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PNG Business News - November 19, 2020

Toroama: Establishing Relations A Top Priority

In order to increase infrastructure and economic development, the region of Bougainville considered establishing relations with development partners as a priority. Autonomous Bougainville Government President Ishmael Toroama in his first official visit to Port Moresby met with several important development partners. The meeting was to familiarise the new president with foreign missions and to strengthen relationships.Toroama said that they expressed support for Bougainville in continuing its mission. He added that the relationship with partners is maintained through the boundaries of the Bougainville Peace Agreement. The focal point of these relations is for the development of the region, and not for advancing any political aspirations. ABG President Toroama met with various officials such as the European Union Ambassador Ioannis Giogkarakis Argyropoulos, Chinese Ambassador Xue Bing, the US Ambassador Erin Mckee, Australian High Commissioner Jon Philp and the representative for ambassador Kuniyuki Nakahara. “I am convinced of the need for an overall aid coordination strategy within which Bougainville’s donor priorities will be articulated,” Toroama said. “Such aid strategy must be rooted in my government’s six-point strategy on Bougainville’s development and political journey.”

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PNG Business News - November 17, 2020

EU Welcomes Organic Law

The Organic Law was adopted for the creation of the Independent Commission against Corruption. This move was welcomed by the European Union, and said that this milestone is a “first promising step on a long road’. “Adopting the legislation is essential, but not sufficient,” it stated. “To make it work, ICAC will further need real independence, bylaws and regulations, qualified staff and funding. In this respect, the EU stands ready to provide a helping hand through its Partnership for Good Governance Program, which provides 100 million Kina for different activities, including the fight against corruption. All stakeholders in the country – Government, private sector, citizens, development partners – should further work together to ‘Take Back PNG’ from the claws of corruption and achieve what we all want: a corruption-free country, where the public resources are fully invested in the lives of people, especially the most vulnerable.”

Business

PNG Business News - November 17, 2020

Hoot: Govt Agencies Must Work Together

Government agencies must work together to make sure investors coming into the country follow the country’s laws and regulations.This, according to the Investment Promotion Authority (IPA), agency in charge of promoting the country and bringing in investors. For Managing director Clarence Hoot, the problem lies with foreign investors going into business activities regulated by other institutions. “For instance, we bring them (investors) in and when they go into logging, then Forestry has to come in,” he said.Hoot was answering the statement of Northern Governor and chairman for the special parliamentary committee for public sector reform Garry Juffa’ who said that the IPA needs to screen investors and hold them accountable for the laws of the country. Juffa said, “It just can’t be allowing anyone to come in, yes we want investment, but we want the right type of investment. If you go around Papua New Guinea now, there are so many non-compliant actors. They come here claiming to be doing business in this area, trade in this business and off they go doing something different and in many instances breaking many of our laws and getting away with it.”Juffa added that IPA could play a bigger role, saying that the special parliamentary committee for public sector reforms was meant to inspect state-owned entities, government agencies to keep them up to par to the standards. “That’s what we need right now, we are not a tiny developing country in the middle of the Pacific,” he said. “We are a growing economy with huge potential, if we are not careful, then what will happen is that we will let the wrong type of people and organisations into this country who will disrespect our laws and benefit from exploiting our resources.”Prime Minister James Marape said that there were laws in place that direct local and foreign businesses, but that policing needs to be addressed. He noted that the government has encouraged investors to come in and do business, but at a certain level.

Business

PNG Business News - November 17, 2020

China Exports Grow

According to PNG Ambassador to China, Don Sawong, the estimated value of exports of China grew from US$34.56 billion (K118.29bil) in 2018 to US$38.52 billion (K131.85bil) in 2019.He revealed these figures during a recent Pacific Island Countries investment promotion event in Shenzhen, China, saying that the extractive industries amounted for 89 per cent of PNG’s export in 2018 and 94 per cent in 2019.“According to the Bank of PNG, three countries in 2019 dominated our exports – China, Japan and Australia,” he said. “In contrast, PNG’s imports are mostly from Australia which provided 50 per cent of all PNG imports followed by Singapore, China and the United States. Thus, China is among the top trading and investment partner for PNG, with a strong bilateral trade growing steadily over the past few years.” Sawong said the trade volume had increased to more than US$2.3 billion (K7.87bil) making the trade balance in PNG’s favour.”He added, “Our export liquefied natural gas to China has assisted with this positive development as China continues to have significant confidence in our economy. Today, Chinese businesses continue to invest in our economy, especially in the extractive sector, infrastructure, energy, real estate development and in many other key resources sector. PNG will continue to welcome Chinese investments and businesses to create employment opportunities, contribute to our overall economic growth and to help improve the lives and living conditions of our people. China’s foreign direct investment to PNG has also increased considerably. In 2018, China was responsible for the most foreign direct investment close to K2.5 billion followed by Australia.”

