PNG survey shows lawlessness the biggest issue for business
Survey shows that lawlessness in Papua New Guinea remains a major impediment to business there.
Analysis by the Asian Development Bank shows that law and order and corruption remain the most severe constraints faced by business operators in Papua New Guinea.
Drawn from responses from 130 firms surveyed by the PNG Institute of National Affairs the findings in the Challenge of Doing Business in PNG survey confirm crime contributes significantly to business costs in PNG.
Don Wiseman asked the executive director of the Institute, Paul Barker, about the nature of the criminality that worries the business people.
PAUL BARKER: Well it is both physical threats, it is both theft but also violence, and a range of other issues.
DON WISEMAN; And corruption?
PB: Well, corruption is listed as the second major impediment to business. So obviously both are law and order issues but we separate them out, so just conventional crime is listed as the worst and particularly by firms that are in particular industries. If you are in a large mining company, yes, it certainly affects you but you are a little bit more sanitised than if you are a small enterprise that is, for example, in the hospitality industry or certain other industries.
DW: Nine years ago, on my first trip to PNG I was told that the biggest industry then was security, in terms of providing security guards and that sort of thing, is that still the case?
PB: It is a very large industry in PNG and obviously some major cost to all the other businesses, so yes there have been jobs and opportunities in the security industry, not only providing security guards but also the fences and so on. If one could reduce that cost and reduce the level of law and order problems then obviously a range of other business opportunities would come up. PNG, for example, should have a major tourism industry like Fiji and Vanuatu but it is obviously a very sensitive industry to crime.
DW: I know governments, successive governments and police have been trying to work on this matter, this lawlessness, reining it in, over a number of years. Are they making any progress?
PB: Well one of the problems that has been occurring is that the police force has barely changed size since independence and it is only really now, in the last year and a bit that new police recruits are being taken on board again. So up until then, you had this relatively small police force covering the entire country and a substantial portion of them are tied up with major projects like LNG, so they are not out there in the urban areas, or the rural areas, providing crime prevention or basic law and order services.
DW: The level at which they were resourced was always an issue. Is that improving?
PB: It has improved in the last year or so. The government has made a commitment to law and order, to strengthening the police, both in terms of numbers, training and capacity. It's still going to be far from what is needed but a move has been made in the right direction and of course you now have this modest support force coming in from the AFP [ Australian Federal Police] to try and assist in the management of the process.
DW: Would you advise foreigners visiting Port Moresby to wander the city on their own at night?
PB: There are not many cities in developing countries that would be recommended for wandering around loosely at night. Port Moresby and Lae get a pretty dreadful press. They are not nearly as bad as they are made out to be but certainly walking around, generally at night, wouldn't be an advisable idea except around well policed shopping plazas.
DW: Do you think that with a concentration of government effort and resources on building up the police that this law and order issue can be solved quite quickly?
PB: It is certainly going to be a major contributor. They need to combine the police numbers, police training. They have got to really improve the standards. Hopefully the AFP will help that but certainly management needs to be strengthened. The police has been quite a divided and politicised force in recent years. That clearly needs to be addressed. It may be being addressed but it certainly needs to be addressed. But clearly there are other aspects - going out into the rural areas - the government has made a commitment to the village courts and to putting people on the payroll in the village courts and strengthening that capacity, because that is the front line as it were of law and order problems, and it certainly needed reinforcing, but other aspects of law and order do need to be strengthened as well, all the way through to the judiciary so that one doesn't the large numbers of people effectively in detention awaiting trial.
DW: In terms of other impediments, the country, for a number of reasons, has got very little roading infrastructure for instance, which is clearly a significant impediment to business.
PB: That's one of the major problems. It is infrastructure across the board. Basic road access,, ports and airstrips and so on, but particularly basic road access. Really many of the roads have been allowed to deteriorate and one of the problems has been lack of funding for maintenance. And that has been a concern, even in recent years when the government has been putting significantly more money into roads, a lot of the money is going into fairly expensive dual carriage ways into the way urban centres, whereas the real need is for basic access roads and adequate standards for urban and peri-urban roads, combined with that need for adequate funding for maintenance. And although the Prime Minister did highlight that there was more funding for maintenance and that the development budget and the recurrent budget were being merged, the reality on the ground is that that's a plan rather than happening in reality. But at least the right things are being said and more money is going into infrastructure, but the other area of infrastructure, for example, is power and that has been a major concern for a lot of businesses as well. That is that a lot of the costs have to be covered by businesses which would normally be public goods, so businesses have to pay for their own security as well as paying taxes for police. They are having to set up standby generators as well as trying to get power off the main grid and often even in the transport infrastructure and of other areas as well, of communications - the companies have to provide a back up service to the public goods. So these all raise the cost of doing business and make PNG that much less competitive with some of its competitors.
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