BY the end of this year Papua New Guinea’s national informal economy policy will have come to the end of its first five year implementation cycle.
The enactment of the ground breaking Informal Sector Development & Control Act 2004 had necessitated the development of the policy.
The lack of government budgetary support has made the road to implementation far from easy.
In the face of this difficulty the policy has lacked the ability to support the bulk of PNG’s population who are engaged in the rural and urban informal economy.
The lack of government support can be partly attributed to changes at the political level. Since Dame Carol Kidu lost the ministry after a change in government, the Community Development Department has seen its leadership change three times. Delilah Gore is its current Minister.
However, this change at the political level might have been a blessing in disguise for policy implementation. With Anna Solomon’s appointment as the Acting Secretary the national informal economy policy gained much needed momentum.
It is hoped that, with Ms Solomon now appointed as the permanent secretary, this will further advance implementation. Certainly her chairing of the informal economy sectoral committee of the CIMC (Consultative Implementation and Monitoring Council) in the latter part of 2013 saw implementation accelerating in strategic areas.
These areas concerned providing public goods and services to enhance the growth of the informal economy as well as improving access to the unbanked population of PNG, most of whom are in the informal economy.
Collaborating with the informal economy sectoral committee, Ms Solomon has been able to position her Department to undertake necessary reforms that complement stakeholder initiatives operating in various sectors of the economy.
In 2013 and 2014 both CIMC and the Department of Community Development conducted provincial workshops on the policy in Alotau, Mt Hagen, Madang and Lae and there are plans for more consultations this year.
Recently Ms Solomon expressed her desire for her Department to take full ownership and responsibility over the implementation of the national informal economy policy, something that was lacking in the previous administration.
This has culminated in the establishment of a new Informal Economy Branch. This effectively elevates the policy’s status. The branch has a manager supported by a core staff of six people to support the implementation of the policy.
This blossoming partnership between CIMC and the Department has led to the review of the Informal Sector Development & Control Act 2004. Led by the Constitutional Law Reform Commission (CLRC), 10 provinces have already been covered as part of a nationwide consultation process. The review is expected to be completed this year with a Cabinet submission.
In the meantime, the Informal Economy Sectoral Committee has requested CLRC to allow it to vet the submission. The committee is concerned that, if CLRC repeals the law and introduces a modal law to be adopted by provincial and local level governments, this will create a big challenge for the Department of Community Development when it comes to coordination and administration.
This is because many provinces and districts don’t have active community development officers at provincial and LLG levels and the Department does not have the capacity to monitor, coordinate and provide advice on the implementation of the law.
In the area of financial inclusion, the Bank of PNG has been industrious in its efforts to increase access and improve the level of competency among marginalised and financially excluded people.
So the future of the informal economy in PNG is brightening. Yet there are still challenges, including confusion about its role in the PNG’s overall economy.
CIMC and the Department of Community Development have called on the government to clearly demarcate between the informal economy and the SME sector and in the process develop strategies to create a pathway for graduation.
Both agencies believe this process should be driven through PNG’s experience rather than outside experience so it captures the homegrown issues affecting the transition of the informal economy into the SME sector.
Development partners are slowly beginning to understand the important role of the informal economy in the socio-economic context of PNG, however there remains a great need for them to invest in the informal economy.
These investments should focus on empowering women and ensuring that wealth generated from impact projects such as the PNG LNG is equitably distributed among PNG’s population.
The PNG government should do the same so that these efforts can complement its policy to stimulate the growth of the SME sector in PNG.
It is also strongly recommended that the government entrench informal economy policy in its medium term planning to ensure there is a sustained effort to support and grow the informal economy to address many of PNG’s socio-economic development issues.
However, this change at the political level might have been a blessing in disguise for policy implementation. With Anna Solomon’s appointment as the Acting Secretary the national informal economy policy gained much needed momentum.
It is hoped that, with Ms Solomon now appointed as the permanent secretary, this will further advance implementation. Certainly her chairing of the informal economy sectoral committee of the CIMC (Consultative Implementation and Monitoring Council) in the latter part of 2013 saw implementation accelerating in strategic areas.
These areas concerned providing public goods and services to enhance the growth of the informal economy as well as improving access to the unbanked population of PNG, most of whom are in the informal economy.
Collaborating with the informal economy sectoral committee, Ms Solomon has been able to position her Department to undertake necessary reforms that complement stakeholder initiatives operating in various sectors of the economy.
In 2013 and 2014 both CIMC and the Department of Community Development conducted provincial workshops on the policy in Alotau, Mt Hagen, Madang and Lae and there are plans for more consultations this year.
Recently Ms Solomon expressed her desire for her Department to take full ownership and responsibility over the implementation of the national informal economy policy, something that was lacking in the previous administration.
This has culminated in the establishment of a new Informal Economy Branch. This effectively elevates the policy’s status. The branch has a manager supported by a core staff of six people to support the implementation of the policy.
This blossoming partnership between CIMC and the Department has led to the review of the Informal Sector Development & Control Act 2004. Led by the Constitutional Law Reform Commission (CLRC), 10 provinces have already been covered as part of a nationwide consultation process. The review is expected to be completed this year with a Cabinet submission.
In the meantime, the Informal Economy Sectoral Committee has requested CLRC to allow it to vet the submission. The committee is concerned that, if CLRC repeals the law and introduces a modal law to be adopted by provincial and local level governments, this will create a big challenge for the Department of Community Development when it comes to coordination and administration.
This is because many provinces and districts don’t have active community development officers at provincial and LLG levels and the Department does not have the capacity to monitor, coordinate and provide advice on the implementation of the law.
In the area of financial inclusion, the Bank of PNG has been industrious in its efforts to increase access and improve the level of competency among marginalised and financially excluded people.
So the future of the informal economy in PNG is brightening. Yet there are still challenges, including confusion about its role in the PNG’s overall economy.
CIMC and the Department of Community Development have called on the government to clearly demarcate between the informal economy and the SME sector and in the process develop strategies to create a pathway for graduation.
Both agencies believe this process should be driven through PNG’s experience rather than outside experience so it captures the homegrown issues affecting the transition of the informal economy into the SME sector.
Development partners are slowly beginning to understand the important role of the informal economy in the socio-economic context of PNG, however there remains a great need for them to invest in the informal economy.
These investments should focus on empowering women and ensuring that wealth generated from impact projects such as the PNG LNG is equitably distributed among PNG’s population.
The PNG government should do the same so that these efforts can complement its policy to stimulate the growth of the SME sector in PNG.
It is also strongly recommended that the government entrench informal economy policy in its medium term planning to ensure there is a sustained effort to support and grow the informal economy to address many of PNG’s socio-economic development issues.
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