|
Foreign Threat to Service Jobs Overblown GLOBALIZATION AND AFRICAN ECONOMIES ON THE VERGE OF THE 21ST CENTURY China-African Relations Lest we forget many of the continents, economies were remarkably “open” and vulnerable to the world economic crisis of the 1970s and 1980s than other regions. Export earnings of low-income Sub-Saharan Africa countries represented in the 1980s 16 percent of GDP; nearly twice the 9% average for all low-income developing countries twice the 9% average for all low-income developing countries (ILO, 1987:66). As a proportion of each GDP, the export ration was even greater. Africa was the most commodity-dependent region in the world, with many countries relying for over 90% of their export earnings on only one or two commodities. In short, African economies were export-driven. A great deal of the economic contraction in Africa economies in the 1970s and 1980s was, therefore, directly related to export performance. It can be seen that African exports grew faster than the exports of other developing countries only in the period 1960 to 1970. After that, African exports grew more slowly. Between 1975 and 1985, Africa’s export and import trade grew at a lower rate than the world average. Exports experienced negative growth between 1980 and 1982, as did imports between 1982 and 1986. The decline in imports was a definite response to falling exports (ILO, 1987:8). Import compression, in turn, led to reduced utilization of existing capacity and steep declines in further investment and output (Hawkins, 1987). The shrinkage in Africa’s export trade can be attributed to the fact that the markets for African exports contracted sharply. It ought to be noted that African exports consist predominantly of primary commodities, which have historically tended to fall, especially in times of economic crisis, in fact, between 1965 and 1985 primary products increased their share in the commodity composition of sub-Saharan Africa’s exports form 92% to 94%, as compared to the decline from 80 to 60% for the developing countries as a group (World Bank, 1987:222-3). The second notable feature of Africa’s export trade is that it is predominantly conducted with the industrial market economy countries (IMECs). Again, trade between the region and the latter even increased from 78% in 1995 to 80% in 1985, while the average for developing countries as a whole dropped from 6 to 63% over the same period (World Bank, 1987:226-7). Thus, Africa was more closely tied to the IMECs than the other “developing” regions and was therefore more exposed to their economic recession in general, and their depressed demand for primary products in particular. The result was that the terms of trade for Africa fell more sharply than for other regions in the “developing” world. Having remained practically constant “between” 1965-73, they then declined by 23% between 1973 and 1982 (ILO, 1987:68). In 1983, they fell by 0.1%, then rose by 1.8% in 1984, then fell again in 1985 by 3.3%, and in 1986, the fall was a staggering 26.3% (World Bank, 1987:176). The sharp fall in 1986 alone was translated into a loss of $19 billion. This massive loss of foreign exchange earnings due to falling prices of exports far outstripped all inflows of foreign funds into Africa whether as investment, loans or grants. The results of the declining terms of trade was growing balance of payment deficits for many African countries stood at $6.3 billion, which represented 4% of the developing countries’ total, and were enough for only 1.7 months of import coverage, as compared to the 3.5 months average for the developing countries and 4.2 months for the IMECs (World Bank, 1987, 230-1). The deterioration in the balance of payments forced African countries to begin borrowing heavily forms the developed capitalist countries. The debts were thus accumulated to compensate for the worsening external environment rather than to add to productive capacity. African countries and others in the developing world were encouraged by the low interest rates offered during most of the 1970s when the international capital markets were awash with surplus funds form the oil producing countries. Excess liquidity in the markets was also a byproduct of the economic recession in the industrialized countries, which was partly caused by a drop in the rate of profit. Therefore, capital was looking for greener pastures abroad. Banks zealously competed with each other to lend to desperate “Third World” governments. They were encouraged by creditor govern-ments “to whom such voluntary and market-based recycling seemed an efficient and costless way of shifting the oil-exporting countries’ surpluses and of further privatizing the interna-tional financial system. “The banks” were able to step up their lending to developing countries by using the technique of lending at variable interest rates and on medium term. This promised to pass the interest-rate risk onto the borrower, and to limit the funding risk (UNCTAD, 1988:92).” The Third World Debt Mountain began to grow higher and higher (Frank, 1981: chap 4; Castro, 1984: Chapter 4). The bubble bursts form the late 1970s as primary commodity prices tumbled to their historic low and, simultaneously, interest rates rose to their historic high. This was a direct result of the adoption by western govern-ments of policies toward combating inflation and the rece-ssion of 1979-82. Consequently, the need for debt by the “developing” countries became more pressing than ever, while its cost escalated. The making of a crisis had begun. For the debtor countries, real interest rates rose by about 12% from 1976-78 to 1981082. Between 1980 and 1982 interest payments increased by 50% in nominal terms and 75% real terms. The debt indicators worsened accordingly. “Third World” debts rose at an annual rate of 16.8 percent between 1978 and 1982, while their economies grew at an annual rate of 3.2% and exports fell by 1.7% during the same period. More devastating was the fact that debt service grew at an annual rate of 23.3% that is at a greater rate than the increase of the debt itself. This was an indication that the loans were being incurred in order to repay previous loans. It was usury beyond Shylock’s wildest dreams. The debtor countries became net exporters of capital to the creditor countries. In 1987, the net outflow from the “Third World” debtors reached $ 38.1 billion. This rose to an estimated $ 43 billion in 1988 (Daily nation, 20-21-88:10). Moreover, the debt continued to rise inexorably. By 1988, “Third World” debts totaled a stupefying $1.2 trillion. Never before in history had there been such drainage of resources from the underdeveloped world to the capitalist centers.
