PNG’s current economic upturn has involved a notable increase in foreign direct investment from Asia.

Malaysian investor R H Group’s Vision City shopping mall is a first for PNG.

Most prominently, the Ramu Nickel project represents China’s first major investment in PNG, but there has also been major investment in forestry, fisheries and retail. Malaysia for one has a range of substantial interests in sectors ranging from agribusiness and forestry to mining and IT services. The best-known local Malaysian firm is R H Group, which has interests in forestry, shipping, media, retail and property development. In 2010, R H opened PNG’s first large-scale shopping mall, the US$350 million Vision City in Port Moresby.

An influx of Asian investment and know-how, mostly from the Philippines, has also transformed PNG’s fisheries sector in the past decade, with new onshore processing facilities enabling PNG to derive greater value from its abundant fish stocks.

Like China, Japan’s primary interest in PNG is to source natural resources. Nippon Oil Exploration holds a 4.7% stake in the PNG LNG project and the two countries are currently negotiating a bilateral investment agreement.

Looking at a map, PNG’s most obvious Asian business partner is neighbouring Indonesia, with whom it shares an 820 km land border. In fact, commercial links between the two have been limited, but PNG’s recent growth spurt has finally attracted the interest of its larger neighbour.

This article first published in Business Advantage PNG 2011/2012