PNG Business News - October 04, 2021
GDP Shrinks By 3.9 Percent
According to the World Bank, Papua New Guinea's GDP shrank by 3.9 per cent last year as a result of Coronavirus (Covid-19)-related limitations and lower demand. The fiscal deficit increased to 8.9% of GDP, according to the bank's recent East Asia and Pacific Economic Update report, with income underperformance rather than a dramatic increase in spending being the major cause. “Consequently, the debt-to-GDP ratio surged to an estimated 49.2 per cent. To address transitory budgetary imbalances created by the Covid-19 epidemic, the revised Fiscal Responsibility Act raised the public debt cap from 45 to 60% of GDP for a five-year period, with the goal of returning to below 40% of GDP within ten years. Falling gold and LNG output, as well as the reinstatement of Covid-19 limitations, have slowed economic recovery this year. The Lihir, Simberi, and Hidden Valley mines all produced less gold in the first half of this year, while the Porgera mine remained closed. Due to planned maintenance at the PNG LNG project, gas output was reduced. Meanwhile, fresh waves of Covid-19 infections (95 per cent of the 18,000 total cases have been reported since February), delayed vaccine roll-out (only 0.4 per cent of the population is completely vaccinated), and related restrictions have hampered travel, reducing non-resource economic activities. In mid-2021, inflation had slowed to 3.3% year on year. The Bank of Papua New Guinea maintained its 3% interest rate. According to three rounds of a World Bank mobile phone poll performed in June 2020, December 2020, and May 2021, the impact of Covid-19 on poor and vulnerable people' livelihoods was severe. by December. The agriculture industry saw the most job losses. Despite modest improvement in the second half of 2020, overall employment fell by 28% between January and December of that year. According to a preliminary analysis of the May poll, employment has been stable since the beginning of the year. While the majority of families in the May poll said their income had remained unchanged since January, moreover a quarter said it had decreased or ceased altogether. The majority of households were concerned about their financial situation in the coming month. Overall, the poll findings point to a slowdown in economic recovery. Reference: The National (29 September 2021). “Economy contracted by 3.9pc’
PNG Business News - October 04, 2021
Marape Highlights PNG Issues At UN
Photo credit: UNGA Prime Minister James Marape has attempted to advance a number of issues on behalf of Papua New Guinea and the Pacific Blue Economy at the United Nations Climate Change Conference (COP-26) in November 2021 in the United Kingdom. On Friday, he addressed this in a speech to the United Nations General Assembly (UNGA) in New York City (Saturday morning, PNG local time). Marape encouraged governments to commit to energy objectives, address land use issues, fight for biodiversity protection, and be more aggressive in their climate funding pledges. “These issues are important to PNG and the Pacific Islands Forum countries and we will be seeking support and advocacy from developed and industrialised countries to back our domestic and regional efforts towards adaptation and mitigation through global funding assistance,” he said. “I will be seeking an understanding to build a special set of criteria that is simplified to enable us to qualify for financial support for our adaptation and mitigation strategies.” Marape urged the world community to fulfill its commitments under the Paris Agreement by submitting individual Nationally Determined Contributions (NDCs) as soon as possible. “PNG was among the first countries to submit our Nationally Determined Contributions (NDC) in 2020, outlining our goal to be carbon neutral by 2050,” he said. “This plan includes the drafting of our NDCs implementation plan, regulations and alignment of NDC adaptation and national adaptation plan, thanks to the support of the UNDP. “We want to see major carbon emitters in the industrialised nations to be genuine and committed in their actions to fund climate change mitigation and adaptations. “A failure in that regard is a denial of that responsibility.” Marape argued that the US$100 billion yearly climate finance commitment made by rich countries to developing countries should be treated differently from official development assistance. “This will allow its guidelines to be sensitive to the climate change mitigation and adaptation agenda and their specific requirement,” he said. “As a natural gas and oil exporter, PNG is working towards ensuring our carbon footprint is minimised by implementing our Sustainable Development Goal 13 Roadmap 2020-2030 on climate change launched last year. “We need to see a more practical demonstration of genuine commitments.” Reference: Post Courier (27 September 2021). “PNG’s Chief Executive Highlights Pacific’s Concerns At UN”
PNG Business News - October 04, 2021
PNG's Ihu Economic Zone Project in Gulf Province to be funded by China
