When The Economy Speaks … Reversing National Unemployment Statistics

6 Things For A National Leader To Do

https://medium.com/series/when-the-economy-speaks-cdb62e49ad36

Peter looks down at his high school examination results transcript for the first time. It is not a pretty picture. He had been praying hard the results that would peer back at him would be different but he also knew deep down that it may not. He had been dreading this moment. It has arrived.

Still, he had wished for otherwise. He is a bright student. But it had not been an easy past few years. He had just lost his older sibling to a debilitating illness. They had been very close to each other. He is also dauntingly aware his parents are not close to each other and fears they may find other partners and break-up. What would that mean as a family? Where would he seek his counsel? Will he be intruding? That bothers him.

Turning his eyes back at the results, he knows he can do much better than what he sees. The reality is dawning at him. He is facing it squarely. These results are not going to help him get into his dream course at the university of his choice. It hurts him. What should he do now?

Suddenly he is remembering that he has to announce these results to his family. He has been known to be the one with a sound head on his shoulders. But now. With this. What would they think of him? Maybe they would not ask. He consoles himself.

But they did. He chose to keep quiet. Perhaps they will understand. He hopes. But meanwhile, he needs to come up with a strategy. Fast. So that his peers do not leave him behind.

He thinks.

He needs to get grades. Good grades. Fast. What subjects will help him do so? French. Perhaps. Grades that would help him put his foot through the door of a tertiary institution. What can he do so that he can catch up with his peers in the shortest possible time? He has the coming summer months to do so.

What jobs are out there that he should prepare for? He really did like the sounds of the field of nautical engineering. He had really enjoyed seeing and fiddling in the cockpit of a cruise ship during one of his summer vacations. It had made him feel happy and come alive. And he loves his Maths and Physics. But he has been told that manufacturing here is not a big deal in terms of jobs. What should he do? How should he decide?

Are his days of plain-sailing through life over? Will he face the same dilemmas when he out there in the big wide world looking for a job? With only four jobs available for every ten working age population, what will become of his chances with not so great grades? Supply of labour is now outstripping the demand for labour. Will jobs become too slim for his picking?

He will need to figure this out. He needs time. But does he have the time?

We all know a story like this.

One way or another.

And so. Here is the situation. You are now charged as the Head of this State. What would you do to turn around the situation?

Run, you say? Oh, you did not say that. Good! Invite more investors, locals as well as foreigners, to invest in the country?

Your predecessors have done that. Poured trillions for decades over with the help of past heads of states and a cabinet of citizen representatives. Yet, widespread unemployment today, has grown to now prevail at 60%! How did that happen?

You say perhaps “they” have not done enough. That you will do more than them. That is possible. For how long would you do more of the same? What went wrong? What else could we do?

Some measures are drastic and feels more like a bitter pill to swallow. But I hope it will make the tough actions we would need to take instead become easier to bear with. So here goes.

1. “EXPORT” UNEMPLOYMENT

Don’t have an agricultural and manufacturing bases? It has been too hard to build them? Well, no worries. Export unemployment at the same rate that we have been importing manufactured goods and the raw materials that were produced so that the unemployed follow the money you have spent buying them from outside the county (or the region).

2 “MATCH” BIRTHS TODAY TO JOB CREATION TOMORROW

If you know we will make more jobs tomorrow, go forth and multiply. But if you know, that we will not, … well, you get the drift.

A runaway population just means runaway unemployment figures that becomes hard to manage.

Supply of labour does not come from our education “system”. It is as the result of rates of births, not today, not just last year but from twenty years back. This is the time it takes for a young person to mature and readies himself for the job market.

Of course, it becomes tricky matching what happens in the bedroom today to the decisions we make in the boardroom twenty years on. The only consolation we can make is, the one who “creates” the child is the same one who plans today to “create” those jobs tomorrow. Well, no, I was not talking about God.

It is you and I. We needed to believe that we can create companies that can create those jobs for our children tomorrow. Companies are more than about hustling for clients to make money for us today or a shell to be used and discarded when we got what we need today. They are meant to create a legacy that makes jobs tomorrow. So, do you believe you can do that?

3 NATIONAL & COMMUNITY DIALOGUES AS FAMILIES Q: what allows industries to grow?

The decisions we make as nations and as families are strongly intertwined.

The decisions to be skilled for the agriculture and manufacturing sector bases are happening within families and households But the data used to inform the decision is based on what they would hear and say is happening “out there”.

If we think the population is not skilled to do manufacturing and in turn as families we think the country is not doing enough to create jobs in manufacturing then there right there, we have a lose-lose situation as a nation.

