Regional Development and Employment: Regional Deficiencies and Entrepreneurship Deficit
20 June 2011
Read by 1293 persons
The severity of the employment problem has become the main concern in disadvantaged regions. In this regard, it should be noted that, for young people aged 15 to 29, the unemployment rate reaches 40% in the governorate of Kef and significantly exceeds this threshold in the governorate of Gafsa, compared to 30% nationally.
It should be noted that, among all the unemployed in these disadvantaged regions, almost two-thirds are young people aged 15 to 29 and, if we add to them the inactive young people in the age group 30-35, we reach three-quarters of the unemployed. More specifically, according to the data available today (May 2011), the unemployment rate for higher education graduates reaches 48% in the governorate of Sidi Bouzid, 46% in the governorate of Gafsa, 44% in the governorate of Jendouba, 44% in the governorate of Tataouine, 41% in the governorate of Kasserine and 40% in the governorate of Kef, while the national unemployment rate is 29%. For girls, it should be noted, for example, that these rates exceed 50% in Gafsa, and well over 40% in Kef.
It should also be noted that:
- The urbanization rate in these regions is quite low: 40% for the governorate of Kasserine, 32% for the governorate of Kairouan and 25% for the governorate of Sidi Bouzid. These are therefore predominantly rural regions, with scattered housing.
- Youth unemployment is certainly increasing with the level of education, but it remains quite high for young people from disadvantaged regions who have left the school system mid-cycle, knowing, moreover, that those among the latter who escape unemployment are often employed in the informal sector, where their working conditions are deplorable.
- Among all unemployed people of all ages, higher education graduates only constitute a small minority. It is therefore also necessary to be concerned about the worrying situation of "lowly educated" unemployed people, whose precariousness and distress constitute an irresistible stimulant for illegal immigration.
- Working women, regardless of their age, generally have less chance of being employed than men. In addition, it should be noted, in particular, that the increase in the relative proportion of women over 30 in agriculture - from 50% in 1980 to almost 2/3 today - reflects a trend towards an increase in the average age of these working women and reflects a phenomenon of "aging" / precariousness of the female labor factor in this strategic sector. In fact, the tendency to extend the working lives of women in the agricultural sector for those over 60, whose relative weight has increased from 5% in 1980 to almost 15% today, often confined to difficult and poorly valued work for rural women, is likely to reduce their physical work capacity, and therefore to impair their productivity standards.
In this context, it should be observed that the economic conditions of these disadvantaged regions contribute to perpetuating this state of growth and employment deficit. These regions certainly justify some "assets", unevenly distributed among the governorates. Agriculture occupies a large place in the economy of these regions, particularly in Sidi Bouzid where the extension of irrigation has allowed the development of various products, mainly market gardening (tomatoes), red meat and milk. Similarly, the governorate of Kasserine, where 31% of the active population is employed in the agricultural sector, is characterized by a large area of rich soil adaptable to different crops, as well as appreciable water resources (3 dams, 77 hill lakes, 19 hill dams, etc.). Fruit growing (apples) and market gardening are the main specializations of this governorate.
Furthermore, in addition to the traditional industry of these regions which is based on the exploitation and processing of raw materials such as alfa (paper pulp), marble and white limestone, mention must be made of the presence of certain subcontracting industrial units (textiles) oriented towards export, established in different industrial zones. Finally, let us note that new ICT service projects are beginning to emerge (call centers).
However, the potential opportunities of the so-called disadvantaged regions are poorly exploited due to the common structural difficulties facing these regions.
In the agricultural sector, the aging of the active population employed there, the fragmentation of ownership, and the persistence of certain traditional, even obsolete, techniques, maintain a tendency towards exhaustion.
In addition, certain limiting factors exert a perceptible braking effect:
- Weakness of supervision and relative shortage of specialized workers for sensitive work such as pruning fruit trees, plowing or various mechanized operations.
- "Unattractive", if not repulsive, working and remuneration conditions for the workforce.
- Patent underinvestment in equipment.
- Deficiencies in the organization of product marketing and input supply channels.
For its part, the industrial fabric is still modest, with low technological density, and therefore with low or very low added value.
Furthermore, the presence of repetitive projects located in saturated sectors is noted. Moreover, it has been observed that a large part of young promoters are unable to ensure the sustainability of their projects due to insufficient financial means (see UNDP study, 2010). The survival rate of BTS projects already launched is still low (UNDP, op.cit.).
