PNG and Fiji formalise closer business ties


If foreign investors have generally been wary of investing in Fiji since the 2006 coup, Papua New Guinea has been the exception.

Nadi International Airport in Fiji

Most notably, in 2009, PNG’s Bank of South Pacific lived up to its name by acquiring Fiji’s Colonial Banking Group and has subsequently invested heavily to strengthen its local presence. A year earlier, regional IT services provider Daltron had bought out Fiji’s Computech.

The two nations are certainly ideal trading partners in theory. They share Melanesian heritage and are fairly close geographically. While PNG’s economy is built on exporting natural resources, Fiji complements rather than competes by relying more on intangible assets such as a world-class tourism sector and its highly-educated workforce.

Unsurprisingly, therefore, the traffic has not all been one way. One of PNG’s leading entrepreneurs is Fiji-born Mahesh Patel, who acts as a conduit for investment from Fiji into PNG. This included involving Fiji’s Damodar Group in the recent project to bring the much-publicised Paradise Cinema multiplex to Port Moresby’s Vision City mall.

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PNG’s Prime Minister Peter O’Neill is clearly keen to encourage these commercial ties. In October 2012, his government announced it was removing tariffs on almost all Fiji goods (as part of a Melanesian Spearhead Group trade agreement) and he made an official visit to Fiji during which he unveiled a major investment plan by PNG landowner group MRDC to expand its recently acquired Pearl Pacific Resort (at Pacific Harbour near Suva).

Another tourism-related project currently underway, in the very heart of Fiji’s capital, is set to become a symbol for the bilateral relationship. The Grand Pacific Hotel, for many years a Pacific icon but more recently lying derelict, will be restored to its former glory through a partnership between superannuation funds from Fiji (FNFP) and PNG (Nasfund), as well as PNG’s Lamana Group (which already runs hotels in both PNG and the Solomon Islands).

With 113 rooms and a 600-seat conference facility, the Grand Pacific will provide Suva with a much-needed luxury hotel. Work is expected to be completed in 2014—ironically both the hotel’s centenary year and the year Fiji is scheduled to return to democracy.