Malaysian puts big investment into PNG shopping | Pacific Beat

Malaysian puts big investment into PNG shopping

Malaysian puts big investment into PNG shopping

Updated 15 February 2012, 12:34 AEDT

Papua New Guinea's strong economic growth is pulling in investors from south-east Asia, with Malaysian companies leading the way.

This month marks the official opening of the Malaysian owned 'Vision City' Mega-mall in Port Moresby - the most notable of these investments.

Jemima Garrett was at the new shopping centre, and she said the Malaysian investment is putting on a showy face.

Presenter: Alex Wake

Speaker: Jemima Garrett, Radio Australia's Pacific Economic and Business reporter

GARRETT: It certainly is, in fact this is a three-storey mega mall which wouldn't look out of place on Queensland's Gold Coast and it's the first stage of a much bigger site that will include an international hotel, apartments and office buildings, so this is I guess just the beginning. You've got every kind of shop in here you can imagine; lots of phone shops, kids toy shops, clothes shops, a hypermart, stationery shops the whole gamut and of course it's very much the marble and metal look, but this investment I guess reflects the company that put the money in and that's PNG's biggest Malaysian company Rimbunan Hijau. At the official opening dinner for the mall, which was attended by the prime minister Sam Abal. The executive chairman, who had flown in especially, said that the complex is expected to generate 200 million kina a year which is around 100 million Australian dollars of economic activity each year.

WAKE: Rimbunan Hijau has been in PNG for a long time, what new Malaysian investment are we seeing?

GARRETT: Indeed RH has been in PNG for a long time, a highly diversified company with interest in everything from newspapers through to logging, which, of course, has been very controversial, because it's been severely criticised for its logging practices. But we are seeing quite a lot of new Malaysian investment. Just on the way up here on the plane, I was sitting next to a Malaysian executive whose company is looking at putting in two manufacturing plants to provincial areas in Papua New Guinea. These would be 20 million dollar US dollars manufacturing facilities in mining services. Malaysians also have the advantage, of course, of having their own bank here, which is Maybank. Even some of the companies which you might think are British, such as WR Carpenter is in fact Malaysian owned and they to are putting in new plants. In the last six months, they've put in a facility manufacturing pre-fabricated houses and they are looking to putting things into the Solomons. So it looks as if PNG's economic boom is moving into other parts of Melanesia. We can also see Fijian companies coming back the other way. We've got Hardware House which is 50 per cent owned by the Vinil Patel group, expanding into Papua New Guinea.

WAKE: So there's quite a bit of investment in PNG coming from other South East Asian countries?

GARRETT: There is indeed. PNG is seeing a lot of interest in tuna. The Philippines, Thailand, in fact Thai Union, which is one of the biggest canning companies is looking at investing in tuna cannery in Lae and so we're really looking at some quite big companies and Fiji's economic growth I guess as people would probably know has been quite strong for quite some years now, but with the PNG-LNG plant ramping up into it most rough period with the construction phase reaching a peak early next year, we're really seeing a lot of action here.

WAKE: And what's the downside with the new investment?

GARRETT: Well, there is a downside. There is a lot of animosity to the Chinese, which we've covered on Pacific Beat and it's clear to see that people here don't distinguish between Malaysians or Chinese from mainland China. There's a lot of Asian ill feeling against Asians directed at the problem of illegal immigrants and also the problem of people having, the Asians being so good at business and are making a lot of money, but I think that's one of the downsides for sure. The other, of course, is the environmental problems, as I mentioned the illegal immigration. There's a whole host of issues that come with this investment that really rely on the government to supervise the companies and if government departments aren't up to the job, which in many cases they aren't, then there's a serious difficulty. So there is a real issue here in Papua New Guinea of capacity of government when it comes to enforcing their own laws and you see every politician you talk to is talking about it, but it's going to be a very big job to pull together the necessary capacity to be able to deal with these issues.


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