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Having established the theoretical possibility of creating 500 million jobs and having identified some of the major trends and opportunities that support accomplishment of this goal at the present time, the Summit must turn to the task of identifying specific recommendations for implementation by participating countries and agencies. In formulating recommendations several criteria should be kept in mind.
Need for specificity
In formulating recommendations to achieve the global goal of creating 500 million additional employment opportunities, the Summit will have to address a very wide range of initial conditions in countries at different stages of development and with different historic, geographic, demographic and political profiles. One possible approach is to prepare sets of recommendations appropriate for different groups of countries—developed nations, transition economies, newly industrialized nations and other developing countries. Of course, country-to-country differences would still require further differentiation: even between the relatively homogeneous European Community, policies and performance vary to widely to cover all cases with a common formula.
This paper does not take this approach. Instead it focuses on common underlying factors or principles that influence employment generation in every country, regardless of its level of development and specific local context. It points to basic social forces that can be activated by every country to accelerate the process of development and employment generation. It then illustrates how some of these principles can be applied in different contexts. If the Summit were to follow this approach, the preparatory task would be to formulate a complete list of such strategies, illustrate how specific countries are currently performing, and assess the potential benefits of raising performance on each strategy. It could further develop the specificity of the recommendations by examining the application of each principle to different levels of development and then leave it to each individual country to identify the strategies most appropriate for its context and the level of implementation possible in the local context. In essence, the Summit would provide a set of tools that policy-makers and other agencies can wield to achieve full employment.
Criteria for Recommendations
- Catalytic Measures to Release Social Initiative: Special employment-oriented programs and projects that generate a quantifiable number of new job opportunities in specific fields of activity, occupations or locations are very appealing, because they stipulate a specific sets of actions that can be taken by governments or other agencies and because their effectiveness can be monitored in a local area. However, in most instances, such programs remain, at best, isolated successes that are undertaken at high cost and fail to multiple beyond the initial program area or have significant impact on the wider population. Government-sponsored or directed programs can be successful when they are conceived and implemented as catalytic measures, to the extent that they lead to widespread imitation and multiplication by private initiative. Emphasis should be placed on strategies that will stimulate greater employment generation by the society-at-large by accelerating the rate of development in different fields. Replicability and self-multiplication are critical elements of a successful strategy. Where specific programs are proposed, it should be demonstrated that the overall impact of such programs can make a significant contribution to addressing the overall problem.
- Role of Governments: Government does have a role in employment generation, but that role lies principally in the formulation of public policies, development of infrastructure, dissemination of information, and support for education and training.
- Strategies Tuned to Different Stages of Development: Maximum social response will be achieved at the point society is already prepared and awake to an emerging opportunity that represents the next evolutionary step in its progress. Recommendations will necessarily have to encompass a very broad range of different circumstances and strategies applicable to countries in different stages of development.
- Strategies Covering a Broad Range of Expanding Social Activities: Strategies should tap the entire gamut of employment opportunities from agriculture, agri-business and housing to health, education and I.T.-enabled services, focusing in each instance on activities at the next higher phase of development appropriate to each geographic region and stratum of society.
- Strategies for Different Types of Agencies: Recommendations should also be attuned to the capabilities and activities of a very broad range of agencies, ranging from local and national governments and international institutions to businesses and non-governmental organizations.
Out-moded Approaches to be Avoided
The Summit will be most effective if it eschews out-dated notions of development strategy that have proven ineffective in the past. The following principles can serve as useful guidelines:
- Welfare and public works programs may serve to alleviate the short-term distress resulting from inadequate job opportunities, but cannot serve as an effective basis for permanent solutions.
- Foreign Aid is not a viable recipe for meeting the world’s employment needs. Emphasis on aid and charity should be replaced by emphasis on investment, empowerment, local initiative and full utilization of all available social resources within each society.
- Subsidies may be effectively employed under some circumstances as incentives to promote the introduction and spread of new activities in society, but prolonged subsidization of out-dated modes of production or employment only postpones the inevitable decline of these activities and diverts investment of scarce resources in more promising fields.
Types of Strategies
These recommendations will fall under a variety of different headings:
- Broad strategies that will accelerate economic development, thereby increasing the rate of employment generation.
- Specific strategies to accelerate development and employment in specific regions, countries and sectors of the economy.
- Public policy measures that will shift the focus of regulations to increase their positive and reduce their negative impact on employment.
- Government programs that will act as catalysts to accelerate real and permanent job creation in the economy, rather than short term programs with only temporary impact.
