Thursday, October 29, 2020

Dear Minister, Matsheka: There is a “magic” that happens when targets are set, it’s called “accountability”

If there was ever a day in which economists were to distance themselves from one of them that day is this past Thursday. Thapelo Matsheka – a well-known and much celebrated economist nationally stood in Parliament, in his capacity as political head of Treasury and in his bid to defend the government’s past and future failures on job creation boldly told Parliament that “other countries have tried to give specific employment targets but none of them as far as I know have ever achieved those targets”. In other words, Matsheka is suggesting that there was no need to set target for job creation. I cannot lie and say I was shocked. I wasn’t. Matsheka is probably borrowing leaf from his political master – President Mokgweetsi Masisi who when asked about the same (targets) in July 2018 said, “The world is too fluid and dynamic to do that. No one in the world has been able to set jobs targets and achieve them, they either created too many or below their target”.

The sentiments by both Matsheka on Thursday and Masisi in July 2018 suggest that they are not the reformists they claim to be. No reformists would shun setting targets unless they want to dodge accountability when the time finally comes. As the popular saying goes, “failing to plan is planning to fail”. Matsheka and Masisi’s decision to shun setting jobs creation targets is surely a plan on their side to get this nation to fail in that mission.  They have made the route to failure even shorter. Their pronouncement is disappointing to say the least.  Meanwhile whilst the self-proclaimed reformists shun target setting unemployment, the harshest brunt of which is borne by the youth, on the other end continues to be on the rise. We can only hope for a miracle to happen since our leaders have chosen to disregard global practice of target setting. One would have thought that our past failures, such as the failure to diversify the economy should by now have taught us a lesson of why setting not just targets, but ambitious ones is of paramount importance.

If there is anything, we should have learnt over the past several years is that government policies do not succeed or fail on their own merits. They fail because of sentiments such as the one made by political heads like Matsheka and Masisi. While it could be true that the world is fluid and dynamic, we must also admit that fierce world markets competition that rose from the globalisation tide continue to make economic diversification for our little Botswana imperative. That is why for so many years now we have been making numerous calls on the need to disentangle our economic diversification drive and track it with monitoring indicators. These indicators can only be in place when targets are also in place. No matter how Matsheka and Masisi want to look at this matter – we cannot afford to not set targets. As self-proclaimed reformists, Matsheka and Masisi should not be subscribing to a failed assumption, that by assigning a reduced role for the government in the market economy and merely targeting macroeconomic “fundamentals”, would results in sudden appearance of jobs. Globally this assumption has been the dominant view since the early 1980s but history does shows us that it has not worked. For countries like Botswana, as numbers would show a corollary of this assumption is that policy did not directly target employment, leaving it, rather, as a residual of macroeconomic policy. That is why by his own admission, Matsheka has come up with a proposal to turn the Citizen Economic Empowerment Policy of 2012 into a law. It is an admission of failure. That failure did not just happen. It happened partly because of lack of set targets and economic indicators. International experiences show that employment targeting and jobs tracking are both feasible to do and are a joint salient undertaking for measuring human development progress. Even the International Labour Organization (ILO) – which Botswana is a signatory to many of its conventions posits employment targeting as a tool for helping governments to address issue of stagnant or high unemployment rates. A literature review or even quick desk top research of a few country experiences with employment targeting offers some important insights and lessons for Botswana on the feasibility of employment targeting. For instance, in 2012 our neighbor – South Africa pledged, in an economic blueprint, to reduce unemployment to 14 percent by 2020 and 6 percent by 2030 (Daniel et al, 2001). Against these ambitions, in the interim, South Africa’s unemployment rate is expected to be 27.5 percent by the end of this quarter (Q1:2020).

Whilst this rate remains the highest rate for that country in 13 years, the transparency and accountability with which employment targets are pursued even when the go off-track arguably reflects a strong explicit political commitment to the achievement of desired employment outcome within specified time frames. Far from Africa, in US, the Federal Reserve is subject to the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978, which specifies policy goals as full employment, balanced growth and price stability and sets interim targets of 4 percent unemployment and 3 percent inflation. The Act has been instrumental in ensuring the US Federal Reserve pursue its dual mandate (Epstein, 2005). Since we are fresh from the 2019 elections, one would have thought that Matsheka and Masisi would be awake to the fact that in the USA, job targeting and performance help the electorates to see if the President and Federal Government are acting according to promises made to them on the creation of jobs. With these two examples, of economic power houses – one for Africa and the other for the world, there is no valid reason why Matsheka should still be insist on shunning jobs creation target setting. Unless of course he is feeling lazy on behalf of some of the bureaucrats at the government enclave.  The #Bottomline however is that employment targeting, tracking and reporting is technical feasible to normalize and fully integrate within a country’s macroeconomic framework, particularly in instances where political commitment is well established.

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