In an exclusive interview held at the 2019 Business Advantage Papua New Guinea Investment Conference, Papua New Guinea’s Minister for Commerce and Industry, Wera Mori, tells Business Advantage International’s Publishing Director Andrew Wilkins it’s time for PNG to extend its economic base.

Andrew Wilkins (AW): What kind of investments do you want to encourage from international businesses into PNG?

Wera Mori (WM): We would like to move away from the extractive industry and extend our economic base. This means we would like to generate more revenue for paying taxes.

At the moment, the number of people in Papua New Guinea paying tax is very small, probably less than 5 or ten per cent of the population. That’s is the reason why we have a small to medium enterprise (SME) policy.

There was also a need to review the policy and the Foreign Investment Regulatory Authority Bill, simply because some of the policies strung to it weren’t conducive for people to come and invest. You cannot put a threshold value in terms of kina or dollar and say ‘Look you have got to have this amount of money to come in and partner with me’ because you will defeat the purpose.

Wera Mori in conversation with Business Advantage International’s Andrew Wilkins. Credit: Business Advantage International

Then there’s the issue of grandfathering. Now, there were expatriates and foreign entities who have been in the country since Independence or before, and you can’t shut the door on them.

As for SMEs, we need to grow them. I’m pretty certain it’s a win-win situation for all parties, and I am purposely emphasising agriculture because 85 per cent of our people are rural-based, and the only form of industry they know is agriculture.  If we are able to organise them, I am pretty sure they will succeed; and that’s what we want. We want them to grow.

AW: PNG has been pursuing the development of special economic zones (SEZ) for a while. The PMIZ in Madang was perhaps an early example of what PNG wants to develop. What kind of facilities will SEZs provide for foreign investors?

WM: Frankly speaking, the investment has to be at least A$10 million dollars, that will give them ten years of concessions and it will be our responsibility to make sure that we have critical enablers such as power, energy and water available to service those economic zones.

‘I am purposely emphasising agriculture because 85 per cent of our people are rural based, and the only form of industry they know is agriculture.’

In the case of the Madang Pacific Marine Industrial Zone (PMIZ), we need about 30 megawatts of power, which we can’t get from PNG Power. We have to look for an alternative source; and it’s the same with water. The present water supplying the city of Madang comes out of Gum River, which doesn’t have the capacity … We’re looking at another source or catchment and putting in a business case to secure funding.

PNG’s Minister for Commerce and Industry, Wera Mori.

AW: What is your preferred model of engagement for international companies wanting to do business in PNG?

WM: The first one would be capital injection but the second, and most important, is skill levels. Skills levels are difficult to value but we need them to move forward and do better. As I have said, money can’t buy everything, can it?

AW: What’s the state of the play as far as making the Security Commission an independent stand-alone regulator for capital markets?

WM: We would like to see that happening because it’s all about a capital market. We would like to make sure that it has the integrity to be basically functioning as a stock exchange.

We would like to have the Port Moresby Stock Exchange running independent, without any influence from the Government or third parties. It must also have integrity and provide a level of confidence for people to invest.

AW: Would you expect that the lessons learned from Papua LNG might rolled onto other agreements, for example P’nyang, or would you expect those negotiations to be different?

WM: I would not be speaking for the Minister for Petroleum or people in the petroleum industry but, personally, I would like to see this as a separate agreement. I may be wrong. I may be corrected. We will see when we come to it.

This is an edited transcript of the interview conducted on 19 August at the 2019 Business Advantage Papua New Guinea Investment Conference. To view a video of the full interview, click here.