So make the intentions and the reasons clear and talk through the concerns surrounding the issue and figure a way to share the information as a nation. If countries around the world today can do grocery shopping online, this is not as big a step as we believe it to be.

4 CONSTRUCT REGIONAL MATRIX-ED GOODS VALUE CHAINS MAP

Get your backyard in order. Know what you want and go for it.

Figure what the latticed structure of chains of raw material supplies that are driven by what customers need as a region looks like and develop a vibrant agricultural and manufacturing bases:
– Do not be led by products that you have but rather focus on what customers want when building the matrix. Construct a map.
– Identify how one good feeds into another cost-effectively for end-customer needs within the local, regional and the global markets
– Know what is available. And what is not.
– Forget the who has what at this point. That is for a later stage when the map is completed.
– Focus on identifying critical processes on the chains, those if unavailable would stall the development of the production and the chains.
– Do not wait for another region to develop their maps and approach the country or the region to conduct the manufacturing for them. You will lose the clout you would need in managing the process and gaining value.

When the mapping is complete, you now have a working document to get your act together and move forward as a nation and the region.

5 ALIGN AND BUILD HUMAN RESOURCES

Align and, where needed, develop human resource skills dedicated to the agriculture and manufacturing sectors with a particular emphasis on acquiring both core across the nation and advanced skills in English, Mathematics and Science, particularly with Physics and Chemistry, that makes them resilient & inclusive in the two sectors.

6 BUILD UP THE PYRAMID OF THE ECONOMY

Concerted setup of corporations in the sub-sectors of: the agriculture (crop or plant / raw material production) and manufacturing that fits in with the regional industry value chain matrix map and schedule.

Economies that rely heavily on extraction industries will have large pockets of unemployment that continue to persist in the nation. These industries gross high returns but they do so by employing fewer people and more machines to keep costs of operations under control and growth of the industry. This way the GDP would certainly look good (but not the food on our tables, which is the real GDP).

Machines do not create jobs for the unemployment rates.

Plant and animal based primary production and manufacturing economic sectors when well-developed have greater potential for creating and absorbing significant employment. Extraction based industries are typically technology driven and has lower capacity for employment of human resources.

As the nation shifts its focus to production, particularly in plants, it will learn to mitigate climate effects country-by-country that would allow the region to produce consistently throughout the year to keep the manufacturing sector humming.

Invite regional and global industry leaders global industry leaders or; incentivise and groom local captains of industry (by long-term overseas stints) to lead, chart and build the sub-sectors bottoms-up including from within households and education sectors.

When The Economy Speaks … ICT Graduate Unemployment Is Just the Tip of National Unemployment Iceberg

DEFINING THE RESEARCH SPACE

It is not difficult to create employment.

It is harder to keep unemployment off!

Do you wonder what came of the billions (possibly trillions) spent by countries both as governments as well as private sector (including foreign direct) investors, across the world, decade after decade (let’s say, now going five decades) with the purpose of creating employment, and then learn to find that unemployment persists relentlessly , companies shut down at the snap of a global economic meltdown and national economic growths continue to take hits, year after year?

Is this story familiar?

Why does this happen?

I am not alluding that the money is siphoned off. That is not where I am going. But, yes, there is another kind of ‘siphoning’ happening.

In the meantime, of course, governments face angry faces of unemployed constituents and so nations react by wanting to see both governments and foreigners ‘continue to invest’ in it.  Why does the issue persist?

Often, when an issue persists, it is a sign we have made the choice to avoid some difficult and hard decisions.  These hard choices  include questions such as what is causing our innate ability to be honest with ourselves, and that includes bearing criticisms, taking a hard look at ourselves (instead of cowing others into submission or hustling as needed), being patient, persistent and being sufficiently resilient to spring back from setbacks, diminish over time.  All of which are factors that are critical to the ability of a country to succeed as a nation in growing its economy.

So, which one do you think comes first?

Nurturing our capacity to be patient, to persist and be resilient and being frugal (doing more with less (not spending no more than 10% of the margins for personal spending while the business is still trying to stand up on its feet (and generate its own income) is the first rule of business)) despite the odds stacked up against us?

OR

Needing to seek investments?

What is destroying our ability to grow these innate capacities for us?  These and more questions are explored in this article.

Botswana’s new leader wants to shrink the civil service, sell state companies and cut red tape as he targets increased foreign investment.

President Mokgweetsi Masisi has identified reducing the country’s reliance on diamonds and creating jobs for the almost one in five workers who are unemployed as his top priorities since taking office six weeks ago.  Private companies will have to take the lead, he said in a May 14 interview in his office in the capital, Gaborone.

