{"id":11219,"date":"2024-07-08T08:30:00","date_gmt":"2024-07-07T22:30:00","guid":{"rendered":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/?p=11219"},"modified":"2024-07-03T07:14:17","modified_gmt":"2024-07-02T21:14:17","slug":"resolving-papua-new-guineas-human-capital-deficit-with-more-than-just-funding","status":"publish","type":"post","link":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/resolving-papua-new-guineas-human-capital-deficit-with-more-than-just-funding\/","title":{"rendered":"Resolving Papua New Guinea\u2019s human capital deficit with more than just funding"},"content":{"rendered":"\n

SEAN JACOBS<\/a>  | Part 3 of 3<\/p>\n\n\n\n

In 2006, the World Bank published a report<\/a> titled Where is the Wealth of Nations? Measuring Capital for the 21st<\/sup> Century<\/em>. \u201cCountries are largely rich because of the skills of their populations,\u201d the report noted, \u201cand the quality of the institutions supporting economic activity.\u201d<\/p>\n\n\n\n

The IMF\u2019s return to PNG provides the platform for a suite of institutional<\/em> reforms \u2013 two of which I have focused on in my previous entries. But the IMF\u2019s focus is not on the skills of PNG\u2019s population and enhancing human capital.<\/p>\n\n\n\n

Indeed, this is an area that has received the focus<\/a> of other international donors, governments and organisations, primarily through skills training and education assistance. \u201cPNG has a critical shortage of qualified workers with technical and vocational skills,\u201d note<\/a> the Australian Government, \u201cwith less than two percent of PNG\u2019s population holding a vocational or technical certificate.\u201d Only 5.5 percent of the population<\/a> hold a qualification, according to the PNG Government, while only 6.6 percent have completed a high school education.<\/p>\n\n\n\n

More broadly, in terms of human capital, the World Bank\u2019s Human Capital Index notes<\/a> that in PNG \u201ca child born in 2020 today can expect to achieve only 43 percent of their potential productivity.\u201d The PNG Government spends comparatively much less on education than other regional governments, notes<\/a> further World Bank analysis, while \u201c15 percent of 10-year-olds cannot read and understand a simple text by the end of primary school,\u201d and only \u201c32 percent of secondary-school age children are enrolled in secondary school.\u201d The report also notes this is significantly less compared to other countries in the region.<\/p>\n\n\n\n

Finding workers \u2013 skilled or otherwise \u2013 is a common complaint<\/a> from PNG businesses across a range of industries. Yet the effects of these shortages extend much further than recruitment gripes \u2013 they have significant effects on society leading, for example, to constant flight<\/a> cancellations and delays, black spot network failures<\/a> that disrupt people to people contact, and banking \u2018technical errors<\/a>\u2019 that limit much-needed access to money, especially when the majority<\/a> of Papua New Guineans do not live near town centres or have access to internet banking. These are just a few examples that frustrate consumers of all income levels in PNG.<\/p>\n\n\n\n

In taking a step back and attempting to review skills assistance measures to address these challenges, it might be useful to look at PNG\u2019s human capital hurdles from \u2018outside in\u2019 versus \u2018inside out\u2019. There is consensus, for example, that funding for skills training is the dominant method to improve PNG\u2019s skills shortages. But clearly other solutions need to be explored.<\/p>\n\n\n\n

It is some of this alternative thinking, I sense, that motivated the O\u2019Neill Government in 2017 \u2013 under Foreign Minister Rimbink Pato \u2013 to overhaul dual citizenship laws to enable more expatriates with a PNG connection to return and use their skills to contribute. The changes, Pato noted<\/a>, provided opportunities for such individuals \u2013 long shut out from PNG \u2013 \u201cto regain their PNG citizenship, reconnect to their roots and contribute back to PNG as their country of origin.\u201d Indeed, acting as a form of labour competition, re-tooling citizenship laws is a practical move in the overall approach to reduce PNG\u2019s skills deficit and enhance its human capital environment. It should be noted that the reform did not receive swift legislative passage \u2013 it took the O\u2019Neill Government around four years<\/a> to complete.<\/p>\n\n\n\n

At the time of writing, it is not clear how successful the reforms have been. If unsuccessful, one reason may be the prohibitive cost for prospective citizenship candidates, which sits at around PGK 15,000 (AUD 6000). The Marape Government should look at reducing this amount to net more prospective candidates and, at the same time, lowering other financial, administrative and travel barriers to entry under PNG\u2019s business visa regime. Other anecdotal feedback I have received from recent successful dual citizens is the prohibitive nature of the dual citizenship requirements, which limit access to certain occupations \u2013 another barrier that Marape should address. Common visa processing delays<\/a> are also an administrative hurdle that further complicates a more fluid PNG business border.<\/p>\n\n\n\n