any African countries were caught in this avalanche. All the achi-evements they had made since independence, as well as their prospects for future development were under the treat of erosion by the rising debt flood. Africa’s debt more than doubled between 1980 and 1990, continued to climb in the early 1990s. The debt took a heavy toll as many countries spent an ever-increase share of their export earns and invest able surpluses to pay back debts. In the meantime, although direct foreign investment rose, it was too minuscule to offset the rising debt service ratios. It can be seen that in contrast to the mostly commercial bank debt of Latin America and North African countries and Nigeria, the bulk of Sub-Saharan Africa’s debt was owed to governments or inter-national development banks and agencies. There were consider-able country variations. In 1986 external debt as ratio of GNP ranged form a low 0f 23-30 per cent for Chad, Rwanda and Lesotho, to a high of 356.5 per cent for Zambia, 234.6% for Mauritania and 178.1 per cent for Congo. The ratio of public debt service to exports was less than 10% for 1r out 38 countries and over 30% for six. The rest hovered in between (United Nations, 1988:57). A growing number of countries found they unable to service their debts, as indicated by tier skyrocketing arrears. The debt burden was becoming unsus-tainable. Between 1980 and 1987, only 12 of the 44 Sub-Saharan African countries were able to service their debts as scheduled, without either running up arrears or resorting to rescheduling agreements with their creditors. Governments, international agencies, and aca-demics spent sleepless nights devising strategies for dealing with the debt crisis. A wide range of prescriptions were offered, including debt cance-llation, debt moratorium, debt conversion schemes, and rescheduling, which became the main means of debt relief. By the mid-1990s no plausible and effective resolution to Africans debt tragedy had appeared. Rescheduling, with all its shortcomings, remained the most widely used strategy of debt relief. Rescheduling carried another heavy price tag. In order for a country’s debts to be rescheduled either at the Paris (official debts) or at London club (commercial debts) that country first had to reach an agreement with the IMF and the World Bank. Thus, the debt crisis forced African countries into the clutches of these agencies. It was a deadly embrace. In exchange for their seal ofapproval and loans, the IMF and the World Bank exacted their pound of flesh from the emaciated African economies in the form of structural adjustment.
