A Paradise for Tourists

A rise in ancient frontline tourism across a variety of international destinations has excelled attention on a key niche market with potential for Papua New Guinea, as the country begins preparations for a series of events commemorating the 75th anniversary of strategic battles fought during the Second World War.

The country’s untouched wilds and close proximity to key regional markets are also likely give the tourism industry an extra boost in the coming years, though its total contribution to the national economy will remain relatively modest, at around 2% of GDP.

PNG’s tourism industry is anticipated to expand by 6.7% this year, with annual growth averaging 5.3% through to 2025, according to the World Travel & Tourism Council, placing it in the top 10% of the 184 countries measured in terms of forecast growth.

Some 172,000 international visitors are anticipated to visit by year’s end, climbing to 238,000 per annum by 2025, the council noted. The governments of PNG and Australia are planning a series of commemorative events in 2017 and 2018 to mark the 75th anniversary of the battles that took place in PNG between the Allies and the Japanese during the Second World War.

The scheduled activities will focus on and around an area known as the Kokoda Track, a winding trail in the centre of the country that marks the spot where Allied troops, mainly Australians and Papuans, halted the Japanese offensive on Port Moresby and drove back invading forces in a series of battles in 1942-43.

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Performance of Papua New Guinea’s State Owned Enterprises (SOEs)

Minister for Public Enterprise and State Investment, Hon. Ben Micah, MP, has addressed the standing performance of Papua New Guinea’s State Owned Enterprises (SOEs) during the Mining and Petroleum Conference in Port Moresby. He also brought to light prospects the PNG government has in place to boost the performance of the SOEs.

Here are eight points summing up Micah's address:

1. SOE’s Contribution to 2015 GDP

Given the drop in commodity prices, the presentation of SOEs has boosted significantly, considering past outcomes. Under the watch of Minister Micah, cumulative asset value of all SOEs vested within the General Business Trust managed by the Independent Public Business Corporation (IPBC) has expanded meaningfully from K5 Billion in 2012 to over K20 Billion presently. Reports have shown the increased contribution of SOEs towards PNG’s Gross Domestic Product have risen from 12 per cent in 2012 to 42 per cent in 2013, to over 50 per cent in 2014; and is anticipated to have contributed over 60 per cent this year. This is an improvement that Micah has much-admired.

2. Reform for SOEs

In line with the government’s refurbishment of several operations taking place within the country, a reform of SOEs is another agenda raised by Micah. The pivotal point of this approach is to address the “failing state” of our SOEs and bring in needed reform and change to improve our SOEs to become the drivers of economic development and wealth creation for Papua New Guinea.

3. Establishment of New Companies

Micah announced Kumul Consolidated Holdings (formerly IPBC) as the new company that is to chart the way forward to reform our SOEs. A new and independent entity to safeguard business and resource taxation regimes are consistent, and that SOEs delivering utilities, will lift their performance, and lift it significantly.

4. SOE Policy Document

After 40 years of operating State Corporations, the PNG government has passed a new legislation policy on State Ownership and Participation in Business. This is the first of its kind and will be tabled in the next parliament sitting. The policy, according to Micah, defines the government’s intent in a comprehensible defensible framework to move forward with clarity, particularly in the mining and petroleum developments.

5. Reasons For State Participation In Business

Of course the idea of the government taking an interest in business seems unruly to most men and women. What guarantee is there that services will not be held supreme to the development of the nation? The State owns 13 SOEs and several investments. Prior to 2012, their combined total fixed asset in the economy excluding NPCP and DataCo, is around 15 per cent but they contribute only 1.9 per cent to the GDP. This indicates that SOEs hold fixed asset that are “under-utilised and landlocked”.

