Month / November 2012

by sheilasingapore

Newspaper Column #6: Have Greens, Will Rain! – Part III

As it appeared in the Sunday Standard, Botswana on  Sunday November 25, 2012 edition.

What goes around comes around. The Good and Bad.

 Today we move to the more exciting bits of this series!

We will uncover the vicious cycle causing water tables to decline and learn how they contribute to growing aridness to seeing the economy turn around.

The take-away from last week was if we take care of this long-term position, it will take care of the fast-changing short-term worlds for us (food security to household incomes).   We ignore this; the cycle brings the problem back harder and faster.  But such long-term positions do not happen by accident.  There is a reason.

I left you with a question at the end of the article.

What is the circle of causality that is pushing the water table down?

What did you see?  Perhaps you saw different versions of it.  Looking carefully, they were not quite circles but were straight-line thinking.   Linear thinking makes up parts of circular causal thinking.

So, let’s take a few examples.

Sometimes I get, the water table is down because our consumption levels have gone up.  This is because population numbers and therefore its related activities have gone up.  And this is because … and sometime we stop here.  In half-jest I proceed by adding, that ‘while fertility rates are up we are not dying fast enough’.  At this point, the class roars into laughter.  Mostly at the ludicrous reasoning.

We also know this is so, because we know of countries, whose population numbers and life expectancy are way higher than ours, yet do not see declining water table levels (see Picture 1).

Tips

So, here’s yet another tip.  Any causal factor used in a vicious cycle has to stand the tests of space and of time.  The above reasoning has not withstood the test of space.

At other times I see, water tables are going down because the rainfall levels are going down, and rainfall levels are going down because global warming levels are up.  Global warming levels are up because ….

Usually at this point, I would pause the group and question it.  Does this line of reasoning suggest that before the advent of global warming, while the water tables may have been higher then, than it is today, were its levels rising with each year.  Which means to say the water tables in 1960s or 70s were higher than it was in the 50s?

Stillness settles in the room.  Sometimes, it is because we do not know if this is true, mostly because we have not seen the data.  But again, it sounds like another ludicrous reasoning.  The reason is not passing the test of time.

So, what have been your thoughts about the cycle?  Had it looked like the above?  Not to worry.  It happens to the best of us.

So, what then is the circle of causality that is causing the water table to go down?  To uncover the cycle, we would need to learn to watch reality like watching a movie – as if without shutting our eyes.  Snapshots will not do.  So here we go.

Watching the reality like watching a movie

Rainfall is a part of the story.  Yes?  As more rains fall on the earth’s surface, they run off into rivers and seas.  And where they fall on land it sinks through the soil and seeps downwards.   As they do so, they help to recharge underground aquifers which in turn help to cause the water tables to rise.

The reverse is also true.

The less rains fall, the less there are seepages and recharges the water tables fall instead.  Here we have come back to last week’s question.  But notice; be it whether it is good news or bad news, the causality is the same.  So for now, we will continue watching the cycle as if it is positive.

Let’s go back to where we left off the cycle.  When the water tables rise, what does that lead to happening next?

Here, imagine the water tables across the region rising through the underground soil.  As they do so, we see more moisture in our soils and as they emerge through the surface, we would now have surface water.  They could either become a pond or your dam.  The more the underground water rises, the bigger the pond.  And so is the reverse.

What happens when surface water rises?  Just as when water levels drop in our dams, we impose water restrictions.  Well, we may say, this time we allow consumption of water … by humans, animals and plants.

When we do not have enough water, notice who we take off the list first?  Did you say plants?  That’s usually true or we introduce plants that resist droughts.  Then we try by as much as possible to share the available water resources between humans and animals.

To continue the thinking, we take it off from where we see plants consume water.  Should we leave them out of the story; it will be less than about the whole.  So, let us say plants consume water.  What happens to the cycle next?

We are now more than half-way around the cycle.  Remember we started with rising rainfall levels?  And we have now reached partway around the cycle to increased vegetation (see Picture 2).

When the vegetation increases over time alongside with surface water, what do you think will be their impact on rainfall levels in the next cycle?