“The government in and of itself does not really create jobs,” Masisi said. “It is not my desire to grow the public service any bigger; if anything, it is my desire to trim the civil service so we are more efficient, we are leaner, meaner, and we can do business and we are more attractive to the private sector for them to invest.”

Source: Agency Staff. (2018). Botswana wants to shrink civil service so privatisation can grow the economy. Bloomberg. Available at: https://www.businesslive.co.za/bd/world/africa/2018-05-16-botswana-wants-to-shrink-civil-service-so-privatisation-can-grow-the-economy/ [Retrieved on 17 May 2018].

OUTLINE:

  1. THE OVERARCHING SYSTEMIC STRUCTURE OF UNEMPLOYMENT
  2. THE STORY OF SUPPLY OF LABOUR
  3. THE DIGITAL USE DIVIDE:  A SPECIAL MENTION
  4. THE STORY OF DEMAND FOR LABOUR
    1. WHEN GOVERNMENTS INTERVENE
    2. WHEN PRIVATE SECTOR INTERVENES
    3. THE UNEMPLOYED DIGITAL USE (ICT GRADUATES) EXPERTS – WHEN THAT HAPPENS – A SPECIAL MENTION
    4. BUILDING INDUSTRY SYNERGY: VALUE CHAIN MATRICES
  5. THE UNEMPLOYED DIGITAL EXPERT (OR ICT GRADUATES) – A SPECIAL MENTION: WHY IT HAPPENS?
  6. WHEN DEFINING THE TRUE NATIONAL UNEMPLOYMENT NUMBERS
  7. REQUIRED RESEARCH ANALYSIS

GENERAL TALKING POINTS OF INTEREST:

THE OVERARCHING STRUCTURE:

Systemically, the growing pool of unemployment today is as the result of the different rates of change that exists between the levels of annual births from as far back as twenty years ago and the capacity of annual jobs created today.  Why twenty years?  That is the average age before someone becomes ready to join the labour market.  The changing rates of unemployment is determined by rate at which these two factors change over time relative to each other.

When the numbers of Jobs Created Today < Children ‘created’ from twenty years ago cause the number of persons that are unemployed adds on to an existing pool.

WHEN
Growth Rate of Births From Twenty Years Ago (A)
IS GREATER THAN (>)
Growth Rate of Job Creation Today (B)

= GROWING RATES OF UNEMPLOYMENT Today (C)

A = SUPPLY OF LABOUR
B = DEMAND FOR LABOUR

And so,
Growing Unemployment = When Growth of A > Growth of B

Meanwhile
Growing Employment = When Growth of A < Growth of B (it would now have the capacity to absorb increasing immigrant employment).

And of course,
Full Annual employment = When Growth of A matches the Growth of B

SUPPLY OF LABOUR

The factor that contributes to the supply of labour in any nation is the rate of births.  Yes, it is dependent directly, on the number of students who graduate from the education system but how wide that pipe is, would depend on the rate at which the nation populates or replaces itself.

It would, however, not be completely accurate to say that had the overall population numbers not increased substantially over the years, that it must mean that the rate of births has not increased.  It could mean instead that the rates of attrition (deaths or migration) or somewhat higher than the rates of births.  Hence, the theory would have to be tested before being confirmed that it is so.

Couples within an intact marriage often would have a better chance at influencing the rates of births within their combined capacity to provide for the children.  However, in an impaired marriage (and I am not referring to visual or hearing impairment) or a marriage where the couple has lost or is losing their ability to be committed to each other, as a couple they begin to produce children outside of the marriage.

As males become increasingly sexually active with several partners (or with the same partner), he then tends to produce more female progeny.  A higher proportion of females within the system would mean a higher propensity of the population to increase its birth rates and therefore even further female offsprings (testament to polygamous communities typically living off on arid lands).  It does so, at times, at runaway rates i.e. populate at rates faster than their capacity to provide for it.

Of course, when the males present their progeny within an open system (marriage or a polygamous community), where everyone sees the number and the gender of children he has produced, it is much more evident as a community and as a nation the impact such behaviours will have on unemployment and job creation in the future.  When he is, however, unable to do so or such information is limited to immediate family members or the village, impacts of such acts become less discernible to the nation as a whole.  Governments seem to be caught unawares of the extent of the issue till the election times are upon them.

