Attract investments to create jobs

UNEMPLOYMENT is considered to be one of the prime social evils that is affecting our lives today.
Its economic impact is not as important as its social impact.
Most people in society today depend upon jobs to earn their living.
Therefore, any situation which negatively affects the jobs of people will affect the fabric of the entire society as a whole.
And this is one issue that should be high on the agenda of the government to eradicate.
The National’s front page yesterday highlighted the grim reality for Papua New Guinea, the formal sector can only accommodate 400,000 to 500,000 workers.
Institute of National Affairs executive director Paul Barker said since about 2014 formal sector employment has largely been relatively stagnant, despite the considerable annual increase in the potential workforce coming out of the schools and colleges, at different grades.
Some industries have shown greater growth than others during this period, including mining during 2018-19, before the pandemic dragged down oil, gas and copper prices.
The Porgera mine (employing some 3,600 full time workers and many more in supply contracts and the informal economy) was closed in April 2020.
Employment is following the trend set by the tight economic conditions.
In PNG, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force.
According to Organisation for Economic Co-operation and Development (OECD), unemployed people are those who report that they are without work, that they are available for work and that they have taken active steps to find work over a period of time.
When unemployment is high, some people become discouraged and stop looking for work; they are then excluded from the labour force.
This implies that the unemployment rate may fall, or stop rising, even though there has been no underlying improvement in the labour market.
The focus on jobs is obviously vital.
However, higher economic growth alone will not solve the jobs problem.
Jobs can be created when growth comes from the transition of labour from informal sectors such as agriculture to the more formal manufacturing and service sectors.
Such extensive growth, however, runs the risk of stagnation once the available stock of informal labour is exhausted – as some Southeast Asian countries found out the hard way in the late 1990s.
On the other hand, growth can come about without any substantial job-creation in the formal sectors of the economy, but through improvements in productivity.
They say opening up to genuine competition and private investment in various fields would increase opportunities, reliability and cut some costs.
To make PNG more competitive and attractive for investors (including smallholders) requires improving roads and other infrastructure and utilities, affordable telecommunication access, ports and shipping services, seriously addressing crime, corruption and excessive red-tape and public sector inefficiency and boosting literacy, numeracy and technical, vocational and professional training.
The government must address issues on law and order, social and make policies attractive in order to lure investors.
A more conservative point suggest that unemployment is like a necessary byproduct of the modern economic system.
And it must be managed within its current levels.
Failure to manage unemployment creates problems.
For PNG, the government can only help eradicate this epidemic through promoting investment in the private sector.
Jobs are created when there is investment in the country.