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Report | The Report: Papua New Guinea 2019

Efforts to improve public governance are gradually bolstering confidence in Papua New Guinea’s economy, despite national performance being heavily dependent on the extractive industries. Backed by macroeconomic development plans, Prime Minister James Marape’s administration is seeking to improve debt management, reduce foreign exchange imbalances, widen access to social services and provide greater employment opportunities.

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Chapter | Industry & Retail from The Report: Papua New Guinea 2019

Already major contributors to the nation’s revenue base, Papua New Guinea’s industry and manufacturing sectors hold significant potential for future investment and development. As such, the administration of Prime Minister James Marape remains devoted to a course that will encourage and protect businesses while working towards a reduction in the national import bill. This policy serves to both hedge against the boom-and-bust cycle of the resource economy, and avoid the ongoing issues the country has faced in obtaining foreign currency by replacing imported inputs with domestic produce. Meanwhile, with a mood of cautious optimism, PNG’s retail sector is recovering from a period of uncertainty caused by the earthquake in Hela Province in early 2018. That same year was marked by sluggish growth, before the APEC Leaders’ Summit in November 2018 triggered an upturn in the hospitality and general retail sectors, and encouraged businesses to invest with more confidence. This chapter also contains interviews with Stan Joyce, Managing Director, South Pacific Brewery; Mahesh Patel, Managing Director, CPL; and Nathaniel Ho, Executive Director, Rimbunan Hijau Group.

Chapter | Legal Framework from The Report: Papua New Guinea 2019

This chapter examines the legal system of Papua New Guinea, as distributed across the national, provincial and local levels, including those governing: investment promotion; regulation of companies; taxation and tax credits; partnerships and joint ventures; personal property; power of attorney; land rights; patents; employment conditions; foreign exchange control; and sector-specific legislation across the extractive industries. This chapter also contains a viewpoint from Eunice Parua, Partner, Leahy Lewin Lowing Sullivan Lawyers.

Chapter | Tax from The Report: Papua New Guinea 2019

This chapter examines the tax system of Papua New Guinea, focusing on those budget and tax changes guided by the Medium-Term Revenue Strategy 2018-22, including: new revenue measures under the 2019 National Budget; the Companies Act Requirement; the Investment Promotion Act; the rules on corporate taxation; withholding tax; non-resident insurers tax; overseas shippers tax; and tax credits, incentives and various types of tax duties. This chapter also contains a viewpoint from Jonathan Seeto, Territory Senior Partner, PwC.

Chapter | Tourism from The Report: Papua New Guinea 2019

With the new administration of Prime Minister James Marape committed to easing dependency on extractive industries, supporting diversification and stimulating job creation, the tourism sector offers significant potential. However, travelling in Papua New Guinea at present requires patience, perseverance and fortitude. Considerable scope remains for savvy local and international operators to exploit shallow product offerings in niche markets, notably adventure, cultural tours and ecotourism. In addition, many Chinese tourists have been made aware of PNG through coverage of the APEC summit. Convincing them to visit will require targeted measures. More broadly, ongoing improvements to transport infrastructure, code-share agreements between airlines and a coordinated effort to counter the perception that PNG is unsafe are essential. This chapter also contains an interview with Heidi Kunkel, Vice-President of Australasia Operations, Hilton.

Chapter | ICT from The Report: Papua New Guinea 2019

With the completion of two undersea fibre-optic cable projects due in the near term, Papua New Guinea’s ICT industry is on the cusp of significant change. The new infrastructure should bring down costs, improve internet speeds and reliability, and galvanise the ICT sector through the proliferation of digital and cloud-computing industries. Internet costs in PNG are among the highest in the region, with many businesses paying extra to have a combination of fixed-line, satellite and microwave wireless plans to ensure continuity of service in the event of disruption. As service provision improves in the coming years, funds previously allocated to securing a stable connection will be channelled towards other investments. In this light, the government has identified the digital economy as a primary area of focus. Solid foundations should allow small and medium-sized enterprises to tap global e-commerce channels, while enabling digital businesses to flourish across the broader economy. This chapter also contains an interview with Paul Komboi, Managing Director, DataCo.

Chapter | Agriculture & Fisheries from The Report: Papua New Guinea 2019

Prime Minister James Marape is intent on putting agriculture, forestry and fisheries at the forefront of the government’s development agenda, with an eye to boost downstream processing of farmed resources. As attempts to galvanise the sector spur the development of Papua New Guinea’s key crops and catches, reforms are under way to ensure the country maximises the potential of its rich soil and biodiversity. The government is also taking steps to increase PNG’s self-sufficiency in food production. Furthermore, PNG must promote agricultural development and encourage its population to participate in reaching this goal. Efforts should be channelled towards structural reforms aimed at improving the ability of state institutions to work with the private sector. Solving issues of landownership will improve investor confidence and encourage domestic and international players to support PNG’s potential for agricultural development. This chapter also contains an interview with Graham King, General Manager, Hargy Oil Palms; and a viewpoint from Goodwill Amos, Former Managing Director, Papua New Guinea Forest Authority.