THE DIGITAL USE DIVIDE:  A SPECIAL MENTION

The Digital divide is a term that typically refers to the gap between demographics and regions that have physical access to modern information and communications technology, and those that don’t or have restricted access.  This technology can include the telephone, television, personal computers and the Internet.

But I would like to make a special case for this divide here.  The Digital Use Divide. One perhaps that was brought on by man’s own decision to avoid the hard choices when he had to make them.

Think back to the time when we were choosing to decide to whom should a topic such ICT to the population?  The old ones?  The young ones?  Which one did we choose?  We thought, it was easier to teach ICT to young minds.  Teaching the old ones would be like trying to teach old dog new tricks.  It will be painful and take a long time.  That is harder.  It takes time and resources’.  Well, moulded, we sure did.

Except, what becomes the consequence of this choice?  It meant that the old ones except in the case of passive use of the ICT are fearful of engaging ICT actively for purposeful and creative uses.  They did not want to come across as incompetent or worse, stupid.  So what will be the result of older generation trying to work with the younger ICT graduate?  What would we do?  Did you say, we could ‘push them away’.  This way the older ones can avoid dealing with the pain of that fear of using ICT.

DigitalDivide_Infographic
Figure 3:  Digital Use Divide

Adding, to this, persons who would typically venture into small businesses in the private sector or set up their own businesses would be persons (typically the parents of the millennials) who did not do as well in school particularly in the  areas of mathematics and science.  They have found it difficult to keep a job since they are not able to do most jobs that are common in the new knowledge economy.

On the other hand, an ICT graduate would have had a much easier time with these subjects, and appear to come across as the ‘know-all millennials who do not care for the ones who do not understand maths and science subjects’.  They would then be perceived as a threat to the older ones.  These experiences, can often push the  wedge in the divide between the two, even further, and often generations apart, from each other.

The trick for now may lie in the young ones learning to make a very conscious, but not obvious, choice to ‘hand-hold’ the older generation along in crossing this bridge of divide that exists now between them.  Very patiently and learning not to tread on tender emotions, when doing so.  Should the two generations figure ways to build that trust between them, we could possibly enter a new era of interacting between the owners and enablers of the economy that would enable them to expand their market, manufacture bases and export capacity to the region, all of which requires the ICT environment to flourish.

It would also mean opening opportunities up for several other careers such as sales, accounts, finance and marketing to take off in the industry.  Should we, however, not be successful in doing so, we face the risk of riding off into a bleak future of seeing the pool of ICT unemployed graduates grow or eventual dwindling of numbers willing to enter the study of the profession or a draining of their talents out of the industry or worse off, the country.    That would present a loss of investments by the country in their learning and therefore a possible alternative future for the country.

What is your view?

Now, going back to the point on the supply of and demand for labour, just a bit.  The trick is both, the supply of labour (bearing of children) and the demand for labour (creation of jobs), is essentially ‘managed’ by the same person, the man in his 30s to the 50s.  When he figures how he would create more jobs than children, he, more than anyone else effectively wipes out unemployment for his country.  Not the government.

DEMAND FOR LABOUR:

– WHEN GOVERNMENTS INTERVENE

When governments create jobs (in government) to absorb the unemployed, they do so at the expense citizens pay to the state coffers or from revenue of sales of raw materials extracted from the ground.  It typically behaves as a cost to the overall system with low returns.

Additionally, these jobs do not fundamentally change the structure of the economy, in particular develop the primary sector of the economy i.e. the production of natural raw materials by its citizens.  This sector not only has the greatest capacity to absorb employment that will be needed for sustained growth of the economy over time compared to manufacturing or industry and service sectors, but it serves as the fuel that will keep the economy burning to some extent, literally, and therefore growing its GDP (the ROI on government and private sector spending).

Investing without the  need to sustain the investment is a sign that the country is primed for investments in the sector as a result of solid growth of the supporting industries.  However, should a country after, tens of years (decades) of investment injections by corporations and nationals from both within and outside the country and in-spite so, continues to rely on such injections to sustain its growth, it then speaks to a fundamental breakdown of the supporting set  of industries (primary for industries and, manufacturing for retail) needed to support sustained growth of the ones above it.

