The Business Advantage Papua New Guinea Investment Conference was held last week in Sydney, successfully showcasing the nation’s potential as an investment destination and canvassing different views from the business community about the opportunities and challenges. A clear picture of the country’s—and the Pacific region’s—great untapped potential emerged.
The conference, held at Sydney’s Shangri-la Hotel, opened with an insightful perspective from futurist Mark Pesce, who explored the possibilities of twenty-first century technology—especially mobile phone and blockchain technology, drones and robotics—for PNG’s long-term economic future.
He described how PNG could use these technologies to leapfrog the industrial era and move effectively into the post-industrial world. In particular, he explored a possible convergence between banking and telecommunications, based on the use of mobile phones.
‘Pesce’s keynote really set the tone for the conference. Not only did he take a long-term view—which all investors must do—but he identified clear trends that, if pursued, could benefit PNG in particular,’ observed MC Andrew Wilkins of conference organisers Business Advantage International.
‘What is encouraging is that work is already underway in PNG in several of these areas. The central bank is actively looking at Blockchain, Oil Search is already using drones to inspect its pipelines, while the near-completion of the National Transmission Network, and a likely new underseas cable connecting PNG to the world wide web are signs of progress in connectivity.’
Focus on growth sectors
The commentary then moved to the finance sector, with a perspective on the most profitable sectors for investment provided by some of PNG’s most high profile fund managers and analysts: Kennedy Wemin (CEO, Melanesian Trustee Services Limited), David Lennox (Resource Analyst, Fat Prophets), Dr Stephen Nash (Chief Investment Officer, Nambawan Super), Eric Kramer, (CEO, PacWealth, investment manager for Nasfund). Interestingly, both Nash and Kramer expressed an interest in investing in PNG’s new underseas cable.
The Governor of the Bank of Papua New Guinea, Loi Bakani, outlined what he saw as the priorities will be for economic development (see our report on the Governor’s speech here.)
A perspective on the opportunities offered in the financial services sector was provided by Syd Yates, Managing Director of Kina Securities, who told the story of how the PNG company had grown from a small staff to becoming a fully-fledged bank and one of the top three fund managers listed on the Australian Securities Exchange.
‘The Government was keen to attract investment, especially in the agriculture sector.’
The Chairman of Air Niugini, Sir Frederick Reiher, detailed the increasing reach of the national carrier and the redevelopment of Jackson’s international airport in Port Moresby so that it can become a regional hub.
Several other aspects of the investment context were explored, including the legal and regulatory environment for business, health services (outlined by International SOS’s global medical chief, Dr Myles Neri) and sustainable agribusiness (with speakers from Innovative Agro Industry and Business for Development).
Economic growth ‘top priority’
On Day Two, the Minister for National Planning and Monitoring, Richard Maru—representing PNG’s Prime Minister, Peter O’Neill—said that the Government was keen to attract investment, especially in the agriculture sector. He reaffirmed its commitment to reducing the cost of doing business and pointed to continued major investment in infrastructure.
He also said that the government had learned the lesson of the past five years: that the economy was too reliant on the resources sector and needed to develop other sectors, such as agriculture and tourism.
‘Over the next five years, our policy priority going forward is economic growth. We have to increase exports, decrease imports and get more value from our resources. This is what we have to do and do it quite quickly.’
Delivering on three key resources projects—Wafi-Golpu, Frieda River and the second Papua LNG project—would be a high priority in the next five years, he said. Import replacement in agriculture was also vital.
Chairman of the APEC PNG 218 Coordinating Authority, Sir Charles Lepani, outlined how PNG’s hosting of APEC in 2018 is progressing, with 15,000 delegates expected, while Mahesh Patel, Chairman of Kumul Telikom, described the efforts being made to make state-owned telcos more responsive to consumers and to reduce costs.
‘Delegates heard about the next wave of young PNG entrepreneurs.’
David Hill, Country Director of the Asian Development Bank in PNG, gave the bank’s view of PNG’s economy, and outlined its plans to invest US$2 billion in key infrastructure over the coming decade, including US$1 billion on the Highlands Highway, a vital lifeline for the PNG economy.
This was followed by case studies of successful PNG companies: SP Brewery in manufacturing (with CEO Stan Joyce) and Highlands Pacific in mining (with CEO Craig Lennon). Lennon pointed to the success of the Ramu nickel and cobalt mine as being particularly exciting, given that emergent battery storage technology is heavily reliant on these two export metals.
There was then presentation on landowner companies from Anitua’s CFO Anthony Neck, while delegates heard about the next wave of young PNG entrepreneurs from Kumul Gamechangers graduate, Roberta Morlin.
Pacific Investment Seminar
In the afternoon, the focus shifted to the Pacific Islands, with some original and rarely heard insights. It started with China expert David Thomas detailing the opportunities that emerge from China’s expansion, which is leading to a 10 per cent increase in outbound investment.
This was followed by a series of country presentations and a round table on the investment terrain in Fiji, Vanuatu, Timor Leste and the Solomon Islands. Timor Leste’s appearance was particularly timely, following the resolution of its long-standing border dispute with Australia only days previously.
‘The event has been a resounding success. We couldn’t have asked for better feedback from delegates,’ said Andrew Wilkins of Business Advantage International. ‘I think they get that this was an event with a difference. Having so many decision-makers in the room made for some good conversations between sessions, too.’
Business Advantage International expects to make an announcement about its 2018 PNG Investment Conference in coming weeks.