Jobless Growth Is Bad Economics

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By Mbatjiua Ngavirue WINDHOEK Minister of Labour and Social Welfare Alpheus !Naruseb says economic growth and private investment alone may not generate full employment or decent jobs in the country. His view is that there is a need to review the commonly held notion that the private sector is the driving force for employment creation and poverty alleviation in developing countries. He believes that in formulating employment policies, national governments must retain their leading role in taking measures to create decent employment for their citizens. !Naruseb made the remarks yesterday when opening a three-day Regional Experts’ Meeting on Integrated Employment Promotion Policies and Programmes being held in Windhoek. The meeting is being held under the umbrella of the African Union (AU), and is the result of an AU Assembly meeting held in Oagadougou, Burkina Faso, in 2004 on Employment and Poverty Alleviation in Africa. !Naruseb noted there have been many initiatives, particularly by developing countries, to create economic environments that promote economic growth and full employment. Their relative lack of success, however, made many people question whether those goals are merely unrealisable dreams. He said it is clear from the large numbers of unemployed and even larger number of “working poor” that the challenge is to increase the rate of economic growth in a way that increases employment opportunities. “Economic growth that does not result in greater employment opportunities does not address the problem that Africa faces,” he stated. For this reason, it is imperative that governments change the way they formulate employment policy at regional and national level. Policies would have to change in order to integrate full and productive employment and the objective of creating decent jobs into all aspects of planning. Naruseb mentioned several initiatives the Namibian Government has undertaken to address the challenge of unemployment, including preparing legislation for a National Commission for Employment Creation. Namibia is also participating as a lead country in the Youth Employment Network established in 2001, to give young people a real chance of finding decent and productive work. The government is additionally drafting an Employment Services Bill, which will regulate employment services and “ambiguous and triangular employment relationships”. He explained that this legislation is intended to support economic growth and at the same time promote decent remuneration and conditions of employment. The proposed new law appears to be aimed at tackling the problem posed by the numerous labour hire companies, created to circumvent the provisions of the 1992 Labour Act. Lawrence Egulu, Senior Economist for the International Labour Organisation (ILO), noted that Africa recorded its highest economic growth rate in almost a decade in 2004 at 4.6%. Despite this impressive performance, Africa was not seeing any significant dent in unemployment and under-employment. He questioned why the total population living below the threshold of US$1 a day was higher today than it had ever been in the last two decades. Echoing !Naruseb’s sentiments, he said poverty and unemployment persist because not enough has been done to incorporate job creation in poverty reduction strategies and development programmes. To make his point, he quoted extensively from recent statements made by ILO Director-General Juan Somavia. “Jobless growth isn’t just bad social policy, it is bad economics. It results in less consumption, more migration, more child labour, and lower aggregate demand. “This results in less investment, less funding for pensions, less taxes, less resources for social policies, and ultimately – more poverty with greater income concentration,” Somavia said. Egulu added that employment on its own does not always pull people out of poverty. “Creating more jobs is not enough. To lift a poor population out of poverty, countries need to aggressively pursue a strategy of creating decent jobs,” he argued.