Business

PNG Business News - November 17, 2020

Pandemic Effects Continue Until 2021

The effects of COVID-19 on impact revenue will continue until 2021. According to the projections done in the 2021 Budget Paper Strategy (BPS) by the Department of Treasury, the loss in business income will still manifest in reduced corporate income tax earnings in 2021 as filings for 2020 assessable year become payable in 2021.The document further predicted that reduction in corporate income taxes is therefore expected from earlier estimates. However, GST and international trade are estimated to recover with economic recovery. The document also stated that taxes and dividends from PNG LNG most probably will remain low given the project is still writing off depreciation costs and debt repayments after following an LNG price and modest oil estimate.These revenues are expected to be around K12.9billilon in 2021.The BPS suggests several priority actions to raise revenue further next year - the approval and implementation of the revised SOE dividend policy that enhances the flow of funds of SOE earnings to the budget; and the passing, correction, and implementation of the PMMR Act which was deemed unconstitutional by the Supreme Court.The Department of Finance is presently revising the draft legislation expected to be passed by Parliament soon. The outlook is that only 25 per cent of the annual projection of PMMR revenues is part of the revenue estimates for 2021. It is predicted that recovery in GST and trade taxes is likely to stagger over the next year (as compared with an abrupt increase). Meanwhile, the non-resource recovery projected in 2021 is mostly GST. Risks to fiscal outlook are further infection periods and deterioration in the global economy.

Business

PNG Business News - November 16, 2020

Australia PM Cancels Visit

In the midst of the current political instability in Papua New Guinea, Australia’s Prime Minister Scott Morrison has cancelled his trip. This comes after high profile ministers led by Deputy Prime Minister Sam Basil have defected to the opposition led by Belden Namah. PNG’s Foreign Affairs Minister Patrick Pruaitch and Attorney-General David Steven also crossed over to the other side. Morrison was supposed to stop by PNG after his Japan trip but this will not happen. He pushes through with his Japan trip as he meets with the new Japanese PM Yoshihide Suga.It is revealed that Morrison was supposed to stop by PNG in spite of the political instability but PNG James Marape asked him to defer his visit.

Business

PNG Business News - November 16, 2020

Marape Faces Leadership Crisis

After 12 high-ranking government ministers led by Deputy Prime Minister Sam Basil defected to the opposition, current Prime Minister James Marape, is facing a leadership threat. This comes a day after the passing of the Independent Commission Against Corruption Bill and a week before the schedule of handing down of the 2021 budget. These officials mentioned the worsening economic woes of the country and its growing debt - in light of the current pandemic. In an earlier press conference, PM Marape claimed to have 52 members within his ranks after 15 other MP’s rejoined his team. Some of those members voted with the opposition to change the permanent parliamentary committee on Private Business and adjourn Parliament to December 2. The government appears to have the number totalling 56, although they said they have 61 members. They were caught by surprise during the resumption of Parliament with votes towards opposition 57-49.PM Marape added that the Parliament used its power to adjourn the parliament, and expected to declare a cabinet reshuffle for those members who defected to the opposition. In spite of these changes, Marape still remains the PM and government still continues its duties until Parliament resumes. A motion of vote of no confidence is expected to be handed to the clerk of Parliament and the method could last for a week for a new Prime Minister to be elected

Business

PNG Business News - November 13, 2020

PNG Continues Trading with the UK

In spite of leaving the European Union, parliament has convened to unanimously continue trading with the United Kingdom. In a vote of 97-0, parliament voted to waive section 117(3) of the Constitution that has bound PNG to trade with the UK under the EU.Section 117(3) would be ratified for PNG to trade with the UK under the UK and Pacific interim economic partnership agreement (UK-Pacific IEPA).According to Foreign Affairs and International Trade Minister Patrick Pruaitch, PNG has a trade surplus of US$82.8 million (K289.5mil) and trade needed to continue in spite of the UK’s exit from the EU. He added that continuing to trade with the UK was to “cushion the economic shock caused by the Covoid-19 pandemic”.“PNG needs such an arrangement to allow the continuation of trade through favourable market access preferences, promote business and investment confidence and strengthen its position as a trading nation,” he said, adding that the UK was an important partner in trading. “We import from the UK, chemicals, pharmaceutical products, machinery and mechanical appliances among other goods that are important to the development of PNG,” Pruaitch said. “So if Parliament ratifies this agreement (UK-Pacific IEPA), we will see our small and medium-sized business continue to flourish with an increase in employment, income and improvements in livelihood for our people.”In addition, he said that the agreement would also help the technical agencies of PNG broaden their knowledge and capacity on best practices for other measures such as sanitary measures. He said that in London last year, PNG High Commissioner to the UK, Winnie Kiap signed the agreement on behalf of the government.“The signing was done in anticipation of the UK exiting the EU which has already happened and the transition phase will end on Dec 31,” he said.

