Higher unemployment stats no surprise to analysts

Namibia's announcement in parliament that the unemployment rate had reached 36.7 percent hardly surprised analysts, who have long been calling for policy reform and job creation. The latest Namibia Labour Force Survey, conducted by the ministry of labour and social welfare, and presented on Tuesday, told of rising unemployment - up more than three percent since the previous survey in 2000. "The rate of unemployment is generally much higher if one includes underemployment - people operating below their full capacity - total unemployment could well exceed 60 percent. Namibia is doing quite poorly at creating new jobs, and this is something that needs serious attention from policy analysts and policymakers," Daniel Motinga, executive director of the Institute for Public Policy Research, told IRIN. The survey indicated that fewer of Namibia's 1.8 million population are now economically active, with the level falling from 54 percent in 2000 to 47.9 percent at present. There are also considerable disparities: more than 56.4 percent of men are employed, compared to only 40.7 percent of women; employment in urban areas stood at 66.5 percent, nearly double the rate in rural areas, where it was just 34.7 percent. "2004 [the statistics on which the survey is based] was really a bad year in terms of job creation. If we look back to 1997 and 2000, then the broad level of unemployment was 34.5 percent in 1997 and 33.8 percent in 2000. This means that joblessness [in terms of the actual number of people] has increased by eight percent between 2000 and 2004," Motinga said. Describing the lack of paid work opportunities as a major policy challenge, Motinga said the unemployment rate revealed that the government had not been targeting its policies to address job creation. "Having said that, creating jobs on a sustainable basis is no easy matter - government has to redirect or switch its budget to capital projects [that generate more jobs]. Currently, less than 20 percent of government revenues go to capital projects. This should change soonest, if we want to make a dent in unemployment," said Motinga. Robin Sherbourne, a Windhoek-based independent economist, said the new unemployment rate "hardly surprised" him, and added that "there is clearly no sign that the formal employment sector is growing". Since independence from South Africa in 1990, he said, politicians had chosen to increase public spending rather than fight the growing unemployment rate. According to Sherbourne, the new unemployment rate contradicted the preliminary results of the 2004 Namibia Household Income and Expenditure Survey, released in April this year, which found that Namibians were better off than they were a decade ago, and the country was on track to meet the UN's millennium Development Goals by 2015. "The survey says households living in severe poverty declined from 8.7 percent to 3.9 percent - now we are saying unemployment is at 36.7 percent. There is a direct link between unemployment and poverty," Sherbourne pointed out. Motinga explained that poverty was multi-dimensional, and "even people without jobs are making a living through small informal business, or receiving transfers from their neighbours or employed family members. This is a crucial point - transfer through extended family networks helps to keep some households out of serious poverty". The ministry of labour and social welfare said its survey of the economically active population was prompted by the need to provide basic information on the size and structure of the labour force, and to measure the extent of available and unused labour, time and human resources for macroeconomic monitoring and human resource development planning. In a statement the ministry said the labour survey would be carried out regularly to enable policymakers to analyse the economy's growth performance, and study demographic and socioeconomic factors affecting the size and composition of the labour force.