– WHEN PRIVATE SECTOR INTERVENES

Notice as in a pyramid (see figure below) the layers at the bottom of the pyramid of economic structures provide much greater capacities to absorb employment than the ones above it.  The math is easy.  If there are 30,000 personnel in the services sector, then we are looking at say, 100,000 persons that would be needed within the agriculture raw material production strata to grow and support the layers above it.  The services and the government sectors will not be able to absorb 130,000 persons when there is little persons and materials to sustain the growth profitably from within the primary industries.  Also refer to Figure 1 below for reference of a country till in recent times that has absorbed large numbers of the population within the primary economic agriculture sector.

pyramid-of-classes-in-egypt.jpg

The private sector creates new jobs when it has the capacity to generate revenue (notice I did not say funding) in a sustained manner at rates faster than the costs of production of the organization.  When the change between the two grows a margin such that the growth in the margins itself is sustained, then the organization is able to create new jobs in a sustained manner for the economy.  This does not, however, happen when its development is based on the principles of socialist economic systems where we strive for equality in the distribution of wealth (that poses risks of rising costs).  It only happens when the rates of growth of revenues inclines and rates of growths of costs decline.

What would influence that?  The current set of employees do.  From management and that includes the boss to the cleaner.  Companies do not create employment. Employees do.  When everyone in the company helps to grow (rather than consume) the margins, they, in turn help the company create margins that help it to expand and therefore recruit more employees in the future.

 When we understand that, in principle, anyone could start anything from anywhere.  There right there is how new jobs become available to us today from the past.  However, when a new employee joins asking what is it in there for them, or carving out their own niche, that’s a warning bell.  It is the start of that company not only losing potential new employees but stand to lose their current jobs.  When there is unemployment today, this suggests that this has been happening from the past.

THE UNEMPLOYED DIGITAL EXPERT – A SPECIAL MENTION – WHY IT HAPPENS?

When graduates or trained ICT personnel continue to stay unemployed within the nation, it is a sign the following are happening:

  • A numbers mismatch.  This is a case of where there are more graduates created (SS) than there are jobs inherently (naturally as in a free market system, as opposed to forced employment creation (those created by government in response to appease an unhappy voting public)) available for the sector.
  • Skills mismatch.  Where the employers are unsure or even feel threatened to hire ICT graduates.  This is a case where employers do not understand what ICT graduates can do (refer to the digital divide segment above, where this elaborated further) for them or what that job would do to affect the bottom-line of the organization.  This gap is particularly noted in the small, medium and micro-businesses.  If these businesses make up the majority of the populace, then ICT graduates who come from that same populace (who are children of that population), will inevitably find themselves at the short-end of the stick.  Their parents are unlikely to open jobs to them, except on compassionate (for socialist reasons) grounds, unless the parent sees a very experienced ICT personnel (who is at this juncture is not a graduate) who can convince they can and will change the bottom-line for the organization.  The small businesses make up the major employers of any country.  Each one of them may not be anywhere close to the size of your national network chain employers, but they are more important as a combined system in terms of numbers and impact.  If this sector does not change its mind towards ICT employment, doing anything else to change it will not make any significant difference to the country.
  • When other graduates are employed gainfully, ICT graduates are better placed to be employed as well.  They usually do not make a substitute for a missing production base, unless the ICT graduate is just as skilled in non-ICT-based jobs, such as cooking food products, as an example, in which case, they would then know how to mechanize the process.  When they don’t. the job for which they are trained for, ceases to stay relevant.There is a systemic breakdown of the economic sectors within the country.  ICT sector employment does not create or conduct the actual jobs needed to generate revenue within the economy.  They facilitate an existing process to become more efficient particularly when the volumes of trade are significant.  The presumption is a process or a window exists that needs to be made more efficient between factors of production and management of production.  This is caused by two interrelated factors:
  • This means sales and revenues are generated particularly in a vibrant manufacturing and agriculture sectors.  However, when markets are dull (as in what happens when there does not exist a strong set of primary and secondary economic sectors) and the economy is not hiring factors of production (jobs in other sub-sector, e.g. milling, cooking, producing furniture, clothes, and so on) in the first instance, and in which case, this window for the ICT sector becomes narrowed significantly.

So which one is your reason?

BUILDING SYNERGY OF INDUSTRIES: VALUE CHAINS

The easiest way for an opposing political party to bring a ruling government down  is, noteworthy enough, not at the elections.  It is slowdown, low productivity and tool down at the workplace, often by employees that are party to the opposition.  This fundamentally does one thing.  It works at gradually eroding the synergies needed in an economy to keep the economy well-oiled and running effectively.  These are its  value chains.

This does not change because the ruler is no longer at the helm and had to leave office to his opponent.  All it does do is the see the camps trade places.  But nothing changes fundamentally until, the lines between the ruling and the opposition fade away and the people of all creeds and parties decide to join their hands, hearts and minds as one.  A broken industry value chain is a sign of the breaking down of its people of the nation.