This paper illustrates of few representative types of recommendations under each of these headings.
BROAD DEVELOPMENT STRATEGIES
In discussing a conceptual framework for employment generation, we said that employment is a natural outcome of social development and that measures which accelerate the process of social development can generate large numbers of permanent new jobs. Global experience over the past five decades has demonstrated the positive contribution of a wide range of factors that increase the velocity of social transactions and the rate of social development, including:
- Peace: Strategies to promote global security, regional and domestic stability.
- Democracy: Strategies to increase the practical expressions of political, economic and social freedom in society.
- Education: Strategies to increase the quantity, quality, ease of access and relevance of general and vocational, formal and non-formal, public and private education at all levels of society in all countries.
- Training: Strategies to identify skill gaps and impart training to expand the availability and upgrade the quality of employable skills, with special focus on occupations where demand is growing and shortages are projected.
- Information: Strategies to increase access to and the quality of all types of information relating to human rights, governmental regulations and programs, business opportunities, markets and prices, technological advances and applications, financial resources, non-governmental activities, etc
- Organization: Strategies to upgrade the productive capacity of all aspects of the social organization in order to support more rapid development and improve the quality of life.
- Telecommunications: Strategies to increase access to and reduce the cost of telephone and data communications, domestically and internationally, which serve as essential infrastructure for participation in the emerging global information-based economy.
- Transportation: Strategies to increase the speed and quality and reduce the cost of all types of transportation for people and goods, especially road transport in rural areas.
- Technology diffusion: Strategies to increase the dissemination and adoption of improved technologies to expand the range of economic activities and enhance their quality, productivity and profitability.
- Investment & Credit: Strategies that increase access to capital for investment in productive activities at all levels and in all fields of economic activity, including micro-credit, hire purchase, leasing, mortgage, and gold deposit schemes.
- The ten categories listed above are representative rather than exhaustive. Each encompasses a broad field in itself. Many are the subject of intensive study and initiative by specialized agencies. A selective effort should be made to identify and concentrate on specific recommendations under these headings that will have maximum impact on youth employment. Several illustrative examples are given below:
STRATEGIES -- ILLUSTRATIVE EXAMPLES
- Improve quality of pre-school & primary education: The demand for better quality early childhood education is soaring in both developing and developed countries, because it is recognized as so important for later academic and career achievement and because more and more women are becoming working mothers. An experimental program for early childhood education in South India has demonstrated that average children can progress academically at least two or three times faster than the norm prevalent in public schools when student-teacher ratios are reduced from current levels of 1-60 down to 1-20 or below, the norm in many developed countries. The preschool student-teacher ratio is currently 3.4 times higher in East Asia and 4.8 times higher in South Asia than it is in Europe. For primary school, the level in Asia is 50% higher than in Europe and in Africa it is double the European level.
In order to deliver quality education to young children, student-teacher ratios should be halved in most developing countries. Such a change would open up millions of employment opportunities for educated youth, especially for women, who represent 94% of pre-school teachers worldwide. Better pre-school and primary education can have an enormous impact on the overall rate of social development and job creation in the future. Reducing student-teacher ratios in pre-schools and primary schools by 25-50% would create an additional 8-15 million jobs worldwide and contribute significantly to improvements in the quality of primary education, which touches the largest proportion of youth.
- Raise minimum standards for education: Most countries have established mandatory minimum levels of education for their citizens, though the required level and degree of enforcement vary widely. Among African countries, the range is 4 to 10 years of compulsory education with an average of 7 years. It is eight years in India and nine in China. By comparison, the compulsory minimum in among developed nations ranges from 10 years in the USA and 11 in UK to 12 in Belgium and Germany and 13 in Netherlands. This partially accounts for the very low level of secondary school enrollment in Sub-Saharan Africa (26%) and South Asia (45%) compared with the world as a whole (60%) and developed countries (100%).
