Trends: The Labour Market In Oman

Trends: The Labour Market In Oman Introduction This paper presents an analysis of the following within the working context of the author who is working as External Relations Manager for Bank Muscat, in the Banks Head Office in Muscat. Main issues and trends in the labour market in Oman that impact the key competences of the organisation Bank Muscat, Oman An Evaluation of the Strategic approaches to HRM that can improve organisational performance Organisations approaches to HRM toward Talent Management After the analysis and evaluation of the above HRM issues and approaches, this report concludes with some recommendations for improving the performance in Bank Muscat, where the author is working as its External Relations Manager. Issues and Trends in the Labour Market in Oman Labour market issues and trends are driven by labour market structure and labour diversity (Schuler Jackson, 2007). The labour market in Oman is composed of indigenous Omani workers and expatriate workers (Al-Lamki, 2005) who have different national cultures (with different ethnicities) which give rise to labour diversity (Triandis et al, 1994) as well. Like its member countries of the GCC-Gulf Cooperation Council, Omans labour market is tight which always poses recruitment difficulties (Metcalfe, 2007). The GCC Gulf Cooperation Council countries (Saudi Arabia, Kuwait, Oman, the UAE, Bahrain, and Qatar) do not have sufficient indigenous skilled work force  [1]  as a result of which the GCC countries had been relying very heavily on imported work force for their economic development. According to the World Tribune report  [2]  , Omans expatriate work force constitutes a majority of 54% of the total work force in the country. As per the recent statistics published by the Ministry of National Economy (2009), Oman, the expatriate population stood at 900,248 against the Omani population of 1,967,180 at mid year 2008. In other words, these statistics indicate that from only a third of the nations population the expatriates occupy a high 54% of the labour market in Oman. In consequence of the above, the Government of Oman has been implementing its Omanisation Policy vigorously since the start of year 2009 (although the Governments Omanisation Policy has been active in the country since 1988 when it was introduced by His Majesty Sultan Qaboos Bin Said through the Ministry of Civil Services to replace the expatriate work force with local Omani work force) in the private sector. This is due to the fact that the Governments implementation of its Omanisation Policy has been successful so far only in the Omani public sector and not in the private sector as the sector still relies heavily on the expatriate work force (Table 1). Nonetheless the banking sector in Oman is an exception to the poor Omanisation in the private sector (Al-Lamki, 2005). Table 1: Employment of Omanis in the Private Sector  [3]   Currently there are 17 commercial banks, including Bank Muscat, in Oman. Bank Muscat is the largest and leading commercial bank in Oman  [4]  . Bank Muscat has been continuously striving to improve its human resources to enhance its operations as well as to contribute to the further development of national human resources. Currently, Bank Muscat has a very high 92% Omanisation rate which has earned the Bank the prestigious GCC-Level Achievement in Nationalisation of Human Resources in November 2009  [5]  . The Bank also continues to be a heavy investor in information technology to keep itself on top of the competition. Bank Muscat has won for the ninth consecutive year in 2009 the Best Consumer Internet Bank award from the prestigious Global Finance. Service sector organisations are labour intensive and in consequence the human resources represent a substantial portion of the overall operating cost of the service organisation (Massey, 1994). Also human resources cost continues to be one of the most difficult expenses to control in organisations yet it is the critical most factor that affects organisational performance (Pfeffer, 1998). These views apply very well to Bank Muscat also. Being an operator in the services sector where in the customers and the employees engage in direct contact (Schneider et al, 1980), and driven to be more cautious in conducting its daily business due to the current global economic crisis, Bank Muscats major focus of its HRM practice is directed at enhancing customer services through effective customisation of banking products and efficient delivery of quality banking services in a cost-effective way. It would be pertinent here to mention Bank Muscats Mission and its Quality Policy. Bank Muscats Mission Statement Quality Policy Bank Muscats Mission Statement is effectively combined with its Vision Statement which states that, Over one million satisfied customers by 2010 through continuous enhancement of stakeholder value  [6]  . And Bank Muscats Quality Policy Statement states, Our Quality Policy is to achieve and sustain a reputation for quality in the national and international markets by offering products and services that exceed the requirements of our customers. We strive to remain the bank of first choice in all our product and services  [7]  . Accordingly, Bank Muscats strategic emphasis is on building further its sources of competitive advantage which are strong community of satisfied customers and quality offerings of banking products and services. Further the financial services market in Oman (Bank Muscat competes directly with HSBC, Standard Chartered Bank, Oman International Bank, National Bank of Oman, Bank Dhofar, Bank Saderat Iran, and Bank Sohar) is becoming relatively more competitive than the financials services market in the neigbouring Qatar. Currently Bank Muscat runs 125 branches, operates 362 ATMs and 112 CDMs, and 4,200 PoS terminals throughout Oman. And another 3 more branches are going to be opened soon in the other cities of Oman, namely, Sohar, Salalah, and Sur. Human Resource Investment Bank Muscat considers its investment in its human resources as the most valuable asset which forms the basis for the Banks operations. In as much as the Banks human resources contain highly-skilled and experienced people, it also has newly recruited staffs that are relatively low-skilled as they are fresh University Graduates. Human resource movements are caused by recruitments and exits. Since bulk of Bank Muscats operations occur in the Banks retail branches, from time to time Bank Muscat recruits new Omani staffs in order to meet its human resource requirements, based on its formal recruitment and selection policies, at its new branches. There are no effects on the movements in the Banks human resources due to employee leaving. For instance, the employee turnover rate at the end of 2009 was 0% for the third consecutive time, as there were no exits due to resignation, retirement, or termination. For senior positions at the branches staffs are