The short in Ken Kandodo’s 15% civil servants pay hike

PAY increments for civil servants have always been loaded with symbolism all over. To some, they remain a typical sign of political maneuvering. To others, a mature sign of an individual-nation’s economic investment plan to improve on service delivery and increase production.
Yet, to many others, it remains an orgy of appeasement policies.
The increments always follow a strikingly similar pattern all over the world: a Finance Minister, Minister of the Exchequer, or whatever name sounds well on a country’s lips, introduces them by way of budget statements in parliament (though they have been known to come through special bills in other countries, too), they are deliberated on, and then passed or nipped in the bud.
The money then comes from tax payers, who ironically include the civil servants themselves. The thinking seems to be that a country that fails to pay its own workers through locally-generated resources can not feed itself. The civil workers then get a more fat cheque the next pay day.
Analysts, too, almost seem to agree that such developments represent the sun’s rays for many under-paid workers, and act as the staircase to a savings culture that has eluded Malawi for as long as the word independence came to stay.
The only sticky point comes when it comes to mapping the ‘right’ time to apply just such pay increments, as there are no general agreed parameters.
However, International Monetary Fund (IMF), World Bank and International Trade Centre (ITC) statistics seem to indicate that pay increments prove more effective when applied against set parameters.
The most common, and most agreed parameter, is that of growth or decline rates for government’s services- both local, by gauging the performance of government departments and related services, and foreign (through the export of human capital). That is why they see it fit to include growth or decline rates for government’s services.
While shedding more light on efficiency in public service delivery, the ratings also add up to a country’s balance of trade with the rest of the world.
There has been no such analysis in Malawi, an anomaly that dates as far back as 1980. President Bingu wa Mutharika has won the acclaim of the Civil Servants Trade Union (CSTU) by increasing civil servants pay more than once during the past five years. The union has, however, called for a much more-percentage package for the increments to weigh positively on workers’ lives.
Mutharika seems set to increase the stakes even further during the 2009/10 fiscal year, and the rest of his last term of office, as indicative in new Finance Minister, Ken Kandodo’s, inaugural budget statement. Kandodo told parliament some two weeks ago it was in government’s plan to add 15 per cent onto existing packages, though some civil servants have asked for more through a myriad of Letters to the Editor entries.
One such servant, Dominic Gervasio Kaliveni , wrote recently the 15 per cent increase was welcome but not good enough. He said most civil servants’ lives revolved around a search for the basics, something that showed through poor service delivery as they could not invest more sweat into a pittance.
While intended beneficiaries indicate that a much bigger increment was all they needed to stroke their output senses, statistics sourced this week indicate that Malawi risked losing out on the real benefits of pay increments without a comprehensive analysis of growth rates for its public services and, in deed, human resource it exports to other countries.
IMF Balance of Payment statistics spanning from 1995 to 2002 are blank on government services’ growth or decline; a trend that continues with other subsequent Balance of Payment statistics, including that of 2007.
This has resulted into zero-rating for Malawi’s trade balance statistics, as well. Trade balance entails a nation’s monetary worth of imports and exports (this includes products and services).
International Trade Centre statistics are also blank on government services, both locally and internationally (through human resource exports).
“It is unfortunate that there are no data on the volume (growth or decline in percentage) of Malawi’s services,” reads a Capacity Study to Promote Exports of Services from Malawi report. It was released on January 31, 2005.
The report says some of the areas that need evaluation and rating included accounting, auditing, book keeping; educational services; equipment leasing; health related services; legal services; managerial consulting; peace keeping and security services; research
(both agricultural and medical-based); tourism and other related services.
While civil servants include those working for the education sector, tourism, research services, public health service delivery system, among others, there has been no evaluation of their performance (in terms of performances) for decades.
Knowledge about a country government service rating- in terms of percentage growth or decline- helps governments, especially those in the European Union, to place a value on the heads of their expatriate staff.
The development has seen most developing countries complain over the use of Western aid, saying European countries spend much of their resources, often meant for development initiatives in Africa, on paying their nationals who are often engaged in such projects.
An independent report on the work of one of the country’s top development partners indicated recently most of its resources went into running costs, which included staff payment. It said only a small chunk went towards real development.
The findings attracted wide-ranging debate, but shed more light on how countries use service valuing systems to take investments and development aid back into their respective countries economies.
Ironically, these services are billed by WTC as some of the areas that could help cover up for the country’s seasonal trade imbalances.
Malawi added some 31 per cent over 2007’s K69.2 billion trade balance deficit. The Ministry of Economic Planning and Development indicates in its 2008 report the country sank even deeper into that year’s abyss, registering a whopping K90.4 billion in imbalance.
It is hugely expected that the country is set to post another trade balance deficit this year. Just how big or small is will be is the only question remaining, now that it is clear the global economic crisis, declining world prices for crops would be some of the acceptable excuses.
However, Kandodo indicated during presentation of this year’s budget statement, government decided to effect another civil servants pay increment in continuing with its motivation programme.
This is expected to feed well into government’s decision to reduce the Pay As You Earn taxable blanket from K9, 000 to K10, 000. The development, however, also indicates that some of government’s workers continued to receive very little packages, below K10, 000.
While delays to carry out a comprehensive government services’ rating report seem more of a luxury than necessity, the Malawi Congress of Trade Unions (MCTU) feels that it goes a long way in influencing foreign investors to exploit Malawian workers.
Currently, the only parameter used to value a Malawian worker (used by foreign investors) seems to be the provision of minimum wage. This seems to have given employers teeth to exploit workers, with some taking as little as K4000 for a home package per month, as most investors opt for temporary employment deals.
MCTU Secretary General, Robert Mkwezalamba, says most foreign employers are taking the cue from government to abuse workers.
“Our workers are heavily exploited, one of the reasons we have been advocating for a revision exercise of our minimum wage. But it goes beyond that, we need more other mechanisms to solve these problems. This includes valuing the services of our workers competitively,” said Mkwezalamba.
MCTU has been battling foreign employers over pittance-pay and conditions of service.
The mother trade unions body feels that the employers over-value their fellow nationals while undervaluing their Malawian counterparts, a trend that had serious repercussions on conditions of service.
Mkwezalamba cited the tendency by some foreign employers to offer different packages for foreign and local staff, respectively, holding similar qualifications and competency levels.
This has riled MCTU president, Luther Mambala, who calls for the deportation of exploitative foreign employers.
Mambala also asked government to initiate measures that would shelter the Malawian worker from sheer exploitation.
“This is our country; why should we suffer?” he queried.
If Malawians are not valuable at home, where else will they be?
That is the short in Kandodo’s proposed budget: it works on assumptions without valuing performance. It rewards papers instead of performance, say the unionists.
In the end, people who perform highly without papers are exploited by exploitative foreign imployers.