Higher levels of education increase productivity, raise personal expectations and consumption, and generate additional jobs in education as well as other fields. Lack of qualifications and inadequate and out-dated skills commonly characterize the long-term unemployed. There is a strong positive correlation between higher education and higher incomes. The employment rate for college graduates in the United States is 75 percent versus 48 percent for high school drop¬outs; and at the height of the last recession, 3.2 percent of col¬lege graduates were unemployed compared to 11.4 percent of high school drop-outs. Only 57 percent of 18 year olds in OECD countries are pursuing formal education. The Japanese built their highly competitive workforce by raising the educational attainments of the bottom half of its primary and secondary school population. Raising the minimum compulsory level of education, as several European countries have recently done, increases the qualifications of new job seekers, increases the number of jobs in teaching, and postpones the entrance of young people into the work force. Raising the statutory and enforced minimum by two years in every country could generate tens of millions of additional jobs worldwide and prepare today’s students for more demanding, productive and attractive employment opportunities in the coming decades. This strategy is as appropriate to developed countries with comparatively high minimum levels as it is for developing countries with low levels, because in each case the demands for more educated workers continue to increase rapidly.
- Funding further investment in education: While every country will concede the value of upgrading the quality and quantity of education, not all will agree that they have the financial capacity to do so. Public investment in education varies widely from country to country. Among the advanced industrial countries, it ranges from a low of under 4% up to a high of nearly 7% of GDP. Among developing countries, the range is from under 2% to a high of over 8%. For most countries in both categories, there is need and strong justification for increasing total investment in education. For many of these countries, the best trade off will be to redirect resources from defense spending to education. In addition to increasing total allocations for education, there is also scope for increasing utilization of allocated funds in some countries. At the end of every fiscal year, education departments in India scramble to find ways to spend allocated funds that have not been utilized and will otherwise have to be returned to the treasury. Policy can be formulated to channel all of these unutilized funds into pre-approved programs designed to upgrade quality of education, such as investment in computers.
- Entrepreneurial opportunities: Over the past three years, the Internet has become an important means for recruitment of new employees. By the end of 1999, 10% of jobs in the USA were being filled by means of on-line recruitment. The internet is a cost-effective system for enabling employers and job seekers to match needs and capabilities across long distances. A similar system can be developed to promote entrepreneurial activities by young adults. The system should provide reliable information on attractive business opportunities together with information on the market, technology, financial, human and organizational resources needed for success. Databases can be compiled at the national level with the participation of business associations, universities and government agencies. Increasing the rate of new business start-ups can create tens of millions of additional jobs.
- Information broadcasting: In most developing countries, information about development and employment opportunities spreads slowly and inaccurately to other people and regions for which it would be very meaningful. Cashew farmers in one Indian village obtain yields ten times higher than farmers in villages just ten miles away, because reliable information about their highly successful cultivation practices never spreads beyond the local area. Similar examples can be drawn from every field of economic activity. Government extension services, university outreach programs, business associations and NGOs fill in the information gap to a limited extent, but leave many important types of commercially useful information and many geographic poorly covered. Special agencies can be established to conduct studies to identify these information gaps and unpublicized success stories, to formulate reliable information packages and to project them to the population through a variety of mechanisms.
- Innovate Organizationally: Creation of new types of social systems and organizations can create markets and jobs in many ways. Significant improvements in the competitiveness and growth of businesses in developing countries can be achieved by raising organizational efficiency and dynamism through better internal management practices and better commercial systems in the marketplace. The establishment of manned pay telephone booths in India during the 1980s is an example of a highly successful organizational innovation that has generated self-employment for tens of thousands of people and made telephone services readily available to the masses that previously lacked access. The same system has subsequently been expanded to provide fax and internet services. A comprehensive study of successful social systems and institutions in both de¬veloping and developed countries should be conducted to identify those that can be transferred and adapted to local conditions in or¬der to accelerate development in each field of activity.
- Computerization: The importance of computer technology for communication, education and commercial activities is now widely recognized, resulting in a their rapid proliferation in business, government, schools and homes. Computers provide access to enormous amounts of information and dramatically increase individual productivity. In earlier decades, there was widespread concern that the spread of computers would significantly, perhaps even drastically, reduce employment opportunities. Recent experience indicates that just the opposite is true. While the introduction of computerized robots in a factory or ATM machines outside a bank, may in fact eliminate jobs that were previously carried out by people, this direct impact seems to be more than offset by the catalytic effect of computerization, enhancing the speed and increasing effectiveness of any activity and, thereby, promoting both quantitative expansion and qualitative development of the activity. In this sense, computerization is a highly effective means for increasing the velocity of social transactions and the rate of employment generation in society. Studies of the US automobile industry have shown that the impact of automobile technology on employment extend far beyond direct employment in car manufacturing companies. The industry has contributed to tremendous expansion of virtually every other industry, including tourism, hotels, restaurants, amusement parks, whole and retail trade, manufacturing and agriculture. Thus, about 9 percent of the entire US workforce is employed in occupations directly related to automotive manufacture, sales and services, road construction and maintenance, and transport of freight and passengers. While much more research is needed to accurately assess the multiplier effect of computerization on employment in the wider economy, efforts to accelerate the proliferation of this technology can make a significant contribution to employment generation.