These will be the subject of discussion in Part IV of this series in next week’s column “Have Greens, Will Rain!”  Well, I am sure; you and your friends will enjoy closing the cycle!  You may notice different responses along gender or age lines.  Try it out and notice.

Would rainfall levels decline?  Or could they increase?  What do you think?

Thinking ahead, what will be the impact of this causality on economic diversification?

Don’t forget the tips!

Till then have a lovely week discovering and learning!

This is the 3rdof a five part series of this article.  Each part will build on the earlier article to an eventual conclusion.  We invite you to participate in the column as well as do your ‘own homework’ – searching and discussing the issue to build your own conclusions.

Ms Sheila Damodaran, an international Strategy Development Consultant in the use of systemic thinking for managing national persistent issues, welcomes comments at sheila@loatwork.com.  For upcoming programmes, refer to www.loatwork.com/Senior_Leadership_Introduction.html.

by sheilasingapore

Newspaper Column #5: Have Greens, Will Rain! – Part II

As it appeared in the Sunday Standard, Botswana on  Sunday Nov 18, 2012 edition

Cycle?  What cycle?

In Part I last week, we were concluding that the water tables in the region were possibly declining.

This series of articles in November is a dedication to this subject.

It explores issues of primary industry (raw material) development to water consumption choices and their effects on families, the nature and the economies.  In short, it underscores the story of diversification of any economy.

All of this will be discussed as we take a trip around the water cycle in this series of the column.

Water tables even if they are underground are part of the water cycle, originating when part of the rain that falls on the Earth’s surface sinks through the soil and seeps downward to become groundwater.  Groundwater will eventually flow out of the ground, discharging into streams, springs, lakes, or the oceans, to complete the water cycle.  (See Picture 1)

When asked how high is the water table and how it has behaved over time, most of us picked Pattern C (refer to last week’s article.  See also red line here in Picture 1 below (refer to ‘Long-term depletion’, the line marked AB)).

That it has shown a general downward trend.

Such long-term trends become evident when we study past data spanning several decades.  They usually escape the best of us when our attention is on what’s happening today (refer to the lines CD).

Here’s the implication of seeing such patterns over time.

The long-term depletion worsens the position of each short-term variation.  We now have a persistent issue but is working its way to the levels of a crisis in the long-term.   Such issues usually resist change and defy our best planning and implementation efforts beyond the short-term.  It is a costly management process.

And if we imagined the water cycle, it would have begun to show signs of weakening intensity.  The local weather conditions could see the likes of droughts or even floods.  Of course, these conditions would reverse with long-term augmentation or increase.

In systemic thinking, we pay attention to these long-term positions rather than the short-term.  This is because of the following reasons:

  • It is these long-term positions that determine what happens in our day-to-day realities.  Ignore them and the realities get worse.  These will help us become more realistic in our planning and implementation efforts;
  • The reasons that cause the long-term position are often very different from those that cause short-term positions; and so,
  • When we find those reasons, they will present areas that will allow us to turn the situation around.  For good.  It saves our resources.

Boiled Frog

To get there, it helps that the country as a whole learns to see and understand such patterns together, with the disciplined eye of a hawk.  All of the time.  Should we not, then like a boiled frog, it would lead us to deeper crisis unawares.  We become the boiled frog instead.

And I left you with a question.  How do we know for sure, that the water tables are indeed declining?

I am sure you have figured this one out.

You might say, well it is when we notice farmers dig their bore-holes deeper.  And they do so, from time to time.  You are right!  This is an indication that the water table for his side of the land is behaving more like Pattern C and as the pattern continues to unfold the land becomes drier (a crisis is looming).

Does anyone know how deep some of the bore-holes in the Kgalagadi and possibly Namibia are?  They did not start that way.  They became that way.

The reverse, however, is true for the forests in the Amazon.  Both are happening at the same time each with its deliberate direction and goal.  This is what we, otherwise, call reality.

Uncovering the Cycle

However, most management concepts did not clarify that our straight-line goals are not designed to fight trends such as AB.  They are designed to fight the shorter-term trends like CD.  The latter, is an important view of the military and the fire-fighters.  Crisis management.

