PNG poor at growing business

THE World Bank’s private sector arm, the International Finance Corporation (IFC), has ranked Papua New Guinea last among Pacific island nations for their reforms to boost business growth.

Samoa is the top-ranked Pacific nation at 67 out of 189 economies, followed by Tonga at 69 and Vanuatu at 76. Fiji ranks at 81 and Papua New Guinea at 133. In the 2015 World Bank Doing Business Report released last week, the Solomon Islands, Vanuatu, Palau and Timor-Leste were praised for their reforms to boost business growth.

A World Bank official, Jonathan Kirkby, said the areas of most improvement this year in the Pacific were in starting a business, getting electricity, registering property and trading across borders. He said countries should use the report as a gauge to measure their progress.

"The countries that are ranked top in the world get there by continually undertaking reform, they are always looking at ways that they can improve the operation of their government regulation. So I think the countries in the Pacific and throughout the world can learn by looking at what other countries are doing."

The top 10 ranked countries are Singapore, New Zealand, Hong Kong, Denmark, South Korea, Norway, the United States, the United Kingdom, Finland, and Australia. Historically, Pacific island countries have not ranked well but they are improving, with Timor-Leste making the biggest improvement in ease of starting a business. The IFC’s Jonathan Kirkby said it used to "take three, maybe six months, to get a business registered".

But Timor-Leste has now created a one-stop-shop for all the bureaucratic approvals needed to open a business, from obtaining a business licence through to tax registration. Now, registering a business takes a matter of days. The new process has made a big difference to people’s livelihoods and to the number of East Timorese who are able to open a business, according to Mr Kirkby. "By doing things like providing information in local languages and simplifying the processes for business registration they have really increased the number of people coming in," he said.

"And there are a lot of women registering businesses. It is a really interesting trend that in Timor-Leste at least half of the people registering businesses are women."

The Solomon Islands is also a top performer, with the biggest improvements in access to electricity. In Palau, improvements in the method for calculating customs duties have reduced the cost and time taken for customs clearance.

The changes are expected to lead to lower prices for consumers and businesses for imported goods.

In Vanuatu, sales of traditionally-owned land have been blighted by corruption and speculation but a new electronic land register, not initially intended as an anti-corruption measure, will introduce more transparency. "Digitising the registry should help to some extent," Mr Kirkby said. "Corruption is a wider problem that requires a lot of different government actions but this should help."

Other Pacific nations have introduced fast and transparent online company registers and registers for movable assets, such as motorbikes, boats or backhoes, which enable those with no collateral to obtain a business loan.

The Doing Business 2015 report uses 10 measures to rank countries; starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labour market regulations. – ABC News/RNZI