WHEN DEFINING THE TRUE NATIONAL UNEMPLOYMENT NUMBERS

Governments and nations can only consider patch works of correcting unemployment as a nation when it looks at the narrowest definition of unemployment.  To consider working with the real rate of unemployment, it would require understanding the state of unemployment that exists at its fullest extent within the nation.  Refer to Figure 3 to determine such a figure.  Remember as always, it is not the primary responsibility of governments to absorb these numbers, if they are high.

These numbers need to be understood as a nation and dealt with as a nation to turn the issue around.  The ruling party or the government can bring it to the awareness of the nation but it is still the responsibility of the nation in deciding together what it will do next as a nation.

To note, unemployment in the region cannot be ruled out as part of the unemployment structure within the country.  We cannot run away from this reality.  A true picture of the country needs to include the true picture of unemployment in the region that needs attention.

Homelessness, crime, substance abuses, domestic violence, divorce rates, growing single-parent households and reliance on government programmes are just making up the tip of this ice-berg.

Vietnam's Employment Figures 1990-2009
Figure 5: Share of employment by sector

Source: Tuyen Tranh and Tinh Doan. (2010). Industralization, economic and employment structure cbanges in Vietnam during economic transition BCollege of Economics Vietnam National University, Hanoi. Available at: https://mpra.ub.uni-muenchen.de/26996/1/Vietnam_industrialization_and_employment_structure_changes.pdf [Retrieved on 17 May 2018].

Unemployment Rate.png
Figure 6:  Defining Real Unemployment Figures within the country / region

REQUIRED RESEARCH ANALYSIS

FOR DETAILS OF DATA REQUIRED FOR RESEARCH ANALYSIS FOR THIS SUBJECT, CLICK HERE.

FOR STORIES RELATED TO PRODUCTIVITY, CLICK HERE.

Regional Article 9: Systemic Development of Industries in a Nation. What would that look like?

Is there such a thing as systemic development of industries?  We can tell what systematic is.  Yes?

But what about systemic development of industries?

Let us take a context.

Let us say we wish to see the industry of dairy production grow within the country.

What needs to happen that would enable the sustained development of this industry.  Now

Milk and cooky

Milk and cooky (Photo credit: Salim Virji)

notice two things:

The first, notice I did not say a dairy company but rather I referred to the industry.  This means it has effects on the nation .  That means more dairy companies are  likely to succeed better as a result the industry is growing.  When we take care of ‘the whole’, ‘the whole’ takes care of the parts.

The second, when we say it is successful, in this work, we would need to define it.  We would expect to see the following happen:

  1. Levels of production rises consistently over time (it rises persistently and resists or buffers itself against significant downfalls) given populations are rising
  2. As such levels of revenue rises  consistently over time
  3. Levels of costs per unit production declines  consistently over time

Yes?  Is that how you see it too?  These are what I meant by the systemic development of dairy production in the county.

Growth of the Dairy Industry (for the Country)

Therefore, what needs to happen for all the above to happen for dairy production?

Well …..

Holstein dairy cows from http://www.ars.usda.g...

Image via Wikipedia

Dairy or milk comes from cow.  So, to see dairy production grow in the country, while anything else may or may not happen, we cannot expect it to grow without first also seeing the growth of the number of dairy cows produced within the country.

On the other hand, should we see a decline of the number of these cows (because we sell the cows so that we may pay school fees), then we can also expect to see a decline in the level of dairy milk produced in the country.

What do you notice by these discussions?  Is this line of thinking the same as systematic thinking?

Did you say, no?  Well, you are right!

So here’s the next question, what would make sure the systemic development of the dairy cow industry grows within the county?

Growth of the Dairy Cow Industry

You know the drill now!

What do cows (anywhere) need?

Fodder?  Meaning, that the level of fodder produced needs to grow so that we are able to produce more dairy cows.  Usually we do it the other way around!  We say well, there is not enough (supply, given demand for) fodder.  The market says that the demand is growing and then, it (the market) tries to scramble to ‘close the gap’.

When demand drives supply, that’s a sign of non-systemic development of the nation.   But in a systemic relationship it is the supply that leads demand.  Notice it does not drive it.  It facilitates.  It just makes it easier.  It respects the order in which causality happen.

English: Distributing TMR (Total Mixed Ration)...

Image via Wikipedia

So, therefore before we expect to see the number of dairy cows grow in the country, we should first expect  to see the number of companies that produce fodder grow within the country.  This needs to happen before anything else does, almost to a fault.