appointed through internal recruitment job promotions (e.g. Assistant Manager to Branch Manager) and the resultant vacancies are filled through the recruitment of new Omani staffs. Competence and Training and Development In view of the above Bank Muscat requires its new staffs with low-skills (who are currently filling in the first-line staffs mostly in the clerical cadre) to upgrade their skills. Acquisitions of higher level skills by these staffs would help the Bank to provide its quality-integrated services to its customers much more vigorously in the pursuit of its strategic mission and vision through a high quality services strategy and at the same time complying with the Governments Omanisation targets. Accordingly, the present HR competence needs of Bank Muscat are derived from the necessity to up skilling its young Omani staffs within the Banks need to maintain competitive advantage against the ongoing rapid changes in the business environment in Oman. To this end the Bank Muscats HR goals are currently focussed in training and development: To reduce skills shortages in the area of complex tasks To Encourage learning to acquire Bank specific-business knowledge for obtaining higher efficiency as well as to cope with changes To provide opportunities for personal and professional development and career growth To forge long term employment tenure on the basis of competence and skills-advancement (through higher/professional education) for entry-level staffs. Strategic Approaches to HRM for Improving Organisational Performance In todays rapidly changing competitive business environment, human resource management is being increasingly considered as a critical part of the strategic management (Sheehan, 2005; Schuler Jackson, 2007) and in consequence Strategic Human Resource Management (SHRM) as a field in itself has been increasingly applied since the 80s as part of management practice (Becker Huselid, 2006). According to Tichy et al (1982) the strategic approach to HRM is known as Strategic Human Resource Management. The strategic alignment of HRM with the organisations business strategies would contribute to enhanced organisational performance (ibid). Strategic Human Resource Management is defined by Ulrich (1997, p.89) as, the process of linking HR practices to business strategy. The outcome of the application of strategic human resource management is HR Strategy: the mission, vision, and priorities of the HR function (ibid, p.190). Managers can contribute more in the form of value-addition to the firm through the strategic use of their human resource competencies (Mullins, 2007). A strategic approach to HRM for improving organisational performance would demand the matching of the needs and talents of people with that of the organisations objectives (ibid). In other words, a competency-based HRM system can provide an organisation to sustain as well as develop its peoples competencies for the organisations future success. Four-task Model of HRM Schuler et al (2001, p.115), through their Four-task Model of HRM, assert that a strategic approach to HRM would contribute to the development of an effective HR plan which would help improve organisation performance by carrying out effectively the following four core HR activities: The organisation maintains the right number of people Employees are equipped with the right work knowledge and job skills for rendering efficient and effective performance (competence) Employee relationships and behaviour are consistent with the culture and values of the organisation. Employees are motivated adequately to meet the organisations needs. When these core activities are effectively carried out the resulting changes in the human resources in the form of employee attitudes and behaviours within a right organisational climate should lead the organisations successful performance (Bowen Ostroff, 2004). For instance these four core activities can help an organisation to create cultures that maintain its unique competencies, promote social relationships built on mutual trust, knowledge sharing, and teamwork (Schuler Jackson, 2007). Together these imply that an organisation which develops employees to acquire better work skills, become more knowledgeable, and achieve higher competencies would be able to effectively promote improved organisational performance. High Performance Work Practices (HPWPs) A key approach to SHRM is high performance work practices (Huselid, 1995). HPWPs are considered by researchers to produce positive effects on an organisations financial and business performance (Appelbaum et al, 2000; Schuler Jackson, 2007). When individuals are provided with the right environment and collaborative team work with adequate job discretion it is highly likely that they would produce high individual performances which collectively would lead to accomplishing a successful organisational performance (Becker Huselid, 2006). In order to do this the management of the organisation should use high performance work practices (Huselid, 1995). In other words use of high performance work practices would impact positively on both individual performance and organisational performance. HPWPs include employee empowerment, employee training, and teamwork (ibid) and talent management and staff retention (Huselid et al, 2005). Likewise high performance HR practices that includes a rigorous selection of staffs and robust training and development systems to increase employee ability levels and skills, supported by comprehensive incentive schemes to motivate employees, and empowering employees, have positive impact on employee productivity and organisational performance (Appelbaum et al, 2000). These HPWPs can lead an organisation to the development of skilled employees who actively engage in producing successful behaviours for the organisation which thus form a key source of competitive advantage to generate mutually beneficial outcomes to obtain higher organisational operating performances (Schuler Jackson, 2007). HPWPs lead to the achievement of these favourable organisational operating performances through the improved social structure within the organisation that greatly assist in better communication and higher cooperation among the work force (Appelbaum et al, 2000). Employee empowerment today is considered as part of talent management (Bux Tay, 2010). Hence, these two key HR practices that are in use at Bank Muscat have been discussed: in the next section 2.2.1, namely, employee empowerment; and talent management, including employee empowerment in Bank Muscat have been discussed in section 3 later. Employee Empowerment Only when individuals are empowered and made to get involved they can become an organisations most valued employees as a consequence of which they would become the right people who can offer value creation both for the organisation and its customers (Sarkar, 2009). Mullins (2007, p.702) defines employee empowerment as, allowing employees greater