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Riot shows gaps in PNG’s informal economy law & policy


LAST week Lae, Papua New Guinea’s second biggest city and the country’s industrial hub, came to a standstill as indigenous youths went on a rampage to rid the city of its street vendors.

The exact cause of the riot is still unclear was but media reports suggest the vendors’ aggressive behaviour may have led to a confrontation which snowballed into the citywide riot.

Some six vendors were critically injured while stones hurled by rioters damaged shops. At the end of the tumult, aggrieved youths presented a petition to Hon Kelly Naru, Governor of Morobe Province, in which they demanded the removal of illegal squatter settlements and a fair business environment for native Morobeans.

The petitioners claimed that most Lae businesses had been taken over by outsiders. The mayor seemed convinced and the Provincial Executive Council immediately decided to ban street vending in Lae, a call loudly echoed by the Lae Chamber of Commerce.

All that is required now is for the provincial government to fork out K2 million from its budget to implement the ban.

While the tension has subsided, the incident has exposed the increasing number of Papua New Guineans, particularly young people, who are frustrated by a lack of employment opportunities.

Many people are now of the view that the benefits derived from the exploitation of the country’s natural wealth are not trickling down to the mass.

They perceive that rampant corruption has ensured the wealth of this country is locked in a bell jar at the disposal of the elite.

In Lae, dissatisfaction against migrants is becoming a concern as locals start to feel the pressure of the population explosion. Settlements sprawl across the city in some cases encroaching upon traditional land belonging to nearby villages like Yalu and Butibum.

Lae’s centrality as a strategic place for trade and investment has also facilitated massive rural to urban migration.

People from the five highlands provinces and other parts of Papua New Guinea have moved to the city. Many of those who cannot find employment resort to operating in the informal economy or to crime.

In 2012 the courts, making reference to the Informal Sector Development & Control Act 2004, restrained Lae City Council from implementing a decision to close the city’s informal markets.

But worse than confrontations between informal vendors and the city authority are the ethnic tensions between different groups that have often brought the city to a standstill.

Indeed the recent riot was caused by confrontations between the Sialums (a district of Morobe Province) and a combined force of Chimbus and Eastern Highlanders.

Critics may jump to the conclusion that the introduction of the Informal Sector Development & Control Act allowed the informal economy to thrive and with it the factors that led to the recent riot.

But it is important to understand that the intention of the law was to find a balance between promoting the positive side of the informal sector while minimising its negativity.

The real problem is the lack of resources devoted to enforcing this law, as highlighted by Koim Trilu Leahy, Major of Lae City, when responding to questions regarding the city’s inability to adequately police street vending.

So what happened last week in Lae took the national spotlight as other cities and towns looked on with intense curiosity.

In cities like Mt Hagen, there have been reports of informal market vendors being victimised by frustrated youths. Recently the new Mt Hagen City Authority declared its intention to ban street vending altogether.

In Port Moresby, the National Capital District’s government’s effort to curb the sale of betel nut has been well documented, including the fatalities and the constant clashes between vendors and city rangers. So far several lives have been lost with the Hanuabada tragedy investigation far from over.

Alotau and Kokopo are exceptions but most cities and towns are struggling to deal with their informal economies.

The Lae riot perhaps provides us with a crystal ball outlook of what will eventuate elsewhere if the government continues to neglect the informal economy.

This is not the time to be reactive but a time for the government to come up with a national strategy to respond to the causes that led to the Lae riot.

Such a response should endeavour to control the negativity associated with the informal economy and at the same time address youth unemployment.

At the centre of the strategy the government needs to update both law and policy as they relate to the informal economy. A review along these lines should take centre stage on the national agenda.

Busa Jeremiah Wenogo is an economist working with the Consultative Implementation & Monitoring Council as a Senior Project Officer specializing in the area of PNG’s informal economy


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`Robin Lillicrapp

How much influence has the Highlands drought upon this scenario?

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