Year

1992

Degree Name

Master of Commerce (Hons.)

Department

Department of Economics

Abstract

Regulation and deregulation have become important policy questions dominating the analysis of Papua New Guinea's transport sector over the last 10 years. In search of solutions to achieve efficiency and low cost transportation, the government has toiled hard at understanding the transport industry and the existing institutional arrangements prevailing within the system. In doing so, substantial amounts of loan funds have been devoted to sectoral studies conducted by consultants to uncover the problems inherent in the system. Although these weaknesses are being exposed to scrutiny of the government, there is still uncertainty as to where to actually start any reforms. This is not peculiar to transport but is relevant to any industry where protectionist attitudes are still commonplace. The potential for change is there but initiatives to change are far from evident. The objective of this study is to use consultants' studies and data as base data to permit further analysis of areas requiring liberalisation and areas where change is not relevant. In the maritime sector of PNG, it is apparent that the market is small and geographic factors have resulted in highly segmentalised sector on which licensing and pricing policies are in part based. These formal controls have, however, diminished the degree of competition along the major trade routes. Similarly, pricing policies which contains both a fixed and variable component, are disadvantageous to small shippers. The existing situation has been aggravated by discriminatory market integration and collusion between major operators. Such constraints have imposed barriers to effective competition from independent operators.

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