freedom, autonomy and self-control over their work, and responsibility for decision-making. According to Spreitzer (1995), employee empowerment is a motivational factor that embeds: employee competences and consistent behaviour and ability to initiate and regulate actions, which collectively influences operating performances in the organisation. The concept of employee empowerment is about leaders giving up their control in order to get the desired results for the organisation (Gretton, 1995 in Mullins, 2007). This is supported by Spreitzer (1995) who states that leaders can become more effective if only they can give up their power, but retain responsibility, to their staffs and teams. An effective management of employee empowerment is capable of producing a large number of benefits to an organisation from the top level to the bottom level (Mullins, 2007). By empowering its employees an organisation can improve both the individual ability and the organisational ability to perform successfully (ibid). Further, employee empowerment can be used as a successful organisational tool to raise employee productivity and profits (ibid). Likewise, empowerment facilitates employees to become innovative and render good performance since conflicts can be greatly avoided and more cooperation can be obtained (Spreitzer, 1995). Appelbaum et al (2000) suggest that empowerment enables greater utilisation of employee knowledge, abilities, and skills which in turn makes them cooperate more in the form of teamwork (Spreitzer, 1995). In many organisations HR role is restricted to routine tasks like hiring and firing, implementing the decisions made by others on pay and benefits (Frost et al, 2002). However, if the HR managers are empowered, then they would be engaged in much deeper aspects of recruitment, selection, and retention, employee training and development and focus strongly on workplace diversity which can contribute to increasing their competence and encourage them to empower their staffs in order to enhance the business and financial performance (ibid). Approaches to Talent Management It would be useful to understand the meaning behind two key words: Talent and Talent Management. CIPD of the UK provides two critical definitions on Talent and Talent Management as follows  [8]  : Talent Talent consists of those individuals who can make a difference to organisational performance, either through their immediate contribution or in the longer-term by demonstrating the highest levels of potential. Talent Management Talent management is the systematic attraction, identification, development, engagement/ retention and deployment of those individuals who are of particular value to an organisation, either in view of their high potential for the future or because they are fulfilling business/operation-critical roles. As discussed earlier, Bank Muscat operates in the services sector and by nature is a labour intensive Company whose main objective of running its banking operations is to provide high-quality customer services in banking and finance. And in this pursuit the role of the Banks people is critical in adding value not only to the customer services they render but also add value to Bank Muscat, thus eventually adding value to the Banks stakeholders. In view of the above and given the diversity of the work force of Bank Muscat, talent management at the Bank would have implications for recruitment and selection of competent staffs and staff retention. Further in terms of succession planning the Bank also has a need to mentor/coach future leaders/managers for Bank Muscat. Figure 1 illustrates the Talent Management framework at Bank Muscat which has been reproduced from the talent management framework supported by the Government of Australia for managing skill shortages  [9]  . Accordingly the following HR activities will be discussed here: Staff Recruitment and Selection Strategic Human Resource Development Mentoring Staff Retention. In addition to the above employee empowerment in Bank Muscat has been discussed as part of the Companys talent management practice under the heading Strategic Human Resource Development. Figure 1: Talent Management Framework The major recruitment and selection objective of Bank Muscat is to attract and retain and thus have the right people with core competencies to enable the Bank to continue to maintain its competitive advantage as a the countrys leading bank in terms of profits, net assets, and up to date IT infrastructure. According to Pollitt (2004, p.24) the following are the core competencies expected from the workers by organisations world wide. These are: Well developed leadership skills, The ability to shift attitudes and behaviors, The capacity to exert effective influence and work through others, The talent for successful partnership working and, most importantly, having the potential to adapt quickly to internal and external change, and To get that change owned and embedded in an organization. Given the low level availability of talent with the above core competencies recruiting right people now is much harder for organisations (ibid). This is particularly true in the case of Bank Muscat which requires people with the above skills and consequential difficulties in finding and recruiting such talent within the tight labour market in Oman. Main (2008) asserts that retaining highly skilled staff is a better option than recruiting new talent as recruiting would not only be an expensive option but also would be time-consuming in the present economic conditions, which applies to Bank Muscat as well though staff recruitment and selection process cannot be ignored. Staff Recruitment and Selection As mentioned earlier the labour market in Oman is differentiated in terms of the composition of the workforce (indigenous workers and expatriate workers). Further Oman has a tight labour market (like its other GCC member nations) which makes recruitment and staffing of employees extremely difficult due to the domestic shortage of skilled people on the one hand and the available young work force lack work experience and the required job skills. In the current economic downturn more and more employers are driven by the need to attract and retain workers with high skills and competencies to improve their organisational performances (Lunau, 2009). Many firms in Oman are experiencing low business and Bank Muscat is no exception which is indicated by a 21% drop in its annual profits for 2010 at OR73.7 million (about USD191.4 million)  [10]  . Nonetheless, aided by its human resource planning the Bank is on the look out for new workers to meet its staffing requirements for succession planning as well as its ongoing retail branch expansions. Without clear job descriptions any recruitment and selection process would be a failure (Frost et al, 2005). For example, the recruitment and selection process in some of the Omani public sector undertakings were criticised by the State Audit