THE new development theme of “leave no one behind” aptly describes the effort the Papua New Guinea government needs to make to embrace the positive side of the country’s thriving informal economy.
Over the years, the government has resorted to heavy-handed tactics to deal with problems arising from the informal economy; that part of the economy that is not taxed or monitored by any form of government, like street vendors and home-based workers.
Although government action has yielded few positive outcomes, it looks likely to continue unabated. For instance, Port Moresby’s municipal authority, the National Capital District Commission, is currently enforcing a city wide ban on the sale and consumption of betel nut.
While the government has blamed pervasive and irresponsible chewing for the poor image of many towns and cities, the government can be equally blamed for allowing the informal economy to thrive in a state of anarchy.
Large parts of the informal economy in the rural and urban PNG are totally disorganised; making government intervention very difficult indeed. In such situations, whenever the government tries to clamp down on the informal economy, it is met with stiff opposition because laws don’t take into consideration the well-being of informal economy participants.
The creation of an informal economy vendors association representing the interest of the various sub-sectors of the informal economy is crucial.
Beyond buai and cigarettes there are people engaged in varieties of informal economic activity including agriculture, trades, handicrafts, floriculture, horticulture, street vendors, mobile traders and peddlers.
Any of these sub-sectors could organise themselves into a vendor association to promote their offerings and protect their interests.
In essence, an informal economy vendors association would be an attempt to organise the unorganised informal economy for the purpose of influencing policy and legislative reform to promote the interests of the informal economy.
The need to introduce such a mechanism was one of the key recommendations of the PNG Informal Sector Study while a National Research Institute study on the rural informal sector economy highlighted that 90% of respondents received no form of assistance, attributing this to the absence of institutions that are mandated to disseminate such information.
This highlights a gap in informal rural economy institutional arrangements where churches, schools, councils and non-government organisations are not able to address important issues. The breakdown of cooperative societies has further compounded the problem.
This demonstrates that the informal economy is operating in an institutional vacuum without any link or representation to in existing governance structures. As a result informal workers are constrained by lack of voice, visibility and validity.
These mutually reinforcing constraints mean that informal economy participants are not supported and represented and that their contributions to national and local economies go unrecognised and undervalued.
In addressing the issue of organising the informal economy participants into vendors associations in PNG, UN Women - working in partnership with the National Capital District Commission (NCDC) through the Safe Cities Market Project - has been able to undertake vendor identification and registration exercises which laid the platform for organising vendors into associations.
The two organisations then facilitated the election of executives for these groups. As of 2014 the project covered Gerehu and Gordons Market with 14-17 vendor groups covering about 1,500 vendors.
As a result of the project, women market vendors have opened basic savings accounts for their daily takings and training in basic financial literacy and other relevant skills is also available for registered vendors.
Through the vendors’ association, NCDC is able to communicate more effectively in regular meetings and also consult on market policy and by-laws.
Lessons learnt from this project can be extended to other parts of the country with the establishment of informal economy vendors association which will have a broader focus. This is important because the government is now at the threshold of creating national law on the informal economy.
So far the UN Women/NCDC Safe Cities Market project has only focussed on addressing violence inflicted on women and girls in the informal markets. Outside the markets there are countless vendors and victim to violence and abuse from criminals, police, enforcement authorities and the public at large.
Most of these people are also the bread winners of their families and they, like the women in the informal markets, need to be heard and represented.
At present the CIMC Informal Economy Sectoral Committee, through a technical working group, is putting together an action plan to establish informal economy vendors associations throughout the country.
Through these, it is hoped that informal economic activities will be linked to the formal sector of the economy which, among other benefits, will ensure the formal sector – reliant as it is on the informal sector - continues to grow.
This concept will need to be recognised in the current review on the Organic Law on Provincial & Local Level Government and the amendments to the Informal Sector Development and Control Act 2004.
The author is an economist with the Consultative Implementation & Monitoring Council as Senior Project Officer specialising in the area of informal economy