When that industry grows (production levels rise at lower units costs), the amount of fodder available in the country also grows.  Therefore, as a result, it will not become difficult for the cows to “eat and go forth and multiply“.  And when it does, the dairy production levels in the country would naturally increase. This happens even without needing the government to take actions to intervene.  This will also add up to lower costs in running the government.

What’s the next question?

Did you say, what would it take for the fodder industry to grow over time?  You are right!  Now we can see, you’ve got the drill.

Growth of the Fodder Industry

Where does fodder come from?

You are right.  Crops!  Fodder is often the by-product or the remnants of crops once humans have used it for their consumption.

English: Fodder crop

Image via Wikipedia

So what are we saying here?  For dairy production to grow within the county, we need to first see the growth of crops produced in the country, grow as an industry.  When that does not happen, and should it instead decline, then the fodder industry declines, which in turn leads to dairy cow production declining which in turn reduces dairy production or makes it difficult to take off for the country.

So what causes crop production to grow in the country?

Which one of the following, in your view, when it is available makes it easier for crop production to grow?  Which of the following would we need to see available?:

  • Land
  • Water
  • Seeds
  • Fertilizer or
  • Is would it be the willingness of people to grow crops for cattle?

Growth of the Crop Industry

However should crop production be the primary domain of the female gender in the country, that is, she decides when, how much and what crops to grow, it is possible she may not be willing to grow crops for cattle.  This is because her primary focus and need is to grow crops to put food on her table, for her children!  Not for the world!  And certainly not for the cattle.

So, therefore which gender do you think should become involved in crop production, so that dairy production would grow in the country?

Should it be led by the mind of man or the mind of a woman who should lead this effort?   Does it differ or not at all?

The mind of the man is typically designed to ‘feed the world’.  There are exceptions, but always look at the rule.  The mind of the woman is there to help nurture (of feed) her child (not the child of another woman!)  Do not fight that or we risk not having mothers for our children.

Who therefore do you think cannot absolve himself from crop production for the county?

Rice production in China

Image via Wikipedia

When the man becomes involved in crop production, we would now be able to feed milk to our children (including the children of the women who did not wish to grow crops for the cattle).  Also, men, unlike women, will inherently (even if it is just sheer strength in their muscles) to till, sow for multiple seasons and harvest larger expanses of land.  This situation is there in the likes of China, Vietnam, India, Indonesia, South America for generations, where production of crops is the domain of the male gender.  This has also has a positive impact on the water cycle .   This means that as more amounts of the land is fertile for crops, such lands in turn encourages more frequent levels of rainfall for the country.

Is the amount of land, water, seeds, fertilizer available therefore consequential in the story.  It really is not.   It becomes consequential when I focus on  my company.  But not from a systemic development of industries and the nation.

So if I focused on changing things that are happening in my company, would that be enough to turn things around for the nation?  The parts separately cannot take care of “the whole”.

Hmm …. what would we have to do differently today so that we as men, women and children can see these together as a nation?

Regional Article 2: What really caused the eurozone crisis? BBC News Dec 22, 2011

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As you read the article. notice how many times we broke the laws of dynamic complexity.  These laws govern the nature of dynamic (recurrent problems) complexity.

I see three laws here.  They are laws 8, 6 and 4.   I have listed the laws against the text of the article below and the explanations at the end of the texts.

There are more.

Show us what you see.

“What really caused the euro zone crisis? Dec 22. 2011 BBC News”

World leaders probably spent more time worrying about the euro zone crisis than anything else in 2011.

And that was in the year that featured the Arab Spring, the Japanese tsunami and the death of Osama Bin Laden. What’s more, 2012 looks set to be not much different. But as euro zone governments hammer out new rules to limit their borrowing, are they missing the point of the crisis?

Follow the path to find out.

Continue reading the main story

The euro zone has agreed a new “fiscal compact”

  • Euro zone leaders have agreed to a tough set of rules – insisted on by Germany – that will limit their governments’ borrowing each year to just 3% of their economies’ output. This is to stop them accumulating too much debt, and make sure we avoid we another financial crisis.

But didn’t they already agree to this back in the ’90s?

  • Hang on a minute. They agreed to exactly the same 3% borrowing limit back in 1997, when the euro was being set up.  It was the  German finance minister Theo Waigel who insisted on the “stability and growth pact”. What happened?

So who kept to the rules?

