The Creation of Employment and Production- The Way Ahead for indebted poor countries.
Posted on May 4th, 2015

Garvin Karunaratne, Ph.D. Michigan State, M.Phil.Edinburgh, M.Ed. Manchester

The Evening Standard(U.K.) of 27 th March 2015, I am living proof that you can take a business idea formed in prison and make a success of your life” narrated the success of Ms Moffatt, an entrepreneur (once a prisoner at Holloway) as a result of the support granted by the Princes Trust, a NGO in the UK. It is a great story of success in enterprise creation.

It is all to the credit of the Princes Trust. The creation of employment is a daunting task so much so that every country claims success on youth training and slowly defer from the task of creating employment. It is true that training does create employment. Training equips a youth to become employed but he has to face the task of finding a job for which he is equipped. The other option is to become self employed. That is also a difficult task where one has to find an item that is in demand, produce it and thereafter sell it. The instance quoted from the Princes Trust enabled that entrepreneur to be a success. That entrepreneur was supported by the Governor at Holloway Prison, a Day Release Course at Caper Manor College at Enfield, the Bernie Grant Art Center, the Menber of Parliament   and the Princes Trust.

It has so happened that the entrepreneur was lucky that things moved in swiftly and all authorities cooperated to make a success.

Considering the high levels of unemployment in certain EU countries like Greece- 26% and Spain-25%, the creation of employment opportunities is crucial .This can be contrasted with countries with low unemployment-Britain with unemployment at 6.5%, Germany at 4.8% and Austria at 5.3%.   A total mass of some 24,850 million people are unemployed in the European Union(EU), which in the context of EU countries that pay unemployment benefits causes a severe strain on their economies. This urges us to explore how authorities can try to build up a system where the entities that supported this entrepreneur can work in a systematic manner.

It is heartening to note that the Princes Trust has taken action to help the creation of enterprises.

In 1979 to 1981, my youths at Clovenstone Community Center in Wester Hailes Edinburgh received grants for community activities like Youth Exchanges, Travel and Majorettes from the Prince’s Trust. Then the Princes Trust had not marched into enterprise creation.

I recall a major altercation I had with the Director of the Princes Trust in Dhaka Bangladesh in 1983. Then I worked as the Commonwealth Fund Advisor to the Ministry of Youth Development in Bangladesh. The Director had made a special visit to Dhaka to meet the Secretary of the Ministry of Youth Development. . His task was to get Bangladesh to agree to open up a youth programme with the Princes Trust. It was a meeting chaired by the Secretary to the Ministry. The Director praised the activities of the Trust to the sky. I was asked for a recommendation. I suggested that in the context of Bangladesh, entrepreneurial activity should be approved for any programme to be meaningful more than dance, drama, sports and hobbies for awards. This led to an open confrontation, the Director insisting the their criteria of dance, drama, sports etc. was comprehensive enough. I submitted that entrepreneurial activity leading to youths succeeding in becoming self employed was more important in Bangladesh. My idea was to use the Princes Trust activities to spur youths becoming self employed. The Director vehemently refused to consider any change. The Secretary of the Ministry who chaired the meeting requested that the Director should kindly consider entrepreneurial activity because that would be more meaningful for Bangladesh. The Director refused point blank. The Secretary remarked that Bangladesh would then not have anything to do with the Princess Trust.   That was the end.

It is heartening to note that the Princes Trust has now changed course and find that entrepreneurial activities are important.   Since 1983, the Princes Trust has helped 60,000 young people to set up their own business ventures. That has been at a cost – pounds 2667 each, but yet a credible achievement.( Greene: Evaluating Youth Enrtrepreneurship: The Case of the Princes Trust: University of Warwick:2005)

For enterprises to be created it requires the services of experts in economics to research the economy and find niches in the economy where there is a potential to create enterprises. The Universities the depositary of experts in economics tackle more theory than practice. The Universities, Colleges of Education that offer skills training and Community Education- all these authorities today work in watertight compartments. They have to all work together to help the unemployed to establish enterprises that will provide them an income. That is what I suggested in Edinburgh in 1981. My suggestion was that the Colleges of Education that provide skills training should also guide the youths to become self employed and this should be supported by Commnuity Education in mustering the resources of communities and the Universities in researching the economies for the cause of creating employment. This however was too far fetched an idea. In the Free Market Economics of today it is taboo to direct the creation of employment. It is all left to the Private Sector, whose main aim is not the well being of people, but that of aggrandizing wealth. In India, there are Guarantee schemes of employment to the unemployed, schemes that offer a hundred days employment to the unemployed. This consists mostly of earth work on roads and is far from offering real employment opportunities to the people. In India the IRDP and TRYSEM are gigantic programmes of skills training, which do not bring about employment creation. These tell us that we have to go beyond skills training and offer guidance for those in training to become employed.

In the annals of development there are only two successes to talk of in employment creation. The first is the Comila Programme of Rural Development, where in 1960-1970, the Government of Pakistan obtained experts from Michigan State University to find the quickest and most feasible method of creating development. The task was to develop the Kotwali Thana of the Comilla District and within ten years they created a situation of full employment. The employment created spilled over into the adjoining Thanas. As a result the Comilla Kotwali Thana is a paradise in a sea of poverty.