Investment & Credit Strategies
- Complementary or local currencies: When we hear the word currency, almost all of us think of the forms of money created by national governments or central banks. However, there are many other types of currency in circulation that serve a similar purpose yet are created by local communities, both public and private, rather than central governments. By recent count there were nearly 3000 such currencies being utilized in countries around the world. We refer to them as complementary currencies because in most instances they serve a complementary rather than competitive function alongside the national currency, filling in where the national monetary system is not fully effective. Every society possesses a wide range of resources that are not fully utilized under normal conditions because there is no demand for these resources in terms of the national currency, i.e. no one has the money to pay for them. Complementary currencies give value to resources that the national money system does not assign value to, such as the knowledge and skill of most people in retirement. It is an extension of the monetary system that can tap unutilized social resources and has the potential to grow to 10 or 20% of the total present money supply.
“There are over 2,700 complementary currency systems operational in the world today, most of which have sprung up to generate local work in high unemployment areas. In the US, 39 communities have followed Ithaca, NY, in creating their own paper currency, redeemable only within the community. More than 400 communities in the UK have started their own electronic complementary currency system called the Local Exchange Trading System (LETS). Similarly, in Germany they are called Tauschring, in France Grains de Sel, and several hundred such grassroots projects are now operational in these countries as well. All of these systems will be explained in detail later. These initiatives are often treated as marginal curiosities by mainstream media and academic circles. However, in New Zealand, Australia, Scotland and 30 different US states, regional governments have been funding the start-up of such systems because they have proven effective in solving local employment problems. In New Zealand, the Central Bank has discovered that complementary currencies actually help to control the overall inflation in the national currency.”
'A Complementary Scenario'
- Any community of people with confidence in themselves and each other can create money of this type. While most of these currencies are utilized on a local and modest scale, the same principle could be applied to partially fund very large-scale activities as well. A quarter century ago the Garland Canal plan to link the seven major rivers of India was seriously promoted as a means to dramatically accelerate national development. The plan would have created tens of billions of dollars of additional GDP for the country from agriculture, power generation and cheap inland transport, but Government of India never took it up because it perceived that the cost in excess of $15 billion was far beyond its means. The Government could consider a possible scenario for financing the project by a combination of traditional and complementary currency. The government agrees to “sell” lease rights to public lands situated along the canal at five times their previous market value (their value enhanced by access to water transport and irrigation) in exchange for materials and services needed to build the canal and to raise sufficient cash to cover the interest charges on the bonds. It is projected that the canal will stimulate a 10% increase in the country’s GDP and contribute an addition 10% to the Government’s annual tax revenues, sufficient to retire the bonds within the ten years. Rural workers living along the route of the canal can offer their unutilized labor for the massive construction effort. All those who contribute labor, materials or land for the project can be partially compensated in the form of complementary currencies redeemable in terms of irrigation water, power and water transport rights on the canal. The project creates 10 million new jobs and $30 billion of additional GDP. The increased demand for cement and steel enables the cement and steel industries to utilize their underutilized capacity. Lands adjacent to the canal are converted from dry into irrigated fields with twenty times greater value. Subsidiary activities associated with the project generate greater production even before the canal is operational. This development is made possible by the country’s faith in its own future.
- Micro-financing: Micro finance agencies have proven extremely effective in extending credit to the poor, especially to women, for self-employment and commercial activities. Survey responses from 925 out of the more than 1500 micro-credit agencies operating around the world in 1999 revealed that they are currently serving more than 22 million client families worldwide, of which 95% are in developing countries. More than 50% of these clients are from families living below the poverty line. Growth of micro-financing has been very rapid over the past two decades. The agencies surveyed project that a more than 300% growth in terms of families being served by year 2005. Intensive efforts should be taken to extend successful practices in micro-financing, not only in developing countries but among poorer communities in developed countries as well.
India has recently taken a pioneering initiative to mainstream and spread micro-credit that should be applicable to many other countries. In 1999 the Reserve Bank of India ser up a Micro Credit Special Cell to suggest measures to the commercial banks for increasing the flow of micro credit. Presently small borrowers (less than $500) represent 89% of the commercial bank loans but only 12.5% of the value of loans outstanding. Segregating small borrowers into new entities can dramatically increase the efficiency of the commercial banks while increasing access to small borrowers. He intention is to channel more of these funds from the banks through micro credit subsidiaries, NGOs, self-help groups and other intermediary organizations. In 2000, the Government has targeted to extend support to 100,000 self-help groups throughout the country.