The Ihu Special Economic Zone (ISEZ) project in Kikori, Gulf, Papua New Guinea, will get a grant of K80 million from China. Last week in Port Moresby, Chinese Ambassador Zeng Fanhua signed an economic and technical cooperation agreement with acting Prime Minister and Kikori MP Soroi Eoe. Prime Minister James Marape, according to Eoe, chose to provide the grant to the project. Eoe expressed gratitude to China for the donation and stated that the two nations' diplomatic and bilateral ties had remained strong. He claimed that his region contained roughly 80% of all found oil and gas. “Kikori is the host of many projects, but there has been no infrastructure,” Eoe said. “This is one area that the Government has recognised. “If we are to harvest resources in Kikori, we need to prepare the people for projects that are coming.” He claimed that the ISEZ will create 12,000 employment, boosting the economy and improving people's lives. The award was announced during Eoe's visit to China as Foreign Affairs and Trade Minister in June, according to Ambassador Zeng. “The agreement signed today is the latest fruits of our bilateral relations and reaffirm China’s commitment to developing a comprehensive strategic partnership with PNG and supporting Papua New Guinea’s economic and social development in a challenging time,” he said. “I believe that with our joint efforts, our bilateral relations and cooperation will bring more tangible benefits both to the Chinese and the PNG people.” Reference: Pacific Mining Watch (27 September 2021). “China funding PNG's Ihu Economic Zone Project in Gulf Province”.
PNG Business News - October 04, 2021
CEFI & NRI sign research collaboration
(from left to right) PNG NRI, Deputy Director for Research Associate Professor Eugene Ezebilo, NRI Acting Director Dr Osborne Sanida, CEFI Executive Director Saliya Ranasinghe and CEFI Manager Communications and Stakeholder Mobilisation Eva Kuson following the signing of the MoU. A Memorandum of Understanding (MoU) was signed today (24 September 2021) between the Centre for Excellence in Financial Inclusion (CEFI) Executive Director Saliya Ranasinghe, and the PNG National Research Institute (NRI) Acting Director Dr. Osborne Sanida with the aim to consolidate and strengthen cooperation between the institutions. The NRI is a publicly-funded policy think-tank in PNG mandated by legislation to carry out independent research and analysis on development issues affecting PNG. The National Research Institute Act 1993, states that the functions of NRI include the following: (a) “The promotion of research into Papua New Guinea Society and the economy, and (b) the undertaking of research into social, political and economic problems of Papua New Guinea in order to enable practical solutions to such problems to be formulated.” (Section5, NRI Act, 1993). The NRI’s mission is to provide quality research which contributes to evidence-based public policies and decision-making processes that improve service delivery, leading to better quality of life for all Papua New Guineans. CEFI was established under the Association Incorporation Act and officially launched on 24th April 2013 serves as the industry apex organisation for coordinating, advocating and monitoring all financial inclusion activities in PNG. CEFI’s vision, mission and values focus on financial inclusion and literacy, poverty elimination and the promotion of vibrant financial institutional operation in PNG. The agreement reflects the mutual value both institution hold in terms of extension and strengthening of research exchange for the general benefit of Papua New Guinea. The partnership signals new research grounds into the country’s economic and social development, with special focus on the role of education in development, and the impact of economic and social change on education. Other research activities under the signed partnership will include exchange of research staff, joint research partnerships and co-hosting of seminars and workshops to disseminate research findings through networks of both organizations. CEFI Executive Director Mr Saliya Ranasinghe stated the partnership is in compliance with CEFI’s mandate on financial inclusion and literacy, poverty elimination and promotion of vibrant financial institutional operations in PNG. “The main areas of this agreement between CEFI and NRI will be on researching the impact of Financial Inclusion Activities, Digital Financial Services, Financial Literacy and Financial Education, Micro Insurance, SME and Agriculture Lending.” Mr Ranasinghe addressed at the signing event. “Synergies like the one between the CEFI and the PNGNRI contribute to the more effective research ecosystem that enriches both the education and economic sectors.” Mr Ranasinghe said. NRI Acting Director Dr. Osborne Sanida equally elated about the partnership states, “NRI as a policy think-tank in PNG looks forward to working closely with CEFI to provide practical solutions to financial inclusion constraints, and contribute evidence-based solutions to improve financial inclusivity for all Papua New Guineans.” “Close cooperation is needed between our institutions and the academic community in order to develop the necessary methodologies and to create the appropriate tools to enable CEFI to carry out their work effectively.” Dr. Sanida remarked. This MOU is effective today and will be renewed every five years between the institutions. Article courtesy of CEFI