The other programme of employment creation is the Youth Self Employment Programme of Bangladesh. Here youths who were on skills training courses were tasked with establishing self employment ventures. .The Military Government that took over in 1982 saw youth activities tainted with politics and was adamant on closing down all youth activities including youths skills training. As the only non Bangladeshi participating at the Ministry level, I was ordered to make a contribution to the youth programmes. I suggested that skills training should be enhanced with a self empolyment programme that would motivate and guide the 40,000 youths in skills training annually to commence self employment ventures. I was told that it was a task that could not be done because in the earlier three years the ILO had attempted to establish a self employment programme in Tangail, Bangladesh, which ended in a miserable failure after a massive expenditure. I was told that the Government did not have funds to waste again. I argued that I could establish a self employment programme which will help the youths in training to establish enterprises which will also help the country in the task of producing what is being imported and reduce the import bill. The argument lasted an easy two hours at the end of which the Hon Minister approved my establishing a self employment programme. The Treasury vetoed that no funds will be available to which I argued that no new funds were required and that the programme will be done with savings from the votes already approved for youth skills training. Finally I was told to go ahead. We commenced work, training youth officers to handling economic enterprises. We   drafted employment modules and addressed the youths in training. A programme was designed and implemented immediately. The rest is history. The entire Ministry of Youth Development eventually became devoiting 90% of their time to guide the youths to become self employed and it was a great success. By February 2011, the Government of Bangladesh reported to the IFAD of the FAO that under this Programme over two million youths had successfully become self employed. This Self Employment Programme is today the largest employment creation programme the world has known and trains and guides 160,000 youths to be self employed every year.

These two successes prove beyond doubt that the creation of enterprises can be done successfully and   this offers hope to Britain and European countries that are today saddled with high levels of unemployment. My own concluding words on my Paper detailing the causes for the London Riots in 2011 are an appropriate end to this paper

There is no point in training only. Training has to be equipped with guidance for the trainee to become productively employed and this is my message not only to London,   Edinburgh but also to   to the rest of the world. It is a beacon of hope to the unemployed everywhere, be it in the connurbations of the USA, in  Scotland or in rural habitats of the Third World”.

(From: The London Riots: A Lone battle by the drop outs of the Education System: The Answer-Self Employment Guidance to the Unemployed.
Posted on September 16th, 2011 in Lanka Web)

As far as Third World countries are concerned they do not offer social security benefits to the unemployed and those who are unemployed have to face starvation or to depend on their extended family for support. What really happens is that the unemployedwait for the elections, mass themselves and throw out Governments that do not provide employment opportunities. This is a recurring phenomenon. The Youth Rebellion of 1971 in Sri Lanka was an attempt by the unemployed to take over the country. In India, there is total unrest in many States and the unemployed protests take on the form of stoning tourist buses. Petty thefts are common in most Third World countries and this is related to the lack of opportunities for people to get into a situation of being gainfully employed. Thus the task of bringing about employment opportunities is crucial. In this context the findings of both the Comilla Programme of Rural Development which created a Thana of full employment, as well as the Youth Self Employment Programme of Bangladesh, give us some hope for the future.

However real development falls by the wayside when the IMF that directs development advises that FreeMarket Lasseiz Faire should be followed- where the Private Sector is accepted as the engine of growth. It is forgotten that the aim of the Private Sector is to aggrandize wealth and not the creation of gainful employment for the people. Countries like Greece, Spain and those of the Third World that are steeped in foreign debt, seek the blessings of the IMF and follow their dictate to impose further austerity, punishing the people that are poor and allowing the Private Sector to rule the roost. The IMF advocates Foreign Direct Investment, whereby foreign investors come in, bring in a small sum of foreign money, create  ventures  based on developing local resources. They work on tax holidays, pay no tax to the country, but take away fat profits, sucking the country dry. That is not investment. Instead it is exploitation.

There has to be a more humane way ahead- the creation of employment and thereby incomes for everyone in producing   what is required for the country,

Garvin Karunaratne, Ph.D. Michigan State, M.Phil.Edinburgh, M.Ed. Manchester

1 st May 2015

3 Responses to “The Creation of Employment and Production- The Way Ahead for indebted poor countries.”

  1. Dilrook Says:

    Entrepreneurial skills and business should be taught to children as part of commerce and accounts in Sri Lanka from Year 7. Lack of entrepreneurial skill among most, especially Sinhalese, is a huge drawback. Sri Lanka should also reduce permanant brain drain by introducing ethnicity based university standardisation so that more Muslims, Upcountry Tamils and Sinhalese will graduate than now. As they have a lower brain drain percentage and currently under represented in universities compared to their ethnic percentage, it will serve the economy and employment of locals. It will be equitable for all.

    I agree with FDIs. In the long term FDIs are a burden; not at all a benefit. They take out all their profit. Instead local entrepreneurial development can be beneficial.

  2. Independent Says:

    Without any of these “entrepreneurial skills ” Sinhala Buddhist entrepreneurs arose in Sri Lanka such as Dasa Mudalai, Sangadasa Mudalai , building empires out of nothing and without stealing public. Then there was Nawalaoka Mudalali , not too bad in reputation.
    In Singapore there was devoted Christian CK Tang and many others.
    Many Tamils from South India came to Sir Lanka and succeeded.

    However, in the past 15 years many crooks came out as new entrepreneurs through political favouritism and nepotism. Without establishing good governance it will be nearly impossible for honest people to be successful entrepreneurs in Sri Lanka.

  3. Ben Silva Says:

    I agree with Dilrook. In addition, basic common skills, customer care, customer satisfaction, good time keeping and reliability are essential. These things are taught in UK UNDER bUSINESS management to most students.

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