The Institute of National Affairs’ (INA) five-yearly survey of businesses in Papua New Guinea shows that once again law and order stands out as the private sector’s top concern, closely followed by corruption.

Port Moresby harbour. Credit: INA

The survey, The Business and Investment Environment in Papua New Guinea in 2012: Private Sector Perspective, canvassed 136 small, medium and large businesses across the country in late 2012, with INA researchers also consulting other stakeholders. The topics canvassed in the survey included government policies and regulations, business security, government–business relationship, effectiveness of government service provision and hindrances to business and investment.

According to the draft report from the survey, 81% of businesses indicated they were ‘fairly to very highly’ affected by law and order problems and 36% said their business and investment decisions were either ‘highly affected’ or ‘very highly affected’ by law and order issues.

‘Law and order is a pre-requisite and that came through in another survey that we did recently that related to community perspectives,’ according to the INA’s Paul Barker.

‘Communities want access to health, education and business opportunities, but they also realise that unless there is law and order and security, then all those other things are intangible.’

Police manpower

‘Equally, we know that the police have been operating with a manpower level that’s not that much changed from the time of Independence [in 1975], when the population was less than three million. Now it’s probably around the eight million mark,’ said Barker.

Businesses indicated that they spend an average K15,000 annually on security systems and 55% employ security guards.

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‘So, the investment in manpower, training and systems is obviously crucial, but also working with the local community and making sure that the community actually trust the police and support the police.’

Serious crime

‘Property theft without force’ is regarded as the most serious crime to business, followed by break-ins and misappropriation of funds or petty theft by employees.

The Institute of National Affairs’ Paul Barker

Kidnapping of employees and arson are seen as the least serious crimes in terms of frequency, despite the trauma for victims.

Businesses indicated that they spend an average K15,000 annually on security systems and 55% employ security guards.

Some improvement in infrastructure

‘Corruption was once again high on the list,’ said Barker, ‘as was the whole issue of infrastructure, just as it was in our 2007 survey—poor transport infrastructure, poor electricity infrastructure.

‘Telecommunications has improved from 2007, our survey shows, but there is still a lot of dissatisfaction with it, because of its high cost and the narrow bandwidth. Business acknowledges a slight improvement in port facilities, but across the board, the other infrastructure is still very poor.

Government issues

‘The survey also shows business acknowledging slight improvements in relation to sustainability of policies, and a feeling that government is listening and being a little bit more responsive to the private sector needs and interests.

Eighty-nine per cent of businesses were concerned about political instability.

‘There is, however, a significant apparent reduction in the portion showing considerable concern in relation to 2007, with the level of concern somewhat more muted in 2012,’ said Barker.

Other key results in the survey include:

• 76% of business activities were affected during periods of political instability;
• just 24% of businesses were confident that government policies would be implemented;
• 56% regard access to land as hindrance to investment;
• 51% of the businesses were unaware of public/private consultations related to policy development and law reform;
• 69% categorised the business/government relationship as generally unhelpful, with 39% viewing government as ‘highly unhelpful’ or ‘completely unhelpful’ to the private sector.

The INA expects to release the final version of the report shortly.

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