6. Considerations for SOE Improvement

With reference to the previous performance of the SOEs, the expectations for all state-owned companies are in essence; service delivery and profit generation. Other considerations highlighted by Micah are: Maximise shareholder values, Improve operational efficiencies, Improve customer focus, Improve corporate governance, Restructure ownership, Attract and retain qualified management, Improve community service obligations, State’s active participation in the extractive industries, Improve transparency in financial disclosures, Rehabilitate SOEs through recapitalization, Expected rate of return, Dividend policy, Environmental stewardship, Health and safety at workplace, Ethics and compliance, Combating corruption, Anti-Discrimination Policy and Research, Development and Competence building.

7. Kumul Management Control System (KMCS)

Confirming proficiency, efficiency and quality output from the government, set to take effect through the companies proposed, requires monitoring and evaluation systems in place. Micah brought to light an effective Management and Control System that is to be adopted by these newly formed companies; this is the Kumul Management and Control System.

8. The Way Forward

Partnership between state business and the private sector to enhance business and increase the revenue base of the country is the favourable way forward for PNG. It has been a long time coming, however, Prime Minister, Peter O’Neill, has instructed to make effective as early next year, mandatory for private sector companies to engage and partner with Landowner companies in all aspects of business. Landowners will be given the opportunity to form equal business partnerships with major projects around the country.

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Pacific Leaders Ready for COP21

Ten Pacific leaders are on the official batting order to address the world when the final rounds of discussions for a new agreement on climate change opens in Paris. President of Kiribati, Anote Tong leads the batting order when the United Nations Framework Convention on Climate Change Conference. He is speaker number 13 in a line-up of speakers that has American President Barack Obama as speaker number 3 and Russian leader Vladimir Putin as the 9th speaker. For the reason that a large number of leaders attending the United Nations Framework Convention on Climate Change’s COP21 conference this week, about 150 so far, their speeches will be delivered in two parallel sessions at the COP21 venue, the sprawling Le Bourget in an outer suburb of Paris.

President Tong is speaking in the morning session in Room Seine on the first day. At the same room but after lunch, four other Pacific leaders have registered to deliver their address, President Christopher Loeak of the Marshall Islands is speaker number 24, President Peter Christian is number 26, Prime Minister Enele Sosene Sopoaga number 48 and Josaia Voreqe Bainimarama, Prime Minister of Fiji as speaker number 50.

In Room Loire, Baron Waqa, President of Nauru is speaker number 15 out of the 16 leaders that are lined up to speak during the morning session. Four leaders will speak here after lunch, namely President Tommy E Remengesau of Palau as speaker number 18, Henry Puna, Prime Minister of the Cook Islands as number 47, Tuilaepa Lupesoliai Sailele Malielelegaoi as number 48 and Peter Paire O’Neill of Papua New Guinea as number 64.

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Discover the Enchanted Islands of Papua New Guinea

This is a beautiful place where a visitor seeing the spectacular scenery across the vast areas of this wild country can simply visualize that he is the only person on earth! From the volcanic mountains to the flooded delta regions, lustrous white sand beaches and untouched coastal atolls, the landscape of Papua New Guinea is as diverse as the friendly people who live there. The island lies just south of the equator, 99 miles north of Australia. It is part of a great arc of mountains that stretch from Asia through Indonesia and into the South Pacific. This island country is enclosed by Bismarck Sea in the north, Arafura Sea in the south and Solomon Sea in the east. This captivating country, the second largest island in the world, has a record 600 islands of varying sizes and more than 800 indigenous languages.

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The Launch of Two Working Papers

Bank of PNG has recently launched two working papers called Demand for Money in PNG and Estimating an Aggregate Import Demand Function for PNG in Port Moresby at the National Research Institute of PNG. The launching was attended by Bank of PNG Assistant Governor Dr. Gae Kauzi, PNG National Research Institute Director Dr. Charlies Yala and other reps from NRI, UPNG and Treasury department who set through a presentation from the BPNG working Papers authors explaining the fundamentals of those policies.

The first presentation was on working paper policies called Demand for money in PNG where author Tanu Irau a senior analyst with Bank of PNG who gave his speech on theories of money demand and money demand studies in PNG.

Whereas mentioned during his presentation on stable money demand function is necessary for monetary policy and a useful instrument for the properties of the money demand function and its linkage to the rest of the economy when formulating policy.

