Port Moresby Chamber of Commerce and Industry PO Box 1764, Port Moresby 6th Floor, Monian Tower, Douglas St. Port Moresby Ph: +675 3213077 or +675 3213254 Fax: +675 321 3251 Email: pomcci@global.net.pg

Welcome  to this edition of our bi-monthly newsletter . For the first time it will be disseminated on our web page with a limited number being made available for those without access to internet.

In our attempts to provide you with a more effective Chamber , we have been very active in a wide range of issues around the city and I would like to highlight some of them to you in this message . Our primary focus this year will be on issues in the city which directly affect the conduct of your business.  Located as we are in the nation’s capital, our busy Executive officers are often called on to represent the national chamber at meetings on a wide range of national issues.  We will continue to do this but our primary aim must remain service to the members in our “electorate.

I trust you will all agree that our new website is a major step forward in communicating directly to the desk of the CEO of our member organisations . The weekly E-News has been well-received and  is circulated around the country and overseas to our foreign missions and other Chambers . I would like to acknowledge the work of James Chin at UPNG  for his assistance in setting up the page and the work involved in constantly updating the pages to keep you informed . We welcome suggestions for improvements to your site and I urge you to participate in the regular surveys we will conduct on topical issues . The site will remain totally open until the end of the year , when we will close certain sections down and make them accessible only to members with passwords  .

As you will have seen from the press , we have been vocal on the issue of minimum wage review , and maintain a stand that a huge rise in the minimum wage will not foster a growth in business and could impact negatively on the entry of  the young un-skilled employee to the workforce . My latest statement  summarises  the issue rather succinctly , where we “maintain  that an environment which is conducive to business and investment is the only way to sustain economic  and social development “.

We applaud the Kenmore Group and its founder Lucio Tan for bringing a delegation of 86 to PNG from the Filipino-Chinese Chambers of Commerce and see this as a sign of confidence in our economic recovery .

Your Executive remains pro-active on a wide range of issues including  NCDC infrastructure and reform , NAQIA , Harbours Board fees, new Elcom rates , Telikom and Post PNG performance standards and  I would single out the work put into the Road Safety Forum  by Fabian Chow for special mention .

David A. Conn , MBE  (President 2000-2001)

Ladies & Gentlemen

Welcome to this our forty-fifth (45th) Annual General Meeting at the Park Royal Port Moresby.  Today marks our first AGM of the new millenium, a significant milestone in the history of the Port Moresby Chamber of Commerce & Industry Inc.  As we reflect on our activities in 1999 it is also perhaps equally important that we reflect on the accomplishments of this Chamber over the last 45 years of its existence.

I am proud to be addressing you today, my third as President knowing that this Chamber was and is still the premier business body in the city.  The objectives of the Chamber have not really changed much since our predecessors set out to form this Chamber after the second World War.  Through their vision and courage, the Chamber has survived the test of time and become the catalyst for the mobilization of private sector contributions to the development of the city of Port Moresby and Papua New Guinea as a whole.  The Port Moresby Chamber of Commerce & Industry is therefore an institution in its own right that we all should be proud of because together we continue to stand and lobby government and city authorities about the concerns of the business community at large.

As we are faced with the new challenge in this millenium, in the age of E-Commerce, Internet trading. significant computer and technological advancements, and a rapidly changing global economic landscape, we must endeavour to safeguard and promote business welfare amidst increasing pressures from Governments.  It is therefore paramount that we demand better fiscal discipline and clear government policies which will in turn assist develop a more robust private sector.

1999 Overview

Ladies and Gentlemen

I need not remind you all that 1998 and 1999 were very difficult years for us all.  Some of these difficulties were attributable to both domestic and international factors which impacted on the PNG economy and more particularly so for Port Moresby.  These included but not limited to:

High inflation rate - devastating on domestic consumer prices on goods and services.
Low foreign reserves
Depreciation of the Kina against major trading partners
Low commodity prices
High domestic interest rate regime
Political instability - Change of government
Introduction of VAT
Inadequate fiscal discipline by government

The above is not an exhaustive list but nevertheless reflects those major events which have underpinned a very difficult business environment for us all.  Again, our businesses in the city have persevered despite these harsh conditions and I commend you all.

But we should also look at the developments at the micro level, particularly, the NCD scene where we have witnessed some tangible development activity which should be noted:-

The new Jackson’s Airport Terminal Buildings
The opening of the Poreporena free-way
The extension and upgrading of the Waigani Drive to Gerehu  roundabout.
The opening of the Port Moresby Stock Exchange in April.
The completion of the Deloitte (NPF) Tower in down-town Port Moresby
The completion and opening of the new Yacht Club and marine facility.
The completion of K20m renovations and upgrading of the Port Moresby Travelodge to Park Royal Port Moresby.

