Corruption: When silence speaks the people can live again

By BUSA JEREMIAH WENOGO via PNG ATTITUDE 

MOST Papua New Guineans like me, who dream of a transparent, fair and equitable nation were wondering if the recent Police fraud squad’s arrests of high profile individuals was the light at the end of this abyss called corruption.

The events of this recent weekend – with the head of the Police fraud directorate being suspended and his forced to step aside – may mean what appeared as a light was only a shadow.

Considering the magnitude of corruption in PNG, honest hardworking Papua New Guineans across both rural and urban areas feel entrapped in a system that sucks the life out of honesty and leaves behind hopelessness and frustration. We are under siege.

It is common knowledge that the 10% commission fee is a way of “getting things done” in PNG. If we choose to go through the proper processes it is “a walk to no way”.

Both government and private sectors are littered with the 10% cowboys. A humble taxi driver can’t get a permit to operate without going through the back door. Government contracts increasingly fall victim to what is euphemistically termed a “self-imposed inflated price”. Police are being bribed to smuggle the green gold of betel nut into Port Moresby.

Meanwhile, on the streets, thousands of impoverished mothers and fathers braving the harsh tropical heat to earn a few kina must be on constant look-out for pickpockets and other petty thieves who care nothing about their wellbeing.

And this is just the tip of the iceberg. Things have become atrocious in our country. We’re a people who have earned all sorts of titles, good and bad. “Land of the Unexpected” was always a fitting description of the chameleon life in PNG. And now we have a corruption, in the words of Sir Mekere Morauta, so pervasive that it would take a miracle to extricate PNG from its tentacles.

Of late I have noticed that many educated Papua New Guineans are losing interest in issues of national interest. They don’t bother buying newspapers or watching the evening news. Even on social media only a handful of are making noise about issues of national importance. Most prefer to lie low, opting to suffer in silence with the rest of the kanakas.

We all see corruption everywhere and the logic is simple and sickening. Don’t worry about something you can’t stop.

I have friends who think that way. They are part of a growing number of Papua New Guineans who operate in mute mode. PNG to them is Gotham in real life where chaos and lawlessness are the rule of law.

While corrupt groupies may delight in this orgiastic reality, concerned people need to wake from their hibernation before it’s too late and peaceful recovery is impossible. Ignorance of evil is not an option. We have a nation to save.

Yet we should listen to their silence and understand that it is a symptom of institutions falling apart due to rampant corruption; it is a sign of a system that is skewed towards pursuing the interests of the few at the expense of the majority.

Our judiciary, seen as one of the last bastions holding out against the oppressors, is constantly bombarded by desperados hell bent on preserving their positions only at the cost of what is truly a silent majority of Papua New Guineans. Yet the silent majority cops the full force of the law even if a can of tin fish or one kilo bag of rice is pilfered because it is needed.

Most of us remain silent in our own world of powerlessness against a corrupted system that is entrenched into the core of our nation. It is no solace that our friends, wantoks, relatives and families may be part of it. Our silence also makes us part of the problem.

This nation needs one good conviction to raise its hopes; one good judgment to bring it back from oblivion. When silence finally speaks, its voice will herald a new era and a new dawn for our beloved Papua New Guinea.

All our eyes are now on the courts. Make us live again for a great Papua New Guinea.

Source: http://asopa.typepad.com/asopa_people/2016/04/corruption-when-silence-speaks-the-people-can-live-again.html#more

A holistic development of Informal Economy is key to SME growth

By Busa Jeremiah Wenogo

In the SME Masterplan 2016-2030 that was recently launched; the Department of Trade, Commerce & Industry (DTCI) expressed its intention to take charge of and develop the informal economy in the country.

