Inclusive means everyone. Inclusive education means education for all – regardless of race, ethnicity, age, gender, background, status, wealth, or physical ability. So what then is ‘inclusive growth’?
Georgia’s
2020 government strategy aims to ‘ensure that the majority of Georgia’s
population benefits from economic growth; (Financial,
March 17, 2014, http://www.finchannel.com). What it means is that the
government aims to ensure that the economy grows while creating jobs and
business opportunities for everyone including for the marginalized and low
socioeconomic communities.
How?
Access and quality are two key factors. For the people it means increased
social benefits, public provision of pre-school education, and health care.
Financial’s article indicates that social transfers – the redistribution of
government income – could come at a trade-off at the expense of public and
private investment in infrastructure and productive capital.
To
make the government’s good intentions a reality, the article states that the
government needs to be ‘smart’ and go beyond income redistribution to
interventions that make markets work for everybody. One alternative is to use public
funding (domestic or foreign) to incentivize private sector investment in new
activities (with an emphasis on new)
that directly engage or otherwise benefit the poor and marginalized. Examples
include: (1) regional development initiatives, and (2) connecting marginalized
groups directly to existing market opportunities.
Regional development
One
of the regional development initiatives suggested is the Svaneti spa resort by
paving a new road to Mestia (currently an 8-10 hour drive from the capital
Tbilisi). But if the road is built, will people use it – will people go to
Svaneti? The previous government promoted Mestia as the ‘Switzerland in the
Caucasus’ which initially led to interest from domestic and foreign investors
in the hospitality industry. About 2 years ago flights to the remote region
were introduced, but they were irregular and restricted by weather conditions.
It’s a risky approach to regional development but, for a rugged and beautiful
location, it may benefit both locals and public-private investors. The
challenge, maintains the article, is for ‘proper business planning and/or cost
benefit analysis.’ But if the road takes people there, and there is little
investment in water, sewage, electricity, telecommunications, recreational
development (such as hiking trails and ski resorts), hotels, cafes, and
restaurants, people won’t continue to go. It’s a dilemma for investors as well
as locals.
Connecting people directly to existing market opportunities
The
Georgian government recently commenced a campaign to re-train the unemployed in
order for them to qualify for existing jobs. The government is also
facilitating the creation of farmer organizations to connect subsistence
farmers to the existing demand for agricultural products. Both approaches aim
first and foremost to target the marginalized and not the private sector. Is
this a problem? For sustainability, the right people need to be trained for the
right jobs, and farmer cooperatives need to sell their products to improve
their livelihoods. In leading people to the market, will other people buy? If
the demand was accurately pinpointed, it might work.
The
farmer cooperative initiative, the European Neighbourhood Program for
Agriculture and Rural Development (ENPARD) targets all 11 regions of Georgia.
They are business oriented volunteer-based organizations of small farmers
designed to create economies of scale, some of which are operated by internally
displaced women. The aim is to have 160 cooperatives covering 45 districts (Georgia Today, March 14-20, 2014). But
currently although almost 50% of Georgians earn an income from agriculture, it
contributes less than 10% to the nation’s GDP. And some farmers continue to
have a negative view of cooperatives, which stems from their previous
experience with kolkoz (collective
farms of Soviet days). So there may still be some cultural misunderstandings
about cooperative farming.
Coordination challenges
Coordination
decisions and actions are the main challenge to improving market opportunities,
maintains the article. Coordination among all stakeholders is required in order
to have a common understanding via a strategic plan or resource plan, as well
as the government’s provision of basic infrastructure. Even then,
implementation of ideas and plans could easily come unstuck, especially if
issues such as environment, land and property, access, water management, and
governance are not adequately addressed in the planning and implementation
stages.
Farmer
cooperatives, vocational training, and social transfers are all ideal and
ambitious, and readily accepted by everyone – they are visible, tangible and
immediate. The goal is to combine social safety nets with longer term,
sustainable, inclusive growth.
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