How to Work With the PNG peoples for business purpose

There are many opportunities open in PNG. In history times business was mostly owned by Australians and New Zealanders. In recent years the door of opportunity has opened wide for all Asians. Malaysian-Chinese are the most successful and the mainland Chinese are positioning themselves to sweep through on many levels. Many Australians are willing to sell their interests for low price because they have no tolerance for working under difficult condition. You can buy a business already set up if you look around with open eyes.

Thanks to PNG government we can say that the country now welcomes investors from other countries more than ever and bend over backwards to help us. Even though you will hear complaining at a local level about Asians nothing is actually done that cannot be taken care of with a payment of gift, money or overseas trip.Government people in the departments at secretary level will often say not to worry about these complaining. However they will expect something so bring your gifts.

There are two major characteristics of the PNG people in general that you must learn. It will help you use them for your purposes.

The first is that they will always bend over to agree with what you say. If you say something and ask isn’t that the truth they will say yes. They may not think that by agreeing they could be accepting your legal terms. This opens the door to getting them to bend over agreeing and agreeing with you and while they are trying to bend over to the ground that is the time to stick them in the arse before they know what happened especially if you give them lots of food and beer. The logging companies are of great success in this strategy. Later those in villages will complain but now you will have the law on your side. If the police will not help you fight their own people at least they will leave you alone. It is very important to secure legal rights in written agreement so if there are complaints later police, judges and everyone in government will take your side.

Second is that those PNG people who schooled will think they know everything and feel they can say what is best for their people. Pick ones that have been overseas if possible they will never be in the village but in town. These are especially think they know everything but since they now have schooling overseas and used to people doing business overseas they will agree with any business proposition and help you convince their people to take your side. Actual fact is hardly any of them know much about business. Let them feel that they have gotten the best of you or give some concessions to their bargaining and you will walk off with most of the riches. They will be happy with just a small amount thinking it is a lot and even a 50:50 deal will benefit you more in hidden ways. This is a good strategy for acting on if you are looking for something of value on their land eg timber, birds, medicine plants or trochus, beche de mer and so on in coastal areas.

The big companies do not like our small business ideas and strategies but usually will look the other way. If you plan to operate in an area with a big company do not offend them but you also will not have to bend to their demands. The big companies have their own games to get their needs of interest as quickly as possible.

Soine particular suggestions on how to manipulate the PNG people under the circumstances-

-those who live in the village have no idea when they sign a legal agreement that the law now goes on your side. Take advatange of such opportunity only tell them what they ask for. You will find that they ask very few questions of you they are just interested in the money.

-most aresatisfied to be middlemen especially those with a little school in their life. Pay them off as necessary and get them to be the PNG figurehead which allows you to operate legally in the country. They will also help you by spying on their own people and reporting to you anything that threatens your interests. They are most worried that you will stick around and continue to pay them and will perform acordingly.

-arrange local women in Moresby hotels as gift early in relationship. White and Asian women they will brag about so that is best to arrange.

-always threaten to go elsewhere with your idea or business if they will not accept your terms. This will frighten almost every one of them from the bottom to the top. They will be so hungry for any money they will always agree in the end. Some stories have gone around that even the top people in the government can be fooled easily in this way.

-if they disagree or reluctant with what you offer them, loudly ask in front of wantoks whether they really want development. This is very effective I can say. Anyone who was arguing against you will be forced into line and agree.

-say to the educated ones that you are very happy you found them because their village wantoks do not understand about business but you know they will.

-those from interior highlands especially will like anything you can do that can make them feel important or look important in front of their village. All of them want to be a bigman so if you make them a bigman you will have their friendship and cooperation and they will always spy for you. Set up a company for them and make them the chairman they will be happy for a long time. Always treat them with respect or importance they will fall for it like dogs.

-take them for drinks at local hotels and then have them sign agreements on paper. Include in agreements reimburse for all entertainment expenses you spent.