It can thus be considered that entrepreneurship deficiencies are at the root of the low mobilization of growth and employment potential in these regions.
From this point of view, and referring to a recent survey by IACE, the main explanatory factors of the regional entrepreneurship deficit can be highlighted:
- The deterioration of the climate of confidence due to the absence/deficit of governance, corruption and security risks.
- The various incentives have practically had no effect on the regions and have not met the objectives of job creation and decentralization.
For some business leaders, the insufficient incentives for investment in disadvantaged regions is the main cause, while other entrepreneurs mention the lack of regular adaptation of incentives to regional requirements and the availability of each region, and advocate for recurrent updates of incentives.
- The environment is not "encouraging" due to the "mediocrity" of the infrastructure. Several operators consider that it is only possible to invest in these regions if there is a minimum of infrastructure (roads, electricity network, gas network, etc.) and a minimum quality of life (commercial, cultural spaces, etc.).
- The costs of recruiting and training quality human resources are penalizing. The absence of managers and highly qualified manpower has discouraged several investors from taking the risk of setting up in disadvantaged regions.
- Banks are perceived by some business leaders as a "major obstacle", especially for SMEs. It would be necessary, according to some operators, to further involve financial institutions and encourage them to better support investors, or even to "penalize" them in case of refusal to grant loans, installments and cash facilities.
Furthermore, the companies surveyed on a new framework more conducive to private entrepreneurship in the regions believe:
- for almost 2/3 absolutely priority to facilitate the conditions for creating a business and make the labor code more flexible;
- for almost half quite priority to facilitate obtaining building permits and authorizations, to ensure the execution of contracts within reasonable timeframes and to improve the conditions for registering ownership.
It should also be noted that the UNDP study (op. cit, 2010) corroborates the results of the IACE survey; it highlights in particular that the weakness of investments in non-agricultural activities in the regions of Kef and Gafsa is explained by specific factors: weakness of equity, absence of mortgage guarantees, reluctance of banks to grant loans due to the risk of non-recovery, scarcity of industrial land and difficulties in converting agricultural land into industrial land, unfavorable business environment compared to coastal regions and unfavorable social climate.
At this stage, it clearly emerges that the dynamism of the regions is mainly dependent on entrepreneurial dynamics. Action standards should be identified to articulate the two dynamics. Beforehand, it is important to specify the contours of a regional development strategy.
Published June 17, 2011
Posted online June 20, 2011
webmanagercenter.com
It should be noted that, among all the unemployed in these disadvantaged regions, almost two-thirds are young people aged 15 to 29 and, if we add to them the inactive young people in the age group 30-35, we reach three-quarters of the unemployed. More specifically, according to the data available today (May 2011), the unemployment rate for higher education graduates reaches 48% in the governorate of Sidi Bouzid, 46% in the governorate of Gafsa, 44% in the governorate of Jendouba, 44% in the governorate of Tataouine, 41% in the governorate of Kasserine and 40% in the governorate of Kef, while the national unemployment rate is 29%. For girls, it should be noted, for example, that these rates exceed 50% in Gafsa, and well over 40% in Kef.
It should also be noted that:
- The urbanization rate in these regions is quite low: 40% for the governorate of Kasserine, 32% for the governorate of Kairouan and 25% for the governorate of Sidi Bouzid. These are therefore predominantly rural regions, with scattered housing.
- Youth unemployment is certainly increasing with the level of education, but it remains quite high for young people from disadvantaged regions who have left the school system mid-cycle, knowing, moreover, that those among the latter who escape unemployment are often employed in the informal sector, where their working conditions are deplorable.
- Among all unemployed people of all ages, higher education graduates only constitute a small minority. It is therefore also necessary to be concerned about the worrying situation of "lowly educated" unemployed people, whose precariousness and distress constitute an irresistible stimulant for illegal immigration.
- Working women, regardless of their age, generally have less chance of being employed than men. In addition, it should be noted, in particular, that the increase in the relative proportion of women over 30 in agriculture - from 50% in 1980 to almost 2/3 today - reflects a trend towards an increase in the average age of these working women and reflects a phenomenon of "aging" / precariousness of the female labor factor in this strategic sector. In fact, the tendency to extend the working lives of women in the agricultural sector for those over 60, whose relative weight has increased from 5% in 1980 to almost 15% today, often confined to difficult and poorly valued work for rural women, is likely to reduce their physical work capacity, and therefore to impair their productivity standards.