PNG Business News - September 30, 2021
Economic Recovery in East Asia and Pacific Faces Setback
The East Asia and Pacific region’s recovery has been undermined by the spread of the COVID-19 Delta variant, prolonging the distress for firms and households, likely slowing economic growth and increasing inequality, the World Bank said. Economic activity began to slow down in the second quarter of 2021, and growth forecasts have been downgraded for most countries in the region, according to the World Bank’s East Asia and Pacific Fall 2021 Economic Update. While China’s economy is projected to expand by 8.5%, the rest of the region is forecast to grow at 2.5%, nearly 2 percentage points less than forecast in April 2021. Employment rates and labor force participation have dropped, and as many as 24 million people will not be able to escape poverty in 2021. “The economic recovery of developing East Asia and Pacific faces a reversal of fortune,” said World Bank Vice President for East Asia and Pacific Manuela Ferro. “Whereas in 2020 the region contained COVID-19 while other regions of the world struggled, the rise in COVID-19 cases in 2021 has decreased growth prospects for 2021. However, the region has emerged stronger from crises before and with the right policies could do so again.” The damage done by the resurgence and persistence of COVID-19 is likely to hurt growth and increase inequality over the longer-term, the Update finds. The failure of otherwise viable firms is leading to the loss of valuable intangible assets, while surviving companies are deferring productive investments. Smaller companies have been hit the hardest. While most firms have faced difficulty, larger firms are likely to see a smaller decline in sales and more likely to adopt sophisticated technologies and receive government support. Households have suffered, especially poorer ones, which have been more likely to lose income, suffer greater food insecurity, have children not engaged in learning, and make distress sales of scarce assets. The resulting increase in stunting, erosion of human capital, and loss of productive assets will hurt the future earnings of these households. Increased inequality between firms could also increase inequality between workers. “Accelerated vaccination and testing to control COVID-19 infections could revive economic activity in struggling countries as early as the first half of 2022, and double their growth rate next year,” said East Asia and Pacific Chief Economist Aaditya Mattoo. “But in the longer term, only deeper reforms can prevent slower growth and increasing inequality, an impoverishing combination the region has not seen this century.” The report estimates that most countries in the region, including Indonesia and the Philippines, can vaccinate more than 60 percent of their populations by the first half of 2022. While that would not eliminate infections, it would significantly reduce mortality, allowing a resumption of economic activity. However, the region will need to make a serious effort on four fronts to deal with long COVID: addressing vaccine hesitancy and limitations in distribution capacity to prevent plateauing coverage; enhancing testing, tracing, and isolation to control infections; increasing regional production of vaccines to reduce dependence on imported supplies; and strengthening health systems to deal with the prolonged presence of the disease. International assistance is needed to support national efforts in all these areas, especially in countries with limited capacity. Beyond containing COVID-19, a comprehensive strategy will be needed to boost growth and ensure it is inclusive. The report identifies accelerated technology diffusion as a possible silver lining of the crisis that could boost productivity, democratize education, and transform state institutions. However, complementary reforms are necessary. Equipping firms with the skills to embed technology in their business must be accompanied by openness to trade and investment and by competition policies that strengthen incentives for firms to adopt new technology. Implementing long-delayed reforms in education to improve teaching quality and curriculum relevance could ensure wider access to the benefits of new learning technologies. Article courtesy of The World Bank
PNG Business News - September 29, 2021
TRANSPARENCY AND HONESTY CORNERSTONE GUIDING PRINCIPLES FOR RESOURCE GOVERNANCE: AGAROBE
