I’m at this conference and I know what many investors will be asking: if I put my money into PNG, will I be able to get it out?

This is a reasonable concern for possible investors. The conference will make it clear that probably the major concern facing PNG businesses currently is foreign exchange restrictions.

These restrictions are creating immediate difficulties in getting enough foreign exchange to pay invoices for imports. There are various arbitrage options for some types of business (especially those with a significant export element to their operations) but these restrictions have really hurt most businesses.

There has been a significant impact on domestic growth, which has been squeezed as imports have dropped back to 2006 levels.

In addition to the short-term concern about paying invoices, it would be hear the stories of businesses in PNG about their experiences in repatriating any capital (such as paying dividends, withdrawing superannuation or selling one’s business assets and withdrawing funds).

Frankly, these foreign exchange shortages reflect poor policy decision-making by the central bank (although there are reports of directions from advisors in the prime minister’s office).

PNG has moved away from the market based exchange rate it adopted after an economic crisis in 1994. It has now effectively pegged its currency to the US dollar. But simply putting an extra $US100 million into the market (part of the government’s 100 day economic plan) is a bandaid response that doesn’t deal with the underlying issues.

This question of repatriation of capital goes to the heart of PNG’s management of its foreign exchange arrangements. Estimates from the IMF and other sources such as the ANU suggest the kina should fall by at least 20%.

A move to a more competitive exchange rate would make foreign investment more attractive and thus could influence the timing of investment decisions.  Still, much can be done now to start exploring ideas and building relationships.

Another question, conference attendees will ask is whether this new government is pro-business other than in the resource sector.

While the resource sector has grown strongly over the last 42 years, the non-resource sector has not done nearly as well – indeed probably going backwards significantly in per capita terms.

When considering business opportunities, it will be important to get a sense of the government’s priorities.  There are concerns that PNG is taking an even more state-based approach to development than the previous government. 

I have stated previously in comments on the Alotau Accord II that there is no clear political or economic philosophy for meetings its claimed objectives of more inclusive growth.

There are no assurances that the anti-growth, anti-business elements in planned policies such as agriculture, SMEs and land will be dropped

There is no mention of private-public partnerships and there is a worrying amount of state-based action in the accord and very little about facilitating the private sector with pro-market policies.

Treasurer Charles Abel’s 100-day economic plan has at least suspended and put under review the worst planned anti-business proposals. But its discussion on strengthening PNG’s economic base starts with a list of well-known resource prospects, then some Australian aid projects (!), then power project prospects that have been around for years followed by some previously announced ‘high impact projects’.

There are no initiatives to try and reduce red tape and improve business regulation to provide a better environment for SMEs. The development path remains focused on resource projects and other ‘big project’ ideas that seem to do well for proponents but not for inclusive growth for other businesses and the people of PNG more broadly.

I hope the conference goes well. Some of the panels look excellent and filled with local practical knowledge. The addition of the Pacific session is a good initiative. I’ll be exploring views from old and hopefully new hands during the conference.

Mainly though, it will be great to have a chance to talk again to people living the wonderful PNG experience.

As prime minister O’Neill banned me from the country for asking questions such as the above two years ago, I miss these opportunities to talk to local people including my many friends still in PNG.