Category: economics thinking

Education as investment. Why do companies not invest more in making education systems work?

One of the most common complaints I hear from employers/supervisors/managers where I’ve lived in Uganda and Tanzania is that there aren’t enough competent staff. There aren’t enough people with the basic computer skills, language skills, team work, coordination, and time management skills. Sometimes I hear complaints about a lack of work ethic also, although I tend to think that this is due to a lack of the above mentioned skills. Staff searches take a long time (also because it’s hard to get the word out; internet is not as widely used). Staff turnover is high, as different organizations all need the same sub-set of people.

Recruitment and retainment of good staff drives up labour costs for organizations. While it is desirable from a living wage perspective to have labour compensation rise, companies, logically, should have a large incentive to keep labour costs down. One way would be to increase the pool of suitable candidates.

Flooding the market with foreign recruits isn’t feasible. For one, the Tanzanian government has strict controls over visa requirements for foreigners (especially non-East Africans) to work in this country. Plus, ‘expats,’ where ever they are from, are usually quite expensive (except from China. Currently reading: “China Safari: on the trail of Beijing’s expansion in Africa.” Fascinating stuff).

Another way would be to have a better educated and trained workforce of Tanzanians.

This begs the question, why do companies traditionally have no interest in pushing for better education reforms in this country?

Smaller companies, of course, would not have this longer term perspective. But for larger companies that are chronically looking for staff to expand (with the economy growing at 7% per year*!), why are they not pulling strings, or at least putting in a good word, at the top policy levels to fix the education system?

I’m sure part of the reason is because investment in education would take over 20 years to reap the benefits of a better trained workforce. Part of the reason may be a common resource problem. Why would any one company invest when all the other companies will benefit from a rise in labour quality? Yet, wouldn’t the premise remain that companies should have the incentive to invest in education systems?

I haven’t really developed this idea, but it’s interesting to think about how it’s actually in the interest of the private sector to invest in the public sector. I’m afraid I haven’t seen much of these except in the form of “corporate social responsibility aid” (which, I must say, I don’t really believe in these days). It reminds me of a workshop I attended the other day: we have to make ‘gender equity’ an incentive/benefit rather than a requirement if we really want companies to take gender seriously.

Any thoughts?

(On the flip side, it seems like many Tanzanians are worried about becoming more integrated in the East African Community because the Ugandans and Kenyans are already taking a lot of the available positions. Common reasons cited include better language skills and ‘aggressiveness.’)

* And 6.9% debt. The growth is almost wholly financed by debt borrowing. Translation from my economist colleague: not as rosy as it sounds.

What would happen if we put a really high tax on garbage. Not recyclables, not reusables, not composted organics, but garbage that is burnt or taken to landfills. “Waste.”

If we had a significantly high enough tax on garbage produced, then there is a very big incentive to 1) produce things that can be reconfigured into a resource input at the end of its life cycle, and 2) figure out ways to make sure current garbage is reused. Add on incentives to figure out how to reduce the amount of garbage that was already produced (resource ‘mining’ from landfills), then we’re really encouraging a close loop system.

What is preventing us from taxing garbage like we tax petrol? What is preventing us from taxing garbage higher than petrol? What are the barriers and conflicts?

A quick google search:

Pay-As-You-Go Garbage Tax: weighing garbage bins

http://www.ecogeek.org/monitoring-pollution/293

Hong Kong mulls garbage tax to tackle waste problem

http://www.smartplanet.com/blog/global-observer/hong-kong-mulls-garbage-tax-to-tackle-waste-problem/2724

Both articles talk about consumer side control though.

The main idea shouldn’t be to focus on taxing consumer/normal resident produced garbage. It would be to target industries. Might as well start the closed loop system at the producer end, rather than the consumer end.

I really should look into Industrial ecology more.

I’m really wary about using culture to explain social phenomena.

It’s not because I don’t believe there are social norms, or trends, or identities. There are. They exist, and have huge influences on how individuals and collectives act.

But it’s because “culture” has a much more permanent connotation than the other terms I’ve listed. Norms change every few decades. Trends every few years. Even identities are starting to be recognized as being fluid.

Culture, though? Always, unchanging, eternal fall back for an explanation when none other rational one will do.

Chinese people are conformists, Tanzanians lazy, Canadians not aggressive enough. Or Chinese hard working, Africans “happy” (what does that even mean?), Canadians multicultural.

Does that make sense? First, how can an entire nation of people have one characteristic? We scoff when horoscopes tell us an Aquarius is friendly. We listen with polite disinterest when we’re told people born in a certain year are bold and arrogant. Yet, we clap our hands and agree when we’re told that 1 billion Indians are naturally good at math.

More importantly, we treat culture as an explanation for socio-economic development. Africans deserve to be poor because they are lazy. South East Asians spend their day sitting around and chatting and dancing, no wonder their economy won’t develop (offended? how is this sentence different than the previous one?). If China’s economy weren’t growing so quickly, people would still be saying that it’s because the Chinese are so “uncultured.”

What we treat as culture in developed countries actually came about because of economic growth and development.

One of my favourite stories is from “Bad Samaritans” by Ha-Joon Chang: the first American and European explorers to visit Japan wrote in their diaries that the Japanese are lazy and always late. They did not know how to work properly and didn’t seem to care about learning. This was Japan 100-200 years ago (I forgot the exact date). Surprised?

Or sounds familiar? Virtually all the people in developing countries are described in the same way in current mainstream Western discourse.

Culture changes. People change. People especially change according to the opportunities and demands placed on them from their external environment. If working hard meant I can have an opportunity for a better life, anybody, regardless of your skin colour, will work hard. If the social welfare system or labour laws in my country are so good that I don’t have to work very hard and worry too much about unemployment, of course I’m going to seem more laid back. Sure, culture and societal consensus at various points in time build institutions. But those institutions sustain cultures also.

Personally, if I have to fall back on culture as an explanation, I can’t help but feel a bit lazy with my thinking.

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Currently reading: “Why Nations Fail” by Daron Acemoglu and James Robinson. The blog is good (although sometimes I find their arguments a bit biased), the book even better.