Grow non-mineral sector, PNG urged

By MALUM NALU

THE key challenge associated with PNG’s economic outlook is to grow the non-mineral sectors of the PNG economy, according to Treasury acting assistant secretary – forecasting branch Nancy Lelang, The National reports.
 She said looking ahead over the horizon, prices of PNG’s major export commodities would continue to be volatile, with the world economy still suffering from the impact of the uncertainty in global growth and stability.

Lelang...PNG economy to grow strongly...

Because of this, it may take time for a global economic recovery to gain a foothold and stabilise conditions over the medium term.
Lelang said for the medium term (2013 to 2016), the PNG economy was expected to grow strongly.
She told the monthly economic and public sector programme seminar at the Holiday Inn last Friday that these non-mineralsectors included agriculture, forestry and fishing sectors;  electricity, gas and water sectors;  transport, storage and communication sectors; wholesale and retail sectors; construction sector; finance, real estate and business services  sectors;  and the community, social and personal services sectors.
Lelang said the growing of these sectors could be accomplished through policies such as:

• Enhancing competition;
• Developing more effective and efficient markets;
• Reducing impediments to businesses and investments;
• Supporting of microfinance;
• Pursuing reforms to secured lending arrangements;
• Continuing the National Land Development Programme;  and
• Accomplishing the housing policy.

“The growing of the non-mineral sectors can also be accomplished through reviews of industries,” she said.
“Such industries that need to be reviewed regularly include Companies Act 1997, sugar prices, PMV and taxi fares, agriculture commodity pricing, as well as pricing reviews for services offered by state-owned enterprises such as electricity, water, postal and ports prices and for specific regulated products like petroleum by Independent Consumer and Competition Commission (ICCC).
“Equally important are the agriculture, forestry and fishing sectors which comprise a vast majority of our people.
“These can be supported with the government continually maintaining basic infrastructure like roads, bridges and ports, as well as, providing microfinance.
“The onus is also on the private sector and all stakeholders engaged in these no-mineral sectors to operate effectively and efficiently to grow these non-mineral sectors of the economy.
“The benefit of growing the non-mineral sectors of the PNG economy is ultimately to improve the quality of life of all Papua New Guineans, as well as to grow the PNG economy.”

Sir Rabbie joins InterOil board

Interoil Corporation yesterday announced that its board of directors has approved the addition of two members, The National reports.
 Sir Rabbie Namaliu and Samuel Delcamp, former executive director and chief investment officer of the Fuller Foundation, have both joined the board.

Sir Rabbie Namaliu

In keeping with good corporate governance practices, the board also decided to separate the roles of chairman and chief executive officer.
Dr Gaylen Byker was appointed chairman of the board.
Phil Mulacek will continue as chief executive.
In addition to serving as PNG prime minister from 1988 to 1992, Sir Rabbie served as Speaker of the National Parliament between 1994 and 1997.
Prior to this, Sir Rabbie was minister for foreign affairs and Trade from 1982 until 1984 and has held several other senior government posts since his first election to parliament in 1982.
Sir Rabbie has chaired InterOil’s PNG advisory committee since last August.
Delcamp has more than 40 years of investment experience.
He served as executive director and chief investment officer of The Fuller Foundation, a public charity, for 24 years.
Delcamp was instrumental in founding the organisation and overseeing the growth in its assets under management from US$4 million to more than US$600 million.
Byker has additionally served as director and president of MBM Partners Inc, an unregistered investment adviser.
During his tenure as a director since 1997, Byker held roles as lead independent director and  chair of the board’s compensation, among others. Nominating and governance committees and membership of its audit and reserves committees

Kongo Coffee to get K10 million loan funding

INTERNATIONAL Finance Corporation, a member of the World Bank Group, will set up a risk-sharing facility with Bank South Pacific to enable the bank to provide K10 million in loans to Kongo Coffee Ltd, the largest locally-owned coffee exporter in Papua New Guinea, The National reports.
 The financing will help the company buy more coffee from farmers, meet market demand and create more jobs.
“IFC’s guarantee means Bank South Pacific will now be able to lend us the money we need to triple our coffee processing capacity to six tonness per hour from two tonnes,” Jerry Kapka, Kongo Coffee’s managing director, said.
“This improvement will allow us to purchase more coffee beans from local farmers, satisfy our customers’ demands, and increase our coffee exports.”
The company largely buys its coffee from remote communities in Chimbu province, where more than 100,000 people rely on the coffee industry for jobs and income.
Most of its suppliers are small growers who own less than two-and-a half hectares of land.
In addition, IFC will provide advice to Kongo Coffee to improve its corporate governance, internal systems, and management skills.
“By helping Kongo increase its exports and sustainability, we are giving small-scale coffee farmers an assured buyer who will want more of their product,” Carolyn Blacklock, IFC’s resident representative in PNG, said.
“More demand means younger farmers have a future and are given the opportunity to expand their businesses, increase profits, and create jobs.” 
A key priority for IFC in the PNG is to provide investment and advisory services to financial institutions to better serve micro, small, and medium enterprises and expand access to finance in rural areas to improve living standards and create economic opportunities.  
IFC is the largest global development institution focused exclusively on the private sector.
It helps developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilising capital in the international financial markets.
In fiscal 2011, amid economic uncertainty across the globe, IFC helped its clients create jobs, strengthen environmental performance, and contribute to their local communities  – all while driving its investments to an all-time high of nearly US$19 billion

Goroka Show gets K20,000 boost

By MALUM NALU

THE popular Goroka Show, PNG’s biggest tourist-pulling event, will get even bigger and better this year, according to Eastern Highlands Farmers and Settlers Association (EHFSA) president Wilson Thompson.
He said this last Thursday during the presentation of K20,000 from Bank South Pacific to Eastern Highlands Agriculture Society for the 2012 Goroka Show.
BSP Goroka branch manager Ruben Elizah and rural banking regional manager Joe Waim handed over the money to EHFSA and show executives.

