Even with the recent decline in oil prices in 2015, PNG remains a sound investment.
PNG is characterised by the proven pathways to development like the ExxonMobil company which operates the recently completed $US19 billion (K58 billion) PNG LNG project - a world class development and operation.
Economists describe the cost of labour in PNG as very low, significantly lower than Australia and some other regional neighbours.
An experienced workforce is also a vital part in the country with upstream oil and gas an established industry.
The low transport costs are involved in the LNG Project because PNG is close to key Asian markets.
There is also a transparent fiscal regime with a tax and royalty system and the government policies are conducive to activity which resulted in operational aspects of industry as well as the fiscal regime.
Regardless of decreasing oil prices, major business houses in PNG are continuing their business as usual.
Bank South Pacific (BSP) one of the biggest banks in PNG and the Pacific in showing its support to the economy of the country committed K50,000 as a major sponsor to support the Papua New Guinea (PNG) Advantage Summit in Brisbane in June 2015.
The summit showcases business and investment opportunities in PNG to the international business community.
The Investment Summit seeks to market PNG as an ideal business partner in various sectors including petroleum, mining, agriculture, business and finance.
Prime Minister Peter O’Neill has also travelled the world inviting investors to come and do business in PNG.
When attending the World business leaders’ summit in the United Kingdom, O’Neill told more than 300 business leaders, from the United Kingdom, as well as Europe and the United States, that PNG have potential returns on investment and welcomes them to invest in the country.
"Stability, responsible management and growth is what we offer to you,” O’Neill told the leaders.
"Underpinning our economic growth are our core policies that are building a solid foundation for our country into the future.
"These policies relate to free education, universal healthcare, improved law and order, and infrastructure development.
"The opportunities in Papua New Guinea are better than they have ever been.
"Papua New Guinea is open for business and I invite you and your colleagues to join with us is maximising these opportunities.”
Minister for Trade, Commerce and Industry, Richard Maru is also supporting O’Neill and pushing for PNG to ‘deepening and widening’ the Interim Economic Partnership Agreement (iEPA) with the European Union.
Maru said this is to cover additional products beyond canned tuna and make provision for accession of additional new members within the Pacific ACP group to join iEPA.
He pointed out that another area where PNG will be seeking bilateral assistance from EU is for the establishment of a fully accredited laboratory for product testing and certification to meet the EU market requirements under the iEPA duty free-quota free arrangements.
Despite going overseas looking for investment, financial situation in the country has been getting worse.
The National Development Bank (NDB) in August does not have the money to fully fund all the small to medium enterprise (SME) loans applied for.
Managing Director Moses Liu said the lack of National Government funding to NDB has hampered the funding of SME loans which the bank has approved valued at over K53 million for 498 customers.
“The current situation has been exacerbated by the fact that the Government has not provided funds to NDB to lend to the SME sector in 2015. It is now August and the Government has not released the K50 million to NDB as appropriated in the 2015 National Budget.”
Despite the financial crisis in the country, major mining investors are still interested in investing in the country.
The Zijin Mining Group of China has purchase 95% of Barrick Niugini Limited’s ownership of the Porgera gold mine.
The remaining 5% shares are owned equally by the Enga Provincial Government and landowners.
Minister for Mining Byron Chan told the company that PNG had been hit hard by the falling mineral commodity prices, but despite this and associated investment risks, Zijin, on its own, had chosen to invest in the country.
The continuous government’s uncontrolled of the economy has also forced the sole fuel distributor, Puma Energy ceasing operations at the Napanapa Oil Refinery after a disagreement with a state agency over tax charges.
This has seen staff being laid-off after a disagreement with PNG Customs on tax payments.
Meanwhile, Bank of Papua New Guinea Loi Bakani has warned the Government to cut spending to non-priority areas to set a good foundation for future budgets.
He said the economy is still strong, where we still have a 9-11% growth in GDP but in reality we don’t have revenue to meet all government policies.
He said the decline in revenue is due to the drop in commodity prices on the world market.
The prolonged El Nino weather patterns is also affecting the business growth in the country.
One of the major effects of the drought is the shutting down of the Ok Tedi Mining Ltd's in Western Province.
The state-run firm had put its mine under “care and maintenance”, the latest example of copper mining around the Pacific rim to be hit by changing weather patterns.
The company suspended its mine operations on August 12, prompted by low water levels on the Fly River, which prevented the transportation of its copper concentrate.
Combined with “a slump” in global metal prices, the suspension has now forced the company to cut costs.
It is predicted that the mine operations to resume in February/March 2016, depending on the weather.
Despite the major financial obstacles faced by the Government, Papua New Guinea is still deepening its engagement within the Asia-Pacific Economic Forum (APEC) member countries to strengthen its trade and investment linkages with larger members and further bridge the region with the South Pacific.
Prime Minister Peter O’Neill has expressed his confidence and vision on PNG, saying PNG will prosper in the years to come.
“PNG hosting APEC will bring tangible development in terms of massive infrastructure development, improvement of health services, security, human development in capacity building, and support our tourism potential.
“This will also lay the platform for the hosting of more and more international meetings in the country, all contributing to PNG’s growing influence in the Asia-Pacific region as an emerging economy,” says O’Neill.