The final leg of the Papua New Guinea Extractive Industries Transparency Commission Bill covering the Southern Region is underway in Port Moresby this week. Central Governor Robert Agarobe opened yesterday the workshop with the key message that honesty and transparency must be the cornerstone principle guiding the management of PNG’s resource to derive best value for development. Mr. Agarobe gave the backing of the Central Province on the proposed law to transition the PNGEITI National Secretariat into a statutory body to be known as the “PNG Extractive Industries Transparency Commission”. “The Central Provincial Government and its people recognize the need to have visibility of the various revenue streams and other benefits received from our extractive projects in the country, and particularly in our province,” Mr. Agarobe said. “Our government also recognizes the importance of supporting the work of the PNGEITI in transforming itself into a Statutory Commission to effectively administer and sustain EITI implementation in PNG. We also recognize the importance of having an efficient and an independent administrative body or a commission that would enable better management and governance of the extractive sector and the proposed EITI Commission law to transition the PNGEITI National Secretariat currently parked at the Department of Treasury is a step in the right direction going forward,” he said. PNGEITI Head of National Secretariat Mr. Lucas Alkan said: “The sustainability and effectiveness of implementing EITI in PNG is dependent on having it legally established”. Mr. Alkan said a NEC decision on which the PNGEITI operations rode held “no legal obligation to reporting entities to ensure compliance. “Furthermore, the NEC Decision that created PNGEITI holds limited powers in enforcing compliance therefore presenting risks susceptible to being made redundant and dissolved,” Mr Alkan explained. Voluntary compliance in EITI reporting is high, however, comprehensiveness in reporting is low. These incomprehensiveness results from the absence of EITI enabling legislation. To mitigate incomprehensiveness in the short term, the State Solicitors and MRA have prescribed EITI reporting and transparency undertakings in mining MOA agreements. So far EITI provisions are captured in the K92 and Woodlark Mining contractual agreement with all future mining MoAs to receive similar undertakings. Limited visibility in revenue reporting over the years have hindered informed decision making for effective governance in the extractive sector. The introduction of the EITI concept and the subsequent intervention of the PNGEITI National Policy now sets the framework for effective governance, not only in the mineral sector, but also in the non- mineral sector utilizing the EITI model for improved transparency and accountability. “Mr Alkan said.
PNG Business News - September 28, 2021
CEFI signs MOU supporting the DEFINE Initiative
CEFI, the Centre for Excellence in Financial Inclusion has signed a Memorandum of Understanding with PNGX Markets, the PNG Digital ICT Cluster and Emerging Venture Management (Unkapt), together the proponents of the DEFINE Initiative, to provide for a framework of cooperation and communication. To achieve the targets of the Sustainable Development Goals (SDG) in the country, one of the initiatives to implement work on the Fintech space is the Developing Financial Markets for Enterprises in the Pacific Islands (DEFINE) Initiative that is being spearheaded by partners which includes Centre for Excellence in Financial Inclusion (CEFI), with PNGX Markets, the PNG Digital ICT Cluster and Emerging Venture Management (Unkapt). The objective of the DEFINE Initiative is to contribute to the development of financial markets, products, and services for – aligned enterprises in Papua New Guinea and the Pacific Island countries, with the ultimate goals of diversifying their sources of capital and enhancing access to finance. This includes the establishment of specialist SME funding facilities for debt, debt-like, and equity-like investments in SDG-aligned private enterprises which demonstrate governance, performance, return and impact potential with a special focus on Women-led enterprises, clean energy initiatives, agribusinesses, and businesses in the ICT sector. Mr. Saliya Ranasinghe, Executive Director for CEFI expressed his views on the journey taken to be working with and supporting the DEFINE Initiative. He further stated that the objectives of the DEFINE Initiative are very well aligned with those of CEFI and together is hopeful that the collaboration of all parties can deliver greater financial inclusion, financial literacy and business capability to the SME sector. PNGX Chairman Mr. David Lawrence stated that a key objective of the DEFINE Initiative is to strengthen the capacity of domestic financial institutions to encourage and expand access to banking and financial services for all, in particular women and the vulnerable, and their integration into value chains and markets. Mr. Lawrence elaborated that as a locally driven initiative, CEFI will be a key partner for meeting our objectives within Papua New Guinea and using the experience gained to export financial services and financial access across the Pacific.