institution of Oman. The key to Bank Muscats recruitment and selection process is the use of clear job descriptions for recruiting the right people. Further since competence is considered as the critical element of Bank Muscats HR practices, priority is given to internal recruitment through promotions which actually helps the team members to work with maximum initiatives, increased expectations, and higher motivation. Strategic Human Resource Development (SHRD) Incorporating the core competencies of human resources and relating them for improving organisational performance is the purpose of strategic human resource development (Bratton Gold, 2007). When strategic human resource development is aligned the corporate strategies of the organisation it can lead to the creation of organisation-specific knowledge and skills (Garavan et al, 2007) which will also help build the core competencies of human resources. An effective recruitment and selection process should complement and support the training and development process (Boxall Purcell, 2003 in Bratton Gold, 2007). Accordingly, Bank Muscats recruitment and selection process is complemented by its training and development process which primarily focuses on building strong customer relationships. Training for Skill and Competence Development at Bank Muscat For this purpose, the Bank has been operating successfully its own Management Development Centre since year 2005 as part of its SHRD. Each training programme at the Centre is driven by the HR Departments training needs assessment exercise. This internal training and development Centre handles the training of the low-skilled employees on one end and high-skill positions on the other end. Training is imparted by training consultants from Dubai, London, and Australia who are supported by 3 full-time professional trainers of the Centre. The Centres training emphasis is based on self learning and Job-integrated learning. And the taught instructions along with the workshop learning programmes are delivered by the trainers who interact freely on a dialogue-basis rather than on a monologue-basis, encourage the trainees to participate more actively in the training and development process. The newly recruited low-skilled employees undergo a short and vigorous training to skill them for their current jobs. Likewise, mid-level skilled employees are trained on a regular basis to develop their current skills to high skills. In other words, both these skill groups receive training for advancing their careers within Bank Muscat. As for junior executive positions customised training programmes are provided at the Banks cost through the College of Banking and Financial Studies (CBFS), Muscat. These training programmes are revised from time to time to keep them up to date in terms of relevance to meet Bank Muscats HR needs. To ensure this the Banks HR Director and the College engage in the course revisions. Additionally, for senior executive positions Bank Muscat provides fully funded educational support for the MBA programmes from the UK. However, it is left to the choice of the individual staffs to pursue the MBA programmes. Nonetheless, employees from all the three skill-level categories receive full career guidance from the Management Development Centres Career Counsellor. Performance Appraisals in Bank Muscat Staff progress and promotion are based on formal performance appraisals in Bank Muscat. Performance appraisals are carried out mainly by the branch managers and within the Banks Head Office they are carried out by the departmental managers (e.g. Manager SME Department). Informational inputs to the branch and the departmental managers for these performance appraisals come through the 360 degree feedback process (including customer complaints). Employees of Bank Muscat are expected to have knowledge and understanding of the banking products. Therefore, performance of employees in the Bank is measured on the basis of their sales performances in the branches i.e. sale of the banking products (housing and auto loans, special savings accounts, fixed deposit schemes, Bank Muscat Credit Cards, etc). Once the performance appraisal process is completed the concerned managers and their staffs meet to discuss poor performance issues and commendations. This dialogue is facilitated by the open communication (which is continuously kept alive due to the employee empowerment practice in Bank Muscat). To the knowledge of this author the follow-up to poor performances resulted in the issues being solved rather than the same employee being found fault with, in terms of poor performance, again. Accordingly, none of the Banks employees has ever been reprimanded or were subject to any disciplinary actions by the Banks superiors. Employee Empowerment in Bank Muscat As discussed under section 2.2.1 earlier, employee empowerment is part of the talent management practice in Bank Muscat. Employee empowerment in Bank Muscat is carried out through: A simple 15 minutes briefing before the opening hours of the Bank on each first day of the week (which in Oman is Sunday for the Banks only) by the heads of the divisions/Branch Managers with their respective staffs. Direct communications in the form of intra-mail to the staffs from their bosses. Introduction of team-based work groups across SME Banking, Housing Loan, and Auto Loans that are linked with group bonus schemes for the team members. Active encouragement by departmental managers to engage their team members in planning and decision making relating to customer service issues and issues relating to operations. Above all the HR Executives directly report to the Banks CEO. By empowering its employees through delegation their productivity (faster processing of customer services) Bank Muscat has been able to keep its profitability up even in the current recessionary time. Mentoring A key strategy in the talent management is to put together the employees and their mentors to transfer the mentors skills, experience, and work behaviours to up-skill employee competencies in order obtain higher-levels of organisational performance (Murray, 2001). The purpose of mentoring process is to transfer professional, technical, and generic skills to people who will continue working in the organisation (ibid). In other words the mentoring process would help employees to stay with the organisation and thus ensure not only in retaining their talent but also help the organisation in its succession planning (ibid; Main, 2008). For example, banking companies stand to benefit from the mentoring process in the form of decreasing time needed to master customer service skills (Murray, 2001, p.36). Bank Muscats major objective is to capture key organisational knowledge from its senior leaders who are approaching their retirement and ensure knowledge-sharing among all its staffs. Based on the outline provided by Murray (2001, p.36) the other objectives of Bank Muscats mentoring process are: