Improving the performance of labour markets in the pacific

The objective of the joint ADB/ILO collaboration under the Technical Assistance (TA) is to support labour market policies and programs in participating Pacific Island countries (Fiji, Palau, Papua New Guinea) that are more evidence-based, collaboratively determined and gender focused.

The objective of the joint ADB/ILO collaboration under the Technical Assistance (TA) is to support labour market policies and programs in participating Pacific Island countries (Fiji, Palau, Papua New Guinea) that are more evidence-based, collaboratively determined and gender focused. The achievement of the objective is expected to contribute to the broader development outcome of national development plans for Pacific Island Countries systematically incorporating policies and programs to improve labour market performance.

In support of the above objective, the joint ADB/ILO collaboration will deliver 6 key outputs:
1. Pacific Regional Conference to promote knowledge-sharing and partnerships;
2. National employment policy/action plan in Fiji;
3. Labour market assessment for Palau;
4. Labour market assessment of Papua New Guinea;
5. National employment policy/action plan to improve labour market outcomes in Palau;
6. National employment policy/action plan to improve labour market outcomes in PNG.

Countries in the Pacific face their own country-specific challenges.

Fiji

A joint ADB/ILO analysis in Fiji has pointed to low levels and patterns of economic growth in the past decade that has not been conducive to job creation and reductions in working poverty. In addition to low levels of investment in the economy, which is particularly critical for job creation, the Fijian economy has experienced limited structural transformation—output growth in agriculture and industry has been limited in the past decade and the shares of agriculture in total GDP has declined only modestly, with a corresponding modest rise in services while that of industry has remained more or less the same during the last two decades. The vast majority of the economic growth in the past decades has been achieved through increases in labour force participation, and there has been little labour productivity growth. Among the employed, almost 60% were in informal employment, defined as employed persons not making contributions to the Fiji National Provident Fund (FNPF), leaving the majority of Fiji’s workers without income security in old age or in case of other shocks. Furthermore, there are serious concerns with the limitations on freedom of association in Fiji, with detrimental effects on the industrial relations climate.

Palau

In Palau, the mini-Census of 2012 indicates that Palau’s population had declined by 12.5 per cent from 2005 to 17,501 with 13,972 persons being of working-age. The dramatic decrease in the population (and working-age population) has been linked to massive emigration during the 2005-2012 period. Furthermore, between 1990 and 2012, the median age of Palau’s population has increased steadily from 25.6 in 1990 to 35.0. A rapidly ageing workforce has critical implications on the sustainability of pension systems, but also important implications on the labour supply in the retail and hospitality industries, which typically employs a relatively large share of young women and men. In fiscal year (FY) 2013, the wholesale and retail trade and accommodation and food service activities together account for 30.5 per cent of formal employment in Palau.

Papua New Guinea

In Papua New Guinea (PNG), the construction of the Liquefied Natural Gas (LNG) project and exports of LNG exports have kept PNG’s headline GDP growth rates high. Nonetheless, given the enclave and capital-intensive nature of extractive industries, the direct employment contribution of these industries has been limited. Employment in mining is estimated to account for around one per cent of total employment in Papua New Guinea. While further indirect employment opportunities are created in other industries associated with extractive industries, such opportunities are often not sufficient to absorb the rapidly growing labour force. According to the 2011 census, the population of PNG had doubled in the last 20 years to reach 7.3 million, and it is projected to increase to 10 million by 2030. To illustrate, while employment in the formal private sector is estimated to have grown by around 20 per cent between 2010 and 2013, driven directly and indirectly by the extractive industries economic boom, formal employment is estimated to account for less than 20 per cent of total employment, and this share is estimated to have remained stable during the same period of time. With the vast majority of Papua New Guineans working in the informal economy, where earnings are typically low and access to social protection and a voice at work limited, there is a strong need to ensure that the high rates of economic growth lead to the creation of decent and productive jobs for women and men.