This no doubt makes a lot of sense especially when the Department is fully focused on developing the SME Sector in the country. It is hoped that with the proposed arrangement the informal economy can at last gain its fair share of limelight and subsequently, much needed boost. The current government does not seem to be interested in promoting informal economy as a separate agenda until and unless it is relevant to stimulating the growth of the SME Sector. Even under the current arrangement where informal economy is housed under the Department for Community Development & Religion (DFCDR), the policy has gained very little traction. Since its inception, the Department’s top brass has shown little or no interest interms of resource allocation for the sake of its implementation. This has forced the CIMC through its informal economy sectoral committee to parent the policy in the interim until the Department has a change of heart. Even now there are signs that the Department is still not sure what it would want to do with the policy. Perhaps the government is discouraged by this notion that vigorously promoting the informal economy would only lead to stagnation in the SME Sector growth as informal economy participants take advantage of the favourable conditions and remain static in the sector. Certainly researches have shown that informal economy vendors in PNG show little sign of transiting into the SME. This has the tendency to deprive the government from growing its formal private sector and expand its narrow tax base. Yet the reality is that PNG’s informal economy apart from the betelnut trade is not fully developed interms of its scope to be a genuine contributor to the national purse.

At present there is very little diversification of activities which is causing intense competition. One has to only venture into a nearby market or drive by and observe the stalls set-up along the road to confirm this. PNG’s informal economy is still plagued by basic constraints such as inhospitable government policy and regulations, lack of access to finance, poor financial literacy skills, lack of product development and market identification knowledge to penetrate or develop niche markets just to name a few. By encouraging the growth of the informal economy the government can still raise tax through the Goods and Services Tax given the close inter-dependent relationship between the formal and the informal economy. Unfortunately in PNG while the relationship is visible, policy makers tend to ignore its socio-economic contribution by placing greater emphasis on its contribution to filth in the city. 

Having the Department of Trade, Commerce & Industry coordinate the efforts of both informal economy and SME growth makes a lot of sense especially when one of the biggest challenges for the SME Policy is to create a viable pathway for informal economy to graduate/transit into the SME Sector. It is hoped that this will help the informal economy to ride on the political will and drive provided by the Minister responsible for Trade, Commerce & Industry.  This is almost a de javu where once upon a time the then Minister for Community Development Dame Carol Kidu was the main driver driving policy and legislative reforms to nurture the growth of the informal economy in PNG.

Regardless, informal economy unlike the SME Sector has a large social component that should not be discarded when attempting to work out the appropriate institutional set-up and support. There are large segment of the informal economy that composed of participants who are purely surviving on the income generated through informal economic activities compared to those who are “business minded”.  This group of people relies on the informal economy basically to “get by”. For this people the informal economy is a “safety net” from unemployment and poverty. Also majority of the informal economy participants are women, many of whom are “bread winners” in their family. However, their participation in the sector is hampered by violence, harassment and abuse inflicted on them by thugs and city authorities. This is where the role of the Department for Community Development & Religion as a welfare department becomes crucial. Department of Trade, Commerce & Industry may have the resources and political will at present to take on board the informal economy but they are likely to embrace informal economy strictly from an economic standpoint; which may take the spotlight away from the social issues impacting the sector. This means that if the Department of Trade, Commerce & Industry push on with its plan it will need to accommodate the Department for Community Development & Religion somewhere in the implementation plan of the policy. The DFCDR in its part needs to show a genuine concern and willingness to support the informal economy. If DTCI takes the lead DFCDR should embrace its leadership and work in partnership for the betterment of the 80-85% of Papua New Guineans.

In taking on board the informal economy DTCI must be willing to accept and respect the fact that a larger part of the informal economy may want to remain in the informal economy for a considerable period of time. That means that the Department needs to exercise considerable patience and put in place a realistic target and strategies to cultivate an “entrepreneurial mindset” that is ready to make a difference in the SME sector in its own timing. Too much unnecessary expectation may actually hurt the informal economy and derail DTCI and the government ambitious and noble plan to increase the number of PNG owned SMEs in the country.        