Now, if the long-term position is true, i.e. if the water tables are going down, then we have a circular causality in our hands.   This requires very different management tact.  We would need to uncover the elements of the cycle to address these long-term positions.

Therefore, rather than ask what we should do about it, the next question here is what is causing the water tables to go down?

Meaning to say, if we say the water table is going down (in the long term), what is causing that?  And in turn what is causing the cause?  And so on.  Think cycle.  Get the idea?

And remember, even when you think you have got to the “root cause”, in this work, we say, even the root cause has a cause.  Nothing exists without a reason.   It is whether we see the reason or we don’t.  In short, the 5Whys methodology does not work for persistent problems.

Do not forget to also go the other way in the cycle!  Should the water table go down, there are consequences.  Yes?  And then what are the consequences of the consequences?

Here’s a tip.  Should the circle not close in itself, then it is not the ‘right’ circle of causality.  Start again but with a different set of reasons.  This is a trick we use, before we understand more deeply the tools of this work.

Go ahead and try it!  There is something inherent about wanting to see vicious circles, as hard as it feels like to get there; it captures our curiosity and intrigue.

So, … what is the circle of causality that is causing the water table to go down?

Well, I am sure, you and your friends will keep trying and enjoy getting there!  This will be the subject of discussion next week in Part III of this series of the column on “Have Greens, Will Rain!”

Till then have a lovely week discovering and learning!

This is the 2nd of a five part series of this article.  Each part will build on the earlier article to an eventual conclusion.  We invite you to participate in the column as well as do your ‘own homework’ – searching and discussing the issue to build your own conclusions.

Ms Sheila Damodaran, an international Strategy Development Consultant in the use of systemic thinking for managing persistent issues at regional and sectoral levels, welcomes comments at sheila@loatwork.com.  For upcoming programmes, refer to www.loatwork.com/Senior_Leadership_Introduction.html.

by sheilasingapore

Newspaper Column #4: Have Greens, Will Rain! – Part I

As it appeared in the Sunday Standard, Botswana on  Sunday Nov 11, 2012 edition.

How high is the Water Table?

One of my favorite subjects of the work that I do here is working with the water cycle.

Well, all of us learned about it in school.  In Grade 5.

Evaporation leads to rainfall.  Rainfall leads to seepage and runoffs.  Runoffs into rivers and lakes lead to evaporation, and so on.

Except the one difference in a systemic approach is it recognizes that this cycle is not a static process.

This means they do not remain active at the same levels of intensity over time.  The intensities are dynamic.  We did not learn about this fact in school.

And therefore, the cycle has the potential to either cause the rainfall levels to increase or decrease over time.  These trends are not clear in the short-term.  The patterns become distinct over longer periods of time, usually in years.  But the shift is definitely happening.

We call it by different names including the likes of global warming today or periods of draughts or seeing unreliable rainfalls or when we have periods of more than average rainfalls.  Their persistent behaviour over time is in effect the consequence of the water cycle in silent action.

It is silent because we do not see the water cycle directly as it is unfolding before our eyes.

Cycles can go two ways.  They can either reinforce positively or negatively.

The next four articles in November is a dedication to this subject and it explores a range of issues from primary industry production to crop or raw material production to dairy and cattle production, water availability, water consumption choices and their effects on families, the nature and the economies.  All of this will be discussed as we take a trip around the water cycle.

Where I came from, in Singapore, we typically have quite a bit of rainfall and so; it was not as much an issue in my mind, until of course when we experience floods there.

Singapore sits right on the equator and so year round, it enjoys a hot and humid tropical weather.

The nature of water is to flow

The inherent nature of water is to flow.   The more it flows out naturally, the more it comes back to us.  Naturally.  When it is trapped, it dries up.

This is a subject that has become dear to my heart as I spent more time in the country.

And then something struck me.  That the excess of or lack of rainfall is not only as a result of the terrain.  There was also the inter-play of the reinforcing nature of these water cycles.  Its intensity to reinforce positively or negatively will vary with its surroundings.

