– Faisal Ahmed and Jestin Johny –
Papua New Guinea (PNG), a small island country in the Pacific Ocean is getting ready to host the leaders’ summit of the Asia-Pacific Economic Cooperation (APEC) in November in its capital city Port Moresby. But the country is embroiled in a political and 
social turmoil with a state of emergency being imposed in its southern highlands. The provincial government has also been suspended. In fact, recently a social media post by the Member of Parliament Byran Kramer calling a minister as ‘dumb’, has caused political friction and the issue had been referred to the Parliamentary Privileges Committee. This is also the time when PNG is striving hard to recover from the 7.5 magnitude Hela earthquake and the hundreds of aftershocks which has caused widespread devastation. The focus is on rehabilitation and to restore the socio-economic architecture of inclusive growth.Political and social unrest was also evident in PNG when Prime Minister Peter O’Neill got a second term in August 2017, and the electoral process was subjected to criticism. All these are gradually deterring the pace of growth and development in this resource-rich country.
Given that the APEC summit is forthcoming, there is, thus, an immediate need to follow a multi-pronged strategy to restore socio-political stability. Moreover, the development planning should comprise of a comprehensive package that can help PNG gain from APEC summit and improve its global competitiveness. Such geo-economic initiatives include focusing on the following sectors.
Firstly, enough policy space should be given for subsistence agriculture which is a major employment generating economic activity in the country. Agriculture contributes to 22.1 per cent of the GDP of the country and provides livelihood to 85 per cent of the population. PNG’s global exports accounts for US$10.5 billion as of 2017 and the contribution of agricultural commodities is duly evident in export statistics. A major agricultural initiative is the World Bank assisted Productive Partnerships in Agriculture Project (PPAP), whose deadline was revised in June 2016 for another three years. PPAP’s objective is to improve the livelihoods of small cocoa and coffee producers and to help increase and sustain their participation in the sectoral value chain. Thus, it entails the participation of private sector as well so that the small producers can get improved market access. However, with only a yearleft now for the project to finish, there are obvious concerns related to it. The likely slow pace of implementation especially in context of infrastructure, therefore, needs more policy attention.Moreover, focusing on the fisheries sector through technology and investments can help enhance production capacity.
Secondly, there is an imminent need to develop a pragmatic roadmap for PNG’s liquefied natural gas (LNG) sector. The country witnessed a generally consistent economic growth in the last decades owing to its extractive industries. The revenue from LNG projects have been deemed to drive economic growth and meet rudimentary socio-economic needs including job creation. It was seen as a major sector to give a boost to the country’s output and put it on a growth trajectory. But recent reports are suggesting otherwise. The challenges related to supply-side constraints and the implementation issues cannot be overlooked.
Thirdly, the small and medium enterprises (SME) sector need utmost attention. This will help the small producers get connected to the global value chains (GVCs) in their respective sectors. PNG joined the Asia-Pacific Economic Cooperation (APEC) in 1993 and will be hosting the APEC summit this year for the first time. This summit would help PNG increase and deepen regional trade and investments flows. This is also an opportunity for PNG to get more integrated with the region in terms of labour mobility, technological paradigms, tourism and people-to-people contact. But, while preparing for the summit, PNG should focus on reducing the supply-side constrains including lack of financing for young entrepreneurs and challenges in digital infrastructure, among others. The government has already put in place the SME Policy 2016 and the Master Plan for 2016-30. The policy has ambitious plans for creating job, expanding the number of SMEs in PNG and increasing the country’s per capita income from US$2,000 to US$9,600. But to sustain this SME model and to attain ambitious outcomes, the focus on increased SME participation in the GVC is imperative. This will help in ensuring the continuity in production process, exports, market access and employment, besides giving PNG enough geo-economic leverage in the multilateral trading system.In fact, the SME Policy need to be aligned with the mandate of the APEC’s Boracay Action Agenda, that seeks to globalize the SMEs with the regional and global value chains.
Fourthly, PNG should seek private investments in key sectors to work toward its commitment to the Sustainable Development Goals (SDGs). The country need to develop an investor-friendly regime to build livelihood-related infrastructure.Most recently, the Asian Development Bank (ADB) has approved a package of US$195 million to PNG for developing improved healthcare facilities.
Finally, PNG should take a leadership role in institutionalising business-to-business (B2B) contacts, facilitating Mode-4 and developing digital infrastructure throughout the Pacific Island Countries Trade Agreement (PICTA). Unfortunately, PNG opted out of another such agreement i.e. the Pacific Agreement on Closer Economic Relations (PACER) when a PACER-plus deal was signed. PACER-plus deal also includes Australia and New Zealand. However, there is a possibility that PNG may sign the PACER-plus deal by end of this year. Being a member of both PICTA and PACER-plus would provide PNG with potential opportunities for mutual capacity building and to enhance its international trading position. Moreover, PNG is also classified in the list of Small Island Developing States (SIDS), to whom it also committed $US150 million for infrastructure rehabilitation, capacity-building and disaster management, among other goals.As a SIDS country too, PNG has immense potential to contribute to issues such as climate change and food security.
Thus, giving enough policy space to such a multi-pronged strategy would enhance PNG’s global competitiveness and enhance its preparedness as a geo-economic player in APEC and the larger Indo-Pacific region.
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About the Author
Dr. Faisal Ahmed
Trade and Geopolitical Expert
Dr. Faisal Ahmed is an Associate Professor and Chair of International Business Area at FORE School of Management, New Delhi and is a leading expert on trade and geopolitical issues. His research and consulting areas include economic integration, global value chains, WTO issues, south-south cooperation, and trade & geopolitics. He held the position of consultant to the United Nations Economic and Social Commission for Western Asia (UNESCWA) on south-south cooperation and has led projects supported by the Ministry of Commerce and Industry, Govt. of India. He also holds an Executive Certification in Geopolitical Analysis from Geneva, Switzerland.He is a member of prestigious international associations like International Studies Association (ISA), Connecticut, USA; and, International Political Science Association (IPSA), Montreal, Canada.
His research papers have been published in national and international refereed journals indexed in Scopus, ABDC, and Web of Science (Thomson Reuters). He has also published several opinion articles, book chapters and monographs with ISBN. Dr. Ahmed has edited a book India’s Foreign Policy: West Asia and North Africa; and is the author of the textbook Business Environment: Indian and Global Perspective published by Prentice-Hall (PHI) publications. He has visited several countries and is invited as Speaker by leading think tanks, Embassy and inter-governmental organisation in India and abroad. Dr. Ahmed’s articles have also appeared in leading newspapers like The Financial Express, Bangkok Post (Thailand), The Hindu Business Line, South China Morning Post (Hong Kong), Business Standard, The Santiago Times (Chile), The Straits Times (Singapore) and The Economic Times. Also, he has been on expert panel in national and international media like Times Now channel, Vietnam News TV and the BBC.
Contact Email: faisal.academic@yahoo.co.in , Mobile# +91-9212572090
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About the Author
Jestin Johny
Academician and Researcher
Justin Johny has eleven years of experience in academics and research. He is currently an Assistant Professor in St. Francis Institute of Management and Research affiliated with Mumbai University.
He has attended various national and international conferences, and published research papers. The research interests include geopolitics, maritime logistics and strategic management.
He can be reached at jestinjohny@gmail.com
Disclaimer : The views expressed by the authors in this feature are entirely his own and do not necessarily reflect the views of INVC NEWS.
