Papua New Guinea - Development policies and prospects for the 1980's

Report No. 3544a,1NG Papua New Guinea: Development Policies and Prospects for the 1980s (In Two Volumes) Volume II: Annex B-Employment, Wages and Manpower Annex C-Agriculture, Forestry and Fisheries: Industry Profiles December 8,1981 Annex D-Industry East Asia and Pacific Regional Office 3L E @ FOR OFFICIAL USE ONLY Document of the bfrid Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without Wbrld Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Kina (K) Kl = US$1.50 US$1 = K 0.67 ABBREVIATIONS BDO - Business Development Officer BOS - Bureau of Statistics (now NSO) CPI - Consumer Price Index DOL - Department of Labor and Industry DOWS - Department of Works and Supply DPI - Department of Primary Industry IASER - Institute of Applied Social and Economic Research MRSF - Mineral Resources Stabilization Fund MWB - Minimum Wage Board NIDA - National Investment and Development Authority NIPS - National Investment Priorities Schedule NMA - National Manpower Assessment NOTA - National Occupational and Training Authority NPEP - National Public Expenditure Plan NPO - National Planning Office NSO - National Statistical Office PDC - Provincial Development Corporation PETT - Pre-Employment Technical Training PNG - Papua New Guinea PNGDB - Papua New Guinea Development Bank PRS - Plantation Redistribution Scheme PSC - Public Services Commission VEDF - Village Economic Development Fund GOVERNMENT OF PAPUA NEW GUINEA FISCAL YEAR July 1 - June 30 through 1977 (referred to as FY_) January 1 - December 31 beginning 1978 (referred to as 19 ) TABLES . zero or negligible - = not applicable n.a.= not available  FOR OFFICIAL USE ONLY ANNEX B PAPUA NEW GUINEA: DEVELOPMENT POLICIES AND PROSPECTS FOR THE 1980s EMPLOYMENT, WAGES AND MANPOWER Table of Contents Annex Page No. 1. POPULATION AND LABOR FORCE . . . . . . . . . . . . . . . . . . 1 Overall Trends .... . . . . . . . . . . . . . . . . . . . 1 Regional Dimensions . . . . . . . . . . . . . . . . . . . . . 3 The Rural/Urban Dimension . . . . . . . . . . . . . . . . . . 6 2. EMPLOYMENT TRENDS AND PROSPECTS .13 Quantitative and Sectoral Experience . . . . . . . . . . . . 13 Citizen and Non-Citizen Employment . . . . . . . . . . . . . 21 Regional Dimensions .24 Unemployment .26 Employment Prospects .27 3. WAGES AND EARNINGS .30 Minimum Wages .31 Assessment of the System in Place in 1975 . . . . . . . . . . 33 Minimum Wage Developments Since 1975 . . . . . . . . . . . . 40 Minimum Wages, Actual Earnings and Labor Costs . . . . . . . 44 Labor Costs Other Than Wages and Salaries . . . . . . . . . . 50 4. SKILLS AND TRAINING .................. 51 The National Manpower Assessment . . . . . . . . . . . . . . 51 Limitations of the NMA .................. 56 Technical and Vocational Training . . . . . . . . . . . . . . 60 APPENDIX TABLES This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization  ANNEX B Page 1 EMPLOYMENT, WAGES AND MANPOWER 1. POPULATION AND LABOR FORCE Overall Trends 1.01 The 1980 census was the first attempt at a full population count in PNG. Previous censuses, while attempting a full count in urban areas, relied on a 10% sample for rural population estimates. Also, the 1980 census benefitted from a great deal more preparation than the preceding 1971 census, because it was initially scheduled for 1976 and postponed annually thereafter. Its quality is thus felt to be distinctly superior to preceding censuses and particularly the one in 1971. That census, hastily prepared, suffered from significant under-enumeration in many places. The National Statistical Office (NSO) /1 believes that the adjustments made to compensate for under enumeration were over done, leading to an estimated population growth rate of 2.8- 2.9% for the indigenous population with a somewhat slower growth rate of the total population because of a reduction in noncitizens in the country. All statistics on population and labor force were based on this exaggerated growth rate until the preliminary total field counts of the 1980 census became available in January 1981. 1.02 The new figures showed a total population of about 3,007 million (breakdown by citizens/noncitizens not yet available), which is some 155,000 or 5% less than was expected under previous projections. Compared to the 1966 census, the population growth rate is 2.3% p.a. Because of the doubts attached to the 1971 census (compared to which total population has grown by 2.1% in the 1970s), we will use the 1966-80 growth rates in estimating population and labor force in the 1970s and projecting it forward. Since the 1980 preliminary census results give the total head count by sex and census districts, but no information as yet on the age composition or other socioeconomic variables, these estimates must of necessity be very crude until more of the results are processed and published. 1.03 The estimates for 1971-80, with the metholodgy explained in the notes, are laid out -in Table 1. The age bracket adopted for estimating the labor force, i.e., 15 to 64, is the one used by the National Manpower Assessment (NMA, see below) but diverges from the usual definition applied in PNG, which is 10 years and over. This reduces the total of the economically active population compared to the traditional definition, /1 The NSO was previously known as the Bureau of Statistics and is referred to as BOS in some citations.  ANNEX B -2- Page 2 Table 1: BACKWARD PROJECTION OF TOTAL POPULATION AND LABOR FORCE IN PAPUA NEW GUINEA, 1971-80 ('OOOs) 1971 1975 1976 1977 1978 1979 1980 1. Total population /a 2,450 2,684 2,746 2,809 2,873 2,939 3,007 2. Population aged 15 to 64 /b 1,295 1,409 1,439 1,468 1,497 1,527 1,557 of which: males 660 733 752 766 781 796 811 females 635 677 687 702 716 731 746 3. Economically active popula- tion aged 15 to 64 /c 945 1,039 1,062 1,083 1,104 1,126 1,148 of which: males 581 648 665 678 691 704 718 females 364 390 397 405 413 422 430