Government is responsible for job creation
Dithapelo Keorapetse | Friday February 10, 2017 11:23
His argument should first be contextualised within the prevailing economic conditions of unacceptably high rates of unemployment and underemployment, poverty and wealth and income inequalities. Matambo as the chief of the country’s economic high command has failed to generate new strategies of how the economy can employ its citizens especially the youth.
In realization of this failure he asserts that the government is not responsible for employment creation. He posits that the government’s responsibility is a facilitation role of creating a conducive environment for the private sector to employ Batswana. Who has presided over an economy which is undiversified, with a minute private sector and unable to create jobs?
The failure to create jobs by Minister Matambo and his government has made him to remember his orthodox economic precepts; that the state should provide law and order and roll back to allow the private sector to lead and that public service expenditure must be reduced. He subscribes to the notion of total liberalisation of trade and finance, inflation targeting and or micro-economic stability and other Washington Consensus debates.
The 2017/18 budget is the first since the golden jubilee independent celebrations. Matambo ought to have answered basic questions in respect of the country’s economy. After 50 years of independence, does the country’s economy meet the necessary conditions for sustainable development such as increased economic efficiency, expansion of national economic capacity, technological advance, economic and industrial diversification and adaptability to external and internal shocks?
What Matambo is saying is that development is not political. However, development is unavoidably political. Development includes increase in general social welfare. It denotes increasing satisfaction of basic needs such as food, shelter and clothing. Political economist and development economists define socio-economic development as the process of social and economic development in a society measured with indicators, such as GDP, life expectancy, literacy and levels of employment.
They broaden the definition to include changes in less-tangible factors such as personal dignity, freedom of association, personal safety and freedom from fear of physical harm, and participatory democracy in terms of the extent of participation in civil society. Economic development should result in enhanced standard of living of a nation’s population coupled with continued growth from a simple, low-income economy to a modern, high-income economy.
This was a promise by this very government in the National Vision 2016 documents 20 years ago. Why is it that Japan, the Asian Tigers and Dubai have managed to develop in 50 years into industrialised countries when they started the marathon of economic development with Botswana? This is what Matambo is supposed to be explaining.
The legitimacy of any government rests on its ability to cater for its citizens. Development is political and for this reason it is the responsibility of the government to create jobs. Government is the political arm of the state. Politicians decide who gets what, when, how and why through allocation of resources in this case the budget.
According to Adrian Leftwich, development therefore entails the organisation, mobilisation, combination, use and distribution of resources in new ways….whether these resources take the form of capital, land, human beings or their combination. Failure to do these constitutes abdication of a primary responsibility. Leftwich contends that development must be understood politically “involving new ways in which all manner of resources – both internal and external – are mobilised, directed and deployed in new ways to promote growth and welfare…”
Borrowing from Weiss and Hobson’s arguments, Leftwich argues further that what is needed is a central ‘coordinating intelligence’, or ‘coordinating capacity’ which can “steer, push, push, cajole, persuade, entice, coordinate and at times instruct a wide range of economic agents and their groupings to go this way instead of that, to do this and not that, and which itself can act where or when private agents can either cannot or will not”.
There is consensus among proponents of these arguments of a developmental state model that the only agency capable of this mammoth chore in a country is the state. This argument places the state at the center of socio-economic development, it depicts the state as an agent of socio-economic change, i.e in charge of employment creation through proper policies and direct involvement. That sort of state should have the ability, influence, and aptitude to manage the market - work through, in and with the market economy.
According to Wayne Edge, developmental state is defined as one in which the state is the primary agent of socio economic change and actively organises it and directs it and Chang describes it as state that follows policies that co-ordinates investment plans, has a national development vision , inferring that the state is an entrepreneurial agent; that engages in institution building to promote growth and development.
The Government of Botswana should learn from the Chinese, Japan and the Tigers; they have many multinational corporations in various sectors some of which have been awarded contracts by the Government. In other words, the Chinese Government is an entrepreneurial state which has huge investment which bring big revenue and create employment. The KIA vehicles from South Korea transport Botswana MPs; the state had invested heavily in the company to avert its collapse and save jobs.
Even assuming that the Government ought to only facilitate as the minister has argued, the question is does the government play this role efficiently? The country’s developmental elite have failed dismally to kill the bureaucratic red tape and other prohibitory conditions for running businesses.
FDI remains elusive because of insane immigration policies; the Government literally exhibit xenophobic tendencies of denials of visas, residents and work permits. Compare Botswana with Mauritius and Rwanda. The cost setting up a business and running it are huge. Obsession with the reduction of government wage bill has resulted in many job losses through privatisation and attrition-those that leave because of retirement, death, health etcetera are not replaced by the government.
The ruling party has promised jobs during the 2014 general elections, this was repeated at various fora including the launch of the Economic Stimulus Programmes. Why should the nation be told that it is not a primary responsibility of the government to create jobs now?
The Government has failed to create jobs through its failure to properly manage the economy in a manner that would create jobs. The ruling elites have not seriously attempted to diversify the economy. Why is Mauritius which has no mineral endowment and which started its economic development around the same time with Botswana way ahead?
The assertion that Government is not responsible for job creation should be dismissed, it lacks substance, logic and basis, and it is a pronouncement that can only be made by a government which has abdicated its core responsibility or is bereft of ideas.