The official figures are staggering: 35% of the workforce - about 280,000 people - are unemployed and looking for a job. Each 1.43 employee support 1 unemployed person. In the USA the figure is 3.3 to 4 employees supporting all the unemployed AND all the pensioners!
The truth is less ominous. Many employed people in Macedonia go unreported. Their employers prefer not to report them as employed in order to avoid paying social benefits and retirement benefits to the state. This greatly distorts the official figures - yet, it would be safe to assume that the unemployment rate in Macedonia is close to 20%.
Unemployment has only bad aspects. A certain level of unemployment is considered to be healthy. People move between workplaces - this is called labour mobility. People desert old professions for new ones, training themselves to occupy higher paid, higher education positions. This kind of healthy unemployment is called “friction unemployment”. A level of 3% to 6% is considered to be friction unemployment in the West (depending in which country).
But the kind of unemployment that is prevalent in Macedonia is not of this kind. It is permanent in the sense that the same people are unemployed continuously for more than a year. It is habit - forming: people lose their self dignity, they become dependent on outside assistance, they are afraid to face reality. Such unemployment has grave psychological consequences. People change under its influence to such an extent that they no longer qualify as workers. This affects the situation inside families. People who used to provide for their families are cast aside as no goods, losers with no prospects for the future. This deeply and adversely affects the very fabric of society’s basic unit: the family.
But unemployment also has a great macroeconomic impact. The State doles out millions of DM each month to pay unemployment benefits. Multiply 60-100 DM per month per 283,000 job seekers - and you will face the frightening figures the Macedonian Minister of Finance is faced with every morning. Instead of putting this money to productive use - it is spent on keeping people idle at home on an allowance which is not even enough for bare subsistence. No one is happy: the Government - because its budget is unduly and unnecessarily inflated, the nation - because good money is thus spent instead of being invested and the unemployed - because they can hardly survive on what the State gives them.
Unemployment is not unique to economies in transition. Even much stronger economies - like France’s and Spain’s - suffer from it. Spain’s real unemployment rate is similar to Macedonia’s.
What are the long term, structural causes for unemployment?
There are more theories than there are unemployed people.
Some say that free trade encourages unemployment of unskilled and semi-skilled labour. Factories move overseas to places where labour is cheaper. Inexpensive imports of textiles and basic electronic wares compete with the local production and - usually - wound it badly.
Others blame labour market rigidities. If the psychology of employees and employers alike is that of “one big family” where no one is fired even in hard times and even if he is incompetent. If the laws and regulations of the state are in favour of a static workforce. If social benefits (annual vacation, sick pay, child support) increase the costs of employing - unemployment will be created. Employers will not hire additional staff in times of economic boom - because they will not be able to fire them in time of crisis. They will prefer to manufacture in places where labour costs are negotiable and low. Where trade unions have been abolished (Britain and the USA are the prime examples) - unemployment all but disappeared. Yet others emphasize the technological revolution (mainly in the fields of informatics). So many professions become obsolete at such a quick pace - and so many professions are revolutionized so often - that more jobs are lost than created.
But whatever the reasons are for unemployment - certain countries are battling this cancer of society in creative ways.
During the 1990’s, Israel - a country with 4,500,000 million people and 20,700 square kilometres - absorbed an inflow of more than 600,000 immigrants (=15% of the population), mainly from the former USSR.
One could expect a dramatic increase in unemployment. If Macedonia were to absorb 300,000 additional immigrants (=15% of its population) tomorrow - its unemployment rate would have skyrocketed until the newcomers would have been absorbed by the marketplace.
Not only did Israel succeed in providing most of this deluge of immigrants with jobs - it also reduced the overall rate of unemployment among its old population! How did it succeed in doing the impossible?
Israel decided to give the unemployment benefits to the employer - not to the unemployed. Let us study an example:
The average unemployment benefit was 900 DM per person per month.
The average salary which an employer was supposed to pay this person if he were employed - would have been 1400 DM per month.
The Government came to the employer with the following suggestion:
Find employment for the unemployed person. Pay him a salary of 1400 DM. We will give you, the employer, 900 DM - instead of paying this amount directly to the unemployed person in the form of unemployment benefits.
So, everyone was happy:
The employer hired an experienced and well - educated worker for 500 DM (The difference between the 1400 DM that he paid him - and the 900 DM that he got back from the Government).
