Wednesday, March 9, 2011

Jobs

The appointment today of 15 cabinet ministers in the Dáil came at a time when the country needed a ‘dream-team’ to be wheeled out, heads held high in confidence, ready to save the nation from oblivion. As the allocation of portfolios was announced, the question of the need for so many governmental departments arose. How crucial are these positions, and how much attention should they receive?

One of the cornerstones of the economy of a developed country is employment. Steady employment means taxable incomes, which means a government can fund things like a health system, roads, policing, schools and all the other things we take for granted (yes, even the Irish health system). These in turn provide employment in the public sector. It seems silly to simplify this to such an extent, but here in Haiti, this structure barely exists. Taxable incomes are virtually unheard of, so most of the money for the above comes from foreign aid. Again, all this is taken for granted in a developed country like Ireland, and so the system has evolved beyond the basics to include government departments with responsibility for less crucial matters, such as (forgive me) the Gaeltacht, Sport and Heritage. The order of priority of these affairs is a subjective matter, but the priorities of a government building an economy more or less from scratch should be unanimous. A solid department of finance is key, backed up by departments responsible for employment, education and transport. It reminds me of the exercise carried out in team-building weekends, and late-night college drinking sessions, where four people try to form a ‘table’ with their bodies. Each person has both feet on the ground, with their knees bent, and lies back on the lap of person behind them, who is at a right angle. This requires all four people to lie back simultaneously in a square, and if one person falls, the group falls. (I’m sure there are many appropriate engineering analogies relative to this issue, but this is the one that always comes to my mind.) The development of a country requires the simultaneous establishment and success of sources of employment, a functioning taxation system, infrastructure to facilitate transport, and education to further the qualifications of the workforce.  So this is the first page of every economics textbook, what of it?

 In overseas aid, particularly post-disaster, job creation is an area that is often neglected. The scale of the disaster in Port-au-Prince was extrapolated by the circumstances that lay in the city long before any seismic plates had shifted. Extreme poverty, and lack of infrastructure, drove people to the city searching for an income, meaning they lived in condensed, poorly constructed buildings, often over-crowded, in a dense semi-arrangement, such as the one on the steep slopes of Petionville, a suburb of the capital that was worst hit by the quake. Whilst jobs are currently being created by the aid influx, particularly in the area of construction, these are not sustainable. If and when the effort to ‘rebuild Haiti’ is completed, the number of jobs in construction will dramatically drop off. And a country cannot sustain itself solely on income tax from construction work. Right now in Haiti, roads are being constructed, and schools are being constructed, both at a rapid rate. These projects assist in addressing the issues of infrastructure and education, but job creation is relatively stagnant, outside of construction.

So why, you might ask, should we be worried about job creation in Haiti, when the live register at home is beginning to look like the 01-area phone book? Whilst we haven’t seen unemployment like the current situation since the 1980’s, the current level of unemployment in Haiti has not been seen in Ireland since before the creation of the State. Two thirds of people here have no formal employment. To go back to education briefly, the training of the workforce has increased as of late, again most notably in the area of construction, but third level education is still lagging behind. It’s like trying to dig yourself out of a hole with no training, formal or informal, in the usage of shovels.

The international community, in conjunction with the incoming government, needs to address the issue of unemployment, while it still has a presence here. Examples of projects that could be carried out include the chicken coop project UCDVO has funded previously, and about which I wrote last month. As farming is what most of the Haitian people have been doing to keep their families in food for generations, it is an area that they are already more than competent in, or at least have experience in. These sustenance farmers need assistance in transforming their farms into businesses. There are already some projects underway that I have heard about, with the goal of setting up the export of mangos to the US. Despite the abundant crop of mangos in Haiti every year, they are only a seasonal fruit, and cannot provide year-round sustainable income for farmers, and so there is a need to research and develop other potential markets for export, and not just to the US. There is also a need to address the issue of the importing of foodstuffs from Asia. However, given the minute crop of rice in Haiti relative to the demand, this does not look like it will change any time in the near future. Given Haiti’s tropical climate, it lends itself to the cultivation of many goods that might not fare well in other climates, and the export of such goods is an area where Haiti could potentially move to the fore, internationally.

Other areas in which Haiti’s export trade has previously blossomed are clothing and textiles. While undoubtedly, the wages of workers in such areas would offend most people, it is an area which could be regulated, and developed in cities other than Port-au-Prince. This could, crucially, balance out the number of workers in the agricultural sector. There are currently textile factories in Port-au-Prince, and the owners of these could be given tax incentives to open further operating plants at other locations.

Until the next generation of educated Haitians comes into the workforce, the majority of jobs will need to be in labour and manufacturing. When the next generation of educated Haitians come into the workforce, there will need to be an incentive for them to stay. In a country where international trade is increasing, there will always be a need for people educated in the areas of business, IT, languages, and engineering, to begin with.  However the initial steps need to begin now, while the international aid agencies are sending qualified people into Haiti.

There will come a stage when the aid cash stops flowing into Haiti altogether. It is our hope that by the time that stage comes, these four pillars of stable economy will be established. From here, the government can take it upon itself to pick more narrow, direct priorities to share its attention. These will obviously differ from (forgive me) the Gaeltacht, etc. To go back to the analogy of the ‘four-person human table’, this stage corresponds to the point where everyone else argues about which people the newly formed table could support, if they sit on top.

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