ne after another, African countries embarked on the rough road to structural adjustment. Seeking to retain some pride, many claimed that these programs were homegrown. A few did, indeed, try to design their own programs in vain efforts to keep the World Bank and IMF at bay and there were mounting domestic pressures for reform, although the visions differed. Some were for a more market-oriented future, others for a more regulated and egalitarian one, and there were those who dreamt of a social democratic red-tape and perhaps some deregulation and devaluation, workers aspired to a living wage and level playing field for collective bargaining, and peasants yearned for fairer prices for their produce. Initially, therefore, several groups welcomed structural adjustment, but some turned against it as the programs began to bite. The hand of the international financial institutions and western governments behind these programs became more visible as time went on jogging uncomfortable memories of colonialism even among the domestic supporters of free-market development. Altogether, by the end of 1987, 30 countries in sub-Saharan Africa alone were undertaking economic adjustment programs of were expected to resume them with the IMF and World Bank (United nations, 1988:5). The African economist and political landscape was fundamentally transformed. It was harsh medicine, applied with uncompromising uniformity everywhere, oblivious to the differences of history or the prevailing economic conditions. The policy objectives were pure textbook neo-classical economics: reduction in the size of the public sector, elimination of price distortions in various sectors of the economy, and promotion of trade liberalization and domestic savings. These policies were to be achieved through the deregulation of prices of goods, services and factor inputs to minimize the role of the state in resource allocation; imposition of tight controls of money supply and credit and of high interests to encourage imports and stabilize balance of payments; aggressive pursuit of comparative advan-tage to increase export earnings, and of an open door policy to attract foreign investment and encourage efficient industrial development; and budget reductions to redress fiscal imbalances. Privatization be-came the leitmotif of structural adjustment was hailed as the panacea of Africa’s economic-ills. Freed form the suffocating grip of the sate and the unproductive cultures of affection, the market would perform its magic and propel African countries from economic crisis to recovery and prosperity. It was a cruel fiction. Sustained economic growth did not materialize, the rates of investment remained low, indeed, decreased, budget and balance of payments deficits persisted and even widened, the debt mountain continued to grow. In a systematic theoretical and empirical critique, the Economic Commission for Africa (1989), crystallized the African opposition to SAP and outlined on alternative reform strategy which, despite its greater intellectual and political merits, was unfortunately ignored because, unlike the IMF and the World Bank, the ECA could neither back its advice with the carrots of cash nor the sticks of sanctions from international financial markets. Drastic budgetary reductions and cuts in subsidies on social service and essential goods, the ECA argued, led to massive public sector retrenchment and undermined human capital and the enabling environment for future development; the indiscriminate promotion of export productions stymied food production and self-sufficiency and could result in over-supply and fall in price; across the board credit squeeze contributed to overall economic contraction and capacity underutilization, which accentu-ated shortage of critical goods and services; excessive devalue-ation fueled inflation, capital flight, worsened income distri-bution, and reinforced the production of traditional exports; high interest rates shifted the economy towards speculative and trading activities; total import liberalization reinforced external dependence on market forces and privatizations jeopardized social welfare and human conditions ((ECA, 1989:37-8). The evidence, indeed, showed no appreciable difference in the growth rates of the ‘strong adjusters”, “weak adjusters,” or “non-adjusters,” despite the World Bank’s determined statistical acrobatics to manipulate the figures (World Bank and UNDP, 1989; Zeleza, 1989; Khan, 1993). In countries where the infrastructure was crumbling, thus raising transaction costs for farmers went up. Besides, where shortages of basic agricultural inputs as well as consumer goods were rampant. It was difficult to translate higher prices into incentive goods. This raised producer prices and had little effect on production, except increasing food prices for all those who had to purchase it. Those affected consisted of urban dwellers, as the thesis of urban bias would have us believe. It also included the growing numbers of landless rural workers and the rural poor, many of whom already suffered from high levels of malnutrition (ILO, 1987: chaps 1 and 4). Devaluation also did not have its intended effects. Many African countries devalued their currencies by several hundred-percentage points. This resulted more in skyrocketing inflation, previously rare in Africa, and falling standards of living than in increased production, for world demand for many African commodities remained stagnant. Trade liberalization did not provide stimulating competition for domestic industry either. Rather it brought a flood of cheap imported goods, which undercut local manufactures. Trade liberalization and return Africa to the colonial days of unadulterated primary production. Privatization fever, which gripped many countries, also failed to deliver as much as was promised. It threatened to lead to economic denationalization in many African countries because the people most able to buy the huge parastatals tended to be foreigners. With some notable exceptions, the indigenous capitalist class was, in the main, too weak to compete effectively with foreign capital in the new and much-vaunted ‘open market’. Given the desperation for foreign investment, most of the privatized enterprises were fire sales. The benefits to the ordinary people were not always obvious. In many cases, the state monopolies were simply replace with private monopolies, whose activities were sometimes even more harmful. For example, the withdrawal or drastic reduction of state involvement in agricultural marketing and services had detrimental effects on small-scale farmers the very people who were supposed to have benefited.
