Expectations on investors will impede development: Chamber
Expectations on prospective foreign investors will impede on economic development in the country, says PNG Chamber of Commerce and Industry president John Leahy.
Prime Minister James Marape recently said during the second SME breakfast last Friday that foreign investors would soon have to pay K20 million into the Bank of Papua New Guinea (BPNG) in order to do business in the country.
Responding to queries on the possible impacts of this stance to both local businesses and foreign investors, Leahy said: “Local businesses already have a competitive advantage just by being here, so if they are unable to compete effectively that must be for other reasons and making it harder for other people just impedes development and adds to costs for everyone, including local businesses.
“The idea of earmarking an amount to be deposited with the Central Bank makes no sense at all except of course in the context of the prudential regulation of the financial sector.
“Even for large investors, it adds to the capital requirements for any particular project and therefore to the cost of investing here.
“For smaller and knowledge intensive and service sector businesses, it would be completely prohibitive.
“We should be encouraging capital investment and skills transfer and this measure would have exactly the opposite effect,” he said.
“If the objective is to improve the foreign exchange position then this will make it worse.
“If the objective is to secure legal obligations of foreign investors, this is a terrible way of doing it, very much a blunt and unsophisticated instrument.”