Maravi

Rupiah, investors and unemployment

COMMENT - Neoliberal 'trickle down' theory has failed.

Rupiah, investors and unemployment
By The Post
Tue 30 Nov. 2010, 03:59 CAT

RUPIAH Banda’s observation that unemployment levels have remained high despite massive investment inflows and economic growth in the country calls for more disquisition. We say this because where there is high unemployment, we have an indication of an unjust economy.

The enjoyment of the right to decent standard of living would require efforts to end the problem of unemployment. Most people rely on work in order to earn a living. It may be formal employment, earning a wage in exchange for giving labour, or it may be through some form of self-employment such as small-scale farming. One of the main tasks of an economy, therefore, is to ensure that there are enough jobs, or opportunities to work, to meet people’s need to earn a living.

One of the main reasons for our high rates of poverty is the failure of the economy to provide sufficient jobs. While it is true that no economy is able to assure sustained full employment, joblessness in Zambia is not just a matter of a few per cent; it is an extremely serious problem.

In order to derive benefit from an economy, people must be able to participate in it; and for most people, the primary means of economic participation is through work. Indeed throughout human history, it has been a basic norm that all are expected to work, and thereby to contribute to the economy. Those who refuse to do so, for no good reason, have generally been excluded from the benefits of the economy. However, if society expects all its members to work and to contribute, then it should make it possible for them to do so. In this regard, a profound responsibility rests on both the political authorities and those who hold powerful positions in the economy. Everything possible needs to be done to maximise job opportunities and where the choice is between greater profits and greater employment, the latter must be chosen.

In Zambia this is a matter of greatest urgency. Very high numbers of our economically active people are without work. As long as this remains the case, there can be no hope of achieving a secure and prosperous future for our people. In some parts of our country, unemployment is at nearly 90 per cent, meaning that each worker has to support not only his own dependants, but another worker and his dependants as well. Thus, unemployment affects not only those without jobs, but also those who have work. In consequence, the poverty and the gap between the rich and the poor which we talked about at length is yesterday’s editorial comment can only be exacerbated. Furthermore, such a scale of unemployment acts as a huge drain on the state’s resources - further reducing its ability to provide much-needed social services.

The harm caused by unemployment is by no means limited to material matters; there is also an enormous social cost. While simplistic deductions must be avoided, there can be no doubt that a connection exists between high rates of unemployment and the distressing high incidents of crime, family breakdown, domestic violence and drug and alcohol abuse which beset our society. Many of these social problems in turn impact negatively on the economy, resulting in a vicious cycle which will only be broken by the provision of jobs.

Clearly, there is more to the question of unemployment than just its economic and social costs, severe as they are in our country at present. Even if unemployment did not impact negatively on the economy, and even if it was not a cause of the social problems we have noted, it would still be a denial of an essential element of human dignity. Through work, we cooperate with the Creator in bringing to fulfilment the created world; we exercise our God-given abilities and talents as co-workers with God in the great task of transforming the material world. Work is not simply an onerous necessity, coincidental with our physical existence, a burden which we should try to escape. It is a vital part of our humanity, the manifestation of our creativity, an opportunity for our growth and fulfilment. Indeed, work is nothing worse than a constituent dimension of the purpose for which the world was created and for which we are ourselves were brought into being.

Of course, it is not always easy to discern all these noble ideas in all the different kinds of work which we experience. Many people, perhaps even the majority, find themselves working in exploitative and demeaning situations which are as much of an affront to their dignity as unemployment would be. What is needed, therefore, is not just work, but humane and dignified work. Nevertheless, we are concerned for the present purposes with the need for work itself to be available to all our people, work which, however humble or exalted it may be, satisfies our innate desire and responsibility to reach fulfilment. That so many of our people are denied this opportunity is a shameful injustice, especially since it is so often the result of the excessive pursuit of profit or of economic policies which fail to take adequate account of the inherent value and dignity of the human person. Work is indeed a right, a right which, as a nation, we fail to respect at our peril.

In this regard, it is disturbing to note that current tendencies that corruptly give transnational corporations and other investors opportunities to reap maximum profits, with all sorts of tax rebates or holidays, with no discernible responsibilities of creating many quality jobs for our people.

Good leaders must be interested in the welfare of those in distress. We must expect them to be concerned with the growing unemployment and the increasing gap between those who have and those who don’t have. We expect them to feel the distress of many who have a big problem about the cost of goods, education, medicine, with the tragedy of unemployment and so many other important concerns where we are all involved and all must help the government. All these are difficult problems for any government to face but to solve them we need hard working and public-spirited politicians. We need people of courage who will defend the truth and demand justice for the poor, the ordinary man and woman.

Clearly, unemployment in our country cannot be seen as a mere quantitative issue, that is, as a simple non-use or inability of our economy to use the entire labour force, but as a quantitative result of the irrational and unjust nature of the existing system of economic policies and relations which favour capital over labour, over human beings. From it stems the paradox that productive human capacity is not fully used in a world where there is so much poverty and where the most basic needs of millions of human beings are not being met.

The phenomenon of unemployment in our country is aggravated by the growing migration of large rural masses to our urban areas, due to extremely poor living conditions and to lack of employment in rural areas. This they paradoxically attempt to solve by crowding into shanty compounds where living conditions are not so different, thus also swelling the vast army of the urban unemployed.

While it is true that trans-national corporations increase employment and income levels to a certain degree, it is also true that this is because capital requires a labour force to increase its profitability. Thence, the inevitable rise in employment associated with foreign capital.

But this phenomenon is highly localised since the multiplier effects of production aimed at the world market is extremely limited in its capacity to create new jobs in other sectors of our economy due to the scarce or non-existent integration into the rest of our national economy characteristic of trans-national capital investment. It cannot be denied that this increased employment and income constitutes a kind of hypertrophic economic growth which is, furthermore, unstable because at any given moment the corporations can be transferred to other places in accordance with the interests of the transnational parents; but even if they were to remain stable, this could never be considered a sign of reliable and beneficial economic development.

So, the heart of the problem lies in the measures our politicians wish and are able to take at a given moment, in the nature of their political orientation and the nature of their economic policies, and thus, in their resolute attitude to struggle for the adoption of fundamental measures which meet the interests of our people. As things stand today, our political leaders have favoured more the interests of foreign capital than the plight of their own people. And in some cases, this has been out of corruption, as a result of the favours foreign investors give them.

Labels: FDI, JOBS, RUPIAH BANDA, UNEMPLOYMENT

posted by MrK @ 5:42 PM