The Prime Minister Peter O’Neill gave an upbeat take on the Papua New Guinea economy when opening the APEC CEO Summit in Port Moresby last week. He pointed to the need for consistent trade rules, and said the successful sovereign bond raising has changed Papua New Guinea’s international profile.

Prime Minister Peter O’Neill opening the APEC CEO Summit. Source: ABAC

‘After 43 years as an independent nation, we have gone through some very challenging economic times, but we are changing that,’ he told delegates.

‘Because over the last 16 years we have seen continuous economic growth and we have seen stable political leadership.

‘PNG has now become part of the international financial architecture.’

‘Even during the global financial crisis and the downturn in commodity prices—and of course the devastating droughts and earthquakes that our country has suffered—we have so far maintained positive economic growth.’

Sovereign bond

O’Neill said PNG’s US$500 million sovereign bond, the country’s first such raising, was oversubscribed by over 600 per cent.

‘This is a very significant outcome for our country.

‘The biggest financial institutions around the world took a close look at our country and liked what they saw.

‘They wanted to be part of the future success of our continued economic growth.

‘PNG has now become part of the international financial architecture.

‘How do we reduce inequality and remove unfair practices in our region?’

‘This has created real confidence for our country and our people—and for the investors who invest in our country.

‘Today we are seeing confidence returning to many parts of the economy, particularly our business community.

‘We are seeing strong opportunities, particularly in tourism, agriculture, fisheries and the resource sector.’

Inclusiveness

Participants signing an MOU for the Papua LNG project. From left: Andrew Barry, MD of ExxonMobil, Neil Chapman, Senior VP of ExxonMobil, Patrick Pouyanné, CEO of Total, Peter Botten, MD of Oil Search, and Peter O’Neill, Prime Minister of PNG.

O’Neill pointed to the Memorandum of Understanding (MOU) with Total, ExxonMobil and Oil Search signed last week—a precursor to a final gas agreement for PNG’s second LNG project, Papua LNG—as another sign of PNG’s burgeoning economic strength.

He added, however, that sharing the wealth is critical.

‘How do we build more inclusive societies where everyone can benefit from the economic growth and development?

‘How do we reduce inequality and remove unfair practices in our region?

‘Our member economies, our governments and our businesses must continue to create opportunities.

‘That can be done also by embracing the digital revolution.’

Rules

O’Neill said having an ‘internationally agreed system to address grievances’ over trade is vital for PNG.

‘This includes actions by major economies that have a huge impact on the trade flows.

‘Small economies, countries like Papua New Guinea, place considerable reliance on international trade and international trade rules.

‘We suffer when rules are broken or ignored; we benefit when rules are followed by all countries, large and small.’

‘Governments need to create active policies to share the economic development prospects, and reduce income inequality in our society.’

O’Neill said governments need to engage with all parts of the society if the benefits of free trade are to be realised.

‘We must embrace the private sector and civil society of we are continue to drive the economic growth.

‘Trade is very critical but it is not enough.

‘Governments need to create active policies to share the economic development prospects, and reduce income inequality in our society.’

Digital

O’Neill said it is necessary to promote an environment that allows members of society to make sure they ‘participate fully in the digital revolution that is taking place’.

He said that required adequate investment in infrastructure, which is ‘needed to deliver efficient, reliable and more affordable internet access’.

Meanwhile, the annual report by the APEC Business Advisory Council (ABAC) to APEC leaders also advocated free trade.

‘ABAC calls on all economies to counter the trend towards protectionism and the deleterious impact that may have on the benefits of economic integration,’ the report said.

‘Trade and globalisation have lifted geographic constraints for business of all sizes, including creating unprecedented opportunities for micro, small and medium enterprises (MSMEs).’