Wednesday, May 24, 2006

New plan to combat unemployment and poverty

Under the cover of the latest terrorist arrest, the government unveiled a new plan to combat unemployment and poverty. Of course, Al Rai is all excited about it. Most people realize that an endorsement by Al Rai isn't worth much.

The plan is supposedly based on the letter sent by the King to the PM last April. In one part of the letter, the PM was requested to find ways to help the poor, through better ways of delivering aid and more microfinancing sources. The plan revealed yesterday is supposed to address this request.

It is interesting to note that the link between poverty and unemployment seems to be wearing away. Most of what will be done is more handouts to the poor, with little concrete effort to create jobs, except by replacing guest workers with Jordanians. In essence, the plan consists of four components.

The first component is based on establishing a "social solidarity commission". The purpose of this commission will be to coordinate existing efforts and encourage charitable donations to help the poor. Presumably, a newly established data base will be used to provide charitable organizations with information on the needy. This will help reduce duplication in efforts and streamlining of criteria for eligibility for help. Apparently, a nation-wide survey has shown that the greatest demand by poor people is the creation of a new bureaucracy for them to hassle with. The PM and the ministers are under the impression that giving people hand outs is equivalent to fighting poverty.

The second component consists of stripping the public universities of the meager "support" that they are given, and using the money for scholarships and loans for needy students. The universities are already deeply in debt, after being deprived of the university fee that is collected in their name. It certainly takes a lot of audacity to claim that further starving of public universities is meant to help the poor. Maybe if they declare bankruptcy it will ultimately save students the expense of getting an education in the first place.

This is where the third component comes in. More vocational training will be needed as public universities are driven to deterioration. The government has vowed to encourage and support "accredited" vocational colleges and institutions. A special committee will be created to determine what specializations will be needed in the market place. Here a bit of recent history might illuminate what is meant.

When Bassem Awadallah was the minister of planning, millions of dinars were funneled towards the "Ammon College for Hospitality & Tourism Education", which is a private college devoted towards training personnel and staff for hotels. It has a working hotel, in which the students receive practical training. A couple of months ago, Al Shahed reported how the ministry of planning funded the transformation of this institution to a university college using public funds. Here is a report in Elaph about the same subject.

In Jordan, private education is a for-profit enterprise. For public money to be used to enrich business men seems preposterous, and no answers were ever given to explain why this was done. It seems that the government plan is to funnel even more public money to enrich even more entrepreneurs. What is really hilarious is that the government is not planning on funding students to get their educations at these institutions, but seem rather inclined to give the money directly to these companies. So, public universities will not receive public money, but private for-profit "institutions" will.

The Jordanization of the workforce is a popular common sense approach that the government is planning to implement. This is the fourth element of the government plan. The problem is that it is based on a gross fallacy. Most non-Jordanian workers working here are day workers. The idea is that if their number is reduced, the cost of hiring them will go up, encouraging young Jordanians to take their place. This sounds reasonable, but is not. Jordanians working as day laborers are still considered unemployed. They have no work records, no social security and no health insurance. I would encourage the PM to visit a few construction sites, where he will meet many young Jordanians working there. The issue is not a "culture of shame". It is more related to having a viable career. Young Syrians or Egyptians can work here for a few years, save up enough money to start a project back home and live well off after they "retire" from Jordan. The idea that a Jordanian who is 20 years old can mix and haul concrete is OK. What about when he turns 50 or 60? What if he pulls a muscle or falls off a scaffold? This is not a career path which will solve unemployment. Sorry guys.

In short, the plan is to give handouts to the poor, and to give even more handouts to businessmen "investing" in vocational training. It is a terrible plan.


At 7:49 PM, Blogger Hatem Abunimeh said...

I think that the part that talks about building 2,200 housing units to accommodate the needs of the poorist in the country is a postive step in the right direction.

I have my own reservations about the other articles of the plan.

At 11:56 PM, Blogger Khalaf said...

Hatem: The housing and the lowering of the age for eligibility for health insurance are cosmetic in my view. I didn't want to make the post even longer than what I did.

At 8:20 PM, Anonymous Anonymous said...

Probably the best way to reduce unemployment is to remove all the red tape involved in starting a business. For example, nobody should need permission from any government body to start a business.

At 10:03 AM, Blogger Khalaf said...

Don: When I built my house, I needed approval from the municipality, the civil defence authority, the department of archaeology and the engineers union. At the time, I felt sorry for anybody who tries to start a business.


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