Papua New Guinea‘s landowner companies have been around for a while, but the current resource boom, particularly the US15 billion (K37.5) PNG LNG project has significantly increased their opportunities. Under the current public private partnership agenda driven by the incumbent government, many private sector organizations are partnering with the public sector organizations to ensure efficient delivery of basic goods and service to the mass and to boost the growth of private and the economy.
The IBBM Enterprise Centre established by the PNG LNG Project in partnership with the Institute of Banking and Business Management (IBBM) in 2009 is a driving force behind private sector growth in PNG.
TIM talked to IBBM’s manager Johnson Pundari about taking private sector growth, particularly, the Small Medium Enterprises (SMEs).
What are the core objectives of IBBM?
Pundari: The IBBM Enterprise Centre was established by the PNG LNG Project in partnership with the Institute of Banking and Business Management (IBBM) in 2009. Its main function was to help build the capacities of SMEs from the Project Impact Areas so that they can be able to participate in spin-off business opportunities from the LNG Project. IBBM works with the top 180 corporate organizations in PNG. Besides the Central Bank, the commercial banks have been the major clients and have their presence in our governing board. PNG LNG Project has a five year contract with IBBM Enterprise Centre. Other clients are Interoil, Nasfund, OTML, Coffey, PNG EPSP and other 150 SMEs.
How do you conduct your capacity building programs?
One of the major functions of the centre is conducting of Business Assessment of SMEs. Eight global best practise criteria are used to assess performance and capabilities of companies and a star rating is awarded accordingly. This process identifies the strengths and weaknesses (GAP Analysis) of the assessed companies and business improvement is done to address the weaknesses. This is followed by recommendations of necessary capacity building programs to help close the GAPs. The Centre has assessed over 300 companies to date. It has then helped these companies in addressing the identified GAPs.
The assessment criteria are:
Governance and Organization
Safety Health and Environment
Reputation and Image
Most SMEs do not grow and mature into sustainable businesses due to lack of simple businesses process and procedures. Businesses are done on an ad hoc basis without adhering to proper businesses practices thus sustainability is an issue. Growth and development of SMEs in PNG will still be vague without proper capacity building programs.
Do you see PNG SMEs having the ability to sustain their businesses?
Pundari: Yes. They have the ability to prosper given enough support in terms of strengthening management and operations systems and processes. Most SMEs need initial guidance through capacity building programs so that they can be guided through sound business conducts and ethics. They need to focus on building strong practices around the eight key areas mentioned above.
PNG needs desperate investment infrastructures. What kind of roles should private sector play in this aspect? What role should the government play?
Pundari: An ecosystem needs to be identified in the SME space. The different challenges of SMEs need to be identified. These include capacity, finance, management, operations, legislative framework etc…and identify organizations, either government or private or donor agencies that can effectively address each of these challenges. The government should provide an enabling environment through proper coordination of resources and legislations to enhance the growth of SMEs in the country.
Interview conducted by Ian D. Hetri