While such reforms may seem small, the effects are twofold. First, they enhance business and commercial activity in PNG. Second, more fundamentally, they expose PNG\u2019s current and future workers \u2013 in the workplace itself \u2013 to external experience and expertise, thus enhancing their human capital potential. Often times a small percentage of workers can have a strong impact on organisational performance, otherwise called the Pareto principle<\/a>, which I have observed across a range of industries and operations in PNG.<\/p>\n\n\n\n

Related here is the emerging concept of expanding tied arrangements, which are used by China and other nations but not Australia. While \u201ca more direct approach,\u201d according<\/a> to former PNG Power Limited Managing Director Carolyn Blacklock, could be \u201cdesigned to provide more support for Australian businesses, even on concessionary terms\u201d and \u201cfuel further development and help crimp the channels of graft,\u201d it would also deliver a human capital outcome to PNG, exposing local businesses, supply chains and workers to external expertise. As I have written here<\/a>, PNG enjoys a comparatively high level of shared values with Australia \u2013 and even the United States \u2013 than other nations, enhancing the potential for skills sharing and other human capital outcomes.<\/p>\n\n\n\n

A more fluid pro-business migration structure does not displace PNG\u2019s existing training assistance regime. Support here should continue and even be expanded appropriately. Additional resourcing should also be considered for PNG\u2019s university system, although concerns have been raised about the quality of university education, especially<\/a> at the University of PNG (UPNG), and the downstream effects on \u201cmaintaining quality intellectual output,\u201d according<\/a> to UNPG Vice-Chancellor Vincent Malaibe. Many students arrive at university without basic literacy skills, Malaibe notes, which reveals an even wider breakdown in the quality of PNG\u2019s education system that needs ongoing PNG Government attention.<\/p>\n\n\n\n

Ultimately, any reform to PNG\u2019s human capital and skills regime comes with recognising that \u201cit is the surrounding sociolegal and political conditions that matter,\u201d to quote<\/a> economist Deirdre McCloskey\u2019s analysis of human capital. Skilled individuals with high levels of human capital can work miracles in difficult social, political and economic climates. But high functioning institutions, which PNG does not have, result in measured tangible differences for such individuals. As Matt Ridley writes in The Rational Optimist<\/em>, underlining the importance of \u2018intangible capital\u2019, a Mexican worker who crosses the border into the United States can \u201cquadruple their productivity almost immediately\u201d by having \u201caccess to smoother institutions, clearer rules, better-educated customers, simpler forms \u2013 that sort of thing.\u201d<\/p>\n\n\n\n

In tandem with the hope of institutional reforms, humble yet realistic changes to PNG\u2019s business borders offer positive outcomes to economic conditions in PNG. Paired with foreign exchange reform, and the rapid introduction of Independent Power Providers into PNG\u2019s electricity sector, the Marape Government has a policy toolkit to \u2018lean in\u2019 to in 2024. This offers the opportunity to deliver desperate reform and outcomes where they matter most \u2013 among everyday Papua New Guineans.<\/p>\n\n\n\n

\n\n\n\n

AUTHOR<\/em><\/p>\n\n\n\n

Sean Jacobs<\/em><\/strong> is a Papua New Guinean-born Brisbane-based writer,<\/a> government relations and public policy specialist, and Industry Fellow at the Griffith Asia Institute<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

SEAN JACOBS  | Part 3 of 3 In 2006, the World Bank published a report titled Where is the Wealth of Nations? Measuring Capital for the 21st Century. \u201cCountries are largely rich because of the skills of their populations,\u201d the report noted, \u201cand the quality of the institutions supporting economic activity.\u201d The IMF\u2019s return to PNGContinue reading “Resolving Papua New Guinea\u2019s human capital deficit with more than just funding”<\/span><\/a><\/p>\n","protected":false},"author":14,"featured_media":11220,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1170,2064,2065,2153,1756,1757,1021,1729,1728],"tags":[2234,2233,2039,2235,2055,969,1050,935,1747],"class_list":["post-11219","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commentary","category-governance-and-diplomacy","category-inclusive-growth-and-rural-development","category-pacific-outlook-feature-series","category-livelihoods-culture","category-geopolitics-diplomacy","category-pacific-outlook","category-sdg10","category-sdg8","tag-dual-citizenship","tag-human-captical-deficit","tag-imf","tag-institutional-reform","tag-international-monetary-fund","tag-pacific-islands","tag-pacific-outlook","tag-papua-new-guinea","tag-sean-jacobs"],"acf":[],"modified_by":"Jill Moriarty","yoast_head":"\nResolving Papua New Guinea\u2019s human capital deficit with more than just funding | Griffith Asia Insights<\/title>\n<meta name=\"description\" content=\"SEAN JACOBS  | Part 3 of 3 In 2006, the World Bank published a report titled Where is the Wealth of Nations? 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