By Anna Moegerlein, Deputy CEO
In Papua New Guinea, small and medium enterprises (SMEs) contribute $2.5 billion to the formal PNG economy and employ almost 300,000 people. These businesses play a vital role in the economic and social health of PNG communities, creating jobs and pathways for self-determination, reducing inequality, and furthering women’s economic equality.
We’ve been deeply invested in the economic wellbeing of PNG since 2017, so in this series we’re reflecting on our work in PNG over the last 7-8 years, as well as the lessons we’ve learned, and where we believe further work should be focused over the next decade as we dream about an inclusive economy for our closest neighbour.
What’s the context?
In 2016 the PNG Government announced a focus on SMEs to boost the economy, create jobs, and help alleviate poverty. The SME Policy’s aim was to support SMEs through various initiatives like training and finance. It set ambitious goals to increase the number of SMEs, employment, citizen ownership of the economy, and reduce poverty by 2030. While some doubt the feasibility of these goals, many experts and business leaders support the initiative.
However, despite a decade of strong economic growth, the welfare of most Papua New Guineans has not seen improvement, with the nation struggling to meet the Millennium Development Goals. Currently ranked 154 out of 188 countries on the UN Human Development Index, PNG lags behind neighbouring nations like Fiji and Timor-Leste.
PNG is grappling with significant socio-economic challenges, stemming from various factors including an economy overly dependent on the mineral sector, vulnerability to external shocks such as natural disasters, and structural impediments like inadequate infrastructure and difficulties in accessing land for investment. Weaknesses in public sector management and macroeconomic governance further hinder inclusive and sustainable development.
Gender inequality, particularly in formal employment, exacerbates these challenges, with women facing significant disadvantages in both job opportunities and income. The prevalence of violence against women adds another layer of complexity, further marginalizing a significant portion of PNG’s potential workforce.
These issues underscore the urgent need for targeted interventions to unlock PNG’s full development potential while acknowledging the resilience and diversity of its people.
Our approach
We believe that an inclusive PNG economy is one where all people, regardless of gender, location, ability, and age can meaningfully participate, create, and contribute.
Our focus, to date has been at three complementary levels:
- Entrepreneur-level: Building the capability of entrepreneurs, especially women entrepreneurs, who have a strong focus on social impact
- Service-level: Building the capability of local partners to deliver entrepreneur support services locally
- System-level: Transforming market access, by working across value chains and sectors
[ Click to images to enlarge ]
Our work has maintained a strong focus on advancing women’s economic equality, though we recognise that shifting gender inequality in PNG requires a holistic strategy, incorporating multiple factors.
We focus on the areas where our skill and expertise lie (the orange and light blue segments in the image below), while fully recognising the role of other enablers, and the need for parallel work and investment in other areas. Without this, we will not address the multiple structural issues that are maintaining the current status quo.
Primary drivers of women’s economic equality
Read more on our core methodology (in orange): TDi’s InsideOut Model
Primary drivers of women’s economic equality
Read more on our core methodology (in orange): TDi’s InsideOut Model
The future of an inclusive economy in PNG
We believe that there is a huge opportunity to support impact SMEs in PNG to create a more inclusive economy.
We believe in women entrepreneurs like Lina Singu, a master bilum weaver who provides access to market for thousands of weavers in remote areas. We believe in entrepreneurs like Rhona Conn and the Ginia Sialis, who see a social problem and build a business to solve it. We believe in entrepreneurs like Sylvia Pascoe who did the same, and then ran for Parliament because she was fed up with the economic inequality in PNG, and wanted to support SMEs through better government funded programs.
Over the last seven years, we have had the privilege of working with all these entrepreneurs and over a hundred more, across PNG. It has been a humbling and deeply personal journey – one where we’ve learned many valuable lessons which are informing the road ahead.
In ten years’ time, we imagine a local eco-system that is supporting hundreds, if not thousands, of entrepreneurs across the country to build impactful SMEs. Achieving this will require not only investment, but also courage from funders and governments alike to direct that investment towards strengthening and supporting local leaders, so that impact remains local, and long-term.
This is Part 1 in a series on our work in PNG, the lessons we’ve learned, and what we can see for the future. In Part 2 of this series we’ll share some of the broader lessons that have emerged as we’ve worked within the PNG SME ecosystem, and in Part 3 we’ll get specific about what we’ve learned at the coalface of business support programs since our work began there in 2018.