Gerry Brownlee, Minister of Foreign Affairs of New Zealand: Viewpoint

Gerry Brownlee, Minister of Foreign Affairs of New Zealand

Viewpoint: Gerry Brownlee

PNG has all the potential in the world; it has almost 10m people, an abundance of natural resources and sits at the geographic crossroad between the South Pacific and South-east Asia. In many ways both the opportunities and challenges that PNG faces are characteristic of the wider Asia-Pacific region.

It is therefore fitting that PNG will host APEC in 2018. With the leaders of the world’s largest economies visiting, this major international forum will provide PNG with the opportunity to highlight its trade and investment potential on a global stage as well as demonstrate regional leadership. New Zealand will work with PNG to ensure APEC is a success for our broader region.

Our relationship with PNG is built on strong trade and economic ties in addition to our historical ties. PNG is our second-largest goods export market in the Pacific, after Fiji, and our private sector is engaged in PNG across a range of industries including communications, construction, aviation, engineering, energy and education. There is much we can do to enhance our trading relationship, and it is important this is led by the private sector. We have established business councils in both countries that work to forge and enhance networks at the business-to-business level, and also more broadly.

There is also great potential to increase imports into New Zealand from PNG. Currently, we import around $12m worth of goods from PNG annually. The private sector is seeing opportunity across the breadth of PNG’s economy, from large contracts in construction to opportunities in niche primary products. In recent years, we have seen major upswings in the import of sawn timber, coconut oil and cocoa beans.

The trading relationship is vitally important but the flow of goods and capital between must also be underpinned by the movement of people and labour. When I visited PNG in February 2017, PNG’s foreign minister, Rimbink Pato, and I signed an air services agreement that will allow up to five flights a week each way between our countries. Increased air services will substantially add to the potential flow of tourists between our nations, and would better facilitate the export of goods and services. Under our recognised seasonal employer (RSE) scheme, PNG has provided between 60 and 100 RSE workers per year over the past few years, and we would like to see a considerable increase in this figure. Seeing RSE workers return to PNG with cash and new skills to invest in the PNG economy is a priority for both of our governments.

In recent times, there has been some publicity around the difficulties working in PNG, such as contractual disputes or potential for unrest surrounding the elections. PNG, like many nations, has been negatively affected by the recent drop in commodity prices. Such circumstances impact on local and foreign investment alike. However, we expect the rewards will be significant for those prepared to stay the distance.

Our advice to New Zealand businesses already engaged in PNG is straightforward: they should do what they can to maintain their current relationships. For businesses looking to enter the PNG market – as with any other market – it is important that they do all necessary due diligence work.

These matters tend to be cyclical but what remains consistent are the links New Zealand has with PNG and other Pacific nations. New Zealand’s optimism for the future of PNG as a regional economic powerhouse is demonstrated by our investment in economic infrastructure. We have committed NZ$50m to support renewable energy as improved energy supply will enable business to grow and invest with certainty.

PNG is a rapidly growing, resource-rich, diverse nation that straddles the Pacific and Asia. The strength of our relationship is evident in our broad-ranging engagement, from defence ties, to aid and development assistance, to our cooperation in the Pacific Islands Forum and APEC. New Zealand views PNG as a friend and partner in the region, and we will continue to do all we can to ensure our relationship reaches its potential.

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Gerry Brownlee

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The Report: Papua New Guinea 2017

Trade & Investment chapter from The Report: Papua New Guinea 2017