- Bank financing: In most developing countries, the majority of employment opportunities are generated in the informal sector, but commercial banks are poorly equipped and disinclined to lend to small clients who lack immovable assets to secure their loans. Non-banking financial institutions (NBFIs) providing consumer credit and industrial leasing may fill this void to some extent through their greater capacity to effectively deal with small borrowers, but often the NBFIs also have restricted access to bank finance. In India, for example, 60% of national savings is generated by businesses in the informal sector, including hotels, restaurants, wholesale and retail businesses, yet they have very little access to bank funds. Central Bank restrictions also limit commercial bank lending to NBFIs. Thus, growth of employment in the informal sector is limited by lack of access to institutional resources. Stricter government regulation of the NBFIs would enable banks to more accurately access their credit-worthiness, increasing their access to funds and their role as an effective intermediary between the banks and the informal sector.
- Analyze job impact of government policies: Almost every government policy has a direct or indirect impact on employment. Often the relationship is not recognized or intended. An analysis of the impact of major public policies on employment at the local, state and national level can result in avoidance or removal of significant legislative and administrative road-blocks to job growth. As environmental impact assessments are now routinely required before new policies are put into effect, governments should require employment impact assessments for new pol¬icy initiatives prior to adoption. The purpose of these assessments should be to reduce government restrictions on job creation, rather than to impose greater restrictions in order to protect existing jobs, an approach that retards social development by artificially preserving the status quo.
- Voluntary part-timism: Increasing the flexibility of working hours will serve the interests of both businesses and workers. Encouraging voluntary part-timism by removing the artificial barriers to job-sharing created by employment laws, social security provisions, administrative procedures and trade unions would raise the morale and productivity of those who prefer to work less, while creating openings for many who are now without jobs. Proportionately reducing working hours and salaries can spread the existing work more evenly over more people. Evidence suggests that reduced working time can raise productivity significantly. Work or job sharing is not an ultimate answer in itself, but it can have beneficial short term impact, allowing time for longer term measures to take effect. As a minimum, governments should remove the artificial barriers to job-sharing created by employment laws, administrative procedures and trade unions. Social security tax systems should also be modified to remove the in-built bias that increases the taxes of those who hold multiple, part-time jobs, rather than one full-time job. Such constraints limit part-time jobs to around 10 percent of the total in Belgium, France, Italy and Spain compared to around 25 percent in Britain and Denmark.
- Modify tax policies: The present income and payroll tax system in most countries raises the real cost of labor relative to capital, and thereby discourages job creation. It heavily taxes people for working, which indirectly raises the cost of labor and reduces the number of jobs. At the same time the system provides investment and depreciation incentives that encourage industry to shift from labor intensive to capital intensive modes of production. Much of the shift from labor to capital may not be economically justified were it not for the in-built bias in this system. Tariff policies also influence employment levels, both domestically and internationally. Low levels of taxation on the depletion of non-renewable energy re¬sources in countries such as USA is another distorting influence that makes machine-driven activity more cost effective than it would otherwise be.
- Industrial policies: The attempts of government to promote or restrict the development of specific industries can have unintended negative impact, even on growth and employment of the very sectors they are intended to support. Often such policies are at least partially motivated by efforts to raise government revenues without full regard for their impact on employment. In India, the textile industry accounts for 16% of GDP, 30% of exports, and 40% of industrial employment—about 20 million direct jobs in factories not including indirect employment in trade and transport—plus on-farm employment cultivating 20 million hectares of cotton. As important as this sector is, its growth is constrained by government policies and bureaucratic bottlenecks. Tax policies and licensing restrictions imposed to promote development of small scale textile units retard reinvestment and modernization of the large mills, while the tax exemption for small units prevents the growth of these businesses into units large enough to qualify for bank finance for investment in more sophisticated equipment. Many countries have successfully utilized industrial policy to promote development of specific industries. Unfortunately, experience shows that once partiality is shown to an industry, it is very difficult for government to withdraw the privileges when they are no longer necessary or even conducive to economic development. While industrial policy may be quite helpful for stimulating growth of nascent industries, it often used to sustain or subsidize industries that are declining or uncompetitive, thereby reducing the incentive for business to adjust to changing economic realities. Every country should re-evaluate policies that currently support specific industries to assess their impact on employment growth.