A case in point is the spread of the forests in the Amazons of South America.  These span to the same latitude as that of Botswana.

[Insert picture of world map here – see Picture I below]

Chicken and egg

Question.  Is the Amazon green because it has more rainfall?  Or does having more greens cause more rainfall in the Amazons?  Or does it happen because both exist together?  Like the chicken and egg.  Both would need to be there for them to reinforce their continued growth.

One way to appreciate the existence of the cycle as a causality of rainfall levels is to take an issue that is related to it and watch its behaviour for persistence.

If it is persistent, we would see the peaks peaking higher or the troughs digging deeper each time.  This requires us to plot the past behaviour of the issue on an x-y axis.  The X-axis is always time.  The Y-axis plots the levels of its behaviour.

Should there be a persistent decline or incline on these graphs, then we know that these cycles or circles of causality are definitely at play.

So for the purpose of this exercise, we will take a factor.  Let us say the level of the water table.

What would you say has been the behaviour of this factor, in this part of the world over a forty-year period?  The further into time we plot these behaviours, the more it becomes clearer to us the persistent nature of these issues.

Would you say the water table levels have remained constant for the past forty years (Refer to Picture 2, Pattern A)?  Or would you say it has increased during the same period (Pattern B) or would you say, it looks more like Pattern C, i.e. the water table has declined over the years?

Which pattern would you pick?

[Insert Graphic 2 here]

Did you pick Pattern C?  Most of us do so, resoundedly.  I have not had a dissenting view to that choice since I had been doing these programmes.

Now, if pattern C is true, then we have a circle of causality in our hands and it is causing problems to recur right here on this land.  To take care of the problem of water shortages, we would have to take care of the water cycle.  The whole cycle.

But before that.  How can we say for sure that it is Pattern C?

Keep wondering.  This will be the subject of discussion in Part II of this series of the column on “Have Greens, Will Rain!”.  I am sure you will be listening to what we see and hear around us every day as you figure this question out.

Till then have a lovely week of discovery and learning!

This is the 1st of a four part series of this article.  Each part will build on the earlier article to an eventual conclusion.  We invite you to participate in the column as well as do your ‘own homework’ – searching and discussing the issue to build your own conclusions.

Ms Sheila Damodaran, an international Strategy Development Consultant in the use of systemic thinking for dealing with persistent issues at regional or sectoral levels, welcomes comments at sheila@loatwork.com.  For more information, refer to www.loatwork.com.

by sheilasingapore

Newspaper Column #3: Is unemployment, the real problem? The Story of Supply of Labour – Part III

As it appeared in the Sunday Standard, Botswana on  Sunday Nov 4, 2012 edition.

Labour is a cost

It can assist to generate revenue but it is firstly, a cost.  When we add them up, it can rack up into billions of dollars.  Easily.

Hence a situation of ‘that we have labour’, will not be enough reason why ‘jobs will be created’.  The jobs need to be paid.  When the money dries up, including borrowings, so does the job.  This will happen in the same way for any country.

The supply of labour however remains unchanged.  They are either more who are employed or more who are unemployed.

Next, think bottleneck.

When the supply of labour exceeds the demand for it, the demand becomes the ‘neck’ of the bottle.  It narrows the uptake of the supply. Competition and waiting for jobs are the inevitable consequences of the bottleneck.  As we release the bottleneck competition disappears.  And so would unemployment.

We would therefore require solutions on both sides of the ‘neck’ to solve the problem of persistent unemployment.

In the past two week’s editions of this column, we introduced two factors that influence persistent unemployment.  Should we create new jobs (i.e. there is demand for labour), unemployment goes down.  Should however, the numbers of births and immigration (i.e. the supply of labour) go up over time, so does unemployment.

We also discussed that the ability of sectors to create jobs is influenced by the health of profit margins of three interrelated industries, i.e. the primary, secondary and tertiary industries.   We discussed when the primary industry grows; they help to grow the secondary industries which in in turn help to grow the tertiary industries.

At this point, unemployment becomes resolved.  Hard as it may sound, it is a solution we cannot ignore.  The easy way out, would lead us back in, one way.  Back to the problem.

