Considering labour in industrialisation: It is for people – not for the statistics!

Abstract

Industrialisation is regarded as key for economic growth in developing countries. Many African countries are pushing towards industrialisation, moving away from resource extractive economies and aiming at economic diversification. To this end, emerging investors’ engagements have been regarded as fresh opportunities for Africa and have been welcomed in the continent. However, the reverse side of the relationship should be revisited. The emerging investors, including China, mostly operate in the textile or light machinery sectors, i.e. in labour-intensive sectors. While this creates jobs, it is also in a low-pay segment, and consequently, labour related issues have often arisen to trouble the waters. The goal of industrialisation should not be achieved by regarding the country’s own workforce purely as productive factors; development is engineered by people, not simply engineered with them. Sustainability of investments is a key factor to consider. A case in point is Namibia‟s experience with a multinational company, Ramatex. Even though the incident occurred several years ago, there are still lessons to be learnt from it. The Malaysian-owned multinational textile company, Ramatex, started its operation in Namibia in 2001. The Namibian government, faced with unemployment reaching a record high of 31% in 2001, was eager to attract the company. The Namibian government provided unprecedented concessions including infrastructure support, and tax exemptions among others. In turn, Ramatex promised to create 8 000 jobs and this was expected to be a cornerstone of Namibia‟s industrial development. However, this bright optimism soon wore off. Besides environmental issues with long-term costs involved, such as the pollution of Windhoek‟s water resources, the company met with increasing resentment from locals. Strikes broke out due to the company‟s ill-treatment of labour and its use of migrant workers from Bangladesh instead of local workers. Finally Ramatex completely closed down the operation in Namibia in 2008 and left the state of Namibia with long-term costs.