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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