Informal Economy Committee
In 1999, the CIMC recognized the importance of informal economy and established the Informal Sector Committee (ISC). The purpose of the committee was to promote and advocate for appropriate policies, legislations, projects and programs to enhance the development of a vibrant informal economy to contribute to the development and growth of PNG.
The committee is comprised of representatives from relevant government bodies, business and civil society organizations. They meet voluntarily to discuss issues relating to informal economy and how the sector can be developed. The first chairperson of the ISC was Hon. Carol Kidu, Member for Moresby South and the current Minster for Community Development.
One of the achievements of the ISC is the enactment of the Informal Sector Development and Control Act 2004 by Parliament. Currently, the ISC is chaired by Mex Kep, Chairman for Urbanization and National Consultative Committee on Informal Economy (NCCIE).
Identifying Constraints
Recognizing that the development of informal economy through appropriate policies and programs require series of intervention to remove the constraints to support the needs of the participants, the ISC with CIMC and the Institute of National Affairs (INA) proposed a study of the informal economy. Funding for the study was secured from Asian Development Bank (ADB), United Nations Development Program (UNDP) and by GoPNG. The first survey in 2001 was “Reviewing Constraints to the development of informal sector in PNG” and the second in 2007 was “Market Research Survey on The Informal Economy in Papua New Guinea”.
Informal Development and Control Sector Act 2004
One of the important outcomes of the study conducted in 2001 was the enactment of the Informal Sector Development and Control Act 2004. The Act was passed to address some of the constraints identified in the study. The Act was highly acclaimed by the International Labor Organization as a land mark achievement for PNG and the Pacific. In May 2004, Cabinet passed the legislation to govern informal sector activities with a dual purpose of developing the informal economy in the interest of public health and safety.
The Local Level Government has been identified as the lead implementing agency. The Act provided both rights and responsibilities for participants in the informal economy and also spelled out the functions and powers of the administering authorities. The Act was meant to be self enforced and implemented to achieve a win-win situation for both the local authorities and the informal sector participants.
The wider consultations held by the CIMC ISC clearly indicate that the local authorities appreciate the importance of informal economy; but lack the capacity and resources to effectively implement the Act. Also, there exist a need for more civic education on the importance of informal economy and to see informal economy as everyone’s business, including the participants, administering authorities, the consumers and the public at large.
National Informal Economy Policy
The Informal Sector Act was passed in the absence of a national policy on informal economy to provide a strategic direction and a clear structure to influence funding and to effectively implement the Act to develop the informal economy. The Department for Community Development in collaboration with the CIMC ISC has successfully made a policy submission to the NEC to set up a framework to develop a national policy on informal economy. The NEC endorsed decision resulted in the setting up of a Ministerial Committee on informal economy at the political level, a National Consultative Committee on Informal Economy at the bureaucratic level and a Technical Working Group (TWG) with secretariat support from The CIMC ISC.
The TWG and National Consultative Committee has met six times this year. The TWG put together a concept paper on Informal Economy Policy which integrate the key findings of International Finance Corporation funded comprehensive study on informal economy in 2007. The concept paper was endorsed by the NCCIE on 13 May 2008 and will form the basis for the development of a national policy.
The national policy on Informal Economy is currently in the process of development. A Government consultation workshop was held at Lamana Hotel on 12 August 2008 and a National Consultation workshop was held at Holiday Inn on 26 August 2008. This work is being funded by AusAID. It is anticipated that the policy be in place by August 2009.
Mogoro Motu Building, P.O. Box 1530, Port Moresby, Papua New Guinea
Tel: (675) 321 1714 / 320 3728 - Fax: (675) 321 7223
