income in 2015 was less than half 2011 levels, according to data from Bank Papua New Guinea’s latest Quarterly Economic Bulletin. Income from palm oil exports was at its lowest level since 2009, coffee sales were less than half the level of four years ago and income from rubber exports almost halved in a year.
During May, forums were run in Port Moresby, Lae, Mt Hagen and Kokopo to solicit public responses to the Papua New Guinea government’s new land bill. The intent of the new bill is to protect the rights of customary landowners, by extinguishing any State leases, mortgages or sub-leases held by non-citizens. But the consequences for PNG industry and the economy could be dire, some observers are saying.