Second presentation was by two authors Boniface Aipi also a senior analyst with Bank of PNG and his colleague Gail Sabok who gave their presentation on working paper policies called Estimating an Aggregate Import Demand Function for PNG which gave a talk on Merchandise trade trends in PNG and import volumes in PNG.

Investigation into estimation of our country’s import demand function has gained much literature in international economics. For PNG by far the only study that was done on the estimation of the import demand function was in 1998. Establishing the determinants of import demand assists policy makers to design policies that enable macroeconomic stability and encourage growth.

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PNG Government to Assist Airlines Industry

The National Government will continue to build the country’s air transport sector because of the high dependence on air transportation by the people, says PM Peter O’Neill. Speaking at the welcoming reception of the brand new ATR- 72 aircraft for PNG Air in Port Moresby, Prime Minister O’Neill says the government is trying to subsidize the industry as much as possible within the confines of the funds they have available, but with the support of shareholders the government will continue to build the capacity of the air transport sector in the country.

This is because the government’s long term vision is to also make PNG the air transport hub in the Asia Pacific region because of our suitable location in the region.

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A New Tuna Processing Plant in PNG

Korean tuna fishing firm Dongwon Industries has signed a $35 million deal with Papua New Guinea to build a new factory on the island. The new tuna plant will be built in the Morobe province in early 2016, and should furnish roughly 2,000 direct jobs and 4,000 indirect jobs. This will be the sixth tuna processing project to be built in the city of Lae.

The project will begin in the first quarter of 2016, making Dongwon the first Korean company to invest in a shore based tuna project in Papua New Guinea. It is the policy of the PNG governments to support offloading of tuna in ports for processing into packaging for export. Starting next year, all fishing in the waters of PNG will be landed and processed in PNG.

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Australia should be an advocate for Pacific at Paris climate summit

Papua New Guinea’s Prime Minister Peter O’Neill has pressed Australia to be an advocate for the Pacific in pushing for a strong arrangement at this month’s worldwide climate change talks in Paris. The governments of more than 190 nations will meet at COP21 in the French capital, beginning on 30 November, to deliberate on a new global climate accord.

O’Neill and other Pacific leaders - whose countries are already undergoing the influences of climate change - are preparing to enthusiastically prosecute their concerns on global climate action in Paris.

But as the largest economy in the region, Australia must also lend its authority to the position of the Pacific islands, O’Neill argued.

“(Climate change) is a huge challenge for Pacific Island nations,” O’Neill said in Port Moresby on Monday. “We are hoping that Australia will take a leadership role in stating our position to the global community.”

The PNG leader asked that the world recognize the impact of climate change on the Pacific was not simply economic, but existential.

“I think Pacific islanders are not really looking for a financial reward,” he said. “We are looking to make sure the international community can assist in the resettlement exercise and rebuilding some of the communities.”

Climate change is likely to be an enormous driver of forced migration over the next century, as densely populated, low-lying areas become unlivable because of rising sea levels, inundation, and salinity. NASA satellite data suggests a sea level rise of 90 centimetres or more is unavoidable over the next 100 to 200 years.

More than 150 million people, most of them in Asia, live within one metre of the current sea level. And while rising seas will have “profound impacts” around the world, NASA earth science division director Michael Freilich said this year, those impacts will be acutely felt in the low-lying Pacific.

“It may entirely eliminate some Pacific island nations,” he said.

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PNG Government Pumping K15 Million to Upgrade Venues for World Events

Papua New Guinea Sports Minister Justin Tkatchenko says the PNG Government will pump K15 million into upgrading all facilities to be used during the 2016 FIFA Under-20 women’s World Cup in Port Moresby. Tkatchenko made the comments while welcoming the news of FIFA’s approval of Papua New Guinea’s hosting rights at an extraordinary meeting in Zurich. The meeting was attended by PNG Football Association President David Chung.