All these above projects have had some dramatic effect on the local economy and brought about work for some of our members.  These visible signs of investments in the NCD landscape are a welcome sign of confidence by the private sector in this community and city.  With the change of government in July we witnessed the suspension of the NCDC government to be replaced by an acting city administrator, Mr. Jamie Maxtone-Graham.  The Chamber is encouraged by some of the initiatives undertaken to date to clean up the rot inherent in the past administration. The shift away from recurrent expenditure to Capital infrastructure development in the 2000 NCDC budget is welcomed.  In fact it is long overdue and I congratulate Sir Mekere’s government on taking  these initiatives for our capital city.

With the suspension of the NCDC, the Chamber representation has been non-existent however we have maintained close consultation with the Acting Administrator to ensure that business sector concerns and views are accommodated during this period.  We are hopeful that the government will bring an early  resolution to the NCDC situation, but the key issues that concerns us are:-

Good governance and accountability
Law and Order situation in the city
Health and education
Better Public Transport System
Improved Infrastructure
Good governance and accountability
Law and Order situation in the city
Health and education
Better Public Transport System
Improved Infrastructure
Public Utilities such as water, sewerage, garbage collection
Eradication of corruption and malpractice at NCDC
Transparent and independent Management running the city

For the first time in 3 years the Chamber was addressed by the Acting City Administrator, Mr. Jamie Maxtone-Graham at our first luncheon of the year last week.  We would like to see this close working relationship continue in the future.

Chamber Activities in 1999

We believe in the growth and expansion of business activities in NCD and to this end we continue to plan an influential role to liaise with the government, other industry groups and associations (peak Bodies) to ensure that business and commerce play a dominant role in the development of our city.

The Executive Committee Members represent the Private Sector on National Government Boards and Committees as follows:-

Investment Promotion Authority
PNG Physical Planning Appeals Tribunal
National Town Planning Board
Consumer Affairs Council
Committee for Unification of Technical and Vocational
Education and Training
Reforms National Monitoring
Port Moresby National High School
Port Moresby  Business College
Badili Vocational Centre
Consultative Monitoring Implementation Council (CIMC)
National Tripartite Council
Motor Vehicle Insurance Trust (MVIT)
NCDC - Law and Order Committee
Information and  Technology Suppliers Associations (ITSA)
National Aids Council
Port Moresby Coastal Clean up Committee

Some of these positions are held on behalf of the PNG Chamber by our members.  It also signifies the important dual role POM Chamber performs for the business community.  As part of an attempt to fulfill our objectives the Chamber was involved and contributed in the following activities.

The Law and Order Summit early last year
The second National Development Forum held in August 1999
Provided Chairman for the NCDC Law & Order Committee until its suspension
Continued to participate in various Electoral Committees established on the Consultative Implementation and Monitoring Council (CIMC).
Participated in the National Dialogue on reconstruction and Development in September
We assisted the business community including some of our members in pursuing government for debts owed to them.
The Y2K committee responsible for coordination Contingency plans during the new year period.

The Chamber held dialogues with IRC and other government agencies on the issue of VAT and effects of its operations on business. We made representation to government pertaining to the 2000 budget.

Finally we were responsible for organising the Budget Breakfast with the Prime Minister, Sir Mekere to address the business community which was a major success.  At the end of December the PNG Chamber moved out of the POM Chamber premises to be on their own.

Premises

The Chamber moved offices mid year to our new premises on Level 6 at Monian Tower.  This move was the best option in terms of cost to the Chamber and better location.

Secretariat

Stella Miria, our former Executive Manager left the Chamber in March 1999 to move with her family overseas.  In the absence of a replacement the position was covered by Committee member, Mr. David Drake until Mr. Heni Goro was recruited.  Our long serving receptionist, Theresa Aila also left our employ in August last year and more recently our longest serving staff member, Mrs. Awagia Tapo who has diligently served the Chamber for over 10 years, departed early March to join her family in Australia on study tour.  We wish them all well in Brisbane.

We have also recruited Ms Jenny Nelson who has replaced Awagia and I am confident she will fit into the role in no time.

Membership

We are committed to building up the membership numbers this year as we believe this is the only way the Chamber can expect to survive.  The out-going Committee is conscious of this and several other issues affecting the operation of the Chamber and has set targets for achieving increased  membership this year.  I also call upon members to refer potential new members, business associates and businessmen to join our Chamber together we make business sense.  Our total paid up membership to date numbers around 125 and we would like to double that by mid year. I also call upon members to refer potential new members, business associates and businessmen to join our Chamber together we make business sense.  Our total paid up membership to date numbers around 125 and we would like to double that by mid year.

