The latest ITUC Frontlines Report 2012 on what needs to be done to create employment in Zambia and deliver a fair wage to workers. It has the usual things one expects from a trade union federation - some very good e.g. call for greater revenues from mining and a more clear industrial strategy. Other things are less clear e.g. the call for reduction in informality but at the same time advocating minimum wages and more comprehensive pensions coverage. In general, its thought provoking - here are the main recommendations :
Given the widespread poverty and extreme high informality of employment with its consequent low wages, poor working conditions and lack of protection of rights, a strategy to formalise the informal economy should be among the main priorities in Zambia. Organising strategies, incentives for formalisation and social protection coverage are some of the steps to be taken to help this transformation.The large size of the agriculture sector of which a substantive part is subsistence farming also accounts for high levels of poverty, informality, low or unpaid jobs and low productivity. A dual strategy to increase on the one hand productivity levels in agriculture and on the other the development of an industrial policy to stimulate manufacturing and higher value-added production is crucial for Zambia to get out of the dependence on agriculture and mining and to increase formal economy employment. Such an industrial policy should go beyond the current plans to promote low value added manufacturing linked to agriculture and mining, and should be far more ambitious with targeted investments in higher value added segments and creation of production, learning and research and development clusters.
To restrict the focus uniquely to increasing productivity in agriculture would be too narrow and only have limited positive effects in terms of formal employment, wages and poverty.
The minimum wage, although it has been adjusted recently, which is a very welcome development, remains far below a living wage and will also continue to put downward pressure on wages in the formal economy. More efforts should be made to reinstate the extension of collective bargaining coverage to give a new boost to collective bargaining in Zambia and to ensure higher sectoral wage levels.Investments in infrastructure and the building of a social protection floor are two important agenda items for the Zambian government that would reduce poverty and inequality while at the same time boosting the economy and employment. A first step is to be made with an extension of old age pension to cover the entire population over 65, followed by child benefits, healthcare coverage and unemployment benefits. The government should further use the planned investments in infrastructure to promote employment intensive investment. Employment guarantee schemes are another area that should be considered.Concerning FDI and investment policy there is a need for a different approach in Zambia. Boosting domestic investment and targeting specific foreign investment that complements the industrial development strategy is one part of the new approach that has to be taken. At the same time abuses by foreign investors need to be addressed more strongly, and royalties from the mining sector could be increased to finance infrastructure, social protection and industrial development.Finally, social dialogue is critical in building a more equitable and sustainable economy. This requires respect for trade union rights, setting up the right mechanisms for dialogue across social and eco¬nomic policy areas, and building the capacity of constituents to participate in such dialogue.