By Benjamin Lyngdoh
In June-August, 2023 Meghalaya CM Conrad Sangma made significant statements on unemployment, stating upfront that the government cannot provide jobs to all while encouraging the youth to work abroad, etc. This is in contrast to the 5 lakh jobs promised by the NPP during the MLA elections in February, 2023. TMC promised 3 lakh employment opportunities. By now voters must connect the dots and realise that these are nothing but election gimmicks. It will be fruitful if this learning is used as terms of references in future elections. But then again, unemployment should not be viewed only from the government’s perspective. A holistic picture of its dynamics is needed. If the people do not engage in solutions to unemployment, there is no light at the end of the tunnel.
In developing economies like Meghalaya, politics influences growth. This dynamic is known as ‘political economy’. It is the study of business and its development in relation to government. It analyses the ways in which governments allocate scarce resources in society through regulations. It is based on the premise that regulation/schemes lead to progress and development. However, this is only true if the government is aware of the needs of the people and their capabilities. Else the regulations and schemes will not hit the intended target. Political economy is an age-old concept. Today there are studies which question if politics should dictate the economy (example Poor Economics, pp. 393-400). They underline that it has to be the other way round, i.e. the state of the economy should direct the policies, regulations and schemes. For example, government schemes require collateral/guarantee in one form or the other. Plus, there are checks upon the credit-worthiness of the applicant. Now, how would budding entrepreneurs with little or no financial backing qualify for these interventions? Further, there are some homestay applicants who are not considered on account of their location (example Mawlai). If such regressive guidelines are followed then it defeats the goal of creating employment through self-employment. This is where the reversal of political economy becomes significant.
There are many youths who are already well-trained with multiple capabilities. Some of them went through a formal programme of education while there are also those who are self-taught. In the age of edu-tech and applications, self-learning is extensive amongst the young. The problem lies with putting their skills into gainful employment. An interaction with them will tell us that the major hurdle is finance. When it comes to money limitation, all skills and dreams are shattered. The other hurdle is market size. The cities and towns of Meghalaya do not have the capacity to provide more employment unless new interventions happen at the macro level. At present there is an imbalance between labour demand and labour supply. The demand is limited whereas the supply is excessive. The automation of many tasks has also contributed to the shrinking of demand. It has also changed the supply-side skill sets that one needs to possess. These imbalances will continue unless there is an injection of vibrancy in the economy. The way out is to focus on hard infrastructure such as roads, airports, railways, special economic zones, agricultural hubs, etc. This will expand the economy and provide more jobs. Even a sample study will provide valuable insights on the imbalance between labour demand and supply and accordingly interventions can be designed.
Even today, the strength of Meghalaya is its rural sector. However, the degree of migration of the youth from rural to urban areas is perplexing. Clearly something is not happening right in the villages. Agriculture and tourism are double engines that would drive growth, but the engines are running at half capacity. Harold Goodwin has researched extensively on the area of responsible tourism. He correctly notes that for tourism to be called ‘responsible’ two things have to happen. One, local products/services must be used at the rural destination. Two, the economic benefits of using such products/services must go to the local community. These are the two pointers that explain migration. In almost all the rural destinations of Meghalaya local products/services are not used, and even if used, the benefits do not percolate down to the deserving local community. Imagine if it was to the contrary, rural tourism would then provide employment to the many with gainful returns. This would also mean a much-needed push for agricultural practices and produce. Sadly, it is not so and hence we can say that Meghalaya tourism is not responsible.
Let us take the case of plastics. Shillong city has been grappling with this problem for quite some time. Every notification banning plastic use has been ineffective. The reason is simple – non-availability of alternatives. The government comes out red-faced consistently. It would have been better if before the ban on plastics, some youths are empowered to set up an alternative to plastic producing enterprises. The demand for various varieties of carry bags is enormous. That way it has the potential to create a number of business enterprises and employ perhaps hundreds of them.
Joseph Schumpeter in his theory of economic development talked about ‘creative destruction’. It may sound negative but in truth it has a positive spin to it. According to Schumpeter, for development to happen some destruction must happen (which is creative). This opens up possibilities for employment and growth. In the process the old is replaced by the new. Sustainable and environment friendly carry bags as against plastics is a creative destruction. Further, as we moved from cathode ray tube (CRT) TVs to smart TVs and when airports and railways would change the transportation and economic landscape in Meghalaya. These too are examples of creative destruction.
Now, this solution may be controversial for some. Venture capital and angel finance is a western concept. They entail quick and targeted financing without collateral/guarantee to budding entrepreneurs who have new and innovative ideas. The ideas are mostly tech-oriented. Facebook (now Meta) and Apple are good examples of business conglomerates that started through venture capital financing. A venture capital uses its own funds and borrowed funds to lend to entrepreneurs. An angel financier uses his/her own funds to finance enterprises (hence the word angel). These are basically people with huge wealth. Meghalaya has business people who have amassed wealth but with no avenues to invest in them. If such wealth can be channelized to finance innovative businesses, the potential positive outcomes are many. Meaning, Meghalaya has the potential to produce many angels. What is needed is a platform to bring these high net-worth individuals together in a form of society or funding agency or foundation (like Bill & Melinda Gates Foundation). A proper strategy and roadmap to this effect can help solve the unemployment problem to a large extent. (Email – [email protected])
In the end, the need is for all concerned stakeholders from academia, practitioners, strategists, government, pressure groups, NGOs, etc to come together and look analytically at the dynamics of unemployment solutions. The issues are many, but, when ideas are put together with good intent a dent can be made in the unemployment scene.
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