FOR EVERY PNG PERSON WHO QUESTIONS AND IS CRITICAL THERE WILL BE 1000 OTHERS WHO YOU CAN USE. SEEK THE INOCENT AND STUPID ONES WHO SCHOOLED OVERSEAS AS #1 CHOICE TO DO BUSINESS WITH.

In the end there laziness will make almost every one of the PNG people search for easy way to make money. Use that it will give you the edge in negotiation. They may act like they know everything but usually know so little in facts. You can easily fool them or not tell them full story.Say something and ask isn’t that true and they will always agree. Most PNG people are happy to sit back so pay them enough to keep their happiness. Give them gifts when they are cross if nothing else works threaten to find another business partner or even leave the country. In the end you will win PNg people are known to resist only a short time before giving in..

Almost every one of these people can be convinced to go your way and turn their backs on their own people with gifts or money.

Trade stores are best way to get your foot in the door from which other side business can be developed. There is no real law in the country except money. Money talks and just like the educated PNG people you can also make the police look the other way or do almost anything by paying. Those in the village can be bought with smokes the more educated ones like Seikos and big boots but they can never tell the difference from the real thing or something cheap and worthless you buy in Bangkok. Even ones who have uni schooling can be fooled as easy as those in remote areas.

Some problems recently but overall visas are no problem it just takes money. A few are being made to be examples to convince everyone that progress is made. We have been told in migration that it is still business as usual.

The welcome mat may not be always around. Get in and get out with efficiency and attention to time. For the immediate situation we can say that there is room enough for everyone to get what you want. Some good businessmen who have proceeded with agreemtns to begin their business quickly have made enough in few years to relax the rest of their life. Anything you promise the people make sure you set the date not deliverable until long after you expect to be gone.

We seek a spirit of cooperation between all of us no matter where we may come from we are here for the same reason. There is enough in PNG for all of us no need to argue or point fingers at each other.

In a willing spirit please consider these humble advices.

Just out of curiousity, does the PNG govt have a strategic plan for developing small business ownership in PNG? In OZ such strategies (known as incubators) help small biz people put together the planning, operations, subsidised premises, advice and mentoring to help people start, run and manage a successsful small biz. The reward for the govt is obvious in the form of tax. Other countries, particularly asian ones such as chine regulalry visit and copt the model as a way of kickstarting their local economies. Plus if keeps the economy in the hands of nationals, rather than foreigners.

None. Only, SBDC (Small Business Development Cooperation) which is ineffective due to funding. You'll have to survive on your own, basically. There may be other forms of benefits but not through what you've mentioned. Tax reduction is what I know of and it works well. In fact many opportunites are given to foreigners in which Asians are taking advantage of than Aussies or others. Mind you, Aussies have some of the biggest firms in PNG and even thousands of smaller ones too. PNG themselves, just some. However, some are slowly coming up.

The Chinese especially have a long tradition of starting businesses using their own savings and getting contributions or loans from wantoks. There is no reason why we cannot do the same instead of constantly using "nogat loan" as a poor excuse for doing nothing!

“A nonny mouse” has a valid and an important point that I have been thinking about for a fair while.

It's true. Getting to start up a small business in any of the prominent locations within most of our towns and cities is an uphill battle. The rental rates for office space is sky high and the risks relating to arm hold ups and thieving is very real. These two and others are a disappointing hindrances. Many a budding PNGean businessmen and women have stumbled because of these.

Asians own nearly all our major super markets as we all know. They're selling all sorts of junk from the little doll to other big things and all those in between. The little space that, they have inside, they're using their tough nuts to co-locate other Asian business. A typical example is the "Stop and Shop" chain of supermarkets in PNG where they have the Pharmacy, GSM Mobile phone and pre-paid phone shop and other sub-standard electronic gadgets. In this way, they effectively shut out any local (PNGean) would be competitors in any of these areas.