Markets need government ownership

By Busa Jeremiah Wenogo

In considering the options that are available in elevating the government’s attention given to markets it is important to note that since the reform on the provincial and local level government, crucial funding arrangement such as the Town and Urban Service Grants have not been forthcoming from the national government to assist the town and urban authorities to maintain services within their respective towns and urban areas. When these grants have been made available provincial governments have not been reliable in distributing these funds to respective LLGs within the province. Now that these funds are now directly deposited into LLG accounts it is hoped that this will have a direct impact on key services like the development and upkeep of markets at ward level. Yet with the government now reducing the LLGSIP from K500, 000 to K100, 000 this could imply a reduction. Inaddition, misapplication or non-availability of these types of grants has resulted in the deterioration of key facilities like market over the years and with it the entire image of the towns and urban centres. It is even made worse when most local authorities are not utilizing their powers as provided for by the Organic Law on Provincial & Local Level Government to enact laws that can enable them to generate revenues internally like imposing fees on the use of market facilities, mobile trading and land tax. One way of overcoming this difficulty would be for the national government to put in place a specific authority to deal with markets. In that way it will enable the national government to appropriate funds from the budget specifically to be used for renovating existing markets or construction of new markets at the sub-national level. Furthermore, public private partnership should be explored to bring in private sector investment as well as encourage counter-part funding with sub-national level government.

Without clarity regarding the role of provincial governments, towns and LLGs concerning markets and funding support to build and sustain these facilities,markets throughout the country have been greatly neglected by the government for many years. Subsequently, there are only few properly equipped markets built to cater for the needs of both the farmers/vendors and the consumers. In the absence of proper market facilities vendors have resorted to road side markets, peddling, mobile trading and even encroaching on state land for space which has led to regular confrontation between the authorities and the vendors[1].

Nevertheless, the government has recognized the importance of markets in its higher plans such as the Vision 2050[2]. It is also encouraging to note that every now and then we read and hear stories about Members of Parliament spending money to build markets. Most recently, Hon Justin Thatchenko and Powes Parkop have spent money on renovating markets in the city. Gordons Market, which is the biggest market in Port Moresby, is expected to undergo major repair to transform it into a modern market[3]. Other markets such as the Mt Hagen Market have been funded by the generous support of the Australian Government through the Incentive Fund. Yet it is fair to say that a lot of the markets have not been properly managed allowing for petty crimes to thrive and rapid deterioration of its facilities. Furthermore, harassment of various forms has been widely reported to have taken place within the markets making most of the markets unsafe for women to sell their produce. Initiatives like the Safe Cities Market Project of UNWOMEN and NCDC are attempting to change the situation in major markets in the city yet these markets will not maintain its good image for many years to come if appropriate mechanisms are not set-up.

Market is a very important driver of economic growth apart from the lucrative extractive industry that is often accredited for producing record breaking economic growth rate for PNG although, there is very little evidence to suggest that these windfall gains have trickle down to the mass[4]. Infact, the emergence of large scale projects such as the PNG LNG have further increased the divide between the “haves” and the “have nots” and led to significant rise in the cost of living[5]. Markets if prioritized by the government and managed properly could provide that avenue for these gains to be passed onto simple farmers and informal economy (sector) vendors most of whom make up the bulk of the PNG’s population.Typically a market of whatever shape or form provides an avenue for the formal and the informal economy(sector) to interact. Thus building more markets will further enhance the prospects of spreading the income/revenue generated from the large resource project across a wider spectrum of the society and will assist in evening out the huge income disparity gap between the rich and the poor. At the same time markets provide the local authorities the opportunity to generate additional income through imposing fees on the vendors for the use of the facilities. Fees should not be necessarily confined to gate fees but can be broaden to include the use of water and toilet facilities so long as they are provided in the best way possible.

Market is a great platform to linking the informal economy with the SME at the micro-enterprise level. Within markets vendors can be identified and trained on specific areas of needs whether it’s functional or financial literacy or understanding their basic rights as vendors and protecting the interest of their clients. The UNWOMEN/NCDC Safe Cities Market Project[6]in Port Moresby has thus far proven that markets are an effective tool to assist in registering and profiling vendors for the sake of organizing them into groups to build a collective “voice” to address their concerns.