PNG Business News - September 24, 2021
Personal Income Tax Laws to be Reviewed
Following the release of its issue paper on October 1st, the Constitutional and Law Reform Commission (CLRC) will review personal income tax rules. According to CLRC Secretary Dr Mange Matui, the Terms of Reference on the revision of Income Tax Laws in Papua New Guinea focuses primarily on the Personal Income Tax paid by public officials and private sector employees. “This review is quite necessary because income tax seems to be very high in PNG,” he said, adding, this is according to the submissions made to the Tax Review Committee in 2014. According to him, an internal discussion paper from 2018 sparked the review because it revealed, among other things, that public servants, in particular, are not benefiting from tax incentives and privileges, and as a result, most public servants working in towns and cities have been pushed to live and work in settlements and villages, putting their lives in danger. Dr Matui stated that the public and relevant stakeholders would be polled on the Key Issues, which include: the connection between living costs and taxable income, and if the tax rate should be changed; public service tax incentives; whether the government should lower the income tax rate for public servants; ways the informal sector may help with taxes; whether tax-free superannuation and retirement benefits should be available, other tax-related concerns. CLRC is also aware of the Government's concerns and reliance on taxes to support the National Budget, he added, adding that the review would be conducted with care. Dr Matui added consultations, which are required by law, would begin on the 4th and 5th of October in the Eastern Highlands and Madang, on the 7th and 8th of October in Simbu and Morobe, on the 12th and 13th of October in Manus and Oro, and on the 27th of October in NCD. Written contributions are also being accepted through November 5th, 2021, by the CLRC. The Commission is encouraging members of the public, tax professionals, and anyone with working knowledge of tax or tax-related issues to participate in the regional consultations through their Facebook page or website. Reference: Loop (24 September 2021). “Personal Income Tax Laws In Review”.
PNG Business News - September 24, 2021
Kina Calls Off Westpac Deal
Kina Securities (KSL) has called off its deal to buy Westpac's Pacific division. Kina and Westpac Banking Corporation have mutually decided to terminate their purchase of Westpac Fiji and Westpac's 89.91 per cent interest in Westpac Bank PNG, which was intended to broaden Kina's market reach. The transaction was subject to numerous regulatory clearances, and the cancellation comes after Papua New Guinea's regulator, the Independent Consumer and Competition Commission, denied Kina's proposed acquisition of Westpac PNG. The authority body stated that it was unconvinced that the acquisition would not significantly reduce competition or benefit the public. The verdict was made only two months after a preliminary determination reached the same outcome. Kina anticipates its full-year 2021 earnings to be in line with the Company's full-year 2020 results, after accounting for transaction expenses and projected revenue from the acquisition that is no longer expected. Kina’s Managing Director and Chief Executive Officer, Greg Pawson said about the termination, “Whilst we are disappointed that the acquisition has not proceeded, this in no way changes the Company’s strategy of seeking both organic and inorganic growth in PNG and the Pacific region. The outlook of the company remains positive.” Reference: Loop (22 September 2021). “Kina Securities Terminates Agreement”.
PNG Business News - September 24, 2021
Foreign Investment Proposals Value Increases to K1.3b
According to Investment Promotion Authority (IPA) managing director Clarence Hoot, the total value of the 249 foreign investment proposals in the nation up to last month was about K1.3 billion. He told a business conference that the energy sector had the most proposed investments, totalling K500 million. He stated that the Coronavirus (Covid-19) pandemic had a negative influence on global FDI, but that this will improve as firms adapt and advance. “Our foreign investment statistics as of August 2021 shows that 241 new proposed investments came into PNG,” Hoot said. “That was about K1.3 billion and the energy sector recorded the highest FDI at a value of K500 million.” With almost K300 million, the wholesale and retail industry came in second. Manufacturing, mining, and petroleum, among other industries, also saw gains. The data came from the IPA's overseas certification procedure, according to Hoot. “Papua New Guinea has had its share in downward FDI’s mainly due to the Covid-19 induced measures and travel restrictions with the movement of people,” Hoot said. “Despite the pandemic scare, businesses are slowly picking up and we expect the FDI to rise as well.” Australia leads the way in terms of investment inflow, followed by Malaysia and the United States. Reference: The National (22 September 2021). “Foreign investment up K1.3bil”.