I suggest that the provincial governments in each towns and cities should build a suitable modern building with all amenities connected to it (phones, water, electricity and Internet - come on, this is a modern world, why not?) and lease each room at subsidized rates to new PNG based companies for a maximum period of two years only. This will give them the necessary footing and experience that they need to go on their own. Who knows, the government might be graduating out hundreds of local businesses bi-annually who would be a dynamic force further down the line.

One might argue, that this is asking too much from the government (handout as many grossly label) but look harder and if you can think in terms of long term gains, this very start up companies might turn out to be contributors in terms of employment, tax revenue and other benefits to the local community.

I have seen many budding business men and women starting up something in their homes but they don't last long because the home as it infers is full of disturbances uncle, bubu, tambu and nephew stops over at some point in time and things start walking out unnoticed or on free take basis. And many businesses have come to dead end like that.


PNGean For Real

This is a great idea. A somewhat similar idea, not from government, but from a supermarket was when Papindo's in Kokopo set up an area for an open market. Papindo didn't bother with fresh produce, but it is so much more convenient to shop at Papindo's for tinned stuff then head over to the women to buy the fresh produce. Small infrastructure adjustments can sometimes make a big difference. In a sense it seems you're talking about a kind of indoor market.

I believe the following initiative by the Morobe Provincial Government go along the veins of what PNGean For Real is suggesting though it's primarily aimed at the rural based farmers. To marks for Haus Tutumang !

I certainly agree to your suggestion as it addresses small to medium based PNG owned enterprises. It's about time each provincial government or the national government does something like this now or the catch up game will be a lot tougher as the Asians plant their roots deep into every form of businesses in PNG.


__________________________________________________

Morobe Rice assured of K1.2 mil injection

By PHILIP DOWA
MOROBE Governor Luther Wenge is pumping another K1.2 million into Morobe Rice Limited (MRL).
Mr Wenge said the commitment was made under the provincial budget because the rice project was for the benefit of the rural rice farmers in his province.
He said this during the commissioning of the new K80,000 rice mill for the project.
The mill was brought in from China last week.
“I have no interest or any share equity in this company but my interest is to see more of our farmers grow rice and bring them here to be milled,” Mr Wenge said.
He said rice was a staple diet of many Papua New Guineans.
“The country spends more than K600 million annually to import this commodity and we should be doing something to save money for the pressing needs of our country,” said Mr Wenge.
On the ownership issue, Mr Wenge challenged the critics of the project to investigate the percentage holdings of other rice companies that are flooding the local market with their products.
He accused these companies of being only interested in making money.
“They do not own farms or assist our local farmers in rice production,” Mr Wenge said.
He said MRL was a company established by the provincial government to implement the National Government’s Green Revolution policy.
“Our National Government has a good policy but it needs back-up from all levels of government.
“We have to sustain rice production to cut imports and make our kina stronger against foreign currencies,” said Mr Wenge.
Former journalist and managing director of MRL Mr Kamo Kini acknowledged the provincial government’s support saying the company was established to assist the rural farmers in Morobe.


http://www.thenational.com.pg/1212/nation20.htm

Luther Wenge get's an "A" from me for doing that. Reducing import bill for a product that can be cultivated and processed here is common sense.

The only problem is that as long as the door is still open to rice imports, there is the danger that what Wenge is doing will only last as long as he is injecting massive subsidies. Everything could easily collapse once he's out of office and government interest is lost in continuing this support.

That's the problem with artificial government support, it's totally un sustainable.

There has long been a push to grow rice in the Morobe. There are two problems. First and worst, the Markham is unsuitable for growing rice. Water just passes right through the soil and does not sustain growth. Secondly, without mechanisation, the work falls on the women. After the first harvest they know how much work, and how little return, there is.

I wonder how much of the PGovts money was put in compared with entrepreneurial funding

Two good points there.
Markham valley is very synonymous to Morobe province. It forms a good part of the province. However, Markham alone is not all of Morobe. Besides that, there are many tested and proven (in PNG) different varieties of rice that can grow well in PNG. Eastern Highlands province is a classic case in point where they grow dry and mountain rice there with excellent yields per hectare.
Therefore, I do still think that Morobe can grow rice in most of its other districts if Markham is not suitable. With a suitable irrigation system, I'd still believe that, at least some of the known varieties of rice can do well in the Markham valley.

