IN Papua New Guinea it is government policy to encourage growth and development of the informal economy. This may surprise observers aware of how often the ‘informal sector’ is the subject of controversy.
After years of effort, a national informal economy policy was adopted by the National Executive Council in 2011, driven by the then Minister for Community Development, Dame Carol Kidu. She was supported in this by the Consultative Implementation and Monitoring Council.
Sadly, the policy lost momentum after Dame Carol departed the Ministry and retired from politics. Three changes of Minister and loss of continuity in the senior bureaucracy have contributed to stasis in the meantime.
As Dame Carol found, gaining support for the policy was an uphill task in the face of entrenched antipathy to the ‘informal sector’ among some members of the PNG political class.
At both local and national levels there are many examples of this antipathy, which reflects an elite psychology distanced from ordinary people who throng the streets and markets of the towns. It suggests an inferiority complex, a sense of shame that such people are a barrier to ‘modernisation’.
The epicentre of this disgust is the street trade in buai (betel nut, Areca catechu). While city authorities are entitled to feel that public consumption resulting from the trade is a blight on the appearance of towns and a risk to public health, it is also a model domestic industry, in terms of the numbers of people it supports, the income generated, and the efficiency of its logistical system.
We can soon expect to see vendors of buai and other commodities cleared from the streets of Port Moresby as part of a clean-up in preparation for the South Pacific Games. What we cannot expect any time soon is a sensible attempt to solve the dilemma — not of the buai trade itself, but of the public consumption of betel nut — while retaining the considerable economic benefits it yields to low-income people.
It is a mark of the immaturity and limited scope of the PNG informal economy that it still lacks a sufficiently diversified set of activities, so that a single informal industry has assumed such notoriety.
The national policy adopted by the National Executive Council suggests measures to encourage a more diverse set of ‘informal’ activities, but implementation of these has been slow due to budget constraints.
In PNG the informal economy is too small, not too large and is still too limited in scope, scale and contribution to national output. A better functioning and more diverse informal economy is seen as necessary to increase the efficiency of linkages between mineral enclaves and the broader population.
A new Minister for Community Development, Youth and Religion (Hon Delilah Gore) and a new Departmental Secretary (Anna Solomon) now give hope that the national policy can gain traction and impress itself on a broader range of government agencies.
Certainly the Department seems now to have a renewed sense of ownership and commitment to the policy.
Busa Jeremiah Wenogo is an economist working with the Consultative Implementation and Monitoring Council in Port Moresby. John Conroy is a Visiting Research Fellow at the Crawford School, ANU
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