By Sarah Byrne

AUSTRALIA and Papua New Guinea share the similar challenge of needing to diversify their economies to ensure returns for the future, according to minister for international development and the Pacific, Liberal senator for New South Wales, Senator Concetta Fierravanti-Wells.

Senator Fierravanti-Wells told an audience at the 32nd Australia Papua New Guinea Business Forum and Trade Exhibition (APNGBF) the global downward trends in the economy mean Australian and PNG cannot rely on the mining boom of the past few decades.

“Nor can we assume that prosperity in the past guarantees prosperity in the future,” she added.

Both Australia and PNG need to diversify their economies quickly, to ensure returns for the future, Senator Fierravanti-Wells said.

On opening the APNGBF, Australia Papua New Guinea Business Council president Greg Pawson said it is an exciting time for the relationship between Australia and Papua New Guinea, but there are “huge challenges”.

Mr Pawson said negotiations on the Pacific Agreement on Closer Economic Relations (PACER) Plus, have been proceeding slowly since 2008 and appear to be approaching a conclusion.

Echoing Mr Pawson’s comments, Senator Fierravanti-Wells said excellent opportunities exist for both Australia and PNG through PACER Plus.

“The negotiations will lift the economies of our region more broadly, and intensify economic management across the Pacific,” she said.

“After all, it is in our mutual interests for close neighbours, and the region as a whole, to continue to grow.”

“This creates jobs, brings people out of poverty, provides education and health care for people, and meets growing infrastructure needs,” she added.

As a result of this relationship between the countries, Senator Fierravanti-Wells said this is why through Australia’s development assistance, it now focuses more on working closely with the PNG government to ensure conditions that attract investment and boost economic growth.

“We have a stake in each other’s success – partnership, for us, is the path to future prosperity,” she said.

Mr Pawson suggested PACER Plus could be a mechanism for advancing the Northern Australia-PNG Economic Zone.

“Perhaps it could also help implement the Free Trade Area between Australia and Papua New Guinea,” he said.

“Both would be good developments towards increased trade,” Mr Pawson added.

Australian investment in PNG, is around A$19 billion, which is about the same as Australian investment in China, and double Australian investment in Indonesia, Mr Pawson said.

Drawing on commonalities between the two countries, Senator Fierravanti-Wells said Australia and PNG are the largest, most diverse countries in the Pacific, and for this reason, they play a role in setting the stage for how the world sees and engages with the whole region.

“We start with proximity and the fact that our boarders are only a short boat trip apart.”

“We have both experienced prolonged periods of economic growth, driven in part by our mining and agricultural exports.”

“We are both blessed with large reserves of natural resources, and both well-situated in our region to meet the growing demands for those resources from our Asian neighbours in the north,” she added.

Senator Fierravanti-Wells said Australia has a strong interest in working together to face the challenges in the region.

“Both Australia and Papua New Guinea need to offer secure, predictable environments in order to attract foreign investment,” Senator Fierravanti-Wells added.

Mr Pawson and Senator Fierravanti-Wells attended APNGBF and took part in the opening of the conference, which was held at Cairns convention centre in mid-May.