PNG Business News - September 24, 2021
US Gives $3.8M COVID Assistance To PNG
As part of the American Rescue Plan Act, the US government announced $3.8 million in urgent COVID-19 assistance for PNG through the United States Agency for International Development (USAID). This assistance will assist in accelerating widespread and equitable access to and delivery of safe and effective COVID-19 vaccines, strengthening health systems, and supporting other public health measures to combat COVID-19 and the recent emergence of the Delta variant in PNG. “PNG is struggling to address the challenges caused by the COVID-19 pandemic within its communities,” US Ambassador to Papua New Guinea, Solomon Islands, and Vanuatu Erin McKee said. She stated that the American people's support demonstrates their long-term collaboration and commitment to working together to address the tremendous global health issue. “With this assistance, the US government, through USAID, has provided more than $9.2 million to address COVID-19 in PNG. “USAID assistance has helped the country implement internationally recognised infection prevention and control strategies, strengthen laboratory systems, case management and surveillance tracking and communicate effectively about COVID-19 prevention and care. Additionally, the United States has already contributed $2 billion as part of its $4 billion pledge, to support COVAX — a global effort to provide safe and effective vaccines for 92 countries, including Papua New Guinea,” she said. The country has already received 580,400 vaccine doses from the COVAX Facility, including 302,400 Johnson & Johnson vaccines given directly by the US government, according to Ambassador Mckee. She stated that the United States is committed to working with Papua New Guinea and other Pacific Island countries to stop the COVID-19 epidemic, alleviate its terrible social and economic effects, and rebuild a world that is better prepared for future outbreaks. “These efforts build on decades of lifesaving work and US leadership in tackling global health crisis. “For the past 60 years since its founding in 1961, USAID has saved millions of lives from diseases such as Ebola, HIV/AIDS, tuberculosis, malaria, and now, COVID-19,” she said. Reference: Post-Courier (21 September 2021). “US Provides Extra US$3.8M For COVID-19 In PNG”.
PNG Business News - September 24, 2021
PNG Delegates Leaves For Dubai Expo
Nine members of the PNG delegation to the Dubai Expo, led by deputy commissioner Jacinta Manua, have already departed the country. They will erect the Papua New Guinea pavilion. “This is an important exercise which will go right throughout the world,” Manua said. “We have been preparing for over a year or so and are now ready for Dubai.” Foreign Affairs, the Department of Information and Communications Technology, the Investment Promotion Authority, the Tourism Promotion Authority, the Finance Department, and the Defence Force were where the officials were picked. The event will take place from October 1, 2022, through March 31, 2022. “We are hoping to show the world that Papua New Guinea is ready to do business with them in trade, investment as well as sharing of knowledge and ideas,” she said. “Papua New Guinea is in the sustainability thematic area that reflects the importance of our policies in terms of environmental sustainability and sustainable development.” Manua stated that the Apec Haus in Port Moresby will serve as the virtual conference venue for the exhibition, which would feature programmes from Dubai. Reference: The National (20 September 2021). “Nine leave for Dubai Expo to promote country’s businesses”.
PNG Business News - September 24, 2021
Malaysia Invests K17 billion in PNG
Malaysia has a $5 billion (K17 billion) investment in Papua New Guinea, according to Mohamad Nasri Abdul Rahman, Malaysia's High Commissioner to PNG. Nasri stated that Malaysia was delighted and looking forward to contributing more to PNG's socio-economic development at the Malaysia Day celebrations over the weekend. “Both countries have been working side by side for more than 20 years,” he said. “We have a big community in PNG, with about 8,000 Malaysians nationwide. “It is good to see Malaysians living side by side with the Papua New Guineans. “We have some investments here and are happy to help develop the country. “We have companies supporting businesses here and that is why we have many Malaysians here. “We support PNG and PNG supports us. “In the future, we will explore more between Malaysia and Papua New Guinea. “We have been given investment opportunities and we will bring in more investments.” Nasri said currently Malaysians were involved in agriculture, health, trading and many more, and “we want to do more”. “PNG is developing and we have to make it easy in terms of people to people contact to facilitate business opportunities,” he said. Nasri stated that the government might always improve in order to attract foreign investment, but that security is paramount in many choices. “Security is the most important which needs to be improved, then we can come and do more businesses here,” he said. “Currently, looking from outside iares concerns on security issues. “That is the only biggest challenge here which we can slowly improve.” Reference: Luma, Dale. The National (20 September 2021). “M’sia investment at US$5bil”.