frican countries, of course, were not affected by, and did not respond to, the structural adjustment medicine uniformly because of their varied economic, political, ideological, and social constitutions. There were four crucial determining and differentiating factors. First, the fiscal basis of the state whether it was a ‘rentier or a’ merchant state (Mkandawire, 1987, 1995). In the ‘rentierstate, in which the state-relies on substantial’ external rent from state-controlled mining production enclaves, the erosion of ‘legitimation expenditures from declining terms of trade and deteriorating economic conditions was likely to have different political and social consequences compared to the ‘merchant state, where state revenue is derived largely form domestic taxes and import and export taxes and the state pursues both extractionist and productionist functions. A critical subtext to this was whether or not, in facet, the state had power over its own currency. The Francophone countries belonging to the West African Monetary Union had no power to issue their own currency, unlike their Anglophone counterparts. The state was, therefore, denied ‘the possibility of reducing wages by resorting to inflation taxation through devaluation which, predictably, infuriated the World Bank (Mkandawire, 1995:42). The way the fiscal crisis was played out, in turn, depended on, second, the social and discursive architecture of the state itself, that its, its administrative capacity, the quality of the leadership, composition of the ruling coalition, the balance between the political and technocratic elements in the state apparatus, and the nature of the dominant discourse (Hutchful, 1995). In regimes of accumulation and power where the national bourgeoisie had footholds in both the private and public sectors, as in Kenya and Cot d’Ivoire, the state was less undermined by adjustment than in regimes where the bourgeoisie was concentrated in the public sector as was the case in Tanzania and Mozambique. In addition, in the latter countries the hegemonic discourse was far more nationalist, statism, and welfarist than in the more capitalist-oriented countries, so that popular debates and political responses to structural adjustment were far more tortuous and the policy shifts more painful. Moreover, the managerial capacity to undertake the reforms was less developed, with the result that external intervention in the administration of structural adjustment was far more intrusive than in the former group of countries. In other words, as far as structural adjustment was geared at the dismantling of anti-capitalist development practices and strategies, it was the “socialist-oriented” states, rather than their capitalist-oriented neigh-bors, that felt and underwent the most profound transformations. The density and direction of the changes were predicated, third, on the disposition and differentiation of civil society, which, in turn, was transformed by the timing, tempo, and configuration of the structural adjustment programs. The implementation of, and responses to, structural adjustment in countries where there were powerful social movements able to defend their access to sate resources, and the deflation of the fiscal position of the state occurred suddenly, differed form the patterns in countries where the social movements were relatively weaker and the economic slide occurred more gradually. Hence, the contrast between Nigeria and Ghana, Malawi the structural adjustment program did not provoke the policy twists, turns, and immediate political opposition that occurred in the “rentier states” of Nigeria and Zambia. Not only was civil society unfolded more gradually than in the latter. Similarly, although civil society was equally strong in Ghana and Nigeria, in the latter the dip in economic fortunes was quite sudden compared to the former. Therefore, the imposition of structural adjustment incited riots in Nigeria and Zambia, but not in Ghana and Malawi.
inally, the pace of implementation and the nature of the popular reaction to structural adjustment programs were affected by each country’s geographical position, which often influenced the design of the program and the stringency of the conditionalties. France, for example, was quite protective of its “client states” in the CFA franc-zone, which were shielded from devaluation for many years after it has become commonplace elsewhere on the continent. What that meant is that while workers in the Anglophone countries could be paid regularly their increasingly worthless salaries, since the state could print more money, and the pacifying illusion of money could be maintained, workers in the Francophone countries were often not paid, which sparked off widespread opposition and ensured that civil servants would be in the forefront of the anti-SAP and pro-democracy movement in Benin and Mali as compared to Kenya and Tanzania. Geopolitically strategic Egypt has a powerful patron in the United States, which intervened on its behalf with the IMF in 1989, while its southern neighbor, Sudan, with its “fundamentalist Islamic” military regime was not so “lucky”. The IMF and World Bank periodically picked favorite pupils for special treatment, to demonstrate to a skeptical world that the reforms were working. In the 1970s, it was Mobutu’s Zaire. In the 1980s Rawlings Ghana got the honor and was rewarded with PAMSCAD (program of Action to Mitigate the Social Costs of Adjustment) PAMSCAD represented a grudging acknowledgment that SAP exacted social costs, as the more “social democratic” organs of the United nations, such as UNICEF, began to point out. In the more sanitized language of the World Bank and its