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FINANCIAL WATCH: How to finance job creation
2005-08-31 08:07:04
By Mireny John
The country is presently engulfed by waves of promises emanating from the ongoing political campaigns staged by the various contesting parties.
It is increasingly becoming the season for listening to sweet words, and fancy promises, apparently spelt out boldly at campaign rallies all with the single objective of wooing the hearts and minds of voters come the October General Elections.
During the official launching of the campaigns last Sunday, the presidential candidates for both the ruling party CCM and the opposition Civic United Front (CUF) revealed that their respective election manifestos, inter alia, target job creation as one of their key objectives, once they clinch state power. This is good enough.
For political expediency, promising voters that a particular party is certain to create the anticipated jobs in a situation where unemployment exponentially can be quite rewarding come the polling day.
Details on how parties are prepared to create the anticipated jobs weren’t in-depth. Yet, analysts seem to expect that every party is serious, and most importantly, will at best demonstrate political will and commitment toward generating gainful work for its people.
The surest strategy for creating jobs is through promotion of ’responsible’ private sector growth in all productive and service sectors of the economy.
Private enterprise is driven by the profit motive, and unless this goal seems to be in sight, entrepreneurs will not dare hire labour.
We have had investment policies in practice for over fifteen years now, and they are supported by a scheme of incentives intended to make the private sector feel comfortable and thus grow.
Countries which have impressive records in taming unemployment achieved their targets, first, by identifying some of the key sectors with a potential for increasing the size of their labour force.
Next, attractive and generous tax incentives are offered to such sectors to attract many of them.
Briefly, no country has achieved job creation without strategic investment in agriculture, manufacturing and services by private enterprise.
Admittedly, agriculture is presently the major employer, but it is so rudimentary in character, and its productivity is so low that it has failed for the last four decades to reduce rural poverty.
In addition, the sector is beset by a myriad of marketing distortions at home and in the global market place.
Increased productivity in agri-business would increase the incomes of more than 75 percent of the country’s population over the long run, thus stirring up aggregate demand.
Hence, unless all the institutional brakes inhibiting large-scale farming like land laws are removed, and unless we direct public finance to the construction of irrigation infrastructure, we can forget about multiplying jobs!
The manufacturing sector must grow in tandem with the farm sector, for there could be certain basic raw materials that domestic farmers might be able to supply much more competitively.
It is undebatable that prosperity of the textile sub-sector in any particular country the world over has gone a long way to curbing unemployment.
To-date, China is still the most populous country on the globe, but its strong clothing industry, which employs millions of people, will clothe the entire world more cheaply than any other country could attempt.
Tanzania has all the potential for food and fruit processing, packaging and marketing, foot wear industries, meat and fish canning, iron foundries and metallurgical works, electrical goods and appliances, brewing, and milk processing.
A limiting factor for developing these potentialities is partly the expensive power, with no cheaper alternative in sight so far.
Less expensive energy sources would make goods and services produced more competitive, hence supporting more jobs over time.
Since the liberalization of the economy in the mid 1980s, less emphasis has been focused on the service sector as a key job spinner: Imagine a prospering tourism sector that will support jobs in hotels, catering, tour companies travel agents, airlines, trade in local art and cultural heritage, and so on.
However, the bottom line to all jobs is investment in human capital.
Unless our sons and daughters obtain the right education and skills, they will never be able to do certain jobs available in modern economies, however many of them are created.
It follows that when taxes are properly spent on funding education in terms of both quantity and quality , this strategy is automatically job creating .
There is no shortcut to providing jobs for the more than 800,000 youngsters who graduate annually from the country’s schools and colleges.
The electorate is watchful of the promises being uttered at campaigns’ rallies, and awaiting for practical results from the political victor, whether pink or white. Gainful employment is badly wanted by us all.
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