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Exporting labour makes little economic sense

By The Standard | Feb 19th 2016 | 2 min read

Labour Cabinet Secretary Phyllis Kandie on Wednesday announced Government plans to export labour. Though this might sound noble superficially, it passes as an ill-thought-out policy statement.

Youths aged between 18 and 35 years comprise 35 per cent of the 44 million Kenyans. Of this, 10 million are not in gainful employment. It is therefore easy to understand why the Government would want to export labour, creating jobs for at least 1 million. No doubt, this will ease the unemployment burden after a promise to create 500,000 jobs annually became unattainable.

Generally, when the youth get jobs, poverty levels, violence and all other vices drop. This comes with the corresponding rise in the standards of living. Working abroad is not necessarily a bad thing. Those who get jobs abroad become a source of much-needed forex earnings. Philippines, for example, with 8.6 million citizens working abroad earns approximately $20.3 billion in remittances each year. But looked at differently, exporting labour could result in brain drain. It also makes bad economic sense in the long term because the multiplier effect of working abroad is minimal compared to say, attracting foreign direct investment, nurturing, reviving and injecting more resources into local industries.

This will not only increase total country exports (a source of forex earnings), it will create employment locally; from sourcing of raw materials to the sale of finished products. Put in another way, countries grow by creating jobs. China, for example, did not grow to become the world's second biggest economy by exporting jobs. It attracted manufacturing by offering cheap labour to Western multinationals.

The export of labour means there are no accruals from return on investment in education and training. Besides, working abroad causes a disruption of family ties. There is also always the risk of poor pay, bad working conditions and harassment and those who fall foul of the law are handed harsh jail terms. Sadly, others die. It would make more economic sense to adapt policies that lead to the expansion of the economy and thereby get more youth on employment than to send them to faraway lands. It also means tackling corruption that is blamed for the loss of 250,000 jobs each year.

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