Mar 24, 2018 Last Updated 3:53 AM, Mar 16, 2018

Minimum wage to go up?

The stage is set for Papua New Guinea to increase its national minimum wage next year, in a move which is seen as providing much-needed redress for the country’s labour pool. The decision to consider revising the rate of pay, which has remained untouched for the past five years, forms a key part of the government’s plans to create a more inclusive, modern economy. However, with much of the workforce still operating in the informal economy and a lack of skills leaving many locals unable to participate in key projects, the government will be keenly aware of the challenges ahead.

PNG’s minimum wage was increased from a fortnightly rate of K30 to K74 when last reviewed in 2008, marking a rise of 146%. A newly appointed board began a series of public hearings in October, with its findings to be submitted to the National Executive Council in January 2014. The timing of the latest review should work well for PNG, which has enjoyed several years of impressive economic growth and high levels of international investment. A US$19 billion LNG project has been instrumental in driving the economy forward, helping the country to notch up average annual GDP growth of 9.5% between 2009 and 2012.

The current minimum wage has provided a stable foundation for investors and industry to predict labour costs, but it has not kept pace with inflation, which has averaged 6.4% since 2009. This is lower than expected given the rate of economic growth, but price increases remain a concern. Inflation peaked at 8.6% in 2011, dropped to 2.2% in 2012 and is expected to come in at 5.5% in 2013. While the LNG project has spearheaded PNG’s economic expansion, a few locals were able to contribute to its construction due to their lack of skills, finding themselves sidelined in favour of foreigners.

A large part of the local workforce—around 40%—is employed by the informal sector, according to a World Bank survey. Of these, around 80% hold jobs in the wholesale trade, retail, restaurant and hotel sectors. Of people who work in the formal economy, 47% hold positions at private companies, while another 37% are employed by the public sector or the military. read more buy your personal copy at

It’s no denying that Vodafone is world number two in the business of mobile phones—even in the Pacific—but all that is about to change. News was abuzz in the telecom industry late November that the carrier—which has carved a household name in practically every continent—Africa, Asia, America, Europe and the Pacific region—is about to off-load part of its wireless stake as early as 2014. It follows moves by AT&T—the largest telecom carrier in the United States—to expand out of the mainland US where competition has restricted its growth and potential earnings. Last September, Verizon Communications signed a deal to grab 45% of Vodafone as part of acquiring Vodafone’s US business for US$130 billion. The transaction marked one of the largest todate in corporate history but it also became part of Vodafone’s slow disintegration process.

AT&T entered the scene of Vodafone-Verizon Wireless last month but Verizon showed little interest in AT&T’s offers. But market insiders reckon AT&T and Vodafone have huge business together as any merger between the two carriers would create the world’s largest telecom name. Combined, Vodafone and AT&T would be ranked a major global force in the telecommunications world with an unparalleled market capitalisation boasting around US$250 billion. read more buy your personal copy at

Deadline looms for PNG

Oil Search will find out this month if the Papua New Guinea government can raise $1.68 billion to avoid giving up its 14.6 percent stake in the company to an Abu Dhabi state-owned wealth fund, which could then expose the company to a takeover tilt. If the PNG government is forced to give up its blocking stake in the Port Moresby-based Oil Search, it could provide a chance for the likes of ExxonMobil, France’s Total or Royal Dutch Shell to move in and attempt a takeover.

The PNG government is expected to announce before Christmas whether it will relinquish its stake to the Abu Dhabi sovereign wealth fund, International Petroleum Investment Company (IPIC). In March 2009, the government struck a highly complex financial agreement to fund its share of construction costs in the country’s flagship liquefied natural gas project, PNG LNG. To secure funding, the government issued a five-year exchangeable bond to IPIC, raising US$1.68 billion.

The bond matures in March, when the government is due to transfer its 14.6 percent holding to the sovereign wealth fund. Oil Search’s management has just finished an investor week in PNG and is understood to be sounding out interest from overseas funds in the 14.6 percent stake, to get on the front foot in the event the government gives up the stake and IPIC opts to sell it. One person familiar with the matter said: “The concern for management is if they don’t take a pro-active role, they open themselves up to someone they don’t want on the (share) register”.

Both Shell and France’s Total have made no secret of their ambition to establish an LNG foothold in PNG and Oil Search could be just their ticket. Oil Search has a 29 percent interest in the US$19 billion ExxonMobil-operated PNG LNG project, which is set to come on stream in the second half of next year. The PNG government could extend the bond or issue a new one, and it has indicated a desire to resolve the issue “sooner rather than later”. read more buy your personal copy at

From a ravaged war-zone 20 years ago to a prime tourist spot every visitor to Papua New Guinea would love to see. That is Bougainville, PNG’s mineral-rich island province where dissidents once claimed a secessionist state in an attempt to break-away from the national government in Port Moresby. Boasting one of the world’s largest copper mines until its closure in 1989 after a bloody and long-drawn civil war that erupted between warring landowners, Bougainville has seen the toughest of times.

But gone are the relics of war and so too the armed gangs which once frequented the streets or places like Panguna, where the mine once stood. “The people here are very, very friendly,” says CEO of Bougainville Tourism, Lawrence Belleh as foreign reporters began calling him last month in the wake of the release of the new film Mr Pip shot on the island. “You can walk on the streets during the night unlike Port Moresby,” he claimed in a reference to a recent spate of street violence in the nation’s capital and other provincial towns. Tourism is being put on the front page of the economy with a new website promoting the island’s coolness.

“We still have the rawness in the natural environment and everything people would want to see, especially with ecotourism that is around here in Bougainville,” Belleh said. Based on a novel Mister Pip by New Zealand author Lloyd Jones, the new movie which captures the highs and lows of the island’s natural attractiveness, is now captivating audiences world-wide. “Some of the actors and scenes you see in the film are actually the experiences people had experienced during the height of the crisis,” said Belleh. Mr Pip’s adventurous showpiece which featured some local cast added a new perspective to the island’s attempt to revitalise tourism in the aftermath of the civil war. read more buy your personal copy at

The Australian government has been warned a A$38 million medical aid project in Papua New Guinea could be used to foist deadly counterfeit drugs onto some of PNG’s poorest villagers. Department of Foreign Affairs and Trade (DFAT) bureaucrats in Canberra are refusing to say if Australia will continue to bankroll the distribution network despite warnings from the PNG medical community of corruption allegations surrounding the project.

Borneo Pacific Pharmaceuticals has won the A$28 million contract to supply medical kits to the PNG government with Australian aid, then send the drugs to aid posts and medical centres around the country. Internal DFAT documents identify Borneo Pacific as PNG’s largest provider of drugs from manufacturer North China Pharmaceutical Group, a known offender in China’s fake drugs crisis. PNG’s medical society alleges that Borneo Pacific “is renowned for giving presents to people in the government procurement system”, and has branded the process ‘corrupt’ and warns that counterfeit medicines supplied under the deal could kill.

The revelations come despite promises to clean up the PNG Health Department’s drug supply division, described in 2011 by its own minister as “riddled with corruption”. The internal DFAT documents show officials knew Borneo Pacific did not hold the required quality standards accreditation to compete in the tender and were worried when the requirement was simply removed by PNG’s Secretary of Health after the tender’s deadline. The same document shows that the non-profit IDA group, which does hold the required accreditations, offered to supply its high-quality kits for A$8 million less than Borneo Pacific’s bid. read more buy your personal copy at


PNA Advertorial 500x702

Find Us on Facebook