In the proposed revised law on the Informal Economy we have opted to maintain DFCD’s role both as a implementer of the policy and overseer of the law to ensure the amendments/enactment by the provincial governments and the LLGs are done with due respect to the policy and the intention of the law. There is now suggestion that the Department should look at setting up a “stand alone” mechanism to better coordinate the implementation of the policy and the administration of the Act. In the meantime the Office of Urbanisation has a bigger role to play and their involvement in nurturing the growth of the informal economy is critical. The challenge would be for DFCD to reach out to OoU and other stakeholders to bring informal economy to a level where it is viewed with less hostility. So far the National Urbanisation Policy has done an excellent job in highlighting the importance of the informal economy particularly its recognition that informal economy and urbanisation are linked together. SO much so that in addressing urbanisation adequate attention must be given to the informal economy or vice versa.

Generally including PNG informal economy is often disorganised and outside the formal sector however, in PNG’s case the need for the law and a policy on informal economy was crucial to nurture its growth. This is in light of the fact that in PNG it is estimated that roughly 80-85% of its total population are engaged in the informal economy. However, the government does not recognise the contribution of the sector to PNG’s socio-economic landscape. There is also the reality that the “gap between the rich and the power” in PNG is significantly widening amidst a rising middle income class that in real terms are struggling to keep up with the high cost structure of the PNG’s Economy. With this law it is hoped that it will arouse government’s interest in the sector and subsequently, get them to provide appropriate policy responses to encourage its growth. The growth of the informal economy is crucial to its endeavour to stimulate PNG’s SME sector.

The law does not aim to “superimpose” this idea that all informal economic activities should be “formalise” instead it aims to protect the informal economy vendors engaged in certain activities but also giving relevant authorities the opportunity to control certain aspects of informal economy that may pose health and safety risk to the general population. Inaddition, there are other areas of the informal economy like “informal squatter settlements” and “financial inclusion” that are not captured in the law simply because the nature of their problems requires a separate policy response from the government. What the law does endeavour to capture are all those “common sets of activities (goods and services) that are typically on offer or prevalent in the contemporary PNG Economy. The narrow focus of the law is also a reflection that the informal economy in PNG lacks diversification and is often described as a sector dominated by the sale of “betelnut and cigarette”. Therefore, one intention of the law and the policy will be to diversify the informal economy and create economies of scale where areas like the agriculture sector grow.

The reality (in PNG and the world over) is that there will always be a segment of the population engaged in the informal economy that will want to remain informal. Vice versa there will be a certain percentage of fomalised businesses that will opt to go informal for various reasons.