The World Bank and the Papua New Guinea Business Council seem to agree on some key areas that need resources to help PNG’s economy thrive. David James compares both statements and analyses what they mean for the country and its future.

2nd Speakers Investment Summit. Credit: BAI

Where do the multilateral institutions and the business community think resources should be best allocated to develop Papua New Guinea’s economy?

Recent statements from the World Bank and the Papua New Guinea Business Council give some idea of which areas will be most targeted in the near future.

The World Bank has set out 10 intervention areas and delves into each one of them in its recently released Country Framework for Papua New Guinea. The 10 areas are:

Strengthening fiscal management, including rethinking the ‘existing fiscal policy anchor based on a debt-to-GDP ratio ceiling’, which, according to the World Bank, ‘does not adequately delink government spending from revenue volatility in the resource sector.’

Improving governance in the resource sector, whose benefits have not ‘reached many of PNG’s citizens’—by helping with government negotiations and strengthening regulation.

Story continues after advertisment...

Improving the management of road infrastructure.

Improving access to, and quality of, human development services to address health issues.

Enhancing access to safe drinking water.

Improving planning and operational capacity for electrification, this includes help with hydropower, and sustainable forms of energy, especially wind and solar.

Improving community access to basic infrastructure and services, particularly in vulnerable areas.

Improving Micro Small and Medium Enterprise (MSME) competitiveness and access to financial services.

Improving the competitiveness and productivity of agriculture and tourism, including through the PNG Agriculture Commercialization and Diversification (PACD) project.

Deepening the economic participation of women and youth. It’s been shown that organisations with gender diversity on their boards and in senior management consistently outperform those without.

According to Lyndel Melrose, Consulting Partner at Deloitte PNG, the PNG Business Council has an analogous set of priorities. Melrose said during a conference in Port Moresby that like the World Bank, the Council will have a focus on broadening PNG’s industry base to ‘balance out the focus on the resource sector so we are not as exposed to fluctuations in that area.’

Melrose also said the Council will have an ‘increased focus’ on agriculture, innovation and productivity, and employment. ‘Agriculture is seen as a key platform for investment and industry growth,’ she said. The Council will also have an emphasis on improving electrification.

Key differences

PNG Business Council eight priority areas. Credit: BAI

One area that the Council is looking at that is not listed as a priority of the World Bank, is the advent of better internet infrastructure.

‘At 20 terabytes per second, the Coral Sea Cable will deliver a thousand times the capacity of our current cable,’ said Melrose.

‘Combined with the submarine cable, which will bring cable to 15 provincial capitals, and the future connectivity of PNG to Hong Kong, this infrastructure is anticipated to reduce wholesale data prices by up to 80 per cent.’

Another area of difference is the Council’s intention to assist the creative industries.

Melrose said a Creative Industries Working Group has been formed ‘based on the recognition that small to medium enterprises (SMEs) are beginning to emerge in the private sector and are expected to grow to 500,000 by 2030.

‘How do we support this growth to help them reach their onshore and offshore potential?

‘Two key areas are protection of IP and the value chain support they need in getting product to market.’

This area seems to be on par with Prime Minister James Marape’s recent comments about his intentions to support SMEs in the country.

The Council’s eight priority areas are:

• Energy
• Internet
• Government and regulation
• Agriculture and innovation
• Sustainable development
• Productivity and employment
• Creative
• Fiscal