Going onto your second point, machination is certainly required when you're looking at a larger area of rice cultivation. With many hundreds and thousands of smallholder participation, their total harvest would amount to a sizable amount at the mill. So definitely, there has to be a starting point. So Morobe province is not wrong in going that way.

If they want to go into very large scale production, then I am sure they can still do that by buying machines, probably some affordable and least expensive ones from China for instance.

The whole issue about viability of rice growing has less to do abouut whether certain rice varieties grow or produce well.

Instead, it has to do with whether people get enough reward (including but not limited to money) in return for the work they have to invest to get that reward. Rice as a general crop is very labour intensive and when done small scale, requires too much work for too little reward. The only reason why Asians grow rice is that they've lost all other options to grow other kinds of less labour intensive crops because of their landlessness.

Rice, just like other items, were traded periodically along the coastal trading zones after all rice has been just next door in Indonesia for thousands of years. But our people weren't interested. The reason was just as you point out, it's too much work. So why do Asians grow rice? They HAVE NO CHOICE. The places where rice was grown historically are very highly overpopulated, people are landless and thus do not have the luxury of growing a crop like taro that requires much less work. So they have no choice but to grow rice and rice provices more food per hectare than does taro, etc in other words perfect for overpopulated peoples. There is a good comparison of the number of hours required to grow rice versus other crops like taro in one of Sean Dorney's books, I think the one titled PNG.

Our politicians were always ignorant about this basic fact which is why they keep pushing rice. But the people in the end vote with the choices they make in doing work for their living.

The hard work put into rice production is comfortably offset by the higher value of monetary attached to it and the longer storage period that it can be kept for after being processed. Compare that with taro. One kilogram of rice (going at K3.20 nowadays in town and much higher in rural areas) would feed at least up to 5 family members for a whole meal. And that 1kg can be kept in the storeroom for at least a year.

1 Kg of taro (costs typically like K2.70) cannot clearly feed a 5-member family for a whole and also cannot be kept much longer than up to 5 days.

Therefore, PNGean families who have arable land cannot and must not continue to live like that forever. They need to critically examine their farming behavior by choosing what is best for them and their family’s future. They need to change with the times. Just because some white man wrote some book for PNGeans cannot mean that, that's the bible that we should let our lives to be dictated by. I refuse that outright.

Finally it should be noted that, there's a huge market for rice in PNG than taro or any other food for that matter when you compare the amount of money that average PNGean families spent on imported rice per year. A whopping K600 million per year for imported rice is not a small figure.

It's about time PNGean families spent part of their money on locally produced rice than making someone rich in another country.


PNGean For Real

But remember, a family who decides between growing rice versus growing taro doesn't have to pay for the taro if they choose to eat that instead of the more labour intensive rice.

Of course you're talking about the town consumer, not the village producer. It's obvious who is sitting in the seat of greater freedom here. It's not the person living OFF their land!!!! :-)

It is about time to break rice monopoly

This is in response to Alphonse Stanley’s letter regarding the need for regulating the price of rice in Papua New Guinea. It is of no doubt that Trukai Industry, a subsidiary of the Australian Rice Growers Association, is a monopoly supplier of rice in PNG. While rice falls into the basket of declared goods for price regulation by the Independent Consumer and Competition Commission, the other aspect of competition in the market and quality of the product has never been addressed adequately by the commission.

The current price of Trukai rice and the quality of the rice sold here is unquestionably high and of low quality. The general population can not complain on that because the majority is illiterate and there is imperfect information for people to make a good comparative judgment on the product. We, who are educated and have international exposure, know what we are getting in PNG are sub-standard as compared to other countries. Mr Stanley in Brisbane can attest that. Rice sold in Australia is far better in quality and price than in PNG. The reason being that, there is competition in the Australian rice market and the price is not a regulated. Rice being a declared product whose price is regulated does not make any difference to the supplier, Trukai — whether its product continues being regulated or deregulated since the industry is a monopoly and it will make profit under any circumstance.