The unemployed person - because he finally found employment with a real chance to continue to be employed in the future if he really contributed to the business that he was employed in.
The Government was happy - because it did not increase its budgetary outlays and expenditures. Yet, at the same time it has increased the level of employment in the economy.
Another Israeli twist: the Government also paid part of the social benefits of the person who was previously unemployed in his first three years of employment. This saved the employer a lot of money and encouraged him to employ and to report the employed person to the authorities.
A whole different approach was experimented with in Great Britain.
All those unemployed in a specific geographic region were assembled into a “Community”. The Community included a wide variety of professions:
carpenters and tailors, electricians and farm hands, gardeners and teachers. A computerized centre was set up. Each unemployed person registered with this centre, listing both his professional capabilities - and goods and services that he was interested in, but did not have the money to purchase.
A matching process then ensued: the tailor was looking for a teacher to give his children some private lessons (which he could not afford in his current financial straits). The teacher was looking for a tailor to saw a communion dress for her daughter. So, the computer matched them up:
The teacher tutored the tailor’s children - in return for his services in sawing the dress for her daughter. Both of them were thus employed, recovering their sense of self-worth and dignity. Moreover, both of them were able to afford things which were badly needed by them but which they could afford under no other circumstances.
This is a return to primordial, pre-monetary, barter economy.
But who will determine how many private lessons provided by the teacher - are worth one dress sawed by the tailor?
A special tariff was published. It reflected the conditions which prevailed in the “real” marketplace in which real money changed hands.
To ease the “payment” process - special Community money was printed in lieu of the unemployment benefits which the government used to dole out to the members of the Community.
Now, each member of the Community received from the Government a monthly allowance in Community money (instead of real money) which he was able to use only with other members of the community, unemployed as he was.
This way, the purchasing power of the unemployed was used exclusively with the other unemployed, easing their overall situation. It also eased the Government’s situation - because it did not have to print additional money to pay out unemployment benefits.
Admittedly, this was a fairly small and restricted experiment - but it was so successful that I believe that it warrants the attention of every nation facing high unemployment.
About The Author
Sam Vaknin is the author of “Malignant Self Love - Narcissism Revisited” and “After the Rain - How the West Lost the East”. He is a columnist in “Central Europe Review”, United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.
His web site: http://samvak.tripod.com
A new report released by analyst firm Point Topic has shown that the future of broadband throughout the world looks promising despite the economic turmoil.
The company has come out with research, which predicts that the number of fixed broadband connections around the world will be 496 million instead of the previously projected 493 million. The research report also upgrades the five-year projection from the previous 683 million to 695 million.
Tim Johnson, chief analyst at Point Topic said that the major reason for this adjustment in projections was the unwavering high rate of growth in developing countries. Once this growth was factored in, a significant modification had to be made in the projections, which were previously lowered because of fears that recession could affect the worldwide broadband demand negatively.
To arrive at the projections, Point Topic looks at the number of households that did not have a broadband connection previously but got a new connection in the period of study. This way the company depicts the trend of broadband growth over several years. Predictions about the future are then made on the basis of this trend.
Mr. Johnson also said that the impact of recession is being felt differently in different places. For example in places like the UK and Spain, where the recession has had a huge negative effect on consumer sentiment, the broadband uptake is clearly lower. However, in developing countries, the economic downturn is not too severe and broadband growth is still strong. Click for more information on broadband UK.
The report also says that by 2012 Norway would leave behind Denmark as the country with the highest broadband adoption levels.
The People’s Liberation Army of China invaded Tibet in 1949. Since then each Tibetan has a many a tale of oppression, forced occupancy and violation of fundamental rights to narrate. Tibet is now home of several hundred thousands of troops who forcefully manages the daily affairs of a once free nation.
The Chinese government claims that it has the right to ownership of Tibet neither because of the military conquest nor because of the so-called “Seventeen Point Agreement for the Peaceful Liberation of Tibet” which it forced upon Tibet in 1951. Their claim is based on historical relationships primarily between Mongol or Manchu rulers with Tibetan Lamas and Chinese rulers and Tibetan Lamas. The claimed relation existed in the 18th century at the prime period of Mongol imperial expansion when the Mongol emperors extended their political supremacy throughout most of Asia and large parts of Eastern Europe and when Manchu Emperors ruled China and expanded their influence throughout East and Central Asia including Tibet.