SECTOR-SPECIFIC STRATEGIES FOR DEVELOPING COUNTRIES
Commercial Agriculture and Agri-business
- Studies of agri-business potential: Developing countries with a large section of the population still engaged in agriculture should conduct studies on the model of ICPF’s Prosperity 2000 to identify opportunities to stimulate employment generation through higher crop productivity and links to downstream agro-industries and agri-businesses. Special emphasis should be placed on development of rural infrastructure for storage, cooling, processing and marketing capabilities to increase the value-added from agricultural crops and extend the reach of marketing activities.
- Raising agricultural productivity: Raising farm output has a direct effect on rural employment and incomes in the poorer developing countries where most agricultural harvesting and handling operations are performed by manual labor. It also has a corresponding multiplier effect on non-farm employment in processing, transport and distribution, which in countries such as India can be approximately one for one or even greater. A range of proven strategies can be utilized to raise agricultural productivity on wide variety of crops.
Soil testing and soil enhancement for micro nutrients that are not replenished by conventional chemical fertilizers has been shown to double or triple farm yields and income under a variety of conditions in India. The quality of soil testing facilities may need to be upgraded to perform these tests. A detailed program has been drawn up and demonstrated in India by California Agricultural Consulting Services.
Government agricultural extension services, research stations and agricultural colleges in poorer developing countries often play a limited role in dissemination of best practices because of lack of clear targets or administrative discipline. These agencies can be required to demonstrate achievement of specific targets for higher yields and profitability on farmers’ fields rather than under non-commercial conditions on government property.
- Farm Schools to create agricultural entrepreneurs: In many developing countries, agriculture is a low prestige occupation. Even in areas where the average income earned in agriculture far exceeds the average salary level in government and the private sector, educated youth are choosing in large numbers the prestige of salaried employment in urban areas to managing the family farm. Agricultural colleges often become unwitting accomplishes by educating rural youth for employment as agricultural extension officers and bank officials. Thus, the best talent from the rural areas is being continuously drawn off from the sector which offers them and the nation the greatest opportunities. For example, in India cultivation of horticulture crops on a small 5 acre holding can earn a net income of $5000-10,000 per annum, while the salary of an agricultural graduate in a government or corporate job averages less than $2000.
To counter this tendency, programs can be formulated to actively encourage rural youth to become agricultural entrepreneurs. Agricultural colleges and universities can give preference for admission of students seeking to become professional farmers. Farm schools can be established in rural areas on lands leased out from farmers to provide on site practical training for farmers on advanced agricultural methods. These schools can be financially self-sufficient since they will produce profitable commercial crops as part of the instruction process.
IT Enabled Industries
- Public policy: Developing countries should draw up comprehensive strategies and policies to promote and accelerate the development of Information Technology-Enabled Industries. Areas requiring special attention include cyber laws to enable e-commerce to flourish and protect consumers, deregulation of the telecom industry to spread access to internet connectivity and attract private investment, investment policies related to foreign acquisitions by firms in developing countries, reform of capital markets to encourage venture capital funds and promote new enterprises in this field, procedures to reduce bureaucratic hurdles, revision of labor laws to increase flexibility, tax policies to encourage rapid growth of this sector, elimination of tariff barriers on computer equipment and peripherals, special entrepreneurial training programs, and establishment of technology parks fully equipped with broadband, satellite telecom linkages to foreign markets.
- Rapid population growth and urbanization have severely aggravated housing shortages and pushed up real estate prices in countries around the world. In India, for example, the current housing shortage is estimated at around 40 million units. Even this enormous figure does not fully take into account the millions of people who live in substandard, crowed, unhygienic conditions in urban slums. Housing is a basic human need and powerful motivating force for development. The aspiration to own a home is shared by people in every country and at all levels of society.
Expansion of this industry can generate very large numbers of jobs in developing countries. Inadequate financing is often cited as the major reason for inadequate growth in this sector. Yet, housing is also one of the few assets that almost always appreciate in value over time, providing reliable security for lending to even highly-leveraged home owners. There is enormous scope for increasing both domestic and foreign investment in this sector by modifying government regulations that presently restrict or discourage such investments. The securitization of housing mortgages that began in the USA and has spread to many countries is an example of a financial innovation that can vastly expand investment in this housing. Micro-lending and complementary currencies can also be very effective means to harness locally available material and human resources to expand housing. A study should be undertaken of successful policies and programs to promote housing development in different countries, so that appropriate packages of recommendations can be presented at the Summit.