Thompson (left) receives the K20,000 from Elizah as Goroka Show chairman Gideon Samuel looks on.-Picture by THOMAS SOLEPA

Elizah said BSP was committed to community activities such as the show, and construction of a mess as Mesauka Secondary School, while Waim said rural branches and small business facilities would be opened in Okapa, Aiyura and Yonki,
“All accommodation have already been booked out by tourists and others are even booking for 2013,” Thompson said.
“I challenge Tourism Promotion Authority and National Cultural Commission to also assist in this premier event.
“We will soon be asking them to remove Goroka Show from their brochures and publications as we have not had any support from them, apart from the Institute of PNG Studies.”
Thompson said the first day of the show would be committed to agriculture and rural development, hence, it was fitting that BSP was now placing more emphasis on rural banking and financial services.
Goroka Show chairman Gideon Samuel said National Gaming Control Board had sponsorship rights for the show, with BSP being the second major sponsor.

Peter O'Neill set to win Ialibu/Pangia seat back

Peter O'Neill is set to win his Ialibu/Pangia seat back.
He has primary votes of more that 50% plus one.
He is set to be the first candidate to win in the 2012 national elections.
O'Neill, at last count, had more than 16,000 votes so it should just be a mere formality for him in the remaining ballot boxes.
At last count today, O'Neill had 16, 583 votes and his closest rival was Raphael Noipo (2,930), while Eke Lama was third on 2, 767 votes.

More details to be posted.

World Bank: PNG must spend better

By MALUM NALU

THE passing of the boom in PNG government revenues will challenge authorities in the coming years, according to the World Bank, The National reports.
 This is according to its latest PNG Economic Briefing The Challenge of Transforming Today’s Boom Into Better Living Standards for Tomorrow,  which was presented by World Bank country economist Tim Bulman at the monthly economic and public sector programme seminar at the Holiday Inn last Friday.

Tim Bulman

The report said meeting the community’s expectations of improving services would require “spending better as much as spending more.
Important policy steps are being taken in this direction, but the pressures to meet short-term demands, and PNG’s social needs, are great”.
“Before the revenues from the LNG and the potential additional projects start flowing late this decade, government revenues are expected to stagnate, especially relative to rising costs of skilled employees, and of materials and the demands of a population growing by around 2% each year,” it said.
“At the same time, the community will continue to expect the government to provide more and better services, towards benefitting from the boom occurring in parts of the economy.”
The report said to manage these opposing pressures, it would be essential for the government to better ensure that spending from the government was translated into education, health and other services delivered to the end user with fewer leakages en route, or that investments in infrastructure were appropriately maintained.
“This will require both better planning and implementation,” it said.
“The establishment of the sovereign wealth fund and the government’s move towards multi-year budgets for capital projects are steps in this direction.
“More effective, especially in the short term, will be reducing leakages.
“Strong institutions of governance, throughout the public sector, and developing a pervasive culture of accountability can help achieve this.”
The report said translating economic wealth of the scale enjoyed by PNG into better living conditions for all citizens was a great challenge.
“Some countries have successfully managed the challenge of the ‘resource curse’,” it added.
“Already, PNG has created a climate that attracts investment in its resource production, and it is developing the institutions to ensure that this wealth supports a stable macro-economy.
“For long-term development and prosperity, it will be essential to design PNG institutions that ensure political leaders have the incentives to turn the nation’s wealth into long-term, broad-based development, rather than maximising the potential for it to generate short-term private rents.
“Failure to do this may undermine the gains of the past decade and the potential ongoing boom, working its way through the project planning and preparation pipeline.”
The report said Standard & Poor’s warned of this risk in February this year when it shifted the outlook for the country’s long-term sovereign debt from stable to negative.
“The challenge will be for the leadership that emerges from the mid-year elections to replicate these efforts in the public realm,” it said.

InterOil extends LNG deal with Mitsui

INTEROIL announced at the weekend that it has entered into agreements with Mitsui & Co Ltd to extend the dates by which certain conditions are to be met and final investment decisions (FID) made in LNG project agreements with Mitsui until Dec 31, 2012, The National reports.
 On March 30, 2012, InterOil indicated additional amendments to extend the joint venture operating agreement (JVOA) for the company’s proposed condensate stripping plant (CSP) with Mitsui, and associated agreements to December 31, 2012, were being contemplated.
“The JVOA for the company’s proposed CSP with Mitsui and associated agreements, have been amended so that the time allowed for FID has been extended until December 31, 2012,” InterOil said in a press statement.
“The JVOA sets out the rights and obligations of the participants of the joint venture to develop a CSP at InterOil’s Elk and Antelope field site in Gulf province, Papua New Guinea.”