BUSA JEREMIAH WENOGO
IT will be interesting to see how politicians handle recommendations from the current review by the Constitutional Law Reform Commission of the Informal Sector Development and Control Act 2004.
The recommendations will be important not just for the future of the informal economy but the economy as a whole.
Early indications indicate a mixed reaction. The top echelon of government is intoxicated with the SME (small-medium enterprise) balm and anticipates that the yet to be completed SME Policy and Master Plan will lead PNG to greater self-reliance and prosperity.
Equally optimistic are the provincial and district tiers of government.
Yet it is to be hoped that the drive for SME growth does not become a journey that leads to nothing at the end of the rainbow.
There is no doubt that, properly conceived and incubated, SMEs can change the dynamics of PNG’s politics and economics. The policy in its own right is revolutionary as it aims to transform PNG from a foreign direct investment/extractive resources dependent nation to a self-reliant economy.
Yet there is an air of pessimism about the government’s drive to stimulate the SME sector given that past government policy decisions have failed miserably.
The demise of the Green Revolution and the NADP Plus Mineral Resource Stabilisation Fund are cases in point.
Like the SME policy, these initiatives were aimed at empowering the majority of our population and increasing participation in development. They all crashed spectacularly.
One of the biggest challenges confronting the government regarding SMEs is how it can create a pathway that connects them to the informal economy.
The government is determined to grow indigenous SMEs from 49,000 to 500,000 over 15 years. While it is looking at reviving the sluggish cooperative society movement as part of its SME stimulus package, it needs to ensure that the scope goes beyond horticulture and captures the entire rural economy.
The government also needs to focus its attention on the growing number of budding entrepreneurs who ply their trade in the urban informal economy.
These people need to be recognised and, just as cooperatives are a vehicle to encourage the growth of the rural economy, the urban informal economy needs a similar mechanism.
Unlike the cooperative society, this mechanism will be more concerned with issues of governance to make sure the informal economy is considered in urban planning where competition for land is intense and where urban authorities tend to favour bigger investments over micro-enterprises.
A grouping of micro-enterprises will provide an opportunity for the urban authority to achieve a win-win situation in trying to address issues of health and hygiene while at the same time allowing informal micro-enterprises and formal businesses to exist side by side.
The present handling of the SME issue by the government looks to be a top-down approach with emphasis placed on fixing barriers preventing the growth of the sector.
Only the push to review the business activity list provides a framework to protect and strengthen the informal economy.
This will no doubt provide breathing space for many informal urban micro-enterprises and smaller SMEs. Some of these activities are already under threat from foreign business competition.
In addition, the idea of having a National Content Plan, apart from increasing the local content of SME product development, should extend its reach into the informal economy.
The government needs to explore more bottom-up strategies to link the informal economy with the SME sector. Some concrete activities towards this endeavour would include grouping urban informal economy micro-enterprises, identifying and profiling training providers and financial institutions that target the informal economy and undertaking a comprehensive stocktake on informal economic activities in the country.
Policies like the proposed SME policy create high expectation among our people. When they fail to deliver, confidence and trust that people have in the government and its agencies are quickly eroded.
It is therefore important that these policies do withstand the test of time by remaining resilient as a result of a strong political support and a determined bureaucratic approach to address the technical difficulties associated with implementation.
It will be interesting to see how the O’Neill government handles the informal economy agenda. If SMEs have created the buzz and hype like never seen before, wait until the informal economy steps into the limelight.
While the emergence of the Review of the Informal Sector Development & Control Act was a result of political will, it remains to be seen if a political champion will emerge to take this task beyond its recommendations.
O’Neill’s term has so far been dominated by the SME agenda. Can he also provide the same substantial support to the informal economy.
BUSA JEREMIAH WENOGO
IT will be interesting to see how politicians handle recommendations from the current review by the Constitutional Law Reform Commission of the Informal Sector Development and Control Act 2004.
Early indications indicate a mixed reaction. The top echelon of government is intoxicated with the SME (small-medium enterprise) balm and anticipates that the yet to be completed SME Policy and Master Plan will lead PNG to greater self-reliance and prosperity.
Equally optimistic are the provincial and district tiers of government.
Yet it is to be hoped that the drive for SME growth does not become a journey that leads to nothing at the end of the rainbow.
There is no doubt that, properly conceived and incubated, SMEs can change the dynamics of PNG’s politics and economics. The policy in its own right is revolutionary as it aims to transform PNG from a foreign direct investment/extractive resources dependent nation to a self-reliant economy.
Yet there is an air of pessimism about the government’s drive to stimulate the SME sector given that past government policy decisions have failed miserably.
The demise of the Green Revolution and the NADP Plus Mineral Resource Stabilisation Fund are cases in point.
Like the SME policy, these initiatives were aimed at empowering the majority of our population and increasing participation in development. They all crashed spectacularly.
One of the biggest challenges confronting the government regarding SMEs is how it can create a pathway that connects them to the informal economy.
The government is determined to grow indigenous SMEs from 49,000 to 500,000 over 15 years. While it is looking at reviving the sluggish cooperative society movement as part of its SME stimulus package, it needs to ensure that the scope goes beyond horticulture and captures the entire rural economy.