Tibet has been under foreign influence at different times of its history which includes the Mongols, the Gorkhas of Nepal, the Manchu Emperors of China and the British rulers. Tibet also have exercised power and influence on its neighbours including China. Comparing to the other states in the world the degree and the length of the foreign influence was quite limited in the case of Tibet. However there is no history of a union or integration of the Tibetan state with any of the rulers associated with Tibet.
China’s territorial claims are highly unacceptable in accordance to international laws and practices.
The International Commission of Jurists” Legal Enquiry Committee on Tibet reported in its study on Tibet’’s legal status:
Tibet demonstrated from 1913 to 1950 the conditions of statehood as generally accepted under international law. In 1950, there was a people and a territory, and a government which functioned in that territory, conducting its own domestic affairs free from any outside authority. From 1913-1950, foreign relations of Tibet were conducted exclusively by the Government of Tibet, and countries with whom Tibet had foreign relations are shown by official documents to have treated Tibet in practice as an independent State. [Tibet and Chinese People’’s Republic, Geneva, 1960, pp. 5, 6]
Tibet has enjoyed forty years of independence which is in itself a valid reason to give independent status for any country in the international community. It’s an ironical fact that many members of the United Nations have enjoyed a similar or even shorter period of independence.
The Dalai Lama on the 46th anniversary of the Tibetan uprising against the Chinese occupation made his stand clear that Tibet does not seek independence from China. Although the spiritual and temporal head of Tibet “The Dalai Lama” follows a middle path the local Tibetans seeks for a free Tibet. The Tibetans feel that the cultural and religious autonomy of Tibet is under threat due to the increasing presence of Han Chinese. The Han nationals occupy a wide range of administrative territory within and outside Tibet. They have taken away the opportunities of small-time Tibetan traders in the streets of Lhasa and have affected their livelihoods.
Since 1989 after some negotiations were on for granting some autonomy to Tibet the Chinese have not given any till date. The people of Tibet are more worried about the diplomacy the Chinese is following to change the demography of the region. China have pumped in infrastructural investments worth 50 billion yuan in developing road, railways, airfields, hydroelectric and geothermal stations which in turn has demanded huge inflow of labor ie the Han Chinese. Though the Chinese terms this as the steps taken for the overall development of Tibet, the Tibetans see this as a danger to their cultural autonomy. According to rough estimates of the Tibetan government in exile there are five lakh Chinese police and army personnel in Tibet.
The government in exile of Tibet starkly objects the Tibetan Autonomous Region (TAR). They want Amdo and Kham to be an integral part of TAR which is not acceptable to the Chinese. The Chinese government always kept the stand of offering Dalai Lama an important position in the government and the condition they are demanding is that he should stay in Beijing which is not acceptable to the Dalai Lama and the Tibetans.
It is during the height of tensions between Tibet and China during the March 1959 Kampa rebellion after which the Dalai Lama fled to India. Since then China has harshly brought down all protests. Though Dalai Lama was given a warm welcome in India the government in exile is not very happy with India approach in Tibet’s case.
In 1954, Jawaharlal Nehru said Tibet was part of China. In 1988, Rajiv Gandhi claimed that Tibet was an autonomous part of China. In 2003, A B Vajpayee said the Tibetan Autonomous Region was part of China. At the same time, China has always been apprehensive of India’’s sympathy for the Tibetan cause, ever since in 1957 when the Dalai Lama shared the dais with Nehru. But since India shares a 3,600-km border with China, it is not expected to overtly question the latter’’s control over the TAR.
India pays for the welfare of over two lakh refugees and believes that autonomy in TAR with the Dalai Lama as the head of Tibetan affairs ease the tensions and make it possible for the Tibetans to return.
The Tibetan Youth Congress (TYC) has been seen as one the major threats by the Chinese administration as it is categorized as a terrorist outfit. China seeks global support in the worldwide “global war on terror” by giving declaring it a terrorist outfit.
Tibetans lack global support and the US is not keen in the Tibetan cause. The uncompromising attitude of the China has made the Dalai Lama travel extensively to internationalize the Tibetan cause.
The well wishers of Tibet hope that China might over time have to provide a measure of autonomy and freedom to five regions Tibet, Xinjiang, Inner Mongolia, Han China and Greater China consisting of Taiwan, Macau, Hong Kong and the prosperous coastal regions.
Lalith Ninan
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