Economic and job promotion
Structural adjustments and market opening have created very few
new jobs in developing countries. This can be traced in part to
the fact that SMEs are still trying to compete with the standardised
and mass-market products put out by large domestic and foreign companies.
It is necessary to seek new routes and design new products.
In the beginning, macroeconomic stabilisation policies, market
liberalisation, privatisation, and outward economic opening boosted
economic growth heavily in many countries. Recent years, however,
have seen a sharp decline in that growth.
The population at large has benefited very little from these structural
reforms thus far. In fact, unemployment, underemployment, and informality
are on the rise. The poor economic performance of recent years (except
in some Southeast Asian countries) has hampered the creation of
new jobs in the formal sector, while the informal sector has a growing
supply of manpower.
The roots of this situation are complex. Globalisation presses
most strongly precisely on the traditional sectors that are known
for being heavily labour-intensive and using a low level of technology;
these are located for the most part in developing countries. Competitiveness
is being increasingly defined in terms of capital, technology and
skilled labour, with the result that cheap and unskilled labour
is losing out.
The situation of SMEs is worsened by the fact that they compete
directly with large domestic industry, particularly in the area
of products for the mass market (garments, footwear, and simple
food products) and are unable to match its scale of production.
Low pay, unpaid family labour, and failure to comply with social
security and pension payments are seized upon to balance the scale.
We have a major challenge ahead of us. We must find ways to increase
competitiveness and at the same time create new jobs. To mention
only a few of the measures that point in the right direction, we
have: modernisation, quality improvements, better adaptation to
the circumstances, and specialisation, more rapid response, demand
orientation, integration into enterprise networks, subcontracting,
export promotion, etc.
Many people who are unable to find job opportunities in the formal
labour market create their own informal micro-enterprises with little
or no capital and little or no specialised professional expertise.
There are few barriers to this kind of business, with the result
that labour and the goods it produces are oversupplied. These products
are poor in quality and are purchased for the most part by people
with few resources. Organisational and institutional measures in
this sector are normally socially oriented (one of the reasons being
that a large percentage of women find employment in it). It is important,
however, to determine whether there are micro-entrepreneurs with
the potential and the capacity to move to the formal sector of the
economy.
Pertinent experiences in this area I have acquired in Peru (formulation
of competition and export promotion policies); El Salvador (designing
an economic and employment promotion policy) and Honduras (job promotion
for rural micro-enterprises).
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