  • Italy was the worst offender. It regularly broke the 3% annual borrowing limit.  But actually Germany – along with Italy – was the first big country to break the 3% rule. After that, France followed. Of the big economies, only Spain kept its nose clear until the 2008 financial crisis; the Madrid government stayed within the 3% limit every year from the euro’s creation in 1999 until 2007. Not only that – of the four, Spain’s government also has the smallest debts to the size of its economy. Greece, by the way, is in a class of its own. It never stuck to the 3% target, but manipulated its borrowing statistics to look good, which allowed it to get into the euro in the first place.  Its waywardness was uncovered two years ago.
  • 3/9 Italy
    Worst offender
  • 5/9 Germany
    First to break rules
  • 6/9 France
    Offender
  • 9/9 Spain
    Top of the Class

But the markets have other ideas

  • So surely Germany, France and Italy should be in trouble with all that reckless borrowing, while Spain should be reaping the rewards of its virtue? Well, no.  Actually Germany is the “safe haven” – markets have been willing to lend to it at historically low interest rates since the crisis began.  Spain on the other hand is seen by markets as almost as risky as Italy.
  • So what gives?

So what really caused the crisis?

  • There was a big build-up of debts in Spain and Italy before 2008, but it had nothing to do with governments. Instead it was the private sector – companies and mortgage borrowers [@1  LAW #8] – who were taking out loans [@2 LAW #4. Interest rates had fallen to unprecedented lows in southern European countries when they joined the euro. And that encouraged a debt-fuelled boom.
  • Good news for Germany…
  • All that debt helped finance more and more imports by Spain, Italy and even France. Meanwhile, Germany became an export power-house after the euro zone was set up in 1999, selling far more to the rest of the world (including southern Europeans) than it was buying as imports. That meant Germany was earning a lot of surplus cash on its exports. And guess what – most of that cash ended up being lent to southern Europe.
  • …bad news for southern Europe
  • But debts are only part of the problem in Italy and Spain. During the boom years, wages rose and rose in the south (and in France). But German unions agreed to hold their wages (and their personal spending) steady. So Italian and Spanish workers now face a huge competitive price disadvantage. Indeed, this loss of competitiveness  [@3 LAW #3 is the main reason southern Europeans have found it so much harder to export than Germany.
  • …and a nasty dilemma
  • So to recap, government borrowing – which has ballooned since the 2008 global financial crisis – had very little to do with creating the current euro zone crisis in the first place, especially in Spain (Greece’s government is the big exception here). So even if governments don’t break the borrowing rules this time, that won’t necessarily stop a similar crisis from happening all over again.
  • Spain and Italy are now facing nasty recessions, because no-one wants to spend. Companies and mortgage borrowers are too busy repaying their debts to spend more.  Exports are uncompetitive.  And now governments – whose borrowing has exploded since the 2008 financial crisis savaged their economies – have agreed to drastically cut their spending back as well [@4 What Law is that?].  But…

Cut spending…

  • …and you are pretty sure to deepen the recession. That probably means even more unemployment (already over 20% in Spain), which may push wages down to more competitive levels – though history suggests this is very hard to do. Even so, lower wages will just make people’s debts even harder to repay, meaning they are likely to cut their own spending even more, or stop repaying their debts. And lower wages may not even lead to a quick rise in exports, if all of your European export markets are in recession too. In any case, you can probably expect more strikes and protests, and more nervousness in financial markets about whether you really will stay in the euro.

Don’t cut spending…

  • …and you risk a financial collapse. The amount you borrow each year has exploded since 2008 due to economic stagnation and high unemployment. But your economy looks to be chronically uncompetitive within the euro. So markets are liable to lose confidence in you – they may fear your economy is simply too weak to support your ballooning debt load. Meanwhile, other European governments may not have enough money to bail you out, and the European Central Bank says its mandate doesn’t allow it to. And if they won’t lend to you, why would anyone else?

http://www.bbc.co.uk/news/business-16301630

@1    When we state country, the one that comes to mind (obviously), it is the government (and therefore) the public servants are spending (the Ministers must be corrupt , etc.).  But the areas of the highest leverage, the citizen, the family, the industries stayed hidden behind the ‘name of the country’.  Law #8 says, the areas of the highest leverage are often the least obvious.  We need to be understanding this about ourselves and use it to turn the situation around.

@2   Taking loans out, which is borrowing money and spending money we do not have, is easier than freezing wages (and choosing not to spend the money).  Notice what we are avoiding.  We usually do not watch what we are avoiding.  We need to be watching both should we expect to turn a situation around.

@3  Loss of competitiveness shows how things have got worse after some time of seeing things become easier or better.  This indicates that the two (when things got worse and the things that got better) are interconnected.  As we appreciate the interrelatedness of these issues, we now begin to have a handle on the situation.

@4  What law is broken here?  Why do you say that?  Do explore the reasonings with each other.