Many international economists are presently speaking of a double dip recession, as some G20 countries turn inward, reducing imports, and essentially closing traditional export markets to each others’ products. These austerity measures aimed at reducing public sector waste and boosting efficiency has also resulted in cuts in some social programs. Noting that when I first coined the word “re-section”, it was in response to an insignificant debate on the definition of a recession and how the private sector uses the resulting media frenzy to reduce staff, tighten budgets and refocus its operations.This is my attempt to bring the debate back to “Confidence”. Many of us believe that without Governments’ so called stimulus packages, at the first signs of the bad mortgage led financial crisis, the recession would have quickly become depression. The opportunity, however, was to change the drivers, by investing the said stimulus money into different sections of the economy. Moving the construction sector from building homes, housing assets, which do not generate income, to building industries, which add value to the economy and would have reduced job losses. Investing in new technologies to reduce energy bills, recycle water and increase food yields is re-sectioning of the economy (changing traditions and priorities to alleviate a recession).
Decreasing waste and inefficiencies in the public sector is more about law enforcement and politics than management. It is well known not withstanding public pronouncement that promotion in the public service is not solely due to individual job performance but is strongly connected to election results. Hence, unsuited persons in positions to implement change have forced the engagement of numerous consultants, all working against each other causing gridlock. Reducing department budget allocations will and has only reduced the quantity and quality of services provided to the population. Re-modeling Government revenue collection and delivery services, for greater efficiency, is a cultural change which must start with the people. The People must feel confident that the long serving public servants can be prosecuted, therefore a small investment in law enforcement will significantly reduce Government expenditure, re-sectioning of the public service (changing traditions and priorities to alleviate a recession).
The private sector has already been accused of using the recession to strengthen its technology and train its customers to use the new technology, making it easier and more profitable by reducing its payroll expenses, re-sectioning of the private sector (changing traditions and priorities to alleviate a recession). The many terms that are used to describe such belt tightening, for example “re-sizing”, “re-positioning”, “re-cast”, lead to what many economists refer to as a jobless recovery. The private sector however, is seeking direction policies from Governments as to which section of the economy it will incentivize to lead the growth out of this recession. Hence, Confidence, the ability to predict, plan and forecast, with minimum risk, the outcome from investment activities driving economic expansion and when this is repeated often, it brings more persons back into the market; as investors, consumers and employees.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
