BUSA JEREMIAH WENOGO
PORT MORESBY - Despite its contribution to the Papua New Guinean economy by way of providing employment and income to almost 85% of the population, especially women, very little has been done to promote the country’s informal economy.
Although the PNG government has made clear its intention to support the growth of the informal economy, participants are largely marginalised from government plans and priorities.
Participants in the country’s large but fragmented informal economy lack “voice” or the ability to collectively bargain with the government to ensure their issues are addressed.
There is no proper mechanism to allow for dialogue between the government and informal economy participants. As a result, the informal economy operates in anarchy with very little or no control from the government.
In a move to organise PNG’s informal economy the Consultative Implementation & Monitoring Council (CIMC) and the Department for Community Development & Religion have embarked on developing the Informal Economy Voice Strategy.
The strategy aims to integrate concerns raised by informal economy participants for consideration by relevant government agencies from national down to ward level.
It also provides for systematic multi-stakeholder involvement including local community representatives. The outcome will be to generate specific actions and outputs relating to organising the informal economy participants into registered Informal Economy Associations which will give them a strong voice in influencing government decisions concerning the informal economy.
Creating the associations will enhance representation of informal economy participants in the decision making processes of government at all levels so that harmonious relationships are created in order for informal economy to be recognised and enabled to thrive alongside the formal sector.
Already an Informal Economy Development & Control Bill has been drafted to allow for the creation of Informal Economy Committees. The provision states that:
1) The Minister responsible for community development affairs may, where he deems proper, establish informal economy committees at the national, provincial and district levels as a voice mechanism for the informal economy participants.
(2) The primary function of these committees shall be to act as the voice mechanism that can be the link between the informal economy vendors, administering authorities, the Provincial and National Government for the purposes of promoting and protecting the informal economy in the country.
Secondly, the strategy will enhance coordination and management as well as addressing capacity gaps within the informal economy allowing it to advance individually and collectively as a sector contributing effectively to the development of PNG.
The lack of consultation between informal economy participants and city, provincial and district authorities has led to many problems.
There is no control over what is done in the informal economy setting. Establishing informal economy associations for informal economy participants will bridge the gap in communication and will provide a medium for them to be heard and given adequate support and attention.
In addition, developing this mechanism will allow balance to be achieved on both sides with businesses in the informal economy conducted within established rules and regulations and problems dealt with through constant dialogue among key stakeholders.
On top of that, the informal economy will increasingly become a partner rather than being viewed negatively as a competitor to the formal economy.
The informal economy association will provide for regular dialogue between formal businesses and informal economy micro-entrepreneurs.
Through this, it is hoped that vendors and city authorities will be made aware of their roles and responsibilities and that informal economy participants will be protected from abuse and exploitation as is often the case when police or city rangers confiscate items belonging to vendors or demand “bribes from vendors as a payment for protection.
The limited amount of alienated land for new development, particularly in urban areas, is another essential subject for dialogue between informal economy participants and town and urban authorities.
Without adequate representation in policy and planning processes, the priorities of the informal economy are increasingly marginalised from those in formal employment.
Given the government’s push to drive the economy by stimulating growth in the formal sector, more and more land may well be allocated for these investments at the expense of the informal economy which caters for the majority of urban and rural dwellers.
In light of this reality, urban planning can become biased in favour of formal business, creating a situation where informal economic activities may not be given space to operate. To counter this, the informal economy association can advocate that the interests of the informal economy be explicitly captured in the planning process.
The government does not have data on the number of people in the informal economy, what they do or specific issues within the informal economy. This data gap prevents local and provincial governments from adequately planning and budgeting to support the work of the informal economy. For example, through expanding or maintaining market facilities deemed to be inadequate to accommodate increasing demand.
The work on the Economic Voice Strategy started with the development of a concept note which was further discussed through various consultative processes facilitated by the Consultative Implementation & Monitoring Council under its informal economy sectoral committee, chaired by Mrs Anna Solomon, Secretary for the Department of Community Development & Religion and co-chaired by the Small and Medium Enterprise Corporation.
A technical working committee chaired by the National Capital District Commission (NCDC) was set up to develop the strategy, which is now in its final draft with plans to conduct nationwide consultation with stakeholders in preparation for submission to the government.