Richard Maru: Trade and Investment in Australia’s Favor

The country-to-country trade and investment relationship between Papua New Guinea (PNG) and Australia is skewed in Australia’s favor and Australia has not done enough to support PNG to increase its exports. I raised this in my keynote address this morning at the 38th PNG-Australia Business Forum and Trade Expo that is being held in Port Moresby.
For the last 47 years trade has been in favour of Australia; that has been the status quo. PNG’s exports to Australia are mainly gold and other precious metals which comprise over 98% of total exports. This means less than 2% are from the non-extractive sector and is valued at about K50 million per annum. Australia’s total exports to PNG is estimated over K1.5 billion, which translates to a ratio 1:10. A very huge trade imbalance. In terms of investment, Australia has invested AU$ 24 billion in PNG while PNG invested AU$ 4 billion in real estate.
Australia has been using its very stringent technical barriers and biosecurity to make it very dificult for PNG to export its taro, sweet potato, fish and other food products to Australian market. So as far I as the Minister for International Trade and Investment is concerned, there is no need for us to talk about a trade agreement. There is no need to talk about Placer Plus or even a study on a Free Trade Agreement between our countries. There is no point when the trade and investment imbalance is so big and so skewed to Australia and unlikely to be reduced in the foreseeable future.
Rather than waiting on Australia to address this issue, PNG has now decided to enter into stronger and deeper trade and investment relationships with other countries with our priority being China.
Enough is enough. We have been pushing on deaf ears for 48 years now and starting this year we are moving on. We have decided to establish eight trade mission around the world to attract more foreign direct investments from these coutries and to secure export markets for our goods. One office will be in Brisbane, Australia. PNG is focusing on new trade and investment partners starting with those who can buy large volumes of our goods and services and invest in the most strategic sectors of our economy in line with our national priorities. Our new partners who we want to strengthen our trade and investment relationship with are China, Malaysia, European Union, UAE, European Union, Indonesia, and Singapore.
Our national objective is to double the size of our economy by 2032 and to do that we have to secure our economic security, food security, energy security and climate change security. We will partner whatever country that will help us achieve that. We are friends to all and enemies to none. We are not interested in geopolitics. Our main priority is securing the future of our people.
With the major resource projects including Papua LNG, Porgera Gold Mine, Pasca A Project, Wafi-Golpu Mine, and P’nyang LNG Project coming online, the government and the ministry of International Trade and Investment are working innovatively to ensure the impact projects get off the ground and the benefits are maximized and shared equitably.
These major resource projects have the potential to inject billions of dollars into PNG’s economy over the next 10 to 15 years. They will support the ongoing economic development and assist the country to progress its ambition to develop Special Economic Zones (SEZs) which is one of the vehicles that our government will be utilizing to grow the country’s economy. The SEZs will increase exports in agriculture, downstream process in agriculture, fisheries, and forestry sectors, replace imports of rice, fish, sugar, beef, chicken, feed, and wheat, and also looking at property, real estate, tourism sector and energy projects to produce clean, reliable and cheap energy.
The country’s GDP is expected to grow at the average rate of 5% per annum over the next 15 years and it will be an opportunity for the private sector to make those critical investment decisions and invest in PNG, particularly in the SEZ space. In the trade and investment point of view, PNG is open for business and we will give red carpet treatment to any investor coming into the country particularly to invest in the identified SEZ areas.
PNG is working to improving the ease of doing business in the country with the recent launching of trade portal, investment guide and working to implement the one stop shop service within our SEZs. We are also working on capital market reforms to improve governance of all stocks equity for companies listed in the Australian Stock Exchange who operate businesses in PNG. We will also make it our priority to address the law and order issues in the country to make the climate safe and suitable for investors to come and invest.
I encouraged Australian businesses to seriously canvas more new and emerging business opportunities in PNG and in particular seek to partner local SMEs and PNG owned companies in their business endeavours.
Source: Facebook
Posted in: Papua New Guinea

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