To improve retention by making our experienced and skilled people feel more valued To improve results-profit or other-with people who are more competent, confident, experienced, and motivated To ensure representation of diverse groups at all levels of the organization To enable our people to learn to work with others with different education, ages, cultures, physical abilities, etc. To improve communication across functional and divisional lines. Bank Muscat applies this to its staffs at all levels i.e. from new workers to newly promoted Managers. In particular the following details the formal mentoring process at Bank Muscat: Each newly promoted Manager will be paired with a mentor. New young recruits and those who are in their early career stages are paired with senior staff members for ensuring their training and retention. Senior members of the staff are to identify leadership and managerial talent and coach them to excel in their present and future work. Special rewards are given to managers whose mentoring leads to staff retention (over a 5-year minimum period). During the last 3 years the top management carried out 4 promotions among assistant branch managers and 3 promotions among branch supervisors among the branches in the Muscat area. Staff Retention The noted management consultancy company, McKinsey Company recommends the creation of Employee Value Proposition (EVP) as a strong means to retain talent in organisations (Brannick, 2001). Four elements make up the EVP (ibid, p.30): Great Company Company and its people care mutually for each other. Employees have pride in working for the company. Great Job Employees feel that their work is highly valued and their talents and achievements are duly recognised by their company. Great Leaders People who provide

Julius Caesar Essay

He says â€Å"If then that friend demand why Brutes rose against Caesar, this is my answer: Not that I loved Caesar less, but that I loved Rome more. † (Ill. Ii. 2022). Brutes here says that he did not kill Caesar because he did not like him, but he put Rome before Caesar in importance and thus killed Caesar for the better of Or me. Another example is â€Å"Had you rather Caesar were living, and die all slaves, than that Ca sear were dead, to live all free men? â€Å"(all. Ii. 2324).Even though nobody was a slave when Caesar w as alive, Brutes takes extra precaution because what he said could have happened so Brutes decided to kill Caesar in order for the of Rome to remain free, which tells readers that Brut s did not kill out of jealousy or for power but to make Rome the best it can be. The last example t hat supports Disraeli quote is â€Å"†¦ As I slew my best lover for the good of Rome, I have the s name dagger for myself, when it shall please my country to need my death. â€Å"(all. Ii. 4547).Based on the quote, Brutes is saying that he will kill himself when he finds it necessary for Rome if he becomes the same as Caesar. Career's rule or power also supports Disraeli quote because whatever Cases does, it is mostly for the good of the common people or the plebeians. Antonym reads his will and says, â€Å"To every Roman Citizen he gives / To every several men, seventies drachmas. â€Å"(ill. Iii. 243244). Caesar would not have done this if he was truly corrupt,Caesar did this â€Å"to sec urea the social welfare of the People. He cares about Rome than anything else and always SST rived to make the citizens, especially the lower or poor class, happier and better people. Another r example in which it again came from the will read by Mark Antonym says, â€Å"Moreover, he hath left o all his walks / His private arbors, and new planted orchards/ On this side Tiber; he hath left them you / And to your heirs forever: common pleasures / To walk abroad and recreate yourselves(all. Iii. 49253). And Mark Antonym ends with, â€Å"Here was a Caesar! When comes such another? † (Ill. Iii. 254). Caesar in the eyes of everybody was a great ruler and was a very honorable man. Going back to the will, Caesar leaves all his luxuries to the common people for them to enjoy y, and that right their is a ruler who truly cared about his people and uses his power for the be term of Rome. Lastly, the conspirators actions in killing Caesar support Disraeli quote.All the conspirators want to kill Caesar for the good of Rome, and Cassias wanted pep arsenal power not because of jealousy, but because everybody thought Cassias very lowly com eared to Caesar as described in this quote, â€Å"†¦ Did the tired Caesar. And this man Is now become a god, and Cassias is A wretched creature, and must blend his body If Caesar carelessly b UT nod on 1511 8). Cassias got no respect in saving Caesar from drowning in t he river, everybody looked dow n upon him like he was worth nothing.All the other co inspiration were friends with Caesar until Cassias convinced them to take sides with him and b reek away from Caesar. When Brutes joined, they decided how to kill Caesar and Cassias prop used to kill Mark Antonym but Brutes being the good man he was said to Cassias it would be too bloody because he wants the citizens to look upon them as honorable people, not murderers an d traitors. After Brute's speech, all the plebeians said â€Å"Live, Brutes! Live, Live! â€Å"(all. Ii. 49).If the c moon people thought Brutes killed Caesar out of pure greed and jealousy, than the people would probably not have spared Brutes but the people are convinced that Brutes kill ‘s Caesar not because of hatred but for the better of Rome. In conclusion, Benjamin Disraeli quote,†Power has only one duty secure the e social welfare of the People. † was supported by Brute's Justification in killing Cases r, Career's rule and will, and t he conspirators. True leaders and truly great men use power to truly do good things rather than taking advantage of it and becoming corrupt. Julius Caesar Essay

Population and economic growth Essay

It seems obvious that more rapidly growing populations have fewer natural resources per person, less physical capital per worker, more dependents, and greater needs for new social infrastructure. Perceptibly, they must be accounted as economically worse off. These intuitions shaped the earlier studies of population and economic development such as Coale and Hoover  model (1958). Later studies developed more neoclassical versions of these ideas, featuring that more rapid population growth led to per capita income. Noble prize economist Kuznets (1956), as well as Boserup (1956, 1981) and Simon (1981) suggested many possible positive effects of population growth, including economies of scale, acceleration of technological progress, flexible market response to emerging shortages , induces institutional changes , cheaper communication and transportation, and easier collective social investments. Kuznets examined per capita income growth and population growth rates across nations and found positive correlation, which seemed inconsistent with Koale – Hoover view. Their study was replicate by many others. In another advance, human capital was explicitly incorporated in growth model, and cross – national empirical analysis in the convergence framework indicated larger positive effects of population growth (Mankiw, Romer and W2EIL 1994). As Dawson and Tiffin (1998, p.149) put it that â€Å" the relationship between population growth and the economic development has long been thought to be fundamental to our understanding of less developed countries . Indeed most text book on economic development includes a section of population and development.