He said aside from some changes to the major venues in the city such as the Sir John Guise Stadium and the Bisini soccer field, the money would be spent on upgrading the fields and training facilities at schools in the National Capital District.

“We’re going to put money into upgrading ovals and fields at 10 to 15 schools in Port Moresby to be used as training venues for the visiting teams.

“That means things like improving playing surfaces, irrigating fields, building change rooms and basically modernizing existing facilities,” Tkatchenko said.

He said primary schools and secondary schools would be sought for the upgrading exercise. The Sir Hubert Murray and National Football stadiums once completed by their respective developers - Curtain Brothers (SHMS) and Leighton PNG (NFS) - will be brought in line with FIFA requirements for staging international matches.

The seating capacity at the Bisini venue would be upgraded with a significant increase from its initial plan. He made it clear that the Government, PNGFA and FIFA would work in tandem to run the tournament.

“FIFA will run the show in terms of the actual event because it is their tournament.

“They will handle media, teams, matches and technical matters while we (the Government) will help facilitate the tournament with ensuring the venues are up to FIFA standards, take care of team accommodation, security, crowd management and things like that.”

 The tournament, which will be staged in the capital Port Moresby next November, will fascinate 15 nations, along with hosts PNG and be played in four pools. Nine teams, including PNG, have been confirmed with the remaining seven places to be decided in qualifiers being staged at present. Europe has four teams in the tournament including defending champions Germany. The others are France, Spain and Sweden. Asia has three qualifiers in Japan, North Korea and South Korea.

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Making PNG Air Unique

“The introduction of the new ATR 72-600 aircraft not only gave the airline a huge boost in the quality of product it offers the people of PNG – it also offered the opportunity to make other changes to the airline, and prompted us to look closely at what we were doing now and what we needed to do in future,” said Muralee Siva, CEO of PNG Air.

“We recognize that to keep pace with the growing size and sophistication of the aviation market in PNG, we can’t just introduce a new aircraft and rely on that to do everything for us – we need to keep reinforcing the airline’s service culture through staff training and we also need to keep improving the product we offer the public,” said Mr. Siva.

“Once we commit to that sort of change, it made sense for us to also introduce a new brand. A new brand provides a fresh beginning for a company undergoing significant change. For us, it represents the company’s bold plan for the future of regional aviation in PNG – to be the first choice regional airline for the people of Papua New Guinea. It also symbolizes that we are not just doing the same old thing with the same old tools.”

Research in the market showed that the airline’s customers were looking for something more vibrant, bright and in keeping with the culture and people of PNG.

“The new name highlights our connection to PNG, and that we put PNG first. It also reflects that, through the majority shareholding of NasFund and MRDC, we are owned by a great many of the people of PNG,” said Mr. Siva.

“The livery we’ve chosen acknowledges tradition, while positioning us as bold, fresh and next generation PNG. It creates a dynamic new look, fitting for a positive, confident PNG airline. An airline’s name is one of its most important and recognizable assets. The new name and livery make PNG Air unique, and differentiate us from other airlines,” Mr. Siva added.

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The First Ever APEC Meeting in PNG

The Prime Minister, who is also the Minister Responsible for APEC, has applauded the Forest Minister for efficaciously hosting the first APEC meeting ever held in Papua New Guinea. In releasing the ‘Eda Statement’ in Port Moresby, the Third APEC Meeting of Ministers Responsible for Forestry settled on a range of measures that will reinforce the forestry sector in Papua New Guinea and around the Asia-Pacific.

"Ministers committed to work to increase forest cover in the region by at least 20 million hectares of all types of forests by 2020,” PM O’Neill said following the meeting.

“To reach this target will require ongoing cooperation between APEC member economies, as well as capacity building and efforts to prevent the sale of illegally harvested timber.

“Papua New Guinea and other APEC economies will work with the Asia-Pacific Network for Sustainable Forest Management and Rehabilitation to strengthen regional trade in sustainable forestry products.

“I congratulate Papua New Guinea’s Forest Minister Douglas Tomuriesa for his guidance of the Ministerial meeting and delivering positive outcomes for the region.”

