Photo: James Marape
The country's lawmakers have unanimously voted in favor of the updated investment law passed by PNG's parliament, specifying the intention to prevent foreigners from operating small businesses that are reserved for locals.
This law includes measures to ensure locals remain in control of businesses such as general stores and taxi and bus services without discouraging other foreign investment.
It followed a public outcry that local businesses face increased competition from Asian migrants. Papua New Guinea’s population is almost entirely indigenous, with a small fraction of Australians, Chinese, Filipinos, and other nationalities.
“It’s time our people take the lead,” said Prime Minister James Marape. “The law is a step toward protecting businesses that only Papua New Guineans can participate in.”
Dozens of business activities, from small-scale farming to owning a security company, are reserved for citizens under Papua New Guinea’s 1992 Investment Promotion Authority Act, but the law has lacked monitoring and enforcement.
The updated law aims to improve compliance so local businesses are protected while still encouraging foreign investment in industries where Papua New Guinea needs outside capital and expertise.
A local general store owner in PNG’s capital city, Port Moresby, said the new law is long overdue. “It took the government 31 years to come up with this bill to protect us from competing with foreigners doing the same business,” said the local, who requested anonymity.
“For example, we are competing in running trade stores in the settlements,” he said, referring to the urban communities that have sprung up as more people move to towns from the country’s highlands.
Marape’s government has a policy of developing small- and medium-sized businesses for indigenous Papua New Guineans.
A Bangladeshi expatriate who runs a store in one of Port Moresby’s settlements said the shop is leased to him for K10,000 monthly from a Papua New Guinean who was tired of family and relatives urging him for financial assistance towards customary and cultural obligations, such as bride price and haus krais (funeral expenses).
“We are doing business because the locals are not really competitive in running their own business. So, the law is good for indigenous Papua New Guineans to take ownership of their own business activities. But then they have to be committed, and their relatives should be supporting them by not asking too much for financial assistance,” the expatriate said.
Generally an influx of foreigners running small businesses reflects decisions and factors that are made by local businesses and their owners, the Port Moresby store owner said.
“Trade stores can be built, but then we rent them out to foreigners to manage due to social and cultural issues that most owners are obligated to because of their outlook and status in society. That’s how most foreigners initially run businesses that locals are supposed to run,” he added.