supporters, they talked of “winners” and “losers,” a metaphor that burnished the Bank’s self-image as a neutral umpire at a game. Whatever the differences, structural adjustment programs failed to deliver on their promises. Recovery remained as elusive as ever. African governments increasingly felt betrayed by the ubiquitous international community on whom they had place so much faith they had swallowed the biter medicine of structural adjustment, but the palliative of international financial assistance had failed to materialize. In fact, capital flows to Africa declined precipitously from 1980. While ODA disbursements rose in nominal terms, real net flows declined. Official’s flows on non-confessional terms also fell as did net flows of official guaranteed export credits. The latter fell from an annual rate of about $ 2 billion at the beginning of the decade to $ 400 million in 1986. The sum of private lending and trade financing was more than halved by the middle of the 1980s. Foreign direct investment in Sub-Saharan Africa plummeted from $ 1.5 billion in 1981 to an annual average of $ 400 from 1984 (United Nations, 1988: 11-13). Altogether, in 1986 $ 18 billion came into Africa as a whole, of which lending, while $34 billion came out of Africa, $19 billion in losses in potential earnings from the sharp drop in commodity prices and $ 15 billion in debt service (Africa Recovery, 1987:1). This comes to a net outflow of about $ 44 million a day. Following the collapse of communism in Central and Eastern Europe at the turn of the 1990s, “aid” and investment flows to Africa declined either absolutely or relatively. Bilateral ODA declined form $ 12 billion in 1990 to $ 10.7 billion in the following year, and sub-Saharan Africa’s share of direct foreign investment among the “developing” countries fell form 13.8% in 1982-86 to 5.3% in 1992-94 (Katsouris, 1995:12). The World Bank and IMF also pocketed the surpluses flowing out of Africa. In both 1986 and 1987 there was a net transfer of close to, $ 1 billion form sub-Saharan African countries alone to the IMF (United Nations, 1988:12). The World Bank also became a drain on the developing countries as a whole. In 1988, it took out about $ 600 million more in interest and debt repayments than it lent (Daily Nation, 24 October 1988:12; Friedland and Westlake, 1986). A growing number of African countries found it harder to service their debts to the IMF and World Bank. By May 1988, five countries, Liberia, Sierra Leone, Somalia, Sudan and Zambia, were ineligible for use of IMF resources because of their arrears to the Fund (Africa Recovery, August 1988:9).
he fundamental contradiction of the World Bank and IMF structural adjustment programs was that the state was supposed fundamental restructuring of the economy. It other words, it was expected to roll itself back, to commit political suicide, which only succeeded, wherever this was tried through massive retrenchment of the civil service, in weakening its capacity to implement the structural adjustment reforms themselves (Picard and Gararity, 1994). The neo-classical disdain for the post-colonial state was based on a profound misconception of state-civil society relations and an ideological misreading of the nature and extent of rent-seeking activities among African states (Mkandawire, 1998:15-20). The State, in short, was not merely a bureaucratic outfit amenable to technical remodeling. It was a process, a constellation of complex social contestations and contradictions. Governments that sough to accommodate domestic pressure against various elements of structural adjustment were accused “of lacking in “political will,” the coded language for repressive capacity” (Mkandawire and Olukoshi, 1995:3). They were accused of pandering to the discredited “rent-seekers,” despite the fact that any show of “political will” was often “directed against groups with not representation in the power structure: workers, the urban poor and the increasingly impoverished middle classes,” as the real rent –seekers knew how to “ingratiate themselves to the political authorities and adjust their business strategies to some of the requirements of the reforms” (Bangura, 1995:86). Thus, authoritarianism was a structural necessity for the World Bank’s and IMFs structural adjustment. In fact, until political pressures against these programs could no longer be ignored ant the democratic movements gathered momen-tum, the international financial institutions put all their eggs in the sturdy baskets of authoritarian rule. One senior Bank official, Deepak Lal, wistfully hailed the military for its capacity to “ride roughshod over… special interest groups” (Gibbon, 1995:137). From the late 1980s the tune in public changed and the World Bank began talking of democratization and human rights, but the legitimacy of the new dispensation was to be measu-red by “good governance,” which essentially meant, ‘the successful implementation of the much-contested adjustment program-mmes” (Mkandawire and Olukoshi, 1995:7). The prog-rams continued to be auth-oritarian outfits: designed in secret negotiations, implemented by unelected technocrats, an overseen by unreliable experts from London, Paris, and Washington. It was a raw deal for African countries. In exchange for puny loans, which were subsequently over-repaid, the IMF and World Bank, on behalf of the world capitalist system, accorded themselves the right nor only to supervise individual projects, but to manage whole economies entirely, approving their national budgets, foreign exchange budgets and fiscal tariff policies, issuing clearance certificates before these countries could negotiate with other foreign agencies, and