The art of job creation

The need for job creation has always been felt in this country though it has not been treated as a matter of urgency. Now there is widespread feeling that job creation is indeed a matter of top priority.

Gone are the days when nearly everyone had a piece of land to cultivate food crops. Seeking a job from someone, especially European employers, was an option, not an absolute necessity. Nowadays most people are no longer contented with merely serving the stomach. They aspire to higher standards of living which include being better dressed dwelling in a brick house with iron roofs, having radios and TVs in the house and enough cash to send their children to school. To have these things, most people need jobs though a few of them may own a business and become self-employed.

Methods of job creation are not obscure. They are easily indentified. But of them as of several things it is a matter of easily said than done.

On top of the methods of job creation is investment. This is spending money to build roads, bridges hotels and factories where they did not already exist, or spending money on repairs and extensions of these.

Money so spent is called capital. It is when the money is spent to produce new goods that it is called investment. When you buy a tractor to open a farm, computers to operate a business build a hotel to promote tourism you are engaged in investment. If you spend money on a car for mere travelling to and fro without any intention to use it as an income generator that is not investment but consumption.

The word capital is used as a short cut for capital goods, the goods used in the production or goods and services. To acquire these goods is very difficult because you have to buy them using not any type of money but the money acceptable to the manufacturer. Most of the goods we need to build factories to equip hotels and so on are manufacture in foreign countries where sellers will accept payment in scarce currencies such as the gold dollar or euro pounds and so on.

So we may demand of the government to create jobs for our young people educated and uneducated. Like a private individual or corporation the government must have the type of money that it can use in importing capital goods. Not an easy task.

The creation of jobs may be done by private investors. Private investors may be indigenous or foreign. In most developing countries jobs are created through foreign direct investment (FDI). It is absolutely necessary to invite or welcome investors because they have both the capital goods and the skills. It is possible that somewhere in your district there are valuable minerals which f taken out can be sold to peole abroad. But how many of us have the skills to discover such minerals and if discovered, the equipment to use in bringing them up from the bowels of the earth.

We can create jobs by enticing into our country foreign direct investors. These people will come if they will be made to feel safe and will be allowed to transfer their earnings back to their country. Our attitudes towards foreigners do matter, xenophobia will keep them away.

The government can initiate the introduction of industries where private capital is hesitant. At the beginning of our independence, President Kamuzu Banda set up the Malawi Development Corporation (MDC) which the government used in setting up new factories, hotels or buying some businesses from private sectors. Later, the MDC sold these businesses to private owners. This was not a revolutionary idea. In order to catch up with the industrial west, Japan at the beginning of the 20th century used this method.

In the present circumstances reviving MDC or something similar is not a bad idea. We say economic development can be achieved through private enterprise. But private entrepreneurs are interested in enterprises that yield profit within a short-time. Had the colonial government of Nyasaland not embarked on afforestation called Chinkangawa, there would be no private firms using the wood.

Our confidence in the private sector should be accompanied with realism. The creation of jobs will require both the State and private sector participation. There are certain small deeds which can generate or preserve jobs. The government could have created jobs for Malawians if it had hired local buses to bring our countrymen fleeing xenophobia. I understand South African buses were cheaper. How cheap were they? While local contractors would have been paid in kwacha while South African contractors payment will be in foreign currency which cannot be increased by an act of the Reserve Bank.

Money paid to a local contractor would remain in Malawi and would generate multiplier effects which would include job creation. The money paid to South African buses will generate profits and multiplier effects in South Africa. In so doing we will have exported jobs , worsened the balance of payments.

Money paid to local contractors would have been subjected to a sales tax or something like it.

Minimum wages when fixed too high force employers to use machines instead of labour. In this way, jobs are lost instead of created. Wherever possible labour intensive investment should be given preferential treatment vis-a-vis capital intensive ones.

Let us be keen to learn from others. We are not the only country that is faced with the need to create jobs.