[kictanet] [strategic inefficiency is what creates a large number jobs] Jobs fall to 6 year low despite GDP "boom".

[S.M. Muraya]

Last night, on Citizen TV, there was a back and forth discussion between a
Senator and the Health CS, in which BOTH were addressing misinformation
(leading to unused if not misused funds).
As it were, both were/are victims of misinformation.

This could be simply addressed if "cottage" industries such as LOCAL Web
agencies could be easily procured (paid and empowered) to help provide *access
to information* (up to date wb portals:)

On Fri, Apr 26, 2019 at 4:50 PM Patrick A. M. Maina via kictanet <
kictanet at lists.kictanet.or.ke> wrote:

> Dear listers,
>
> In order to create jobs, the government should move away from policies
> that focus on increasing efficiency to those that are strategically
> inefficient.
>
> Examples:
>
> 1. SMEs, e. g. cottage industries, are inefficient - compared to larger
> factories, but they can create exponentially more jobs with less tax
> breaks. Most SMEs also spend all their revenues in Kenya, while promoting
> other dependent MSMEs.. unlike large corporations which tend to move funds
> abroad for different reasons (tax, asset protection, hedging, dividends
> etc).
>
> 2. We always see donors (especially, I believe, WB & IMF if I recall
> correctly) always pushing govt to redirect expenditure from recurrent/wages
> to "development"/infrastructure (clearly in their own interest as assets
> can be securitized for their own peace of mind, and more debt can be
> incurred in dev projects). So they push developing countries to reduce
> manpower in critical strategic sectors of the economy (less teachers,
> doctors etc) or to pay below-market wages.
>
> What is the impact of such financial efficiency measures? Do they not care
> that the employees they keep asking to be retrenched are real people with
> families? Do they not care that manpower reduction means our children get
> the worst teacher:pupil or doctor:patient or police:civillian ratios?
>
> Such recommendations lead to massive hidden costs downstream that cannot
> be attributed (e.g. low quality education, poor healthcare, increased
> insecurity due to overloaded+underpaid workers). It just looks like we have
> endless problems of incompetence but it is not by accident... we follow
> "weaponised advice", designed to keeps us poor.
>
> Efficiency efforts should be limited to enabling high impact service
> delivery (optimized processes) not financial efficiency.
>
> Government should find ways/tactical excuses to ignore callous and
> unethical requests/pressures for cold blooded fiscal efficiency.
>
> Public sector Performance Contract targets need to be linked to a basket
> of grassroots metrics that reflect the general quality of life for the
> ordinary population (besides GDP, Inflation, NSE Index & exchange rate).
> This can be presented in dashboard format on eCitizen so that wanjiku can
> see what is happening, hold officials to account for not delivering and be
> motivated to support such initiatives (but the data must be *real* to avoid
> risk of future backlash).
>
> Our "missing middle" problem (i.e. a tiny middleclass) needs to be
> addressdd. It exists because government incentives for business have
> focused mainly on Micro enterprises which are too inefficient to be
> sustainable, and large corporations that are too efficient to fill the jobs
> gap (and too demanding - always asking for endless concessions just to
> maintain status quo).
>
> If you track current incentives given to large corporations and account
> for all outflows and hidden costs (many of these corporations are the
> architects of grand corruption in the country) - you will see a MASSIVE NET
> LOSS / WEALTH EXTRACTION directly attributable to corporate activities
> (e.g. encouraging harphazard spending, lobbying for bad laws or poor
> incentives).. despite the appearance of "gains" on simplistic paper reports
> that ignore the full impact.
>
> A thriving middle class (people who are not rich and not poor - with
> ability to buy a car, spend regularly on mid-level leisure and even save
> for luxury spending) is what ends poverty and drives a strong economy.
>
> Small and Medium-sized Enterprises SME are the key to a thriving middle
> class and rapid, large scale jobs creation. They tend to lean towards
> formality, will often have more educated founders, are inefficient because
> of scale - but not overly so as to be unsustainable like Micro enterprises,
> and a few will have potential to grow into mega corporations.
>
> De-risked MSEs are what attracts high quality FDI in the form of venture
> capital. So rather than pitch tax breaks to global investors, the
> government should pitch de-risked high potential small enterprises (the way
> Israel and some EU countries are doing) whose business model has been
> proven in order to attract capital to scale up the businesses.
>
> The reality of Tax incentives to big corporations is that they only
> cannibalize the treasury - and these same corporations will do everything
> they can to minimize local expenditure (even furniture is imported yet we
> have skilled carpenters), and extract wealth in all manner of ways (e.g.
> transfer pricing).
>
> Most jobs offered by large factories are low level, while skilled jobs
> (r&d, conceptualization, design, development) will be outsourced with the
> (false) excuse that Kenyans are not competent. In reality they just want to
> prevent HIGH VALUE KNOWLEDGE TRANSFER so that locals don't build indigenous
> alternatives.
>
> I know some of the things I write are not supposed to be said because it
> will spoil some lucrative plunder parties.. but I alsonknow many of you
> know what I am saying is TRUE because you have seen it being done, heard
> about it or (God forbid) participated in it .
>
> This habit of taming monsters by feeding them with our kids is becoming
> too much and has to be called out for what it is.
>
> The youth are our children. It is our duty to create an enabling ecosystem
> framework that attracts opportunities and truly rewards them for
> innovation.
>
> We need a Kenyan Steve Jobs or Bill Gates who own their own companies -
> rather than have them and their ideas gobbled up by monopolistic dinosaur
> corporations that want to suppress their enterpreneurial dreams supressed
> in order to delay, the next wave of disruptive innovations. We need
> hundreds of winning case studies - not tens of mostly foreign owned
> startups (not that it's a bad thing to have foreign ownership, the key
> thing is that, given our history of suppressed esteem, our youth
> desperately need role models they can relate to so that they can start
> BELIEVING in themselves).
>
> We can't just tell youth to be job creators.. that's like telling a
> starving person to go find food. If they knew how - or where, they would
> not be starving.
>
> The REAL reason we tell the youth to employ themselves - yet we have not
> created an enabling framework - is because they have caught us napping and
> we want to deflect responsibility.
>
> "We" means anyone over 35 years old whether in privage sector or
> Government. Our parents didn't give us a gift to keep (the opportunities we
> enjoyed), they gave us a BATON to pass on in a long term RELAY RACE.
>
> Did you drop your baton (I did too)? Pick it up. Ignore the naysayers.
> Start running.
>
> Link:
>
>
> https://www.businessdailyafrica.com/news/Formal-jobs-fall-to-6-year-low-despite-GDP-boom/539546-5088750-nra671z/index.html
>
> Warmest regards,
> Patrick.
>
> Patrick A. M. Maina
> [Cross-domain Innovator | Public Policy Analyst - Indigenous Innovations]
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-- 
SMM

*"Better a patient person than a warrior, one with self-control than one
who takes a city." Prov 16:32*
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