Formalising squatter settlements to create capital in PNG

BUSA JEREMIAH WENOGO

THERE is growing concern in Papua New Guinea that the increasing size of the informal economy is giving rise to more petty crime such as pickpocketing and other law and order problems.

In Port Moresby, markets such as Gordon and Koki are frequented by pickpockets and drug dealers. It is common to see drunkards roaming the markets armed with a bottle of SP and no sense of care or respect for the rule of law and fellow human beings.

The situations is such that law abiding citizens, especially women, are encouraged not to attend these markets either as a buyer or a vendor in fear of falling victim to harassment and abuse.

A couple of weeks ago, a policeman was harassed by market vendors while on patrol in Gordons Market. Police retaliation was swift and the canopy of umbrellas sheltering vendors was set alight. People ran in all direction as police fired bullets into the air.

It is also about time municipal authorities took stock of the alarming rise in criminal activities orchestrated by young people usually residing in squatter settlements in and around the fringes of Port Moresby and other major urban centres.

Most of these youths retract to the informal economy due to the lack of employment opportunities within the formal sector.

Many end up spending much of their time taking drugs and drinking cheap homemade alcohol such as “coffee punch”.

Looking to the future, the constant movement of people from rural areas to urban centres will further intensify this problem.

A lot of law and order problems affecting major urban centres have been attributed to the rise of informal squatter settlements.

These unplanned settlements are said to harbour people who are unemployed and to have a high prevalence of violence and crime. Not conforming to the rule of law through formally registering their properties also allows them to take advantage of their anonymous status.

Criminals who originate from these settlements take advantage of this situation by avoiding the arm of the law and instilling fear into the community.

On the other hand they are able to secure the community’s support through a Robin Hood existence where they rob the better off and share the spoils with their communities.

They may be seen as heroes and protected by the community through a “keep your mouth shut for your own good” policy. This makes it very difficult situation for police to track down these criminals.

When I first thought about this issue, I drew inspirations from Hernando De Soto’s book The mystery of capital, in which he argues that the absence of a national formal property system supported by appropriate legislative reforms has prevented most of the poor in developing countries from unleashing “capital” to transform their lives and the economy as a whole.

As a result capitalism has been blamed for many miseries and much suffering in the developing world while at the same time benefiting only a few elite individuals.

De Soto stresses the importance of governments creating laws around prevailing social contracts to facilitate transition from the informal economy into the formal sector.

He offers developing countries such as PNG a set of policy tools that address squatter settlement issues and the petty crime and violence associated with informal economic activities.

If settlements in PNG are turned into suburbs with house owners holding their own titles and homes connected to basic household utilities such as water and power, municipal authorities will be able to better address law and order problems and tackle challenges posed by the informal economy.

Records of homeowners kept in a central property registry will enable agencies like the police to tap into them if ever they are after a person of interest.

A formal property system will effectively instill accountability when house owners are securing loans or when government is providing services such as garbage collection, electricity and water.

Even traffic infringement or parking charges can be billed to the allotment number of the house. There can be confidence that violations of laws and regulations can be dealt with thoroughly.

Informal squatter settlements are now home to most working class Papua New Guineans who cannot afford to own a house or rent decent accommodation. And this movement into settlements is gradually changing their situation and image.

For people who dream of owning a house one day, informal arrangements are explored with landowners to access cheap unused land in settlements to build houses.

Houses built on this land are usually high covenant and of similar design and market value as those approved by the Building Board. They are built to win the favour of landlord and authorities so that a formal title may be secured.

There are also reports of people colluding with bureaucrats to secure titles over land in major towns and cities.

These examples illustrate the need for the government to develop laws that will allow people access to titles that can be used for multiple purposes.

Informal squatter settlements are not necessarily the fundamental problem so much as the system and laws that are in place. If informal squatter settlements are converted to properly titled areas, these homes can become assets that can be used as capital to grow the PNG economy.

Through such action ordinary Papua New Guineans can own assets and aspire to leverage them to become successful entrepreneurs.

The informal economy, historically responsible for filling in the gap and clearing up the mess left behind by the formal sector, can be the remedy to address stagnation in formal sector growth and not an ailment.

De Soto and his team of researchers found that the value of most informal squatter settlements around the world is trillions of dollars but they remain dead capital.

By government introducing appropriate laws to formalise these squatter settlements, they can inject life into dead capital and transform the economy.