The threat of

Papua New Guinea

The threat of nationalisation

By Robin Bromby

A LEADING Papua New Guinea politician has raised doubts about the security of hundreds of mil lions of dollars of foreign investment in his country. Deputy Prime Minister Ako ka Doi has come out in favour of

nationalising all major foreign-owned

companies in Papua New Guinea. While Prime Minister Rabbie Namaliu has said the government has no nationalisation poplicy in mind, Doi’s statements must threaten what remains of business confi dence in that nation.

Doi told a provincial premiers’ confer ence in Port Moresby that the Govern ment was moving toward ensuring that Papua New Guineans take over all major

foreign-owned companies operating in

the country. “There must be a change toward economic nationalism,” he said.

The following day, Prime Minister Namaliu issued a statement trying to set foreign investors’ minds at rest. He assured the business community that the Government was committed to honour ing existing contracts and arrangement

with foreign companies.

But a few days later Doi spoke again on the issue: “The Prime Minister is right in saying we do not intend to nationalise foreign investment but I per sonally want to see it happen that way.”

He specified companies operating in the areas of stevedoring, transport, retail and wholesale as ones which should have already gone to Papua New Guinea own

ership.

Also of concern in Port Moresby is the decision by the PNG Trade Union Con gress to press for a 20 per cent wage increase for all workers at a time when the Papua New Guinea economy is being hampered by the fact that wages

are uncompetitively high by Third

World standards, while productivity and skills levels are well below those of neighbouring Asian countries.

For the moment anyway, foreign com panies including those involved in

mining and oil development are keep

ing up a public face that they still have confidence in Papua New Guinea. Pri vately, though, most expatriate managers are extremely worried by both the un predictability of the local politicians, and of the government’s failure to get any handle on the escalating law and order crisis. One Australian living in Port Moresby summed up his decision to pull out of the country next month: “You know things are grim when you choose a restaurant mainly by the level of security it offers.” □