By DALE LUMA
MILLIONS of eligible workers around the country are looking for jobs in the formal sector, which currently can only accommodate between 400,000 and 500,000, an economist says.
As more young people enter the job market this year after graduating from tertiary institutions and schools, the chances of securing formal employment is slim.
Institute of National Affairs executive director Paul Barker told The National that formal employment in the country had been stagnant since 2014, despite the increase in potential workers coming out of education institutions.
He said the country had an eligible workforce of between three million and four million adults (over the age of 18) not in fulltime employment, with between 400,000 and 500,000 jobs in “a small formal sector”.
He said the majority of this segment of society sustained their livelihoods through the rural semi-subsistence sector or urban informal economy.
Some well-educated individuals end up making a living in the informal sector, selling betel-nut and second-hand clothes on the streets.
“Since about 2014, the formal sector employment has been largely relatively stagnant, despite the considerable annual increase in the potential workforce coming out of the schools and colleges, at different grades,” Barker said.
“Some industries have shown greater growth than others during this period, including mining in 2018-2019, before the Coronavirus (Covid-19) pandemic dragged down oil, gas and copper prices.
“The Porgera mine (employing around 3,600 fulltime workers and more in supply contracts and the informal economy) was closed in April 2020.”
Barker said that between 2018 and 2019, the country saw an economic recovery following the Southern Highlands and Hela earthquake, with stronger commodity prices.
But the Covid-19 struck, closing much of the tourism, hospitality and airline and travel industries and restricted other industries with reduced demand and constrained shipping.
“Recovery occurred in some markets in 2021, with improved demand and commodity prices (partly driven by temporary constraints in global supply chains), and by the opening up of economies with the partial lifting of travel restrictions,” he said.
“This generated a boost in employment again around the world, which is being felt modestly in PNG as well, even though with its low vaccination rate, PNG remains largely off the beaten track for tourism.”
Barker said if stronger commodity prices were sustained, including in agricultural crops such as coffee and vegetable oils, it would translate into some boost in production and marketing over time with seasonal agronomic and related factors also being crucial.
“Policy and political uncertainty and relatively high production and other costs of business in PNG continue to undermine competitiveness and therefore restrain domestic and foreign direct investment and employment generation which one would expect to occur in PNG, considering the seemingly suitable conditions here for agriculture, tourism and a range of other economic activities,” he said.
By DALE LUMA