even posting representatives to their Central Banks and Ministries of Finance and Trade. It reeked of colon-ialism. As during the colonial era, it was Africa’s masses, the peasants and the workers, and increasing the professional middle classes, who were paying the price with their seat, tears, and blood, not only from the deteriorating economic condi-tions, but from increased tyranny as well. The structural adjustment programs reinforced the triple crisis of legitimation, regulation, and sovereignty for the postcolonial state, which strengthened its authoritarian tentacles, on the one hand, and fueled struggles for the “second independence,” on the other, a subject examined in detail in the voluminous democratization literature. It is quite evident from the preceding analysis that Africa’s encounter with globalization and liberalization has been differentiated and contradictory in spatial and temporal terms. African economies generally did well when the world economy was doing well and they began to perform poorly when the world economy entered a period of prolonged recession from the 1970s. But it cannot be overemphasized that they were enormous variations in growth rates among countries, which shows that some postcolonial states were capable of generating and sustaining development. If as much intellectual energy was spent on analyzing the complex and differentiated patterns of economic growth and development among African countries as has been in wholesale condemnations of African state failure, we would be in a much better position to understand the varied problems and prospects of development in Africa in the age of globalization. By Paul Tiymabe Zeleza, Professor of History and African studies, University of Illinois at Urbana Champaign, USATO Foreign Threat to Service Jobs Overblown Report concludes unemployment fears in richer countries are misplaced and services sector will follow trend in manufacturing only to a limited extent, writes Peter Marsh Anxiety over off shoring of service jobs seen as overblown Growth in outsourcing of service jobs form rich countries is likely to be constrained because only one in seven workers in low-wage nations has the skills needed to work for multinationals, according to a McKinsey study published today. “Offshore employment [in services] will grow gradually, making no sudden impact on labour markets overall in developed countries,” says the report by the McKinsey Global Institute, a research arm of the strategy consultancy. Is say the trend will have “little effect” on wages in rich countries, scotching the idea that offshoring could help hold down inflation in those nations. The McKinsey report is the first to come up with authoritative estimates of how many service jobs could move from rich countries to poor ones. McKinsey estimates this figure could reach 160m by 2008, or 11 per cent of the world’s projected 1.46bn service jobs. But the study says only a fraction of this potential will be realized. In 2008, there will be 4.1m services jobs offshore, or 1.2 per cent of services jobs in rich countries. One reason for this is multinationals’ attitudes to recruitment, McKinsey says. The consultancy conducted 83 interviews with human resources mangers working for multinationals, and found that, presented with workers from emerging economies with appropriate academic qualifications; they were likely to reject 87 percent on other grounds. The main resources for the low likely take-up were poor language skills, “the low quality of significant portions of the educational system [in developing nations]” and cultural differences. Diana Farrel, director of the institute, said multinationals often failed to take up offshoring because of initial costs and other hurdles. Debate about “offshoring” of service jobs to low-cost countries has reached fever pitch in the past few years, with concern in much of Europe and the US that such developments could be a big source of unemployment. A report from the McKinsey Global Institute, part of the McKinsey consultancy, says the fears are overblown. Even though the supply of young people in low-wage economies with good educational qualifications is likely to increase substantially in the next decade, demand for employing them in their own nations in jobs transferred from rich countries is likely to be muted, the report says. On top of this, many young professionals in the 28 low-wage countries studied by the institute – even though they may have university degrees – lack the work-related experience and aptitude that foreign companies are looking for. “A lot of developing countries are churning out new graduates but not giving enough though to he practical skills they will need if they are to work for multinational companies,” says Diana Farrell, director of the institute. The report indicates that even though many manufacturing jobs have migrated from rich countries to emerging economies over the past 10 years, due to cost-cutting pressure, the service sector is unlikely to see the same trend. McKinsey decided to look at employment in offshored services partly because of the much larger proportion of output taken up by services than manufacturing and also because of political concerns about the trend. “The subject had become such a hot potato that we though it was worth analyzing,” says, Ms Farrell. On the demand side, McKinsey tried to work out the likely requirement for people in service occupations in offshore centres by looking at eight sectors of the global economy: automotive, healthcare, insurance, information technology services, retailing, pharmaceuticals, banking and software. It also analysed specific types of service jobs within each of