In today’s edition of the column, we explore the story of the supply side of unemployment and its solution.

This becomes important to help us see solutions that are digging us in deeper into the problem.  It will be ironical that what we had hoped will help the situation could actually be making them worse.  Things become better before they become worse.  At that point, we would have a situation spiralling out of hand.

A case in point is, if there are more of us than there are jobs available, skilling people without creating jobs will not make unemployment go away.  I know we do not like to hear this.  And neither do I.

Jobs do not stay vacant.  They are going to others.  And yes, while the best man may win, there is another man (or woman) out there.  That is the point.

If the problem does not budge despite resources, then it is a sign that all what we have done was to apply a solution to the consequence of the problem but not to its cause.  To deal with the cause, we would need to pull ourselves away from the fire to notice where the gas pipe is coming from.  A fireman cannot help us at this stage.

Supply of Labour

What causes the increase in the supply of labour?

One might say, well that’s easy.  It is caused by migration.  Well, that is certainly true.   For the short term.  Migration is just that.  Sometimes they are in.  And sometime they are out.

Sustained long-term increase in the supply of labour is caused by the rates at which locals add births to the population numbers within the country.   This impact is pre-determined.  It cannot be changed,  its effects are not felt immediately but they were set into motion twenty years ago.  They are felt twenty years later when the babies have grown into young adults and are about to join the employment pool of the country.

We therefore do not connect the problem to the cause since they are both distant in time and space from each other.  And when we do not see this relation, we disregard the cause and take the easier way out.  We look at immigration.  This happens for any country.

And so, if unemployment is persistent today, then this is an indication that numbers of those born twenty to thirty years ago and have now joined the labour pool, had been pushing up slowly but steadily.   Yesterday, we rejoiced each birth in our families.  Of course, we were not watching their total consequences on the nation for tomorrow.  Well, not yet.

As a nation, how many persons have we added to the pool of supply in the past forty years?  Yes, it may feel late to ask such a question.  It is meant as a way to face reality.

Let us say, should we produce 5,000 children per month, and that makes it 60,000 babies born in a year, then we can reasonably expect that twenty years from now (and 1.2 million people later), when they grow up, we would need to be preparing for an additional 60,000 jobs (given gender equality) for that cohort.

This is in addition to those already employed prior to them.  If we are seeing 30,000 retirees, we are still looking at creating an additional 30,000 or more new jobs for the cohort.  And do not forget these 60,000 do not stay at producing another 60,000.  Yes?  How many will they produce in ten to fifteen years from now?  That will become tomorrow’s reality.

How much would an additional 30,000 jobs (for that year) cost us?  Don’t forget the other years and other employees.

Who created the children?  You are right.  We did!

Who will create the jobs for them?

Creating Jobs

In a recent project on unemployment in a country, we saw the population of 35 year olds and younger, ballooned six folds in a thirty-year period.  On the other hand, job creation had not risen by anywhere near as much.  The population had disregarded these economic factors.  Of course, we can say, economic and bedroom choices do not always mix.

At rates of six-fold increases, just that layer of the population would quite easily add over another 1/3 million persons by the next generation.  These are figures before immigration.

So what is happening?

In short, we are now attempting to “fight” the problem somewhat oblivious to these realities. We saw the fire. But not what caused it! We had hoped that the supply of labour could influence the demand for labour. But that is just not economics.

Still, I wonder if, as citizens, we can totally absolve ourselves from not understanding these figures and how they play up in our everyday lives.   What do you think?

At some point we would no longer be able to shut our eyes to this.  The reality would soon wake us up, as as we see our children stay unemployed.

Have we come back full circle here?  Who designed this circle of causality?  Is this unique for one country?

What should we do today?

As citizens should we know what these numbers look like for the country?

Understanding this trends, profoundly changes the game plan in many ways.  Firstly, it allows the problem to be solved where it started (the community), not where it ended (government).  There is leverage here, as it allows the greatest changes to happen with the least amount of effort.