In this context, it should be observed that the economic conditions of these disadvantaged regions contribute to perpetuating this state of growth and employment deficit. These regions certainly justify some "assets", unevenly distributed among the governorates. Agriculture occupies a large place in the economy of these regions, particularly in Sidi Bouzid where the extension of irrigation has allowed the development of various products, mainly market gardening (tomatoes), red meat and milk. Similarly, the governorate of Kasserine, where 31% of the active population is employed in the agricultural sector, is characterized by a large area of rich soil adaptable to different crops, as well as appreciable water resources (3 dams, 77 hill lakes, 19 hill dams, etc.). Fruit growing (apples) and market gardening are the main specializations of this governorate.
Furthermore, in addition to the traditional industry of these regions which is based on the exploitation and processing of raw materials such as alfa (paper pulp), marble and white limestone, mention must be made of the presence of certain subcontracting industrial units (textiles) oriented towards export, established in different industrial zones. Finally, let us note that new ICT service projects are beginning to emerge (call centers).
However, the potential opportunities of the so-called disadvantaged regions are poorly exploited due to the common structural difficulties facing these regions.
In the agricultural sector, the aging of the active population employed there, the fragmentation of ownership, and the persistence of certain traditional, even obsolete, techniques, maintain a tendency towards exhaustion.
In addition, certain limiting factors exert a perceptible braking effect:
- Weakness of supervision and relative shortage of specialized workers for sensitive work such as pruning fruit trees, plowing or various mechanized operations.
- "Unattractive", if not repulsive, working and remuneration conditions for the workforce.
- Patent underinvestment in equipment.
- Deficiencies in the organization of product marketing and input supply channels.
For its part, the industrial fabric is still modest, with low technological density, and therefore with low or very low added value.
Furthermore, the presence of repetitive projects located in saturated sectors is noted. Moreover, it has been observed that a large part of young promoters are unable to ensure the sustainability of their projects due to insufficient financial means (see UNDP study, 2010). The survival rate of BTS projects already launched is still low (UNDP, op.cit.).
It can thus be considered that entrepreneurship deficiencies are at the root of the low mobilization of growth and employment potential in these regions.
From this point of view, and referring to a recent survey by IACE, the main explanatory factors of the regional entrepreneurship deficit can be highlighted:
- The deterioration of the climate of confidence due to the absence/deficit of governance, corruption and security risks.
- The various incentives have practically had no effect on the regions and have not met the objectives of job creation and decentralization.
For some business leaders, the insufficient incentives for investment in disadvantaged regions is the main cause, while other entrepreneurs mention the lack of regular adaptation of incentives to regional requirements and the availability of each region, and advocate for recurrent updates of incentives.
- The environment is not "encouraging" due to the "mediocrity" of the infrastructure. Several operators consider that it is only possible to invest in these regions if there is a minimum of infrastructure (roads, electricity network, gas network, etc.) and a minimum quality of life (commercial, cultural spaces, etc.).
- The costs of recruiting and training quality human resources are penalizing. The absence of managers and highly qualified manpower has discouraged several investors from taking the risk of setting up in disadvantaged regions.
- Banks are perceived by some business leaders as a "major obstacle", especially for SMEs. It would be necessary, according to some operators, to further involve financial institutions and encourage them to better support investors, or even to "penalize" them in case of refusal to grant loans, installments and cash facilities.
Furthermore, the companies surveyed on a new framework more conducive to private entrepreneurship in the regions believe:
- for almost 2/3 absolutely priority to facilitate the conditions for creating a business and make the labor code more flexible;
- for almost half quite priority to facilitate obtaining building permits and authorizations, to ensure the execution of contracts within reasonable timeframes and to improve the conditions for registering ownership.
It should also be noted that the UNDP study (op. cit, 2010) corroborates the results of the IACE survey; it highlights in particular that the weakness of investments in non-agricultural activities in the regions of Kef and Gafsa is explained by specific factors: weakness of equity, absence of mortgage guarantees, reluctance of banks to grant loans due to the risk of non-recovery, scarcity of industrial land and difficulties in converting agricultural land into industrial land, unfavorable business environment compared to coastal regions and unfavorable social climate.
At this stage, it clearly emerges that the dynamism of the regions is mainly dependent on entrepreneurial dynamics. Action standards should be identified to articulate the two dynamics. Beforehand, it is important to specify the contours of a regional development strategy.
Published June 17, 2011
Posted online June 20, 2011
webmanagercenter.com