Luncheon Programme

Our Luncheon programme during 1999 has been satisfactory however I want to see the attendance record improved as this are the only opportunities we have to subsidise our costs.  I’m sure the incoming Committee will continue to vigorously pursue a intending luncheon speaker in the cause of the year.

Newsletter

Our Newsletters continue to improve slowly and it is expected that when the new staff are finally settled in, these publications can go out on a timely basis.  It is my hope that in future newsletters can be put up on our Website and also can be forwarded to members via electronic mail.

I urge members to provide editorial as well as to support the publication with your corporate advertisements which will assist in keeping the publication cost at a minimum.

The Future

Ladies and Gentlemen, in conclusion I want to say that despite the tight and gloomy business environment we face I am confident that light is beginning to shine at the end of the tunnel for us all.  Sir Mekere’s government of the last 9 months has undertaken several initiatives which I believe will underpin the economic recovery of the country.  With the support of donor agencies and friendly countries positively endorsing Sir Mekere’s vision for PNG, we should have reason to be optimistic about our business prosperity.  Again the positive changes now evident in the administration of our City and particularly the shift in the focus of the NCDC budget is welcomed by the Chamber, money spent on infrastructure improvement in NCDC augurs well for both NCDC tax payers as we now can observe some real tangible improvement around NCD.

Finally, I would like to thank the members for their continuing moral and financial support for the work of the Chamber.  I would like to thank the outgoing Committee and the staff for their support and contribution over the last 12 months.  As we plot our course in the new millenium assisted by the latest tools of business and technology, let us not loose sight of the fact that the Chamber consists of the members, a united voice which has been around for the last 44 years in Port Moresby.  Therefore our “Date with Destiny” to coin in Sir Mekere’s words was in fact set last century and we continue to move forward weathering the storm in this ever changing social economic and political landscape which we call our city of Port Moresby.

CES IEWAGO
(now the Immediate Past President)

After 2 years of the NAQIA system there are positive moves towards viewing its operations to overcome problems in the system.  Talks are scheduled during the second half of 2000 between NAQIA and the business community.

The need for specific complains on NAQIA

The more specific the type of complaints about the present system, costing and operations about NAQIA the more soon the business community can negotiate a solution with the various parties involved. While complaints have been mostly registered on the informal level some more written complaints sent to the various chambers would assist. It would help the focusing of the pattern of problems to be addressed.

Impasse during 1999

Talks at various levels were held between the Chamber of Commerce and NAQIA representatives during 1999.  It was like bulldozer heading North meeting tank heading South.  Business interests were put forward to be addressed and NAQIA  requirements, powers and enabling legislation given and put back in reply.

The situation clearly reached an impasse and talks were broken off by both parties till further notice.

We believe that while the talks were not immediately productive they did set the framework for a better understanding of the needs of the other side.  Unfortunately during 1999, there has been little room to accommodate the two bodies.  Partly it would appear that NAQIA required time to get feedback on the actual operation.

Public consultations for 2000

Businesses have expressed the view that the public consultation about the whole quarantine matter was structured non-appropriately.  NAQIA charges were to go up by 75% and 100% but for no improvement to service.

The manufacturers council has brokered a round table discussion between the business community (which includes the PNG chamber representing all the chambers) and NAQIA.  By mutual consent it was agreed to keep all specifics confidential at this stage.  Negotiations began in March and another round of talks is underway as to the problems to be reviewed and systems in place.

Just an additional cost ?

There is no more common ground unless NAQIA realises that it is not just imposing an additional cost.

One example is PNG’s embattled cattle industry.  Additional costs in the cattle industry have subjected it to the death of a thousand cuts.  Reacting to non viability there has been a significant contraction in cattle numbers.  Higher fees have for no additional benefits clearly will have a devastating impact on this area.

This is just one of the matters of impact, problems to be reviewed and systems-in-place to be looked at.

Beyond the Typewriter Age
The computer age is here.  The internet is king.  Computers and the internet are an essential part of the commercial world and no one who hopes to survive or prosper can do without either in coming years.
There are still in 2000 more than a few hold-outs from the computer age but they are passing the way of ALU SIGNS typing school.  At the end of 1999 Alu Signs quietly closed the doors on its venerable typing school.

Old hands in Port Moresby fondly remember the valuable service that the institution served in its day.  No doubt more than a few of today’s secretaries and office staff owe at least part of their productivity to its contribution.  Within a few months its Boroko premises has been transformed into “Kakaruk King”.  We hope the rest of Boroko’s commercial center does not end up a long string of Kai bars and Chicken outlets.