† However there is no consensus whether population growth is beneficial or detrimental in the economic growth in the developing countries. As Thirwall (1994, p.143) commented â€Å"the relationship between population growth and economic development is a complex one and the historical evidence is ambiguous particularly concerning what is the cause what is the effect.† It is traditionally seen that the people of Bhutan are, by virtue of the circumstances of their habitat and precipice terrain, subjected to serious handicaps and constrained to scratch the earth for rather squalid and miserable living. The general impression in the minds of Bhutanese and foreigners alike who visit the nation is one of total abandonment and salutary neglect of the people. For most of the people of rural area, electricity, portable water supply, clinic, health centers and hospital which are by and large concentrated in the alleged urban areas, are just illusive luxurious. High proportion of the population still lives in the state of nature, by –passed by the modernizing influences and forces, which revolutionize traditional societies to progressive modern societies. The state of the life of the population kills its enthusiasm, dampens their morale and mitigates their sense of motivation and initiative. The scarcity  of these pre-requisites in the country is faced for the wanting of human capital that linearly depends upon the size of its Population. For this reason, it seems that low population growth rate of the country has, to large extent, been blamed for its state of affairs. Acrimonious debate regarding the economies and diseconomies of population has spurted between two schools of thought. One argument, presented by Clark and Ohlin, is in favour of unrepressed population growth based on the contention that it stimulates business and general economic growth cycles and therefore necessary for development. The other argument of Malthus is in favour of repressed population growth on the ground that unrestrained rise in population will mean less resources for individual members leading to considerable reduction in the euphoric life and well being of the people in that society, thus constituting an impediment to the socio-economic development of the society. The practical import of these divergent views is that positively or negatively, population question is intricately related to development which by all considerations is man –centered. Alluding to the positive and negative impact of rapid population growth, Ude asserted that â€Å"though there can be no development without human beings, any development that does not lead to overall increase in the welfare of the people is deficient. However, despite the merit of Malthus school’s arguments in favour of repressed population growth, the rapid population growth has unequivocally been a panacea in dealing with the problem of human capital whereby underdevelopment and poverty was in prevalent in Bhutan. Therefore Bhutanese in general should be sensitized to the realities of their abject miserable situation. Steps should be taken to mobilize the energies and efforts of the people to increase the growth rate of the population to the level that considered sufficient enough to beget human capital drastically needed for revolutionizing the economy through starting imminent developmental work with their help. In this paper, efforts are made to discuss the issue of population growth in Bhutan in its various ramifications. In the first place, the author takes the critical look at the deplorable economic conditions of the people. This is followed by an incisive examination of the implications of the phenomenon of population growth on the beleaguered economy. In like manner, the importance of the population growth, particularly in relation to the  generation of human resources and consequent development in the country are highlighted. Next, some suggestions and recommendations are made to ameliorate the economic conditions of the people, arising as a result of lack slow population growth rate in the country. METHODLOGY This is paper is based upon literature and theoretical evidences rendered by various school of economic thought. We have used Kuznets and W.W. Rostow model to explain the implication of population and economic development in Bhutan. In addition to this we used time series data for economic growth and population from the different issues of National Accounts Statistics reports of Bhutan, and population and census of Bhutan 2005. The State of Economy in Bhutan The plight to Communities in Bhutan is the focus of current discussions by many economists and a matter of concern for all levels of government in the Country. The picture of the country is described as being pathetic and the main features of the pre-requisites of economic development are found to be under-developed because of under utilization of its natural resources. In most areas in Bhutan, the basic infrastructural facilities which have been considered by W.W Rostow as prerequisites for development and tolerable human existence are generally lacking3. One of the pre-requisites of the well being of the community of any country is its roads. there are no functional roads for vehicles in rural areas and in some part of the country, roads construction work has not been yet started, thus leaving the people in those areas in dreary isolation from their own people and the rest of the World. The existing roads are also in deplorable condition. They are generally characterized by innumerable pot holes, deep enough to snap a car’s shockers or give the rim a terminal damage. The sad story of our rural roads calls for great concern when it is realized that over 70 percent of Bhutanese, as noted above, live in the rural areas and that it is from the latter that most of the food products of the country are derived. Without good roads, it becomes a big problem to send food products from these areas to the urban dwellers mainly depend on the rural folks for their food supply. Hence, every harvest season, thousands of rural farmers watch  helplessly as the crops which they cannot evacuate to the urban markets go waste, thus marginalizing their income from farm proceeds over the years. Being an agricultural predominated economy if it cannot able to produce exportable product, it must produce as much as food grain as is required by the