I have tended to believe that should citizens understand these numbers, they would become clearer at steering the country out of this problem.  Even by themselves.  These may include making choices such as coming up to speed in ways to create jobs rather than wait for jobs to be created.  Or consider seeking employment outside the country.  It is the go-getter attitude by such individuals that will eventually help draw revenue to any country and themselves.

That’s for today.  How may we better prepare ourselves for tomorrow?

Families are key

We could actually become better at matching birth with job creation rates.  Knowing these trends, may free us as families, to consider channelling resources to the building of the primary industries of the economy.  This is a strong system of production of raw materials for all levels of the economy.  Farmers, and growers of raw materials, who see this impact beyond putting food on their table for their family, are beginning to pay attention to this systemic reality.  Production is now greater than consumption in the country.

When they do so, the family is now taking a step towards ensuring that jobs are more likely to be created at other levels of the economy, for the children we produce.  We may find that as more resources are allocated to primary industry production (and less to child production) we become better at learning to manage our population numbers more in line with the capacity of the country to produce jobs for our children.  There is an order in which causality happens.

Unemployment, at that point, stops becoming a problem.

How do you see this issue?  Given the above, do we need to understand the picture that is happening for the country today?  What’s stopping families allocating resources to primary industries?

Go forward another twenty years from now.  What trends would you like to see?  For our families?  The economy?  And our country?  For employment?

Hope this inspires discussion amongst your family and friends for ways you see us resolve this issue.

English: US Whig poster showing unemployment i...

English: US Whig poster showing unemployment in 1837 (Photo credit: Wikipedia)

by sheilasingapore

Newspaper Column #2: Is unemployment, the real problem? The story of Demand for Labour – Part II

As it appeared in the Sunday Standard, Botswana on  Sunday Oct 28, 2012 edition.

Supply of Labour

Industries (be they by locals or foreigners) do not exist for the sole purpose of employing citizens.  Hard as it may be to accept this point, it really is not that difficult to see the reason.

What is harder to see is an unemployed economy will affect the growth of his industry.  Not immediately.  But eventually it will.  Think most political revolutions. It is a sign of a vicious circle.

In last week’s edition of this column, we uncovered two factors that influence persistent unemployment in any country.   These were:

  1. The rates of growth of demand for labour (by employers) vs.
  2. The rates of growth of supply of labour (by employees)

As the supply of labour (rising birth and migration rates) persistently exceeds demand, unemployment grows.  This does not mean that our attempts at correcting the problem will not be successful.  They will not be successful for the long-term.

On the other hand, as the demand for labour (number of new jobs created) persistently exceeds the supply, unemployment would decline (and literally disappear by itself).

This week, we explore the demand – a side commonly used by most of us when focussing on the problem of unemployment.  In the next edition of this column, we will get around to supply.

But before we continue, what does the picture of growing demand for labour look like?  We might say, well, that is obvious.  We would see companies and industries recruit and persons as employees of their organizations.  That’s where most of us would stop.

But that would not be quite enough here.  We should see increasing numbers employed for the long-term.  Possibly even for decades.  And it happens primarily in the private sector.  They are key. If these three conditions do not happen, then real and deliberate growth in demand for labour has not quite happened.  Yet.

But what influences the demand for labour to grow consistently (rather than ad-hoc)?

It would require industries and the country to post a healthy growth of its income margins or profits.  Year-on-year.

Margins / Profits = Level of Revenue Earned – Level of Costs Incurred

This difference needs to grow sustainably.  Where revenues grow and costs decline, the industry is well positioned to create new jobs each year and pay for higher wages in other years.  The reverse is also true.  When the margins are negative, we would face sustained unemployment.

What would cause the margins to grow sustainably for any industry?

Asking this question is deliberate in helping the mind steer itself to the inevitabilities.

Does sustainable growth of margins happen because we are able to apply “do more with less” strategy, really well?  Or, is it because sales have picked up for that industry.  Well, yes, partly.

However, here’s the inevitable.

The extent to which we see sustained growth of margins depends on the extent margins or profits grow across ALL the three levels of industries in any economy, i.e. primary, secondary and tertiary industries.  These three share a very tight systemic relationship!