Politicians need to recognize the important role of markets and make provisions in terms of funding in their budget to build and routinely maintain markets (both primary and secondary) to create income earning opportunities to as many people as possible within their constituency. Such funding arrangement such as the DSIP should have a portion of that money specifically allocated to building markets in all districts as was stated in the previous 2011-2015 MTDP[7]. As highlighted above this should be complemented with the government empowering an existing department or agency to be responsible for ensuring that markets are built and routinely maintained throughout the 89 districts. Furthermore, it does not hurt for the national government to explore the idea to introduce a national body/entity to plan for and manage market facilities throughout the country on behalf of the people of this country.Better still it could amend relevant sections in the Organic Law on Provincial & Local Level Government to clearly highlight that building and maintaining markets in the provinces, districts and wards is the role responsibility of the respective sub-national government.This could then be reflected and amplified in the revised Informal Economy Development & Control Act. Whatever approach the government intends to take on board one thing is clear; its challenge will essentially be one of resource and commitment to this endeavour, something that the government has been seriously lacking eversince.

Last published: Weekender, The National Newspaper: Friday, March 4, 2016

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[1]EMTV (2015) ; “Calls Made To Crack Down On Street Vendors In Lae”; http://www.emtv.com.pg/article.aspx?slug=Calls-Made-To-Crack-Down-On-Street-Vendors-In-Lae&subcategory=Top-Stories

[2]http://www.pacificclimatechange.net/index.php/eresources/documents?task=view&id=333&catid=249

[3]EMTV (2015); “Gordons Market to be redeveloped”; http://www.emtv.com.pg/article.aspx?slug=Gordons-Market-To-Be-Redeveloped;

[4] Massey University (2014); “PNG’s paradox of plenty outlined in UN report”; http://www.massey.ac.nz/massey/about-massey/news/article.cfm?mnarticle_uuid=B66733E8-CE19-295B-6262-30E52AF133FE

[5]

[6]http://www.ncdc.gov.pg/safe-city-for-women-girls.html

[7] The REDD Desk (2011); Papua New Guinean Medium Term Development Plan 2011-2015; http://theredddesk.org/countries/plans/papua-new-guinea-medium-term-development-plan-2011-2015

Who looks after the markets?

By  Busa Jeremiah Wenogo

In PNG the function of establishing and looking after physical markets is said to be the sole responsibility of the sub-national government .i.e. provincial, Local Level Government (LLG) and urban authorities. Yet the Organic Law on the Provincial & Local Level Government does not spell out explicitly that this is the case. Although the law particularly in section 42 and 44 covers elements of the informal economy (sector) such as “mobile trading”, “cottage industries”, “agriculture”, “fisheries”, “betelnuts and any other marketable items”[1], there is nothing specific on whether the powers given to provincial and LLGs under the law cover aspects relating to the function of building and maintaining market facilities. Yet at the national level according to the Department of Provincial & Local Government’s manual on Determination assigning service delivery functions and responsibilities to provincial and local level governments, the Department of Community Development & Religion through its Community Economics Section, is responsible for “declaring market areas” and “arranging gazettal of informal sector inspectors” at the LLG level[2]. Unfortunately in reality that has not been the case in most LLGs. At the sub-national level only the NCDC Act 2001 as per section 41 sub-section 2(m)[3]clearly states that the commission has responsibilities over markets within NCDC.However, this is also problematic given that not all major markets within Port Moresby fall under the auspicious of NCDC. Markets like the Manu-Autoport market in front of the former TST supermarket was established by the TST Company back in the 1980s[4].

Furthermore, being deprived of the powers to issue land titles most provincial governments (including NCDC), urban authorities and LLGs can only plan their towns and rural areas but cannot easily allocate space for building markets on state land[5]. The current centralization process of land tenure system in PNG is very tedious and time consuming. In the current legal environment, land that were planned for building markets could easily be allocated for other developments at the prerogative of the National Department of Lands & Physical Planning. This is made worse by the rampant corruption within the national department of lands and physical planning where state land is acquired by individuals and firms under dubious circumstances[6]. The lack of priority put on markets by various tiers of government means that most of the land is allocated for other developments other than market. From this reality one can deduce that a lot of the markets that are set-up in provinces and LLGs are either built on customary land operating under some sort of social contract between the State and landowners or illegally set-up on private or state land. In a city like Port Moresby where the State is fast running out of land competition is intense in securing the scarce undeveloped state land for development purposes. As a result markets  are increasing being pushed out to the peripheries of towns and cities away from its strategic node areas where there is ample concentration of demand.

