Failed States

I've just been in Pakistan.  In fact, I'm posting this from Abu Dhabi airport while in transit on the way back home.

While I was there one of the local newspapers published some think tank's list of failed states (measured on a range of criteria such as security, access to education, wage levels, health, etc).

Somalia topped the list, followed by Zimbabwe ... with Pakistan at No 8.

Did it feel 'failed'?  Well, unfortunately it did, rather. I met some great people but most of them are bewildered and frustrated by an environment in which vast natural resources go untapped, small companies grow into comfortable slightly bigger companies and then stop, corruption is rife, many good jobs are 'political' appointments, the government often bails out failed companies (leaving no incentive to turn it round), only those whose parents can afford to pay for it get a good education, and so on.

The situation is not hopeless ... but its going to take a bold leader to take on this 'climate of cosiness' and create rewards for real success (not just commercial success).

That leader has not emerged yet!

A Community building a Future

Today I was on Bhit island (just off Karachi in Pakistan) talking to representatives of the Baba Bhit (two islands making up one community) Fishermen Educational Society.

Baba Bhit is a community of fisherfolk who, until recently, had a literacy level of zero and an uncertain future. They land their catches at Karachi fishing harbour where 'middlemen' take a significant cut of the proceeds.

In the last 5 years, they have:

1. Established the Educational Society which has itself started a school - for boys and girls - on the island and recruited teachers from the mainland
2. Worked with a micro-finance bank to provide a 'branchless bank' on the island where fishermen can deposit and withdraw funds (within a certain agreed 'float') using chip & pin technology.
3. Established a plan for their own landing site, chillstore, market hall and shrimp peeling plant so that they can sell direct to processors, add value, employ women and - hopefully - secure permission to export to the UK

This is productivity in action!

I was there with UNIDO (United Nations Industrial Development Organisation) and we hope to be able to help them with some funding for number 3. It is always better to help those who are helping themselves.

Can New Zealand match Australia?

The poor old New Zealanders work among the longest hours in the OECD but have relatively low pay.
 
To address this, they naturally compare themselves witrh their nearest neighbours and matching Australian levels of productivity has become a kind of holy grail.

Australia has the advantage, however, of vast mineral wealth.

New Zealand, therefore, has to think and act smarter - taking advantage of its own advantages. Perhaps prime amongst these is New Zealand's smaller size.  This should give it the flexibility it needs to to transform the economy, using their own impressive natural and human resources.

Of course, only time will tell whether they can pull this off.

Measure what?

Last month the Washington Post ran a story about an employee in Alexandria, VA having to work so much harder (in effect doing the work of two men) due to the recession forcing companies to opt for 'greater productivity'.

This confusion of 'productivity' and 'production' is understandable ... since it reflects the difficulties of measuring productivity in appropriate ways.  If this company has indeed made workers work longer hours - for the same money - then productivity ... measured as output per dollar ... has gone up, but productivity ... measured as output per person hour ... has not.

So, we need to be careful about making decisions or judgements on productivity figures without understanding the basis of calculation (and the underlying 'truth').