Pundit
1. GoK has now hundreds of contracts and contractors. Under the Industrial Training Act (I hear it has been reformed), every contractor is required to take up a number of apprentices. These are determined by the size of the contract. The SGR alone would attract like 10 000 apprentices to the Main contractor; Sub-Contractors would occupy another 10K
A country like Kenya, with hardly any serious infrastructure, should not have such a huge unemployment problem: people can be usefully put to work.
Over on Jukwaa, we once had a long-running thread on Nazi economics:
http://jukwaa.proboards.com/thread/8607/africa-copy-germany-economics-stayAn "extract":
When Schacht too over, something like 6 million Germans were unemployed. When he left, about 3 years later, the number was less than 500,000 and by 1938, the number was less than 50,000, i.e. practically full employment. What's more, those figures don't tell the whole story, because the period also started a rapid rise in the number of "expatriate workers".
A great deal of what he did had similarities with the "New Deal" in the USA---putting people to work on the public purse. What is interesting, though, is they got these people to do real work: if I recall correctly, German productivity in 1938 was the highest in Europe, and living standards shot up
...
The manufacturing aspect is interesting in many ways: E.g. Hitler the car-lover, his dream of a "people's car" [literally a "volkswagen": "volk"= people, "wagen=car"] and the German car industry; Hitler's need for a vehicle to promote Nazi propaganda, whence the subsequent rise in the mass production of radios (which also helped with employment), etc.
Going back to the question of what we can do here and now, I was intrigued to read that:
"As a country, therefore, Kenya has identified industrialization as the way forward towards the attainment of middle-income status as outlined in the Jubilee Manifesto and Vision 2030. I formed the Ministry of Industrialization and Enterprise Development to spearhead our industrial revolution and export diversification agenda". [HE President Kenyatta]
http://www.statehousekenya.go.ke/speeches/uhuru/june2013/2013130601.htm
The said ministry's website, when it is not down (which seems to be most of the time), hardly gives the impression of an industrial revolution in the offing. It seems to be down again right now, probably due to intensive planning for the revolution, but from the Mars Group's website, its immediate plans:
Expected OutputsMedium Term Performance Indicators & Targets
http://budget.marsgroupkenya.org/national/programmes/116/#.Uf7glmrD_IU
Hardly the stuff of industrial revolutions ....
Countries like Kenya need to take a serious look at countries such as South Korea, Taiwan, Singapore, etc. instead of just dreaming that an industrial revolution or whatever occurs simply because one says it will or should occur. In South Korea and Singapore, what I have seen is not just big plans and "visions" but also concrete steps for how to transform the plan/vision into reality---and they have worked. In contrast, as things stand right now, Kenya's Vision 2030 seems to be no more than a mild exercise in absurdity. That, by itself, is not necessarily bad---things that cause amusement are always welcome. The problem is that quite a few people seem to take it seriously.
I note that some comment has been made on Kenya's manufacturing sector. That is rapidly going nowhere.
First, the continued importation of cheap Chinese junk is not helping, although it contributes to a huge deficit in favour of the Chinese. And on this, I learned something "useful" on my latest trip to Beijing: I was out to buy some electronics, on the grounds that they were obviously cheaper in China. My hosts advised me not to and, instead, to buy the same things elsewhere. The reasons they gave? Most of the stuff sold locally, to the not-so-well-off Chinese masses,
and to poor places like Africa, is the low end of the cheap, crappy stuff; what goes to the West generally undergoes somewhat more rigorous quality control, even if there it is not especially highly regarded.
Second, whereas other Asian countries---Thailand, Indonesia, Vietnam, etc.---are taking advantage of rising labour costs in China, with Chinese (and other countries') companies now outsourcing to those places, nothing of the sort is happening in Africa. Africans seem content to borrow money for infrastructure, at which they will gave and excitedly announce that "
Kung Fu is indeed helping us! What a friend!"
Over the weekend, I had dinner with a variety of people---Asian, Western, etc.---and from a variety of professions. I asked them for their thoughts on how some Asian countries had done so well and if their experience could be "exported" to Africa. Generally, they pointed to four things:
* The right government policies, vigorously and forcefully seen through.
* Advantageous use of readily available human capital. (In this regard, one or two "unhelpfully" mentioned our seemingly endless capacity for mayhem, with large numbers of youth "employed" in "rebel armies", etc.)
* A low tolerance for corruption, even if it exists. (On this one, I was staggered to learn that estimates, by a UK group, of stolen African money stashed overseas is around $1 trillion---Buhari's $150 billion is only for 10 years and for just one country---but the begging is endless!)
* A very strong and focused work-ethic. (Here, NACADA's figures, which show that most youth in the "Capital Area" and surrounding environs are "fully loaded" by noon hardly paint a pretty picture for the future.)
A lesson from agriculture:And coffee. A look at most of Africa's traditional producers of coffee shows that they either "not growing" or are in "decline", and that has implications on revenue, employment, etc. On the other hand, a place like Vietnam has come from behind to now rival Brazil. Why are such things important? While a place like Kenya has all sorts of VISION dreams, with Konza City---which could well turn out to be no more than a land Ponzi scheme---exciting the imaginations of many, perhaps the "right" road is the "dull" one. Also from the same Jukwaa thread:
I recently read a very interesting book that has some relevance here:
How Asia Works: Success and Failure in the World's Most Dynamic Region, by J. Stidwell.
http://www.amazon.com/How-Asia-Works-Success-Failure/dp/080211959X/ref=cm_rdp_product
One of the Amazon reviews gives a good summary:
Author Studwell argues that there are three critical interventions that governments can use to speed up economic development. Used in Japan, South Korea, Taiwan, and now China, they have produced the quickest progressions from poverty to wealth that the world has seen.
The first and most overlooked is to maximize output from agriculture. The second is to direct investment and entrepreneurs towards manufacturing exports. Machines can easily be purchased on the world market, and successful east-Asian governments promoted technological upgrading through subsidies conditioned on export performance. (Exporters were almost invariably better businesses than firms that sold only at home.) The third is to focus capital on the fastest possible technology learning and the promise of high long-term profits, not short-term returns and individual consumption. This tends to pit the state against many businessmen and consumers with shorter-term horizons.
Thus, economic development is as simple as one, two, three. Unfortunately, wealthy nations and their economic institutions (the World Bank, the International Monetary Fund) have provided contradictory advice to poor states, despite the fact that no significant economy has ever developed successfully via free-trade and deregulation from the beginning - including the U.S. and Great Britain. Positive intervention has been required in agriculture and manufacturing that fostered early accumulation of capital and technological learning.
If he is right, and he makes a convincing argument for his case, then things don't look that great for Africa:
* What should be done in agriculture is not being done. This is one place where all the "surplus labour" could be put to good use. (I note that even in Kenya, the "economic powerhouse of Eastern Africa", unemployment is something like 40% and mostly of young energetic people.)
* Cheap junk from China et al continue to erode manufacturing capacity. Currently Africa (all of Africa) contributes something like 1.2% or so of global manufacturing output.
* As a consequence, the sort of "technological learning" that Stidwell refers to is not taking place.
In fine:
Places like Kenya should simply prepare for worse to come: the population will keep growing; the government has neither the will nor vision---and I don't mean jokes like "Vision
3020 2030; places like Nairobi to host even larger slum populations while the "cream" drive fancy cars on Chinese-built roads; etc. I see little on the horizon to suggest a change any time soon.
Topic: Unemployment crisis (Read 10083 times)