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Planning For 2017 Elections

A memorandum of Agreement was signed between PNG Electoral Commission and the provincial administrators of the East and West Sepik and the Madang province to cooperate and partner for the planning and conducting of the 2017 general elections.

While signing the MOA, provincial administrator for Madang province, Mr Daniel Loi said, election is a collective responsibility and every provincial government must support the electoral commission to see a smooth flow of election come 2017.

“We can’t say it is the Electoral Commission’s responsibility to conduct the elections, the electoral commission is there to facilitate but it comes down to each provincial administration to provide man power and logistics support in our respective provinces” said Mr Loi.

In the meantime, electoral commissioner Sir Andrew Trawen says the MOA is a recommendation between the electoral commission and provincial administration in delegating task in terms of logistics and men power during the election.

“We have always been faced with issue of men power, logistics and security come every election and with the signing of this MOA, there is a common understanding between the Electoral Commission and the Provincial Administration on what each of these two parties will do during the election so we don’t have to bother ourselves with these issues” said Sir Trawen. 

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“I believe we can and must be confident about our future” says PM Peter O’Neill

The people of Papua New Guinea should be confident and optimistic about the nation's future, despite the current difficulties, the Prime Minister, Peter O’Neill said. Mr O'Neill said the 2016 budget is a responsible, fair and balanced response by the government to difficult times that would address short term problems while laying the foundations for strong economic and social growth in the future.

"Just last week the independent Bank of Papua New Guinea outlined changes to economic and business conditions that were largely beyond the influence or control of the national government," the Prime Minister said.

"In the June quarter the weighted average kina price for the nation's exports declined by 13.7 per cent when compared with the corresponding quarter of 2014. The price for mineral exports declined by 13.3 per cent, while agricultural exports were 16.8 per cent lower. We are a mining and agricultural export nation - dependent on world prices and world demand.

"When export prices decline by around 14 per cent in a quarter, the economic and social impact is massive.”

“But it is largely beyond our control - the more we export, the more international factors have an impact on our domestic economy, on government revenues, and on the income of our farmers and the community generally.”

PM O'Neill said the budget would make sound, balanced and fair adjustments to government spending in particular, and it would also impact on revenue projections.

The Prime Minister said inflation had declined, lending to the private sector had grown, and employment had risen even though there had been significant job losses resulting from the end of the construction phase of the nation's first LNG project.

"We are resource rich - and the prices of the minerals, oil and gas, and agricultural and forestry exports while generally low now will improve."

Mr O'Neill said Papua New Guinea is very well placed to take advantage first when commodity prices rise - and even better placed to meet the rising demand for energy and food from the nations of Asia with whom Papua New Guinea enjoys outstanding relations.

"I believe we can and must be confident about our future. The basics of our economy are strong - and we will benefit when commodity prices recover and the export environment grows," Mr O'Neill said.

"The national budget is aimed fairly and squarely at addressing current challenges - and laying the foundations for a stronger future in which the whole nation will enjoy the benefits," the Prime Minister said.

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A Life Changing Experience with Tree kangaroo

A conservation program intended to help save an endangered tree kangaroo in Papua New Guinea has completed - benefiting the lives of hundreds of local people. The Tenkile Conservation Alliance was established to save the endangered species in a remote part of Sepik province many years ago. Their numbers were down to only 100. Jean Thomas and her husband went to the area to run the program, and she says it turned out to be a life changing experience for her family and for local villagers.

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Congratulations to Niugini Nickel

Niugini Nickel Ltd (100% subsidiary of Resource Mining Corporation Ltd) has recently received guidance from the Registrar of the Mineral Resources Authority of Papua New Guinea that the Mining Minister has granted an exploration licence for the new tenement EL 2337 for a 2 year term ending November 1, 2017. RMI welcomes the news of the grant of this exploration licence which provides faith of tenure for the immediate future and provides a level of assurance for the continuation of their development of proposed work program

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