PNG Business News - September 24, 2021
Archipelagic Economies: Spatial Economic Development in the Pacific
A new World Bank report on the challenges facing the Pacific region’s outer island communities identifies investment in people and livelihoods as a key for inclusive economic growth. Archipelagic Economies: Spatial Economic Development in the Pacific looks at the challenges Pacific governments must address to provide services and infrastructure to populations spread across hundreds of islands spanning the vast Pacific Ocean. The report puts forward a series of practical steps that countries can take to overcome these challenges in a way that supports resilient and inclusive economic growth. “Many Pacific countries are faced with significant challenges in delivering services and connecting remote, outer island communities; with difficult decisions around resources and how to best invest often limited resources into outer island communities,” said the report’s lead author, World Bank Lead Economist for Fiscal Policy and Sustainable Growth Robert Utz. “This report aims to provide Pacific governments, development partners and decision-makers with evidence to assess options for fostering development for the people in those outer islands, so they can make stronger contributions to the larger economic development of the whole country.” The report identifies six guiding economic policy principles: Policy solutions that seek to achieve equitable increases in living standards need to be grounded in an understanding of the economic implications of the Pacific region’s unique economic geography. Outer islands’ development should be assessed from a spatial perspective; one that considers interactions with the country’s main island and the region beyond. A balanced approach that combines investments in urban areas to accommodate migration from outer islands to main islands with support for outer island populations is likely to achieve better welfare and equity outcomes than an approach that neglects one side or the other. Growth-enhancing investments should be guided by clearly-identified opportunities, rather than by a desire to try to equalize economic opportunities across islands. With limited scope to close the gap in economic opportunities between outer and main islands investments to promote livelihoods and human development should be given preference. Outer islands are subject to a complex political economy of intra-island and outer island-main island relationships that need to be considered in development interventions. “This is an important and timely study,” said Denton Rarawa, Senior Economic Advisor at the Pacific Islands Forum Secretariat. “The current COVID-19 crisis has highlighted the need to address the institutional, service delivery and capacity gaps of nations across the Pacific. As we strive for greater vaccination rates and begin to think about how we’d like to rebuild after the pandemic, I believe this report has a lot to offer the future of the Pacific, especially in our efforts to leave no one behind.” The Archipelagic Economies report is a companion publication to the World Bank’s Pacific Possible series, which in 2017 and 2018 looked at opportunities for economic growth in Pacific Islands Countries across key sectors including tourism, fisheries, and labour mobility. The World Bank works in partnership with 12 countries across the Pacific, supporting 87 projects totaling US$2.09 billion in commitments in sectors including agriculture, aviation and transport, climate resilience and adaptation, economic policy, education and employment, energy, fisheries, health, macroeconomic management, rural development, telecommunications and tourism. Article courtesy of World Bank Group
PNG Business News - September 20, 2021
Telikom Merger 85% Complete
Telikom PNG Ltd interim chief executive officer Amos Tepi said the Telikom-bmobile merger should be finalized by the end of the month. Tepi stated that the merger was roughly 85% complete. “We are just looking at the regulatory and legal aspects and once that is over, we are going over the line so we should meet the deadline,” he said. “It’s all progressing and about 85 per cent completed.” Communications and Information Technology minister Timothy Masiu previously stated the merging of bmobile and Telikom PNG into a single retail operator was critical as it would improve access in the country. “Legally speaking, merging bmobile and Telikom is a challenge because of the cross-collateralisation arrangements in place on assets,” Masiu said. “Technically speaking, the integration of two SOE (state-owned enterprise) mobile networks also has cost implications.” Masiu stated that, in light of the K1.6 billion loan obtained from China's Exim Bank to expand network coverage, as well as recent asset audits, the government was now prepared to consider investing in the merger – before considering any other options for the telecommunication state-owned enterprise's future. “After considering a wide range of reform options, merging is the best decision for the business and this will pave a way forward to a liberalised market.” The government spent five years ago in a nationwide broadband initiative that gave Telikom a converged 4G communications network. Following that, bmobile's RediSIM subscribers were able to experience 4GLTE network capabilities thanks to a phased upgrade that was completed this year. Kumul Telikom Holdings Limited (KTHL) made significant efforts to achieve the merger and consolidation of the mobile company as part of the Government's communications reform instructions to create a single mobile network. It is the final key component in KTHL's attempts to deliver competent, cost-effective, and competitive mobile communications. The Government's October 2019 state-owned enterprise reforms covered a number of critical business components, including improved governance and accountability. It also necessitated a stronger focus on achieving fundamental SOE goals, such as providing accessible, cheap, and dependable services while generating a reasonable return on investment. The KTHL mobile network integration was the company's first significant infrastructure expenditure in the previous three years. As part of the reform, the National Executive Council authorized the merger, and work began in 2018. Reference: Luma, Dale. The National (15 September 2021). “‘Telco merger 85pc complete’”