The announcement early last year by the Lands Minister that provincial lands boards will be set-up in all provinces throughout PNG is key to ensuring that provinces develop their own plans and coordinate developments[7]. Certainly Provincial city and town Masterplans that are critical to guiding the work of the provincial lands board should make market a priority in every district and ward throughout the country. Market aside from road, airstrip and bridge is the most fundamental public infrastructure that should be present to empower the local community in the rural and urban areas to engage in commercial oriented activities. Such an arrangement mooted by the Minister will greatly assist provincial government, urban and town authorities to tie-in their planning process with land, the most important resource or asset. The Minister should further complement this move with other reforms in the area of customary land with the view to strengthen“collective ownership “and ensuring “shared benefit” among landowners. Furthermore, laws in relation to towns and cities particularly its definition, management and planning should be reviewed for the sole purpose of protecting and nurturing their growth. This exercise should at the very least include market as one of the important minimum standards when planning towns and cities.Perhaps from the outset the government should make use of the opportunity provided in the review of the Informal Sector Development & Control Act 2004 to spell out clearly whose role it is when it comes to building and managing market facilities. Although the CLRC draft report on the review of the Informal Sector Development Control Act 2004 has already identified this need. The review report could initiate the process by creating/inserting a provision in the revised law to spell out clearly that the administering authorities of the law in the likes of NCDC, provincial governments, urban and town authorities and LLGs be responsible for the management and upkeep of the market facilities. Going beyond that it could also propose for a national government department to take carriage of looking after market facilities in PNG or create a separate entity empowered with its own powers to build, maintain and manage market facilities throughout the country.

Last Published: Weekender: The National Newspaper: Friday, February 26, 2016, pg 55

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[1]Organic law on Provincial Governments & Local level Governments (1998); pg 24 & 26; http://www.ago.gov.pg/images/downloads/Organic%20Law%20on%20Provincial%20Governments%20and%20Local-level%20Governments.pdf,

[2]Department of Provincial & Local Government Affairs (2009); The Determination assigning service delivery functions and responsibilities to provincial and local level government; pg 8

[3]National Capital District Commission Act 2001, pg 25; http://www.paclii.org/pg/legis/consol_act/ncdca2001367.rtf.

[4]UNWOMEN; Making Port Moresby Safer or women and girls: A scoping study findings (2011); pg 18; http://www.unwomen.org/~/media/field%20office%20eseasia/docs/publications/2014/8/making%20port%20moresby%20safer%20for%20women%20and%20girls%202014.ashx?v=1&d=20141202T120316

[5]National Research Institute; “Fairfax Harbour – An iconic harbor of significance” (2014); http://www.nri.org.pg/index.php/22-news/179-fairfax-harbour-an-iconic-harbour-of-significanc?showall=1&limitstart=

[6]

[7]Department of Lands & Physical Planning; Land Tok (2015); pg 10; http://lands.gov.pg/News/LandTok/LandTok_012015.pdf

Getting PNG’s informal economy right

By Busa Jeremiah Wenogo

On 19 October 2015 the Constitutional Law Reform Commission launched the draft report on the Review of the Informal Sector Development and Control (ISDC) Act of 2004 at the University of Papua New Guinea (PNG). The report contains a set of recommendations and a proposed bill to replace ISDC Act to be presented to the government for its consideration later in 2015. If passed, the proposed bill could transform PNG’s socio-economic landscape.

The report called for wide-ranging reforms in the areas of financial inclusion, research, policy and government’s functions, as well as budget reforms to better equip local level governments (LLGs) to administer the Act. If, as the report recommends, the informal economy is recognised as a ‘wealth distributive mechanism’ it could allow money generated in big impact projects, such as the PNG liquefied natural gas (LNG) project, to be transferred to the majority of the populous. And, if provided with the right environment, it could promote entrepreneurism and innovation.