these sectors that could theoretically be performed “remotely” in low-cost countries on behalf of consumers and industrial customers in rich countries. The degree to which individual jobs can be offshored depends on how “customer-facing” they are. In retailing, with the with the vast proportion of employees tied to stores, only about 3 per cent of all the jobs in developed regions lend themselves to being transferred to low-wage economies. But in engineering and finance – because many jobs in these filed are done well away form contact with customers – the theoretical proportions are much higher, at 52 per cent and 31 per cent respectively. On the supply side, there is no doubt about the large number of potentially suitable able candidates for service jobs done ‘remotely’ in low-wage nations. The study says there are 33m “young professionals” with degrees and up to seven years’ work experience – in fields such as engineering finance and information technology – in the 28 countries it looked at. The number compares with just 15m in the rich countries the institute studied, which include the US, Germany, Japan, UK, Australia, Canada, Ireland and South Korea. Moreover, the number of young people with professional qualifications in emerging economies is expanding at 5.5 per cent a year – five times the figure for the developed world. But the report scorns the idea that young people in this category in emerging economies can just walk into a job with a multinational employer. Many are judged unsuitable, not just because of lack of practical skills but because they may be in the wrong part of the country, away from big airports pr “offshoring centers”. Sometimes, too, steady demand in specific locations – parts of India for instance –for serviceprofessionals employed in a previous wave of “offshoring” has driven up their wages, making them no longer so attractive for a foreign employer. The study says that in service support jobs – covering fields such as administration – only 2 per cent of all the notionally qualified people in the emerging economies will find work in multinationals in 2008. In analyst jobs and finance, the comparable figures are similarly low, at 3 percent and 5 per cent respectively. However, the proportion is much higher in engineering, where it reaches 63 per cent –partly reflecting the tight supply of engineers in many emerging economies. A New Approach towards Environment The concept of desertification as adopted in 1992 by the United Nations Conference on Environment and Development (UNCED) is defined, as “Desertification is land degradation in arid, semi-arid and dry sub-humid areas resulting from various factors, including climatic variations and human activities”. The institutionalization of desertification and its establishment as a global environmental problem can be traced back to the United Nations Conference on Desertification (UNCOD) held in Nairobi in 1977. It was after 1977 that the United Nations Environment Programme (UNEP) was charged with the responsibility of implementing a plan of action to stem the expansion of the desert conditions. At this time, people saw drought as the catalyst that exposed the deleterious effects of long-term degradation of the environment. The prime causes were identified as over-cultivation and salinization problems on irrigated cropland, overgrazing and deforestation. Desertification and its causes permeate various sectors of the economy and encroach on sustainable development. The debate on desertification, therefore, has gone beyond the realm of environmental issues per se to incorporate socio-economic considerations so that environment and sustainable development are integrated. This issues analyses the problem of desertification with reference to Swaziland by providing a brief background of the country, describing the state of desertification, and analyzing attempts being made to combat desertification within a national and regional context in view of globalization. Background to Swaziland Swaziland lies between latitudes 250 and 280 south and 300 and 330 east in southern Africa and covers an area of 17364 km2. It is bounded by South Africa in all directions except for a small portion in the east where it shares the boundary with Mozambique. It is divided into physiographic zones, which run almost parallel in a west to east direction, and known as the Highveld. Middleveld, Lowwveld and Lubombo and lubombo, respectively. Theoretical Framework Desertification is always conceptualized differently because it is various definitions tem from divergent values, experiences, interests and objectives. Land degradation, which is the major determinant of desertification, implies the lessened capacity of land to produce. Net degradation is the difference between degradation from both natural processes and human interventions, on one hand, and restorative natural and human processes, on the other (Blaikei and Brookfield 1987). As such, desertification is a social concept, which involves judgments, which will vary from one social context to another. It is impossible to find a definition of desertification that permits a consensus to emerge on how it should be measured, compared and monitored across differing ecological and social systems. The identification and measurement of land degradation is partly an ideological and political issue. According to Graniger (1990), Desertification has four direct causes, over-cultivation, overgrazing, deforestation and mismanagement of irrigated cropland. These do not occur by accident, but are greatly influenced by the effects of growing populations, economic development and conscious policy decisions by government and aid agencies.