The government also needs to focus its attention on the growing number of budding entrepreneurs who ply their trade in the urban informal economy.
These people need to be recognised and, just as cooperatives are a vehicle to encourage the growth of the rural economy, the urban informal economy needs a similar mechanism.
Unlike the cooperative society, this mechanism will be more concerned with issues of governance to make sure the informal economy is considered in urban planning where competition for land is intense and where urban authorities tend to favour bigger investments over micro-enterprises.
A grouping of micro-enterprises will provide an opportunity for the urban authority to achieve a win-win situation in trying to address issues of health and hygiene while at the same time allowing informal micro-enterprises and formal businesses to exist side by side.
The present handling of the SME issue by the government looks to be a top-down approach with emphasis placed on fixing barriers preventing the growth of the sector.
Only the push to review the business activity list provides a framework to protect and strengthen the informal economy.
This will no doubt provide breathing space for many informal urban micro-enterprises and smaller SMEs. Some of these activities are already under threat from foreign business competition.
In addition, the idea of having a National Content Plan, apart from increasing the local content of SME product development, should extend its reach into the informal economy.
The government needs to explore more bottom-up strategies to link the informal economy with the SME sector. Some concrete activities towards this endeavour would include grouping urban informal economy micro-enterprises, identifying and profiling training providers and financial institutions that target the informal economy and undertaking a comprehensive stocktake on informal economic activities in the country.
Policies like the proposed SME policy create high expectation among our people. When they fail to deliver, confidence and trust that people have in the government and its agencies are quickly eroded.
It is therefore important that these policies do withstand the test of time by remaining resilient as a result of a strong political support and a determined bureaucratic approach to address the technical difficulties associated with implementation.
It will be interesting to see how the O’Neill government handles the informal economy agenda. If SMEs have created the buzz and hype like never seen before, wait until the informal economy steps into the limelight.
While the emergence of the Review of the Informal Sector Development & Control Act was a result of political will, it remains to be seen if a political champion will emerge to take this task beyond its recommendations.
O’Neill’s term has so far been dominated by the SME agenda. Can he also provide the same substantial support to the informal economy.
There is no doubt that, properly conceived and incubated, SMEs can change the dynamics of PNG’s politics and economics. The policy in its own right is revolutionary as it aims to transform PNG from a foreign direct investment/extractive resources dependent nation to a self-reliant economy.
Yet there is an air of pessimism about the government’s drive to stimulate the SME sector given that past government policy decisions have failed miserably.
The demise of the Green Revolution and the NADP Plus Mineral Resource Stabilisation Fund are cases in point.
Like the SME policy, these initiatives were aimed at empowering the majority of our population and increasing participation in development. They all crashed spectacularly.
One of the biggest challenges confronting the government regarding SMEs is how it can create a pathway that connects them to the informal economy.
The government is determined to grow indigenous SMEs from 49,000 to 500,000 over 15 years. While it is looking at reviving the sluggish cooperative society movement as part of its SME stimulus package, it needs to ensure that the scope goes beyond horticulture and captures the entire rural economy.
The government also needs to focus its attention on the growing number of budding entrepreneurs who ply their trade in the urban informal economy.
These people need to be recognised and, just as cooperatives are a vehicle to encourage the growth of the rural economy, the urban informal economy needs a similar mechanism.
Unlike the cooperative society, this mechanism will be more concerned with issues of governance to make sure the informal economy is considered in urban planning where competition for land is intense and where urban authorities tend to favour bigger investments over micro-enterprises.
A grouping of micro-enterprises will provide an opportunity for the urban authority to achieve a win-win situation in trying to address issues of health and hygiene while at the same time allowing informal micro-enterprises and formal businesses to exist side by side.
The present handling of the SME issue by the government looks to be a top-down approach with emphasis placed on fixing barriers preventing the growth of the sector.
Only the push to review the business activity list provides a framework to protect and strengthen the informal economy.
This will no doubt provide breathing space for many informal urban micro-enterprises and smaller SMEs. Some of these activities are already under threat from foreign business competition.
In addition, the idea of having a National Content Plan, apart from increasing the local content of SME product development, should extend its reach into the informal economy.
The government needs to explore more bottom-up strategies to link the informal economy with the SME sector. Some concrete activities towards this endeavour would include grouping urban informal economy micro-enterprises, identifying and profiling training providers and financial institutions that target the informal economy and undertaking a comprehensive stocktake on informal economic activities in the country.
Policies like the proposed SME policy create high expectation among our people. When they fail to deliver, confidence and trust that people have in the government and its agencies are quickly eroded.
It is therefore important that these policies do withstand the test of time by remaining resilient as a result of a strong political support and a determined bureaucratic approach to address the technical difficulties associated with implementation.
It will be interesting to see how the O’Neill government handles the informal economy agenda. If SMEs have created the buzz and hype like never seen before, wait until the informal economy steps into the limelight.
While the emergence of the Review of the Informal Sector Development & Control Act was a result of political will, it remains to be seen if a political champion will emerge to take this task beyond its recommendations.
O’Neill’s term has so far been dominated by the SME agenda. Can he also provide the same substantial support to the informal economy.
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