STRATEGY OF STRATEGIES
The Summit may succeed in drawing up a very extensive list of potentially beneficial strategies that can be implemented locally, nationally and internationally to generate 500 million additional employment opportunities or even more. However, critical decisions will still need to be taken to determine which strategies can be implemented most successfully in each country and region of the country at any given time. Therefore, the Summit should also present an overall strategy that will help decision-makers determine the most appropriate package of strategies for their specific area, the priority to be given to each, and the sequence of their implementation. This is what we refer to as the strategy of strategies.
In the course of its development, every society passes through a progression of stages and sub-stages from less to more advanced levels. The early stages form the essential foundation and basis for greater, more sophisticated developments. This principle is true both for development of the society as a whole as well as for development of specific geographic regions and fields of activity within the society.
This progression can be illustrated in the field of agriculture, which has passed through a natural evolution from rain-fed subsistence cultivation to irrigation by river water, man-made irrigation tanks, and wells to tap groundwater resources. These advances have been followed by introduction of various levels of mechanization, as well as hybrid seeds and fertilizers to increase soil fertility and plant productivity. Sprinkler and drip irrigation are later innovations that have dramatically increased the productivity of water resources in agriculture. Biotechnology is now being applied to advance agricultural development even further. This progressive development of on-farm practices has been made possible by and has stimulated corresponding advances in related fields. As agriculture became more productive, infrastructure facilities such as roads, storage and cold storage facilities, soil labs, veterinary and extension services, weather forecasting, market forecasting, research institutes, training and educational programs have been expanded and upgraded. Increasing farm productivity has led to the introduction of commercial crops, processing plants, links to downstream industries and to global export markets.
A similar gradation exists in every field. India’s recent accomplishments in the software industry are based on a long series of prior stages, including the education of large numbers of English speaking college graduates; the opening of world class technology and engineering universities in the 1950s that generated a huge surplus of engineers; the sending of large numbers of people for higher education and employment in the USA and UK, where they were exposed to the latest technology and demonstrated a high level of competence in this field; establishment of firms to place Indian software professionals on temporary work assignment in the USA; the return of well-educated and experienced Indians from abroad to found new software export companies in India; the proliferation of software training institutions to train hundreds of thousands of graduates in a wide range of computer-related skills; the liberalization of computer imports; opening up of the telecommunications sector for private and foreign investment; software export promotion incentives; and so forth.
Regardless whether the field is agriculture or computer technology, different countries are at different stages of progression. There are also considerable differences between regions within countries. The most appropriate strategy for any country or region will be to identify precisely where it currently is on the development progression in each specific field and to identify and implement measures that will advance activities in the field in a logical sequence to the next higher stages.
This does not mean that every developing country needs now to pass through the entire sequence of steps that nations have earlier passed through in each field, since access to knowledge, technology, organizational know-how and markets is far greater today that in the past. Nor does it imply that the time required for each stage of progression today need be similar to what it was in the past. The world is much better prepared for rapid change today than during any earlier period. However, it does mean that there are essential prerequisites for each further stage of advancement and that the maximum progress will be achieved in the minimum time by identifying and fulfilling these conditions. The more conscious a society becomes of the essential stages and conditions for the development process, the more rapidly it can traverse the ground that others have already passed over, abridging the time and avoiding the errors and problems of those who have come earlier.