As we take care of the whole, not parts of the economy, the nation grows.  We all know that.  AndI know we can turn this knowledge around with our hands and feet.

So what causes sustained systemic growth of all three types of industries?

Think tomato sauce.  The cost of manufacturing and eventually retailing that sauce would depend on the cost of the transport and distribution systems (secondary industries) needed to transport the raw materials to the factory or retail sites as well as the cost of producing the raw material itself (i.e. from seed to fruit by the farming industry).

The transport industry, in this regard is secondary to manufacturing while farming of tomatoes is primary to both transport and manufacturing.

Should however, the costs of the primary and secondary industries for each unit of product produced increase over time, the  tertiary industries would not be able to reverse those costs, much less grow without incurring further costs and will have their work cut out for them to stay afloat, much less see their margins grow in sustained ways.  That is the reality.  The experience will otherwise be like juggling balls.  It will be hard to take our eyes off them because we do not know when they will fall.

When these costs are passed on to the customers or citizens, it makes it harder for them to find ways to fund continued private sector development efforts.  Here we have now come full circle.

In most cases, the primary industry refers to raw material production, in particular crop production.  As we grow our raw materials (as we have achieved with sorghum production), its secondary (farm and brew trucks) and tertiary (brew production and retail) industries will begin to grow as well.

Just as the white farmers in South Africa in the primary industries (vegetables, fruits, dairy and livestock production) have done for the Chinese and the Indians in the secondary and tertiary industries there (as well as here in major supermarket chains).   This relationship, however, did not happen overnight.  It took almost one hundred and fifty years in the making in South Africa (and not forgetting two centuries before that in India).

So for a nation to thrive (not survive), think the root of a plant.  When the root thrives, so does the plant.  When it dies, so will it and the other healthy roots around it will suffocate the plant out.  Removing the top of the plant will not cause it to go away.  The root will bring it back.

I am sure you see it!  When the profit margins do not grow for all of the three industries, the number of new jobs created does not grow.  Instead, unemployment grows.What is the implication of these to employment, you ask?

Where are we today as a nation on this graph?

Which industries are dominant for the nation?  Which ones are not?  Which industry do you see as driving the others?  Would you like to be a part of or lead from that seat?  I am sure you can!

What would cause the health of primary industry or production of raw materials to grow over time?  This will be the subject of another column.  But till then, I wish you, happy thinking and discussing.

So is unemployment the real problem or could it just be the tip of another problem? The iceberg. How do you see this issue?  Go forward another twenty years from now.  What could these trends look like then?  Could this possibly affect the sovereignty of a nation?  For any nation?

The 3rd instalment in this three part series of this article will appear in the next edition of this column.  It will explore the supply side of the equation of labour and unemployment.   Watch this space.

by sheilasingapore

Newspaper Column #1: Is unmployment the real problem – Part I

As it appeared in the Sunday Standard, Botswana on  Sunday Oct 21, 2012 edition (maiden print).

This is the 1st of a three part series of this article.  Each part will build on the earlier article to an eventual conclusion.  We invite you to participate in the column as well as do your ‘own homework’ – searching and discussing to build your own conclusions.

When unemployment persists (hard as it is to admit it is happening)

Persistent unemployment, in any country is a consequence of two factors.

The rate of increase of supply of labour (birth rates from twenty years ago) relative to the rate of increase in the demand for labour (job creation rates of today).  In jest, it is a mismatch of rates of child creation of the past vs. rates of job creation today.

Should the rate of demand for labour exceed supply year on year; we would have full employment of the locals and perhaps be able to employ foreigners as well.  However, should supply of labour persistently outgrow demand; we would now have a classic case of persistent unemployment.

When we, as citizens, learn to watch these two behaviours of change as a nation over time then we should expect to resolve the issue of unemployment.   For good.

When we don’t, and we are oblivious to the reason, all we can expect to do is to play a catching-up game but not solve the problem.  It stays on the charts as a stubborn problem, usually on the President’s table, worsening over time.  This is, despite efforts from all quarters to run ahead of the problem or get to the root of the issue.  Not to say, we hear persistent disgruntlement amongst the locals about the lack of employment opportunities for the youth or for those employed the lack of pay rises and we harbour fears of jobs being taken away by foreigners.

