A lot of talking and no significant economic progress : a review of wage policy in Papua New Guinea

Abstract

Since gaining political independence in 1975, Papua New Guinea has always aspired to economic development. Throughout the subsequent years, it identified shaping and implementing an appropriate wage policy as one of the most practical policies to facilitate an economic environment conducive to achieving that dream. The dream seemed more achievable when the nation's political leaders saw the huge economic growth of its Asian neighbours in the 1980s. This reinforced the firm belief that they could be closer to achieving the same feat, if they too deregulated the labour market, which was seen as a significant obstacle to creation of employment opportunities and development generally. This paper traces the emergence of minimum wage policy making in Papua New Guinea and discusses the inherent concerns, issues and dilemmas associated with the shaping and performance of various wage policies. Leaders have acknowledged that high minimum wages are an obstacle to economic development. The conclusion reached from the analysis is that unless the leaders also devote more determination and commitment to isolating and dealing with other major issues (i.e. law and order, political instability and appalling infrastructure), the dream of achieving an Asian oriented economic development will prove to be only an illusion