Helping private enterprises create jobs

Author: David Hew

I weighed in recently on the issue of creating jobs. My letter entitled “one suggestion to create jobs” published by the Straits Times Online Forum on 6th February 2009 can be found at :

In my letter I spoke of how Offset programmes can help retain or create jobs. Two questions continue to perplex many; namely, what is an Offset programme and how can it help private enterprises retain or create jobs.

What is an Offset programme?
Imagine you are buying a new car. In addition to selling you the car, complete with the necessary certificate and freebies you want thrown in, you may be seeking some or all of the additional benefits listed below from the car salesman; namely, that he acts also as:

• a second-hand car trader, undertaking the sale of your old car;

• an insurance salesman, procuring for you the insurance for the new car; and/or

• a banker, finding you the loan to purchase the car.

The salesman knows that if he fails to bring you the additional benefits, another may and he would lose a sale. He would therefore have to proactively ensure that he is competitive to stay in business such that when say; you need a loan, you cannot possibly get one with better terms on your own than the one he can offer you.The car salesman is therefore differentiating his offer by providing you a range of benefits in order to induce you to make a purchase.  You in turn will only make the purchase on condition that these benefits are extended to you. Like all buyers, you seek to maximise value from the use of your scarce resources.

This is in essence what an Offset programme is. In connection with a procurement to be made; a government makes known its many needs, additional to and without compromising the objectives of the originating procurement. Sellers are invited to propose a range of benefits meeting as many of the buyer’s needs and objectives as possible, thus differentiating their offerings from those of their competitors. If these benefits offered are accepted they would be made a condition of the purchase.

How can it help private enterprises retain or create jobs?
There is no denying that private enterprises have important roles in retaining and creating jobs. In order to do this, they would however need to grow and if growth is not possible; hopefully continue to be in business at least and not down size or worst still, fold up.

Governments can be the catalyst in helping businesses stay in business or grow.

We compete in a globalised environment.  We need look no further than what other governments are doing and how they do it, helping their citizens and private enterprises through Offset. The importance some countries attached to Offset can be judged from the careful and detailed ex ante and/or ex post appraisal studies or reviews that they subject their programmes to.

How do governments do it?  Like the person buying a new car, a government can convey, through a formal Offset programme, the considerations it will give if a seller differentiates his sale by offering a range of benefits directed at engendering development, growth and helping the private enterprises in the buyer’s country.  Such assistance trickling down and translating ultimately to jobs being saved or created.

The secret lies not in just how, but how correctly and well a programme is conceived, developed and executed. Do these incorrectly, it may amount to protectionism.  Or, do it badly, failures or losses may ensue. Do not apply them when the circumstances are appropriate and one may have failed to

• legitimately assist its citizens and local corporations face the challenges of globalisation and/or,

• more importantly, discharge one’s inviolable responsibility to extract value for money from purchases made with taxpayers’ money.

Such failings, if any, should raise questions when other countries – many of whom are technologically and industrially advanced countries – have and continue to demonstrate that enviable benefits including job saving and creation opportunities are attainable, if the right circumstances for the application of an Offset programme exist and when they are properly executed.