Tuesday, May 8, 2012

Job creation must underpin devaluation

The Malawi Kwacha has been finally floated. It is now time for government to focus on creating employment opportunities for the struggling average person. Critics of devaluation have on many occasions argued that resulting higher prices will affect poor people. Even the late president held the same view. But on many occasions we have not come clear and open to identify these “poor”. The most vulnerable group in the event of high price increases, are the unemployed, usually unskilled and often reliant on the extended family system for survival. If there are numerous job opportunities, a general high level of skill, I think we would be less concerned about devaluation, particularly with respect to basic needs. At least a steady income ensures a reasonable degree of certainty, comfort, security than none when a devaluation strikes. How big is the unemployment problem? Since the advert of “multiparty democracy” in 1994, emerged many private secondary schools as we adopted a liberal approach to education. Free primary education was introduced and enrollments skyrocketed. Schools were overwhelmed, ill prepared. There were not enough teachers, and government undertook a massive recruitment drive for teaches. Jobs got created. Unfortunately, Mzuzu TTC was turned into a University, but nonetheless we managed to get most of young into school. But it appears we have not thought much about what they would become. But nonetheless it gives a quick snapshot of how a major targeted government policy can create jobs and future unemployment. We needed to seriously think beyond kids completing Standard 8. We seem not to get that yet.A child that was aged 5 in 1994, is today 23.This is the free education child. They are supposed to have graduated from University or completed some tertiary education. We have so many of such young people that have not had an opportunity to pursue University or tertiary education. Opportunities have been limited. A majority remain unskilled and unemployable. They just loiter around. Our ill-preparation is reflected in the quota policy, a fire fighting tactic. During the same period, the Malawi Government closed the Polytechnic Board of Governors. An institution that trained various technicians. Offereed opportunities for skills training outside the University of Malawi. While TEVETA took force, capacity of Technical Colleges has been static. Various private colleges have mushroomed, but often beyond the reach of average students whose parents are so poor or deceased. So what do we have?Huge multitudes of young people that are unemployed and have only completed an MSCE or none at all. But they can be turned into useful citizens. They are the ones that will bear the huge cost of a devaluation mentally. Financially, most of their families if they have a job, will swallow the hard devaluation pill. Now we cannot talk of Malawians lacking a saving culture if unemployment is not critically addressed. A devaluation will become senseless if we cannot bring our young into the skilled job market. I hope JB, can explore various policy tools to deal with the situation. I have in mind a-few tips that our government can pursue in-order to have a sustainable job market.In the case of skilled but unemployed Malawians, government can consider giving some tax incentives to private businesses that recruit any of jobless persons. Even more if they recruit straight form colleges. For example, if a business recruits 20 or so chaps that have good qualifications and commits to keep them for some period, a 1% reduction in corporate taxes can be offered with strict monitoring by Ministry of Labour and the Malawi Revenue Authority. Such companies can be monitored throughout the tax- paying periods. It can even be extended further to businesses that recruit straight from Technical Colleges or other non-University tertiary institutions.On the other hand, I believe increase spending in technical or vocational education is key. We can be surprised that most of the houses being built in our cities have the hands of untrained brick layers. Even electricians or plumbers have learnt their trade on the job. Not a reason to smile. There is not enough space or room available at the technical colleges. At the interim, I would contend that increasing capacity of the few technical colleges is worthwhile. Our innovation can go further to introduce more trades and programs for apprentices that extend the pool or range of skill, and in turn increase employment chances. The government can even consider building more technical colleges across the country to offer various courses. Just imagine at the moment we have Mzuzu, Lilongwe, Salima, Nasawa, Namitete and Soche Technical colleges. Not enough to train various skills in trades. Government can even support private institutions such as Phwezi Rural Polytechnic just like they do with grant aided secondary schools or nursing colleges to increase their capacity and range of trades. Talk to our development partners.In short, devaluation and removal of restrictions on forex trading the Reserve Bank of Malawi announced are bold and shrewd monetary policy. However, on the fiscal side, the government can deal with unemployment by giving businesses incentives to recruit. It would enhance a range skill development opportunities to the youth. If we address the critical problem of unemployment we will care less about a devaluation. It will also help reduce the dependency ratio of an average Malawian family, that cannot simply save for the future. Now is the time to think seriously about job creation or else our young people will continue resigning to fate. Consequences are disastrous on the health budget. Need I elaborate? I leave it to you.Feedback: anyasulu@yahoo.com

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