Yet will the government ensure that the bright intentions of the law are realised? The sad reality is that implementation and enforcement have always been achallenge for the PNG government. Most LLGs in PNG are struggling to function effectively due to a lack of resources as well as a limited understanding of their functions and responsibilities. Since the reduction of the Service Improvement Grants for LLGs from K500,000 (about US$168,750) in the 2013–2014 budget to only K100,000 (about US$33,750) in 2015 budget, the ability of LLGs to deliver services has been severely handicapped. The situation is likely to remain the same or further deteriorate for the near future. To make matters worse, as referenced in the report, most LLGs that were consulted had no idea about the existence of the 2004 Act even though it was a national law.

The report also found that at the national level there was a lack of oversight, which enabled local administering authorities to make laws that did not align with the Informal Sector Development and Control Act 2004. This has led to some local laws beings contested in the courts.

To address this, the Department of Community Development and Religion has indicated it will dedicate a new section to coordinating the implementation of the policy and the law. Yet this may not yield any tangible results. The department itself is still reeling from a leadership tussle two years ago that has seen the department fragment into factions. In the aftermath of this battle most offices are still half-empty. And the Department has not shown any enthusiasm towards implementing the National Informal Economy Policy. In this environment there is no guarantee that the law will be implemented once it is passed.

Given that, within the informal economy, there are diverse sets of activities (some of which pose serious health and safety risks) the revised law must adequately control the growth of the informal economy to minimise its harmful effects. The informal economy law in its current form is consistent with this sentiment but has insufficient controls. The report recommends reinforcing this idea by raising penalties for informal economic businesses that negatively impact the environment, hygiene, health and safety as well as for those that sell addictive substances.

But the report fell short of proposing a mechanism to protect the rights of informal economy participants. There is no mention of the need to ‘properly organise’ informal economy participants, and their activities, to assist dialogue and consultation. Section 3(1) of the Informal Sector Development and Control Act 2004 allows the administering authority to consult with relevant ward committees, police and government agencies when declaring areas in which informal economy businesses could be conducted.

But there has been little consultation so far. This has been compounded by the fact that informal economy operators and vendors are disorganised. Given the complexity of the informal economy, provinces need to develop informal economy committees comprised of key stakeholders to deal with these issues.

The report also did not highlight the need for a proper restorative justice mechanism to be in place to deal with cases of harassment and abuse inflicted by enforcers on informal economy participants. The current Informal Sector Law is silent on this matter.

For most informal economy operators the Village Court is the most affordable, reliable and dependable arm of the justice system since it addresses individual and community legal concerns. As most vendors lack basic literacy skills and resources it can be difficult for them to navigate the formal legal system. Developing an informal economy market vendor association that represents their common interests could greatly assist such individuals. Such a grouping should also include those who are operating outside of formally recognised markets such as street vendors, peddlers and mobile traders. An interest group like this could better appeal to administering authorities and policymakers.

The report could also pose some problems for participants in the informal economy. Increasing penalty fees and repealing section 18 of the current Act — which excluded informal economy participants from certain regulations — will force participants to comply with standards that maybe regarded as too high. This is especially true for the many participants that have very poor literacy skills and lack formal employment to supplement their inconsistent, meagre incomes. While the intention of the report is to put forth a progressive vision for PNG’s urban centres, this should not come at the expense of people’s livelihoods.

About 80–85 per cent of PNG’s population engages in the informal economy in some form. Therefore it is vital that the government gets the law right. If it does, it may well be a game changer for PNG.

Busa Jeremiah Wenogo is an economist working with the Consultative Implementation and Monitoring Council (CIMC) in Port Moresby.

Via The East Asia Forum http://www.eastasiaforum.org/2015/12/05/getting-pngs-informal-economy-right/?utm_campaign=shareaholic&utm_medium=facebook&utm_source=socialnetwork