Empower Your Business

Accounting is Just the Beginning

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Business Advice Papua-New-Guinea Style

I have just come back from a week assisting local business owners in Port Moresby in Papua New Guinea.

It is a place of huge contrast with luxury, very expensive hotels and apartments alongside falling down shanty-towns, slums, filth and poverty, relentless sun (it was the dry season), with everyone sweating profusely in the heat. There is rubbish strewn everywhere, mangy dogs rummaging through everything. Graffiti is rife, thousands of people sitting in the dirt on the roadsides trying to sell small piles of fruit or nuts, naked kids coated in dust running and rolling in the dirt, and walking along the street you have to dodge locals spitting out great mouthfuls of red betel nut juice (out of vehicle windows too) which they chew to make themselves high. Not only does this juice stain the roads and pavements everywhere but also it makes their mouths bright red. The beach is covered in rubbish and filth too.

Contrast that with the luxury hotels and apartments. Because of the booming economy (GDP growth is 9% due to oil, gas & minerals) our rooms cost $600 per night. Apartments cost $5,000 per week – yes, that’s per week! The cost of employing the expats is huge. The minimum wage here is $2 per hour whilst food is more expensive than at home.

Whilst there are some very friendly people in PNG it a very dangerous place. Many you speak to, both locals and expats, have been robbed or car-jacked at gun or knifepoint more than once. Shops have signs saying “No Guns or Knives” which is comforting to a degree I suppose! Whilst we encountered no problems ourselves, we were careful. We had a couple of drivers taking us around and if we walked anywhere, we tended to go with at least one other or made sure it was busy and not dark. I did go, against advice, for a couple of runs as it was getting dark along the seafront but it was very busy with locals so I felt safer with so many people around but I was told off later for doing so by the NZ High Commissioner and the expats!

One of our drivers (a local obviously) say crime is not due to poverty, but laziness, as the criminals come from the Highlands where they all have ancestral lands to farm but can’t be bothered. There are thousands of security guards and all businesses, hotels and restaurants etc have them standing around en masse. In addition to the security guards, high fences surround all houses and business premises together with roll after roll of barbed or razor wire or electric fences. Upon arrival in the car, they beep their horns, the gates are opened and immediately shut and locked with you on the inside! You can’t even move around the hotel without using a card which activates the lift, opens the doors in and out of the stairwell or the doors in the mostly glass walls which divide off the sections of the hotel on the same floor.

When assisting a business its best to see the business in action. In PNG this means leaving the safety of the hotel and venturing out into the suburbs or outlying districts. The two most exciting trips for me were out to business owner’s homes and business premises, the first in a shabby part of town a long way out and secondly, to a village built on stilts out over the sea.

On the way to the former, the car I was being driven in (by my new local client) broke down, just alongside a really shabby-looking shanty town. Watching the interest shown by the hundreds of locals upon finding a European in their midst, locking the car doors was not that comforting but luckily, just in time, the car chugged into life again allowing our journey to continue. Not wanting to risk that car again, I asked my new client to telephone one of our drivers to bring me back into the city but he couldn’t find where I was, so after driving around for a while gave up and went back into the city! By then it was getting dark and I was beginning to wonder what to do, as the local taxi drivers are untrustworthy and walking out where I was (a very rough suburb) would be crazy. Luckily, the driver returned following my requests for help and eventually found and rescued me. 

As for the village on stilts, the house/business we had to visit was about 400 metres out on a long slim planked wharf with huts on either side. The surface of the wharf consisted of slats of wood but what was alarming was to be told to walk in the middle because the ends were not safe! Even worse, many of the slats were missing so there are huge gaps to step over as the wharf swayed alarmingly from side-to-side! Tripping and plunging into the sea would have been one thing but not into the soup of rubbish, sewage and sludge that collects underneath the houses, as needless to say, not only do the villagers use the sea as their toilet but their animals too, mainly pigs that are trapped in tiny wire cages with corrugated iron floors. And then, horror of horrors, smiling kids wading waist deep in the sewage sludge – yuk! Apparently, the huts do blow down now again but there’s never been a tsunami, just high tides that bring the water level over the floors! The locals sit listlessly watching as you pass whilst one or two wash themselves or their clothes in big tin buckets.

Business there is done a little differently, with corruption a huge problem, as is the large network of family and friends they call “wantocks” which is both a blessing and a burden. A blessing because that’s the way they get business, but a burden because they don’t know how to get business the normal way! In addition, they feel obligated to either employ their wantocks or support them with money or gifts, which can place real pressure on the business owners in terms of affordability, as everyone thinks the business owners are rich.

Business objectives are different too, as they are not bothered about profitability but want to employ more people and feel obligated to expand their businesses to support their wantocks. Despite that, we were surprised by the successful and profitable businesses we saw which, overall, are financed out of cash flow, as they lack the security for borrowing which is hard to get anyway. We could do with more of that in NZ.

So a fabulous experience all round, and even better, we’re going back next April. By the way, my business Facebook site under the name Nick Roberts (not Nicholas Roberts) includes some photos, so take a look if you’re interested. Unfortunately, as always, photos cannot really capture the whole experience…