countrymen. The irony of the Bhutanese economy is that all economists see it as rugged mountainous country which has less scope to produce that what is required by its people. They have made such impression Worldwide about this economy that nothing can sufficiently be produced here except remaining dependent on others for each and every thing. Moreover, the Bhutanese economy is suffering of the shortage of pre-requisites necessary for great spurt from backward economy to industrial economy. According to W.W.ROSTW, every developing country has to pass through a certain stages of development that he manifested as per-requisites of economic development. According to Gerschenkron, the existence of certain necessary conditions (pre-requisites) is not required for industrialization as is put forth by Rostow. He based this view on two empirical observations. First, the preconditions for industrialization that existed in England during its industrial revolution was virtually absent in the backward countries of Europe or existed on a very small scale. Secondly, big spurt of industrialization occurred even in those countries where they were not present at all. Without having adequate preconditions, these countries like Italy, France, Germany, and USSR (before 1985) had brought big spurt in their economy. Though they had not sufficient pre-conditions for great spurt, they had an adequate human capital because of high population growth to exploit natural resources and utilize them for generating precondition corresponding to industrialization period of these countries. Since Bhutanese economy is also passing through the same state of affairs by which the present developed nations were passing historically, it can also bring big spurt in its economy provided it should have its own sufficient human capital. This may be possible if it review its National population policy for stepping up its growth to meet the demand of labour force in the country. Population and Economic Growth: Many dynamic and active debates have been held regarding the impact of the increasing population on the economic development of the country since the  existence of the Malthusian theory. No doubt, an increase in the population in most of the countries has adversely affected the per capita output of the nation. Our empirical study related to the impact of population growth rate on economic growth has explored statistically very significant and optimistic findings in case of Bhutanese economy. The basic infrastructural facilities which are required, at the rudimentary development stage of the country, unfortunately found almost missing. This country needs stringent measures towards establishing more academic and vocational institution so that more academicians, engineers, doctors can be trained to enhance the pool of the human capital. Specialization in the works increase the quality and productivity of the labour and this probably be procured, if the country will have a well- versed pool of human capital. The massive group of the human capital will automatically enhance the economic growth of Bhutan. Development of the countries such as India and China are entirely impinging upon the human capital. Economic growth rate of these countries, since their independence, has grown very rapidly because of large group of human capital .Though these countries have suffered because of the high growth rate of population; they are progressing at high rate only because of innovations and technology, which in turn, depend upon the human capital which is linearly related to their population. India is enjoying the status of nourishing almost 16% of the total population of the World and economically stands fourth in the world based on purchasing power parity as per the World Bank report of 2008. Population is not the sole factor for slowdown in the economic growth of the country, but factors like political instability, corruption, inefficient managerial system, misallocation of resources, etc. are more responsible for it. As the Chinese proverb reflects that â€Å"Roads and railways lines are considered as the fate lines of the nation†, the government of Bhutan must pay attention towards the dissemination of the network of roads. Government needs to start some plans and projects to build railway track and Air routes through which tourist can be attracted within the country that will enhance the Foreign Cash Reserves. According to National statistics Bureau of Bhutan (2010), 69%of the total population of Bhutan is living in rural areas (205Gewogs -Bhutan at glance -2008) of the country. Most of the  villages are deprived of the basic amenities like road; safe water supply, education, regulated markets where the surplus product of the peasant could be marketed. There are only 29 hospitals with 145 doctors that are taking care of 6, 71083 people (Population and Census of Bhutan, 2005). It means that there are approximately one doctor per 5000 people that seem to be a very poorest ratio after Ethiopia and many others under developed countries of the world. There is a need for increasing the health related facilities in the country. Geographical conditions of the country become an obstruction in the way of the masses to avail the medical facilities in the hospital. Empirical findings show very dismal progress in the area of health. These entire problem faced by the people are ascribed to lack of human capital which could be solved by increasing the population of the country. â€Å"The economics of scale† phenomenon of population 1. Population and market structure Despite of the Malthus theory of diminishing return when it comes to scarce resource like food and water , some of optimistic population growth economist , like Kuznets (1956), Boserup (1981), believed that population growth can really help the nation economy to turn from ineffective economy into economies of scale state. According to Kendrick (1977), economies of scale are an important factor to increase the productivity of labour of a country. A country with rapid population growth can suffer many maladies like capital dilution, shortage of necessity resources and the causality could lead the whole population to poverty, famine and starvation. However, there are three arguments supported for the idea that population growth can boost the country economy by economics of scale phenomenon. Firstly, a nation, which has a rapid population growth rate, means that its population size will develop with a quicker rate. The bigger the population size is, the larger the market size becomes. In order to meet the product demand of the large –size market, bigger and more effective as well as longer performance period manufacturing plants are required to develop (simon, 1994). Countries in the world with larger population size like India and China are growing faster than any other country of the world because of their strong market network. Market base not only generate entrepreneurship among nationals