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A great (but ignored) way to include everyone in development


PORT MORESBY - In Papua New Guinea, when it comes to the informal economy, a major focus for many years has been on markets and street selling.

While these do play a vital role in providing an avenue for informal economy participants (mainly women) to generate income, there’s another important component of PNG’s large informal economy that has been largely ignored.

The informal settlements in most urban centres have grown exponentially due to the escalation of rural-urban migration.

In cities such as Port Moresby, Lae and Mt Hagen, the growth of informal settlements has been so rapid and pervasive that it has reached a point where urgent action needs to be taken to arrest what has become out-of-control development.

It is estimated that by 2030, one-third of PNG’s population will be living in urban centres with an annual growth rate of 1.6%.

In Port Moresby alone it is estimated that over 45% of the 700,000 plus population of the National Capital District live in the unplanned areas and settlements. Most of these people will not be able to secure formal jobs and will take up livelihood activities within the urban informal economy to get by.

The National Informal Economy Policy for 2011-2015 estimates that 80-85% of the total population is involved in the informal sector. In Port Moresby alone it estimates that about K2 million changes hands every day in the urban informal economy. That is about K750 million a year.

In most developing economies, the informal economy has outgrown the formal sector to the extent that governments are being urged to embrace the informal economy to combat rising unemployment.

This points to an urgent need for the PNG government to integrate informal economy into its urban development plans and priorities, as it has often been advised to do.

Lacking an inclusive approach to urban planning, city and town planning in PNG has become uncoordinated and the outcome is government and citizens competing over limited available land to satisfy their respective interests.

The push by the government to stimulate the economy through growing the formal sector in an endeavour to increase the nation’s tax base is putting it on a collision course with an ever-increasing informal economy urban population constantly searching for space to trade goods and services.

It is a shame the government has not heeded its own urbanisation policy which has identified the need for an integrated economic, social and physical approach to planning and managing towns and cities.

Instances of clashes between authorities and informal economy participants (street and market vendors) and forceful evictions from and of settlements are a result of a planning process that is not inclusive.

Globally the new UN Urban Agenda 3 calls on governments throughout the world to ensure urban development is sustainable by linking urbanisation to overall development.

For a country that has a thriving urban population engaging predominantly in the informal economy this is an important statement. Data from the national audit survey on the informal economy clearly indicate that increasing numbers of urban dwellers are being pushed out of existing markets due to limited public space.

The National Capital District Commission now has an opportunity to spearhead this paradigm shift under its settlement upgrading program.

NCDC has already made its intention known to integrate livelihood activities, but the form this will take is unclear. While reserving land for new markets is important, efforts should also be focused on making sure that titled land allotted to block holders is of sufficient size to facilitate “backyard livelihood” activities.

There is no doubt that, if every resident of an urban area of PNG are given the opportunity to use their land for economic advancement, it will assist create sustainable towns and cities in our country.

The huge market for fresh produce in Port Moresby and the success of the once popular Stret Pasin Stoa scheme of the 1970S and 80s is a testament to the fact that an integrated approach to land planning and development will encourage them to become enthusiastic and productive partners in the nation’s development.


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