Thus, if one takes Grainger’s view, it is logical to conclude that all efforts at desertification control shouldaddress issues of economic development that impact on the environment. Various social groups are vulnerable to desertification and need to cope with adverse environmental situations or to establish new livelihoods, aspects that have a political connation. It is on these premises that for example SADC countries, as a regional grouping, have adopted a policy which, inter alia, protects and improves the health, environment and livelihoods of the countries that are using the banner of desertification to come to grips with some environmental issues and their impact on sustainable development. State of Desertification in Swaziland Aspects of desertification in Swaziland manifest themselves in land degradation and drought risk. It has been established that land degradation in the country is a result of overgrazing, deforestation and the loss of soil productivity, perhaps due to over-cultivation. Processes of over-cultivation, overgrazing and deforestation are the result of excessive pressures on resource ecosystems, which are fuelled by local forces such as increase in human numbers and the escalation of their needs, poverty, land shortages and landlessness and poorly conceived national policies (Darkoh 1998). In Swaziland, the areas affected by soil erosion as the dominant form of land degradation correspond closely with areas where livestock grazing is the predominant land use. Similar observations (Jensen, Remmelzwaal and Dlamini 1994) indicate that degradation occurs mainly in extensive communal grazing areas due to lack of good grazing management and the absence of soil and water conservation measures; serious degradation is concentrated in areas around dip tanks and watering points across the whole country. And that the most affected areas are the Upper Middleveld with its deep red soils, and in the Lower Middleveld where soil sodicity is the main contributing factor. Desertification may also be aggravated by prolonged drought and desiccation. The concept of desiccation refers to longer-term deficits in rainfall, which seriously disrupt ecological and social patterns. In Swaziland, agro-climatic characterization has provided climatic information for crop production. The agro-climatic conditions are described by means of moisture zones and thermal zones. The moisture zones are classified based on annual rainfall and the length of growing period (LGP). The LGP is a simple water balance based on rainfall, evapotranspiration and soil moisture storage capacity and provides a useful indication of the amount of water available to crops. According to the Swaziland environmental Action Plan (1997), the country is divided into six moisture zones, i.e., one humid, two subhumid, two moist arid and one dry semi-arid zones. The humid zone (H) has an LGP of 270 - 290 days, a dependable annual rainfall of 1000 – 1200 mm, and a mean annual rainfall of 1250 – 1450 mm. This Zone (H) has an LGP of 270 -290 days, a dependable annual rainfall of 1000 – 1200 mm, and a mean annual rainfall of 1250 – 1450mm. This zone occupies only 3% of the country and is confined to the highest parts of northern Highveld. The moist subhumid zone (SH2) is characterized by an LGP of 225 – 289 days; a dependable annual rainfall of 850 – 1000 mm; a mean annual rainfall of 1000 – 1250 mm; and covers 15% of the country comprising mainly the larger part of the Highveld. An LGP of 150 – 179 days; dependable annual rainfall of 700 – 850 mm; and a mean annual rainfall of 850 – 1000 mm; and a mean annual rainfall of 850 – 1000mm characterize the drier subhumid zone (SH1). This covers 27% of the country comprising the larger part of the Upper Middleveld, and parts of the Lubombo and Highveld. An LGP of 150 – 179 days; a dependable annual rainfall of 550 – 700 mm; and a mean annual rainfall of 725 – 850mm characterize the wet moist semi-arid zone (MSA2). This zone covers 21% of the country and is typical of the Lower Middleveld, but includes drier parts of the Lubombo and Upper Middleveld. The dry moist semi-arid zone is characterized by an LGP of 120 – 149 days; a mean annual rainfall of 625 -725 mm; and a dependable annual rainfall of 450 – 550mm. It covers 23% of the country comprising mainly the northern and western parts of the Lowveld. The dry semi-arid zone (DSA) is characterized by an LGP of 100 – 119 days; a dependable annual rainfall of 450-450mm; and a mean annual rainfall of 550 -625 mm. It covers 11% of the country comprising mainly the southeastern Lowveld, which is the driest part of Swaziland. According to UNDP (1997), 28% of the total land area of Swaziland is under semi-arid conditions while 50% of the area can be considered dry sub-humid. In addition, 22% of the population lives in the semi-arid region while 53% of the population lives in the dry sub-humid area. However, the area of productive land vulnerable to desertification is 78%, in which 74% of the population lives. As the Swaziland situation shows, desertification may be linked to climatic variation but is mainly an outcome of failure in resource management. When human mismanagement weakens the natural system, drought and dessication of often lead to desertification (Darkoh 1998). BY H.M. Mushala Source: Globalization, and Development in Africa |