but also causes induced foreign investment in the country. All developing countries like Bhutan need significant funds to expedite economic development programme for making provision of amenities required for higher living standard of the people of the country. The present state of economic affair of Bhutanese economy necessitates the expansion of market base to have an induced foreign investment and the generation of entrepreneurship among nationals to establish spectrum of industries in country to bring about industrial revolution. â€Å"All the developed countries of the present world were backward historically† (Gerschenkron 1947). Germany, Italy, USA, and England have achieved a status of advance industrialized countries, which were also backward in past, due to their strong army of human capital. Therefore, we can conclude that if Bhutan intends to be a developed country, it will have to acquire more human capital but that would be possible only if it increases its population. Population and specialized labour force Large size of the population not only expands a market structure but also possess an impressive number of labours. Because of the avail ability of the labour force it is possible for firms to divide their labor into particular division of labor to do specific tasks. An excellent example of specialization is car assembly line in which each division just takes responsibility of installing only one part of the car such as engine or car wheels. According to Adam Smith, â€Å"division of labor has caused a greater increase in production than any other factor. This diversification is greatest for nations with more industry and improvement, and is responsible for â€Å"universal opulence† in those countries†. Moreover, through specialization, working skill of labor force is likely to improve more quickly with learning-by-doing. Since a large size of population demands a tremendous number of products, these workers have more chances to improve their working skill. As a result, the average time spending for producing one unit of output have tendency to decrease more quickly than in smaller market-size. Correlating with saving producing time, the cost per one product is also deducted and firm is more efficient through specialization. Finally, the rapid population growth rate could cause a positive effect on communication and transportation. Transportation plays an important role in economic development. A good transportation system can help reduce  transportation cost and travel time. Along with high population growth rate, the increase in population density is inevitable. A dense population is likely to pressure the government to develop more in transportation system such as railroad, highways and road. Take China as an example, according to United Nations Population Division, in 1985, its population density was 110 people/km2 and the total amount of railroad was 52,000 km while in 2010, the total length of railroad is 91,000 km (increase 75%) and its population density is 141 people per square kilometer (increases 28%). Transportation improvement is surely a general trend for every economic development, but it is not deniable to state that the population density has a strong impact on number of construction of transportation. As Julian L. Simon stated in â€Å"The Ultimate Resource†, â€Å"population growth clearly leads to an improved transportation system, which in turn stimulates economic development†. Population and self reliant in food grain The falling trend in total arable land is a serious concern for the government of Bhutan .These appalling trend cannot be owed to an increase in population but to an occupation changes in the economy which inherited due the occurring structural changes via economic development as is put forth by Schumper . Since the economy has started growing, the corresponding sector of agriculture sector like service sector and industrial sector have also started developing whereby the agriculturist are induced to migrate from their agricultural occupation to service and industrial sector. When the land owner shifted from agriculture to service and industrial sectors, their land turned barren. Migration of the masses from their earlier main occupation to services and industrial sector must be considered as main cause of fall in arable land but not the pressure of population. we can emphatically favour the economies of population that if the size of the population had high, the size of arable land would not have decreased rather it would have increased. We corroborate our views with the help of classical economist hypothesis that â€Å"supply creates its own demand.† we can apply classical theory to endorse our theory that an addition to the supply of labour because of increase in population will exploit the latent natural resources of the country to meet their demands. An addition to labour force will not only exploit natural resources for their survival but also help in  filling the lag of supply of them to give impetus to the economic growth. Therefore, increase in population will not exploit resources and find new mode and means for the country but will also make this country self –reliant for food grains and many other things including labour force for which this country is totally dependent on other nations. In essence, development of the Bhutanese economy necessitates high growth of population. CONCLUSION The authors optimistically weaves fabric of hope that if the measures outlined above are emphatically implemented, the population itself will be brought to the optimum size and aligned to match its requirement in exploiting and utilizing the latent natural resources of the country for giving impetus to the economic development of the country. Structural changes of the economy via disseminating the spectrum of industrial base are not possible in wanting of human capital that linearly links with size of population of the country. The country’s overdependence for outsourcing all kind of works will dampen if the planners review its population policy to increase it to that level necessary for exploiting the latent resources required for economic development. Reference Birdshall, N., & Kelley, H.T. (2001). Population matters Demographic Changes, Economic Growth and Poverty in the Developing World (1st Edition). New York: Oxford University Press. Boserup, M.,&Rothenberg, J.(1980) Population dynamics in developing countries( 1st Edition ) New York: Macmillan co. Clark, C. Population Growth and Land Use, New York, St. Martin’s Press, 1967. See also: Ohlin, G. ‘Economic Theory Confronts Population Growth’ in Coale(ed) Economic Factors in Population. Growth. New York, John Wiley and Sons, 1976. Coale, A. J. (1973). â€Å"Demographic Transition†: International Union for the Scientific Study of Population: International Population conference (Vol. 1, Liege). New York: Oxford University Press. D, Kinggsley. 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