Business

PNG Business News - November 13, 2020

Chinese Company Signs MOU for Marine Industrial Park

Chinese company Fujian Zhonghong Fishery Ltd has signed a Memorandum of Understanding valued at US$150 million (K527.20mil) for the industrial park for marine resources in the Western region. The Company also wants to put up a marine industrial zone. According to Fisheries and Marine Resources Minister Dr Lino Tom, the investor would work with the National Fisheries Authority to give technical assistance in what they planned to do. Meanwhile, the government is hoping to sign an agreement for the exports of marine products, invoking job creation and economic benefits.“This project will allow about 90 companies to access the Chinese market in terms of selling marine products,” he said. “We also want to encourage foreign companies to invest and realise the potential we have in the marine sector. It is quite a massive foreign investment in the country. Not only will they fish but also create more jobs.” Western Governor Toboi Awi Yoto and South Fly MP Sekie Agisa are hoping that the agreement will soon be signed. “We have the products in the country but we do not have the market,” Yoto said.

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PNG Business News - November 13, 2020

PNG Establishes Independent Commission Against Corruption

To combat corruption, the Papua New Guinea parliament has passed legislation which establishes an Independent Commission Against Corruption (ICAC).In 2015, constitutional establishments to establish an ICAC were passed but efforts to take this into full force lapsed - until the Marape government took over last year.According to Police Minister Bryan Kramer, his office is looking forward to working with issues on corruption and money laundering, both in PNG and overseas. Meanwhile, Prime Minister James Marape said that along with other legislation such as the Proceeds of Crime Act and the Whistleblower Act, this new measure can help strengthen the institutions of the country. One of the forces behind this legislation, Attorney General Davis Steven, gave accolades for this new measure, adding that the house of parliament has the final decision to protect the country from unscrupulous endeavours.

Business

PNG Business News - November 13, 2020

Lae Cheif Makes Maiden Call

The largest container vessels in Papua New Guinea have already made its maiden call to Shanghai.The 2,750 teu Lae Chief and two sister vessels equipped with three 45 tonne cranes which can carry breakbulk, out-of-gauge, reefers and vehicle cargoes is now sailing to Lae, Port Moresby and Townsville.“This is a proud moment for Swire Shipping, not only because we have launched the fixed-day fortnightly service from North Asia to Papua New Guinea and Australia, but also because we have done this by deploying these owned, modern and eco-friendly vessels,” said Jeremy Sutton, general manager of Swire Shipping. “By deploying these new ships on our upgraded service, customers will enjoy a more frequent product, delivered on fixed-days and with the ability for future growth.”

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PNG Business News - November 11, 2020

ADB Funds Air Nuigini

In the restructuring and reorganisation of Air Niugini, the Asian Development Bank (ADB) will fund K100 million.Treasurer Ian Ling-Stuckey said the task of recovery would take a bit longer and be more difficult for this airline which is slowly starting to continue its domestic and international flights after the 8-month lockdown. He added that some state-owned enterprises such as Water PNG, PNG Ports, Motor Vehicle had operated during the pandemic but Air Niugini and PNG Power Ltd were badly hit. Ling-Stuckey remarked that there would be a clearer framework for partnerships, guaranteeing that the interest of the public is protected. “These will be exciting times but also challenging times,” Ling-Stuckey said. “This is all part of making PNG stronger as we emerge from the pandemic. “We are laying the groundwork for sustainable, long-term gains that boost SoE performance and ensure other social development objectives become a reality. This includes the goal of providing electricity to 70 per cent of the population by 2030, greatly improving water and sanitation and providing services at affordable prices. These reforms, which may include reforms we saw with Nasfund and Bank South Pacific, will ensure the appointment of professional directors and high-performing managers. With capable management and adequate financial assistance, the SOEs can prosper in a climate many people are describing as the new normal.”

