One-third of Papua New Guinea businesses expect sales boost from South Pacific Games


Retailers, tourism operators and the hospitality industry are the main business beneficiaries of the 2015 South Pacific Games being hosted in Port Moresby, according to ANZ Economist Dan Wilson.

ANZ's Daniel Wilson

ANZ’s Daniel Wilson

In its latest quarterly survey, ANZ researchers report that not all businesses are expecting the Games to increase their activity, with 31% expecting an increase, 20% expecting the same level and 14% expecting business to decline.

‘With the start of the Pacific Games, we wanted to get a sense of the business community’s expectations of the impact of the major sporting event,’ Singapore-based Economist Dan Wilson told Business Advantage PNG.

‘We surveyed about 230 corporates which have business operations in PNG,’ he says.

‘The majority are onshore, however some offshore head offices are also surveyed.

‘The survey covers importers, exporters and domestic players in manufacturing, commodities, wholesale and retail trade, hotels and restaurant, and other sectors.

‘In Papua New Guinea, confidence is high during the games and we would expect a pickup in retail sales and tourism flows.’

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‘The results were not overly surprising given only a certain subset of industries within PNG would likely benefit from increased visitors within the country.

‘For example, a coffee or palm oil exporter would likely be unaffected by the games.

‘A construction company which helped build the stadiums would likely see their business activity decline after the games given their contract is finished.

‘However, hospitality, retail and wholesale trade companies would likely see a boost to business over the period.

‘In Papua New Guinea, confidence is high during the games and we would expect a pickup in retail sales and tourism flows.

‘Typically, major sporting events have very little economic benefit for the host country, and most times are detrimental to society over the long term’ he says, citing  the world-class football pitches built for the 2014 World Cup in Brazil, ‘with some now used solely as bus depots’.

‘The biggest boost to economic growth may come for the country which secures the most gold medals.’

However, as we reported earlier this year, the Games have provided Port Moresby with the opportunity boost much-needed infrastructure development, totalling K760 million (US$362 million).

Night vision of the new Kumul Flyover. Credit: Skerah/Hawkins

Night vision of the new Kumul Flyover. Credit: Skerah/Hawkins

The bulk of this budget—about K700 million (US$335 million)—was spent on essential infrastructure projects, including the major redevelopment of Sir John Guise Stadium (itself built and donated by China for the 1991 Games), a new sports complex, new halls of residence at the University of Papua New Guinea campus (serving as athlete accommodation) and 20 other redevelopments.

Roads have also benefitted from the Games, with the K160 million, 600-metre Kumul Flyover opening in late May, relieving city congestion and providing a much-needed link between downtown Port Moresby and Jacksons Airport.

On a smaller scale, mobile phone sales have exceeded expectations, according to Digicel’s chief operations officer Paul Stafford. He told Business Advantage PNG sales of the Pixi 2 smartphone were almost three times greater than expected.

The final word goes to ANZ’s Dan Wilson, who says the biggest boost to economic growth may come for the country that secures the most gold medals.

At the time of publication and with five days remaining, PNG had a total of 125 medals, followed by New Caledonia with 116 and Fiji with 80.


  1. Stanis Hulahau says

    The fiscal spending of K760 million in the short-run may boost profitability position of the retail businesses, tourism operators and hospitality industries including other service industries such as PNG Power and Telecommunication companies. The question is whether this fiscal spending has created new jobs for Papua New Guineans who then will use their wages on consumption and thus encourage further production and investment? Or whether those companies who earned a short term boost in profits are willing to invest their profits in PNG, therefore increasing production and further job creation leading to consumption spending and economic growth? If the profits of the firms are kept as savings either in country or offshore and there are no new jobs created, then the effects of this fiscal spending may not have any positive consumption and investment effect on PNG’s economy in the medium to long term leading to economic growth. However, if there are increased investments by profitable firms, production and spending in the economy, we may be able to see positive economic outlook in the next six months. It may be too early to speculate.

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