Pros and Cons of Hosting the APEC Meeting in Papua New Guinea

By: Ludwig Aur Aba

Asia Pacific Economic Cooperation (APEC) is a very important international organization and PNG hosting APEC meeting will bring together very important leaders of superpower countries like USA, Russia, China, Brazil, Australia, Indonesia, Japan and others. There will also be other observer countries as well. PNG was privileged to have been awarded the hosting rights in the last meeting, mainly because of its status as one of the fastest growing economies in the Pacific and the APEC leaders at that time were impressed on the performance of PNG economy, hence the nomination and selection. It was indeed a privilege for PNG in the eyes of the world to have been selected ahead of other countries, which were also nominated.

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A good number of people have raised concerns about the benefits of hosting the APEC meeting in 2018, at a back of a suppressed economy and dilapidated state institutions and infrastructure. Several responses were provided but it does not give detailed information about how the country is going to benefit from such an important international event. At the outset, it is quite understandable why people are unhappy about hosting such an international event, when the country has cash flow problems, limited employment opportunity, dilapidated infrastructure, break-down of state institutions, poor social and health indicators. They are questioning why spending K120 million (could be more) on the event, when the economy is in bad shape.

It is worthwhile, a detailed explanation of the pros and cons of hosting such an important event is made to every concerned citizen so they are aware of the costs and benefits.

 

Pros

1. Raise profile of Port Moresby and Papua New Guinea

Raising the profile of our city can lead to lasting economic benefits, not only for POM but PNG as well. For example, cities which hosted the Olympics and other international events have seen a persistent increase in recognition and tourism. Like other international meetings, hosting the APEC raises a country’s profile, which are important in generating new economic benefits and business investments since the day PNG was selected to host the APEC. The importance of this is that it can change the views of the world on Port Moresby, and PNG, especially when POM was ranked as one of the most unlivable cities in the world and PNG has the most corrupt country. There are other aspects of Port Moresby and PNG the world does not see, let’s work together and give them these. Port Moresby is always in the front pages for the wrong reasons, PNG should capitalize on this event to get united and show the world that PNG is different from the rubbish that are published in the media. If there is going to be any chance to increase the profile of Port Moresby and PNG, it is definitely the hosting of APEC.
Why is Port Moresby given too much attention and not other centers? The first answer is Port Moresby is the capital city of PNG and as such, it must be treated as a capital city. You look at Sydney, Tokyo, London, New York, their governments and the private spend lots of resources to bring to where they are now. The country is changing and we must change and accept new developments. Most of these infrastructures have created thousands of jobs for our people. These infrastructures will still be here for our future generations to use. In my opinion, we must give Port Moresby the treatment it deserves to be our capital city, which all of us can be proud of, and our visitors can enjoy.

2. Long term Trade, Investment and Jobs

A significant benefit Port Moresby and PNG benefited is the long-term investment, which comes from preparing for hosting APEC. The preparation did not start yesterday, it started when PNG was selected as the host country for APEC 2018. The POM and PNG will have a legacy of improved infrastructure including venues that should address some of our daily traffic worries. Unlike, other investments, infrastructure is very expensive to build and people should accept this fact. POM should invest heavily in infrastructure and public transport to cater for the influx of not only our visitors but our increased population. This will leave a legacy for residents of POM, they will benefit from improved public transport. Any new investment bring with it jobs, and this may proof beneficial for PNG because the several years of planning and investment will help create jobs and can revive POM and can boost economic output.
Apart from the investments infrastructure and public transport, leaders of major business corporations will be here as well. They will be looking for opportunity to invest their dollars. They may strike trade deals with PNG-based corporations or resources owners. New Business deals could be struck and the employment benefits will be immense. In the long run, such deals will continue to provide employment and tax benefits to the country. Countries may also sign trade treaties or other areas of cooperation that may benefit PNG as well.

Some of the short-term benefits of hosting such events are the logistical and transportation services, which will also benefit from hosting such events. The hotels and catering services will serve our guests (in terms of bed, food, drinks etc). The security services will be increased. These will be immense. Added to these are the inflows of foreign currency, especially US dollars. Some of the leaders will be here with their spouses and other relatives and would like to spend on something that they will remember. These will benefit cultures. We should showcase our cultures to the world. PNG should be showcasing our cultural diversity, the more than 850 different languages to the world leaders as a promotion to attract more tourists into PNG in the future. East New Britain will also host some of the APEC meetings, they will also benefit from the meetings, including hotels, security, showcasing our cultures and selling artifacts etc.

These long and short term investments and spendings are important given the state of economy, by creating jobs, and can help create economic recovery. The investment has potential for leading to higher growth and higher future tax revenues.

 

Cons

Although hosting such important events are beneficial in economic wise, there are other things which may not be so good. For example;

1. Cost of building the infrastructure

To host an Important Event like this, require huge capital investments, which should be paid for by tax payers, unfortunately. The Costs of building these infrastructures have a tendency of going up and could be much greater than expected. Associated with the cost over-runs are the over inflated contracts, and the involvement of politicians in such contracts. These are the main issues. Politicians should not get the dirty fingers in such big projects. Unfortunately, we are in PNG and cannot avoid that.

2. Short-Term use

The other important thing is that many of facilities built for the APEC can never be fully used again. It will rarely be full outside of the Olympics. This can be mitigated by careful planning.

3. Potential for negative publicity

If things go well, a POM can benefit from positive publicity, but if things go badly, it can cause the opposite.

4. Cost of Security

The budget for the security will be biggest slice of the cake. Like any major events, this APEC should increasingly implement higher levels of security. This is both costly and can restrict freedom of movement of local citizens during the meetings.

4. Borrowing and Increase in Debt

Also, one bad thing about hosting such events is that, it eats into the budget of the host country. With the current difficult economic times PNG is facing, it has no choice but to borrow and fund the activities leading up to the APEC meetings. This may add to the overall Government debt of PNG, which will eventually be paid by the tax payers.

 

Conclusion

In my view, it is understandable why people complain about the spending by the Government to host the APEC, while other areas are suffering. But developing Port Moresby is not wrong, it is our capital city and we have to develop it. In life, there are always trade-off, we can’t get all we want. We should make some sacrifices, and in the meantime, the sacrifices are being made by the 7.5 million people of PNG to host this very important economic meeting. Let’s make use of every opportunity from this meeting and try and get something out of it to compensate for our sacrifices.

The importance of this is that it can change the views of the world on Port Moresby, and PNG, especially when it is ranked as one of the most unlivable cities and the most corrupt countries in the world. There are other aspects of Port Moresby and PNG the world does not see, let us work together and give them these. Port Moresby is always in the front pages for the wrong reasons, PNG should capitalize on this event to get united and show the world that PNG is different from the rubbish that are published in the media more frequently. If there is going to be any chance to increase the profile of Port Moresby and PNG, it is the hosting of APEC.

Let us not kill the enthusiasm to host such international events. PNG has come of age, though we have problems, they are not unique to PNG. Every country has its own set of problems, it’s not only PNG. President of US, China, Japan, Russia and others will be here. PNG just had this rare opportunity to host them. We should feel privileged to host such very powerful and important leaders on earth.

I hope I make some sense here.

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