Business

PNG Business News - November 11, 2020

ADB Grants Government K1.75 billion

In transforming all state-owned companies, the Asian Development Bank (ADB) has granted the government K1.75 billion. Minister for Treasury Ian Ling-Stuckey said that this is beneficial in transforming the enterprises into high performance and quality organisations.“This program encompasses all SOEs. It will bolster their financial and technical capacities and, together with greater transparency and accountability, will underpin PNG’s long-term economic growth prospects and potential,” Mr Ling-Stuckey said.He added that the US$500 million loan approved by the ADB- with the initial US$100 million provided in 2021 - supports the SOE reform program. “The opposition will jump up and down and just say more debt. But as a businessman I am willing to borrow if my returns are much greater,” he said. “This loan from the ADB will be at an interest rate of less than one per cent – so just over one-tenth of the cost of the disastrous and expensive Sovereign Bond issued by the O’Neill government and other expensive commercial borrowings. The rate of return from this project will be high and easily cover the cost of the borrowings.”

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PNG Business News - November 11, 2020

Landowners, Ministers Approve PNG Biomass Project

Deputy Prime Minister and Minister for National Planning Sam Basil and Energy Minister William Onglo, with representatives from government, landowners, and Oil Search after the briefing.In light of the need for sustainable energy, the Marape-Basil government has supported the PNG Biomass Project.According to the Deputy Prime Minister and National Planning Minister Hon. Sam Basil, “This Biomass project is very important, not only for the Markham Valley, Lae and the Ramu Grid. It is important because it is a great example of the new power generation paradigm. For our country, the pathway to developing a functioning power sector is not forged overnight. Since 2009, the Biomass project has been successful but is waiting for the Government and stakeholders to come together to make it happen.”He added, “For our country, the pathway to developing a functioning power sector is not forged overnight. Since 2009, the Biomass project has been successful but is waiting for the Government and stakeholders to come together to make it happen. This plant will generate 30 megawatts and recently we had bi-lateral partners come forward and added an additional solar plant that will be assisting the [biomass] power plant to put more power into the grid. But I believe the challenge is still there, we still need to get it together to make sure that we make this [project] come true. PNG Power and many other stakeholders can make this happen. It is very important when you look at the upcoming project in Morobe Province, for example, the Wafi-Golpu project and the expansion of Lae city, the new airport being built in Lae, new fly-in fly-out – those developments will demand more power.”Meanwhile, Minister for Energy Hon William Onglo highlighted the significance of electrifying PNG by working together with Independent Power Producers (IPP) and other countries. “In PNG we need energy, energy is the catalyst for industrialisation. As a Government, we have a roadmap for the next 30 years. Right now, we have 15% of our people accessing electricity, we are looking at 2030 to have 70%. How can we do that? We need all the stakeholders. It is achievable working with IPP and PEP partners,” he said. For his part, Oil Search Country Manager Leon Buskens affirmed the commitment of his company to bring national development priorities on electrification, driving inclusive economic growth, diversifying the energy mix, reforestation of the country, and developing renewable energy. “We have prepared the foundation for a world-class integrated renewable energy project in the Markham Valley. We have taken the time, almost 10 years, to do this properly. To do right to the landowners from their lens, to align with our National priorities, to support international obligations, and to ensure that this is an energy and social development project,” he said. “It is through our tireless efforts in the Markham Valley that we are paving the way for a new power generation paradigm. A new paradigm that will contribute to the resolution of the black-outs, the brown-outs, the disruptions and power cuts we all deal with.”Local landowner leader Frank Godfrey has all high hopes of working with PNG Biomass since they have been doing it since 2011. He said, “PNG Biomass is already benefiting us and contributing to the well-being of our communities. We are happy to receive benefits from land rentals, incentives through landowner companies, and growing our cash-crops on plantation land. But now to see the biomass power plant and the solar panels. This project is only real if we see the construction. We have waited and waited, but do you see a power plant? Today gives us hope, we see our Ministers here, they say this project will happen and is important to the country. Our people will keep growing the trees, our Government supports us, and we know Oil Search will deliver.”Some of those who attended this gathering included Climate Change and Development Authority, PNG Power, the Independent Consumer and Competition Commission, the Bank of PNG, PNG Forest Authority, the European Union, the International FinanceCorporation, and the Australian High Commission as well as landowners from the project area.

Business

PNG Business News - November 09, 2020

Ankle Monitors Required for Foreigners Entering PNG

As part of quarantine measures, foreigners travelling to Papua New Guinea will need to wear ankle monitors which will cost them $US28, according to Pandemic Response director, Daoni Esorom.Esorom said Response Controller David Manning approved this exercise and will be tested for a month."The controller approved the engagement of TrackCo to track them while in quarantine to ensure they adhere to the guidelines," Dr Esorom said, who added that PNG residents are exempted from this rule. So far, PNG has tallied 7 deaths and nearly 600 confirmed cases.

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