So,

Sustained Growth of Supply of Labour > Sustained Growth of Demand for Labour

= Sustained Unemployment

[Insert graphic here]

These two factors are not directly related to each other, but they each

 influence unemployment, separate as they may be.

But what led things to get this far?

What causes the demand for labour to decline relative to the supply of labour?  And what causes the supply of labour to increase relative to the demand for it?

First let’s explore the supply side.

Here’s a case in example.  In the ten years to 2010, Vietnam saw its population numbers grow from 80 to 89 million.  Growth of population numbers and more typically birth and migration numbers influence the supply side of this equation.  Job creation on the other hand, did not see such levels of growth.  The result is, we see runaway unemployment in the country.

Closer to home, while, population numbers in the country do not compare anywhere close to those we see in Vietnam, still when we look beyond the overall numbers, there are interesting data that we cannot ignore.

We know the overall population numbers have grown somewhat from 1.5 to 2 million levels over a decade.  Given however, the concerns of mortality rates one may conclude that our population numbers have not really changed all that much to warrant the unemployment levels we see in the country.

But realistically … has the supply of labour declined over time?

Births rates from twenty years ago, leads to the supply of labour and therefore the unemployment numbers we see today.

When we remove population and mortality figures and see our fertility rates, we may notice that these numbers have not been all that low.  In fact, typically in most populations, each generation outnumbers the previous one.  Think of population pyramid, where the numbers of young born are in numbers greater than older persons in the population.  But also see population pyramids for more recent decades assuming wider bases than those in previous ones.

Such trends are not apparent when we gloss over overall population data.  Yes, there is migration data.  But we cannot shut our eyes to these sheer levels of increase.

Do we know by how much such numbers have grown?  In the country?  In the region?

A separate question is, when should we start noticing such increases?  Would it be when the young turn 20 years old and are now looking for a job and they complain they cannot find one?

That will be too late!

We would now instead be dealing with “a fire” in our hands.  Youth unemployment rather than employment.  Yet it really is a problem that had its embers simmering for the past 20 years.  Quietly but surely.  But we were not watching it, till the embers had blown over and we now have a fire in our hands.  At this point, we say, we have a problem.  A burning platform.  But the signs were long there.  If we push this now, the system will push back.

Ok it has not.  And … has the demand for labour increased by such levels during this period?

If it has, we should not see sustained unemployment.  This is indicative that the demand for labour has not matched such levels.

How much has it increased by?  Perhaps more importantly, how much would it need to increase by?  Two-folds?  Six-folds?  What do you see are the answers?  What is making it difficult to get there?

Interestingly, should we think carefully about both sides of the equation, that is, the jobs and the children we create are influenced by the same segment of the population.  The Adults.

While perhaps we may argue that these’ activities are carried out’ by different sub-segments of the adult population, it is still the sole prerogative of this group.  The problem may not belong to any one part of this group, i.e. government or private sector or families.  That sounds like the bad news.  That it was our fault (in any generation).  But the good news is if we created the problem, then we also have the ‘power’ in our hands and in our hearts to turn it around (yes, even as a citizen) for the nation.  Together.

So is unemployment, still the real problem?  How do you see this issue?  Go forward another twenty years from now.  What would these trends look like then?

Yes, you are right given this, the reality looks painful for our children too.  But I also know, if anyone can turn this around, it is us!

The 2nd and 3rd articles in this three part series will appear in the next edition of this column.   It will seek to explore the story of the demand and supply sides of labour respectively more deeply and what causes them to either grow or decline over time.

END

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Countries by birth rate in 2008World map showing countries by nominal GDP per...

While this is her maiden newspaper column, Ms Sheila Damodaran is an avid writer on her blogs and website.   An international consultant in the use of systemic thinking for regional or sectoral strategy development, she welcomes feedback on her column as well as requests for types of persistent issues you wish to see discussed in her column at sheila@loatwork.com.  For more information, refer to www.loatwork.com.