Declared products also have the leverage in that arrangement to negotiate with the Government through ICCC to alter their prices so a rice monopoly like Trukai Industry will always be a winner. PNG has everything to gain if we allow competition in the rice market and deregulate the price of rice. Australia is not a traditional rice producer and therefore their production is highly capitalised, hence their production cost is higher than those in Asia. Consequently, Australian rice sold in PNG will always be highly priced. Another important point to note is most of the agricultural products in Australia receive government subsidy, including rice, and PNG is one of the major rice export market for Australia, which is partly the reason for Australian rice monopoly, through Trukai in PNG.

As ICCC is mandated to ensure competition exists in all the markets of the country, it must take the lead in research or market study to establish the viability of introducing competition into the rice market and for that matter other markets as well. Mr Stanley and its employer the ICCC must not shift blame and go on the defensive mode for their failure in ensuring fair trade and competition in the country. For how long can you regulate the price of rice and not address the real issue of monopoly and imperfect rice and when is the right time for breaking the rice monopoly?

— Myx Wally Ensisi Valley

Post Courier - Letter to the Editor, 13 Dec 2005

I believe that although the short term goal should be to break the rice monopoly, the longer term goal should be to reduce our reliance on imported foods of any kind, including rice.

When we eat imported food (Beata tinned fish, trukai rice, and all kinds of other store bought foods), we support foreign producewrs, not PNG producers. We support foreigners more than wew support Papua New Guinean. We support foreign countries more than we support PNG.

Only rich people would support others with such a hefty foreign aid. Our rice buying alone exceeded K300 million a few years back. Only rich people would give so much money to foreigners (I realise not all that money ends up overseas, but enough so that it is a significant drain of national wealth).

I thought I've seen some Indonesian rice, or rice with other names other than trukai from places other than Australia. Tru o nogat?

Ultimately, the rice mill will have to be replaced, and from the looks of it, this will require yet another subsidy from the government.

Economic activities are sustainable only IF they pay their own way. They cannot have government subsidies. If they do, they are short term artificialities that will later collapse.

Thus, I don't see that Wenge's assistance is any more than a subsidy contribution to creating activities that cannot be sustained.

The suggestion on this board that the government create a simple structure and space for PNG owned businesses to operate is something that does not have to be a subsidy. If the building is constructed, then space rented on a not for profit basis, then the shop keepers renting space in the facility pay for the upkeep of the building and it becomes a sustainable operation.

The solution to the rice problem is obviously to promote the crops that we've grown and eaten for thousands of years.

We have to be careful that more intensive agriculture does not come at the expense of our village people giving up their land rights for which they will be sorry. In other words, village people can grow food themselves like they have for thousands of years. They don;'t need some tom, dick or harry foreign company coming in and taking away the people's land rights for 99 years and making the bulk of the money off that land.

Clearly more efficient agriculture is needed to produce the food we need at a more economic cost. Why focus on machines? Machines are foreign made and they eat up foreign made repair parts, plus they use up fuel that while not foreign made, has been linked to foreign prices by our sell out government officials.

Why not use horses and plows instead just like people still use throughout the world to plant and harvest protatoes. Horses use truly PNG grown food, there are already horses in the Markham Valley, and the use of horses to plow and harvest sweet potatoes would greatly increase efficiency.

The only people to suffer will be the towns people who want the convencience of rice cooking compared oo pealling potatoes. First thing is that you don't have to peel potatoes, second thing is that we need to start supporting rural people more and urban people less if we truly commit to all this talk about rural development. Development naturally favours urban areas and the only way to avoid this is to tax urban people more. Spending a little more time preparing PNG grown kaukau, taro and yams instead of rice is a small tax to support our village people.

Stopim nau