The goal of generating 500 million additional employment opportunities within the coming decade may have been inconceivable at any time in the past. Even now, many may find it difficult to believe this goal is achievable. But, so too were many of the world’s recent accomplishments in different fields before and even after their realization. The end of the Cold War and imminent threat of nuclear annihilation, the peaceful unification of Europe, and global spread of the Internet are striking recent instances of humanity’s heightened capacity for rapid advancement. Never before has world society had the power for such a significant undertaking, one that can provide greater economic security for vast sections of humanity. The very fact that the YES initiative has been conceived and set in motion is an expression of an enhanced capacity for creative thinking and constructive action. In an age when human rights and needs are continuously reaffirmed in the international arena, it is easy to mistake the call for full employment as one more in a long list of unfulfilled and, perhaps, unachievable human aspirations. But that would be an error of judgment equivalent in magnitude to that to which many Europeans fell prey a few centuries ago when they looked upon the call for political democracy as utopian idealism or idle fancy. In retrospect it is now evident that the political emancipation of the common citizenry from the exercise of arbitrary power and tyranny by monarchical rule, which the advent of modern democracy has brought about, represents that indispensable foundation for humanity’s enormous social progress over the past several hundred years. Political freedom has liberated human thought, aspiration, energy and initiative from the oppression of physical power. The principle of might is right has largely given place to the principle of right is might in the governance of advanced democratic nations. But political democracy can only be considered the first step, the first of four great freedoms that are necessary to fully liberate the power of the human spirit for the fulfillment of life on earth. Political emancipation must be succeeded by an economic emancipation that will permanently abolish the insecurity and threat of deprivation that still looms like a specter over the lives of large sections of humanity. No amount of technological development or prosperity can by itself ensure economic security for all. This second great freedom can only be brought about by the proclamation and enforcement of the right of every citizen to a sustainable livelihood, which means a commitment and dedication of every society to the goal of full employment. The sense of peace and security generated by such a commitment will release a hitherto unimaginable outpouring of human energy, creativity and accomplishment in all fields of activity. If instituted now, it can bring within the century just beginning greater progress for humanity than has been achieved during the entire millennium that has just come to a close. Political and economic emancipation together constitute the necessary foundation for two higher levels of human freedom and fulfillment. First, it will make possible a psychological emancipation of the human individual from oppression, confinement and conformity to the ruling ideas, values, thoughts, feelings and behaviors that the dominant majority in every society seeks to impose as a subtle form of control and domination over itself and everyone else. Psychological emancipation will give rise to a society of thinking, creative individuals capable of conceiving and realizing in life ideals we dare not believe in or even dream of today. And finally, this third freedom will make possible a fourth, a spiritual emancipation of humanity from the limitations and oppression of the human ego and a discovery of the spiritual infinity which is our true source and destiny.
Commitment to full employment
Social development is a process of self-conception by which the collective progressively realizes in action new ideas and values that it has previously embraced in thought. The insistence on affirming the human right to assured employment opportunities does not issue merely from an idealistic call for a social justice or from sympathy with the economic insecurity and profound physical suffering of those who live in physical deprivation, though both justice and human sympathy demand nothing less. Rather this insistence arises from an understanding that this affirmation is an inevitable next step in the natural course of human development, which sooner or later the human community will demand and take by force if it is not extended by consent.
In retrospect we take for granted the previous steps in this evolutionary progression of humanity, steps which at the moment they were proposed seemed utopian, unrealistic or even anathema to many who were called upon to take them. The extension of property rights and voting rights to the un-enfranchised majority in monarchical Europe, the abolition of slavery in North America, the end of West European imperialism and colonial empires around the globe, the elimination of military rule in Latin America and totalitarianism in Eastern Europe, the eradication of social ostracism, religious persecution, untouchability and caste privilege, and the global battle to eradicate famine, illiteracy and epidemic disease are inevitable steps from humanity’s primitive, feudal past in which a small minority possessed all the privileges at the expense of the unpossessed majority to a free and prosperous future in which every individual is not only free to strive but empowered to achieve and enjoy the fruits of freedom and prosperity.
Yet, at the moment these rights were first proposed, they were vigorously denied or scorned by those few who enjoyed the security and privilege of prior possession. A landed aristocracy ridiculed the notion that the masses could or should choose their own representatives, formulate their own laws and govern themselves. An educated minority derided the idea that every citizen could or should acquire literacy and book knowledge. But these and so many other apparently unrealizable and, perhaps from the perspective of an earlier period, undesirable goals have been accepted in principle as the rightful heritage if not yet the concrete possession of all humanity. The process of this evolutionary progression is well documented and its lessons can readily be drawn. Every society has the option of utilizing one of two modes of progress, evolutionary or revolutionary; either to accept the natural and inevitable course of human development that is gradually extending greater and greater rights and privileges to all human beings or to resist the inevitable course until the growing social pressure of evolutionary force explodes and wipes out the old order. While both courses are possible, they are certainly not equally desirable. The first can result in a very rapid and smooth advancement leading to a far higher level of material prosperity for everyone. The second may easily result in a more or less prolonged period of social disorder, insecurity and destruction of the old, before the new can be built on a stable foundation. The Summit should project the evolutionary pathway to a more peaceful and prosperous future, reveal the great magnitude of the opportunity that exists for rapid progress at this time, and provide a map for those willing to convert this opportunity into reality.
Reference This paper was originally prepared by The Mother’s Service Society, Pondicherry, India for the Youth Employment Summit