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Overlooked laws prevent proper growth of informal economy

Gerehu Market, Port Moresby


PORT MORESBY - In Papua New Guinea most people believe the informal economy – like street, door-to-door and market vendors - operates without legislation or appropriate policies.

This is perhaps understandable since, in most places, informal economic activities are conducted in a chaotic and disorganised fashion.

And market inspectors and urban council rangers are mostly nowhere to be seen to ensure that relevant rules and regulations are complied with to protect the interest of the consumers and the public.

In their absence, police reluctantly step in to sort out problems, often using heavy-handed tactics.

This has led to controversial and sometimes fatal incidents with police officers falling victim to the wrath of disgruntled vendors and vendors losing saleable items worth thousands of kina as a result of retaliation by police.

It is a daunting challenge to say the least. Faced with limited resources and the perpetual wave of migration into towns and cities, most urban authorities have found regulating the informal economy to be overwhelming.

As a result most authorities have resorted to imposing bans as a quick fix solution. But such measures have been unsuccessful.

Recently the National Capital District Commission in Port Moresby made a decision to ban the sale of cooked foods and betel nut at bus stops and in public spaces in a bid to address petty crime, littering and other issues of health and safety.

In doing so, NCDC cited the Informal Sector Development & Control Act, which was inaccurately said to have led to the uncontrolled proliferation of informal economic activities.

Inaccurate because, while the Act supports the conduct of informal economic activities, it does advocate the need for controls. And the law’s been around for some time - it was enacted in 2004 and an accompanying National Informal Economy Policy was launched in 2010.

In the case of cooked food and betel nut it calls for minimum standards to be adhered to by vendors while authorities like NCDC are required to provide disposal bins and inspectors to enforce the law. Failure to comply invites a fine not exceeding K50.

So, contrary to the general understanding of many Papua New Guineans, PNG in fact has a law and a policy to deal with its informal economy. In fact, PNG is one of only a handful of countries to have a specific law and policy dealing with the informal economy.

The main reason why a lot of people in PNG are in the dark about this is because the government has given little or no support to awareness, advocacy and implementation.

A cabinet decision to provide over K2 million in the 2011 budget saw nothing forthcoming, contributing to the dilemma faced by most urban authorities in regulating the informal economy.

Most urban development plans don’t include the interests of the informal economy therefore little is done or given to support it.

Most markets facilities are run-down and not enough land is set aside for building. Recently, NCDC closed down Port Moresby’s largest market at Gordon as part of a three year, K30 million modernisation program.

However questions have been raised on the NCDC relocation plan with many vendors missing out in securing a space at the refurbished Boroko Market.

As a result, these vendors can be seen plowing their trades openly along the roads and parks in and around Gordon Market area.

Furthermore, a question mark lingers over a portion of the Gordons Market land adjacent to the Gordon Clinic which has been fenced off by a foreigner. Live chicken sellers now set up their stalls along the corrugated fence.

NCDC Governor Powes Parkop, at the behest of the vendors, has given an assurance that development will not proceed until a detailed investigation is undertaken to determine the legality of this. But so far there has been no report and no clarity on the status of that piece of land.

In the meantime, throughout the city a vast colony of people scurry around searching for whatever land is available for shelter. These communities get by without access to power, water and sanitation while the country’s top brass enjoy a comfortable lifestyle living in villas and expensive apartments.

The new housing minister has provided hope by prioritising the upgrade of settlements and people are keen to see that promise come to fruition.

He has acknowledged that key to this is proper planning and coordination between service providers, landowners, settlers and regulators; something that is currently missing and is key in successfully tackling the informal economy.

Busa Wenogo is an economist who works with PNG’s Consultative Implementation & Monitoring Council as a senior project officer specialising in informal economy


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