CEFI & NRI sign research collaboration

by PNG Business News - October 04, 2021

Photo credit - CEFI. (from left to right) PNG NRI, Deputy Director for Research Associate Professor Eugene Ezebilo, NRI Acting Director Dr Osborne Sanida, CEFI Executive Director Saliya Ranasinghe and CEFI Manager Communications and Stakeholder Mobilisation Eva Kuson following the signing of the MoU.

A Memorandum of Understanding (MoU) was signed today (24 September 2021) between the Centre for Excellence in Financial Inclusion (CEFI) Executive Director Saliya Ranasinghe, and the PNG National Research Institute (NRI) Acting Director Dr. Osborne Sanida with the aim to consolidate and strengthen cooperation between the institutions.

The NRI is a publicly-funded policy think-tank in PNG mandated by legislation to carry out independent research and analysis on development issues affecting PNG. The National Research Institute Act 1993, states that the functions of NRI include the following:
(a) “The promotion of research into Papua New Guinea Society and the economy, and
(b) the undertaking of research into social, political and economic problems of Papua New Guinea in order to enable practical solutions to such problems to be formulated.” (Section5, NRI Act, 1993).

The NRI’s mission is to provide quality research which contributes to evidence-based public policies and decision-making processes that improve service delivery, leading to better quality of life for all Papua New Guineans. CEFI was established under the Association Incorporation Act and officially launched on 24th April 2013 serves as the industry apex organisation for coordinating, advocating and monitoring all financial inclusion activities in PNG. CEFI’s vision, mission and values focus on financial inclusion and literacy, poverty elimination and the promotion of vibrant financial institutional operation in PNG.

The agreement reflects the mutual value both institution hold in terms of extension and strengthening of research exchange for the general benefit of Papua New Guinea. The partnership signals new research grounds into the country’s economic and social development, with special focus on the role of education in development, and the impact of economic and social change on education. Other research activities under the signed partnership will include exchange of research staff, joint research partnerships and co-hosting of seminars and workshops to disseminate research findings through networks of both organizations.

CEFI Executive Director Mr Saliya Ranasinghe stated the partnership is in compliance with CEFI’s mandate on financial inclusion and literacy, poverty elimination and promotion of vibrant financial institutional operations in PNG.

“The main areas of this agreement between CEFI and NRI will be on researching the impact of Financial Inclusion Activities, Digital Financial Services, Financial Literacy and Financial Education, Micro Insurance, SME and Agriculture Lending.” Mr Ranasinghe addressed at the signing event. “Synergies like the one between the CEFI and the PNGNRI contribute to the more effective research ecosystem that enriches both the education and economic sectors.” Mr Ranasinghe said. 

NRI Acting Director Dr. Osborne Sanida equally elated about the partnership states, “NRI as a policy think-tank in PNG looks forward to working closely with CEFI to provide practical solutions to financial inclusion constraints, and contribute evidence-based solutions to improve financial inclusivity for all Papua New Guineans.” “Close cooperation is needed between our institutions and the academic community in order to develop the necessary methodologies and to create the appropriate tools to enable CEFI to carry out their work effectively.” Dr. Sanida remarked. This MOU is effective today and will be renewed every five years between the institutions.

 

Article courtesy of CEFI



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PNG Business News - September 28, 2022

PNG’s minimum wage

Commentary by Stephen Howes, Kingtau Mambon and Kelly Samof The urban minimum wage has been an important part of Papua New Guinea’s economic history. In the last few years before independence (in 1975), it was greatly increased. In the decade or so after independence, it was widely regarded as too high. In 1992, it was slashed, merged with the rural minimum, and hardly increased again for more than a decade. We can compare the minimum wage in PNG today with other Asia and Pacific developing countries using International Labour Organization (ILO) data. As Figure 1 shows, PNG’s minimum wage is 18% below the average of the 19 countries shown if the market exchange rate is used to compare minimum wages. It is 37% below the average if differences in cost of living are also taken into account (with conversions made on the basis not of market exchange rates but so-called purchasing power parities or PPPs). The greater difference in terms of PPPs reflects PNG’s relatively high cost of living. 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The PNG minimum wage is converted into Australian dollars using the current exchange rate. Both wages are then adjusted for inflation and expressed in 2021 prices. The two series follow diametrically opposed paths. The Australian minimum wage fell with the high inflation of the 1970s and industrial relations reforms of the 1980s, and by the early 1990s was little more than half its value in the 1970s. It then increased in the late 1990s and 2000s during the resource boom, and has continued to increase. Adjusting for inflation, it is now almost back to where it was in the early 1970s. The PNG minimum wage does the opposite. It increased in the 1970s and was then held stable due to indexation, until the big bang reforms of 1992. Adjusted for inflation, PNG’s minimum wage continued to fall until 2004. 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For example, in tuna processing, one of PNG’s main competitors is the Philippines. From Figure 1, we can see that PNG’s minimum wage is lower than the Philippines' on the basis of PPPs, but actually higher on the basis of market exchange rates. While the former is what matters for the welfare of workers, the latter is what matters for international competitiveness. Whether PNG’s minimum wage should be increased will require a lot more analysis. The point of this blog is simply that PNG’s minimum wage does not look high any more by international comparisons, as it has fallen a lot since independence. PNG is often described as a high-cost economy, and this is a fair description. However, with regards to unskilled labour, it is no longer a high-wage economy.   Data note: The PNG Economic Database provides the weekly minimum wage of PNG going back to 1972, and the PGK-AUD exchange rate. Wikipedia provides the Australian weekly minimum wage data (hourly and weekly, on the assumption of a 38-hour week) starting from 1966. The Australian CPI is from the Australian aid tracker. There are some years where Australian minimum wage rates change more than once in a year. For such cases, we took the average as annual minimum wage rate. The data for Asia-Pacific comparisons are from the International Labour Organization and the World Bank. The different frequencies of minimum wages for each country in 2019 in the ILO’s report are adjusted to convert to weekly rates. World Bank data is used to obtain market exchange rates and PPP conversion factors. For the Goodman, et al., data go to Table 3.6 on p.61 in their report.\ Disclosure: This research was undertaken with the support of the ANU-UPNG Partnership, an initiative of the PNG-Australia Partnership, funded by the Department of Foreign Affairs and Trade. The views are those of the authors only. This article appeared first on Devpolicy Blog (devpolicy.org), from the Development Policy Centre at The Australian National University. Stephen Howes is Director of the Development Policy Centre and Professor of Economics at the Crawford School of Public Policy, at The Australian National University. Kingtau Mambon is currently undertaking a Master of International and Development Economics at the ANU Crawford School of Public Policy, for which he was awarded a scholarship through the ANU-UPNG Partnership. Kelly Samof is a lecturer in economics at the School of Business and Public Policy, University of Papua New Guinea.

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