ABSTRACT
Since independence the Government of Papua New Guinea’s participation in and ownership of non-financial public enterprises (NPEs) has expanded, in part due to pressing requirements of establishing necessary national institutions and infrastructure. The purpose of this paper is to describe the public enterprise sector in Papua New Guinea with particular focus on identifying the NPEs, reviewing their institutional and financial arrangements, and their role in the economy. As a result of the description some problems arising with increasing government participation are highlighted. The organisation of the paper is as follows: Section II defines nonfinancial public enterprises and the taxonomy employed in this paper for their analysis. It also reviews the NPEs in Papua New Guinea, their size and importance in the economy and their recent financial performance. Section III discusses the relationships between the Government and NPEs, including the institutional arrangement for control, the information flows, and the budgetary, financial, and taxation relationships. NPE’s roles in resource allocation, growth, development, and other matters are briefly reviewed in Section IV, and other economic roles are briefly reviewed in Section V. Current and feasible pricing practices, as well as implicit subsidies, are reviewed in Section VI. Conclusions are drawn in Section VII.