The reality is that the rest of Boroko’s commercial heart is responding to commercial realities.  It’s not going to fade away.  Business owners have shown remarkable resilience and recovery over the years.  A few doors down towards Okari house is another business, called Sengco Niumec.  It’s experiences over the years might provide a clue as to what Alu signs needed to learn to survive.

They sell cash registers, radios and other similar small electrical consumer goods.  The business has expanded its inventory over the years according to customer demand.  It has expanded the range and ensures that what machines customers want is in stock and supplied.

One Size of Cash register fits all?
No way, Joe.  If the office machines supplied didn’t have a variety then the business would have gone down the tube.  Just on cash registers there is an assortment of about four different types.  It’s a cost-benefit equation: customers react to market discipline in choosing how high a standard of cash register they will pay for and estimate how useful the extra cost will be in reducing operating costs.

The current situation is that most shops do not use bar codes so why should they invest in the (expensive) technology.  Some shops use a half-way house to scanners, investing only in sophisticated cash registers, finding  twenty keys (keys for fast moving stock with automatic pricing) sufficient for their coding.  Others use cash registers with more automatic keys.  The extra cost in upgrading is justified in quicker customer service and better inventory control.

Owners are constantly juggling the equation to find a good market balance.  We don’t need a government bureaucrat to force everyone to use bar codes and scanners.  Change and upgrading to appropriate technology will come.

At the time we inspected their sales office we talked to Mr. Terry Havava, one of the sales executives there.  They only had two types of cash registers in stock.  Two other lines were out-of stock.  Was this an example of bad business management?  No way.  Its normal in PNG even in 2000 for distributors to periodically run out of stock of slow-moving or slower-moving items.

Running out of stock is not a business disadvantage if resupply is on the way provided its not urgently needed.  Besides you’ll probably find the opposition is also out of stock of the same item.  Also its expected because everyone understands the danger of overstock on slow-moving items.  Running out of stock could even be a sign of good business management.  If cash register Z (out-of-stock) is desired because of its special combination of features then its normally worth a short wait rather than buy cash register A (which is in stock).

Besides Sengco Niumec will assist regular customers by even lending a  used cash register to your business while you wait for the Z-item to arrive or for your regular machine to be fixed up.  It’s called customer service.  It’s all about ensuring that Sengco Niumec meets the customer’s needs while the customer appreciates the need for delay.

The business customer understands commercial reaily and accepts that the price of having reasonably priced special items is to sometimes have a minor delay.

The contrary could be said if you run out of stock of a fast moving item.  Beware, you could easily lose your customers to the opposition!

Delayed action while competition heats up all around Alu Signs
A few other tips could have prevented the demise of Alu Signs Typing School.  At Boroko shopping center there are newer training schools that have sprung up: at Okari Haus, Ori Lavi Haus, the Old Hugos building and who knows what else and that’s just around Tabari place.

Demand for mere typing is only a small part of the market today.  And with today’s poorly educated wannabes they fail to appreciate the need for a typing base before they attempt higher computer skills.

Two years ago Alu signs woke up to the problem and started to take action to move with the times.  They applied to register a computer school.  Other action was delayed.

In retrospect they delayed too long.  We are unable to say that they took any concrete steps to purchase a computer (or computers) for the school or retrained their manager in computing or other actual steps to move the dream into action.  At the end of 1999 they had to throw in the towel.  Times had moved too quickly for them to survive.

IBM was able to leverage its existing customer  base in adding machines into the computer age.  We are positive that under the right management Alu Signs could have made a similar transition.  After all, it had a lot of superb advantages that the newcomers did not: an existing customer base, a reservoir of goodwill plus a superb highly visible location together with a stationary business to stabilise the fluctuations of the education market.

A business consultant such as Merrill Lynch or PriceWaterhouseCoopers could easily have earned their consultancy fee by pointing out the steps needed to make the path towards the dream goal.

We believe that the demise of Alu Signs Typing School is in many ways a sad pity.  There is too little demand for typing courses vis-a-vis the demand for computing courses.Typing is not an option but a necessary business skill.  Proper reasonably fast touch typing is not taught widely enough.

People are training for skills (sexy computer age courses) that they believe make them more employable rather than for the skills (the typing base) that are needed.

This skills base is not being addressed adequately.  All those wannabes had better think twice where they spend their parent’s kinas.  There is definitely an oversupply of half-trained useless non-competents in Microsoft Word/Excel and Lotus.  There is still definitely a need for good competent typists for businesses.  That is the advice of an employer who has interviewed and tested many staff over the years.