Tackling Unemployment In The Canary Islands, Spain.

Direct foreign investments, especially from multi national Investors are without doubt a game changer in any given labour market, which has been seriously battered by a prolonged and aggressive economic recession. Quite a number of prospective investors are not in haste these days to make future business decision; instead they take ample time to conduct initial analysis to ascertain the available incentives, feasible market, labour productivity, and taxation etc, before making commitments.

The good news is that, the Internet makes it possible to conduct exhaustive research on just about anything under the sun. Detailed business information about any given destination is not far fetched, with just a few mouse clicks away, you are there!

There are so many risk factors at play for a potential investor. Direct foreign investment should be a win, win game and not a nightmare as often.
Governmental policies play pivotal role in attracting investments into the various sectors of the economy, other than tourism and construction, which have been the status quo in many parts of Spain, like the case of the autonomous region, Canary Islands.

Self employment is not a new paradigm; instead it remains the most important employer of labour. A newly created business needs time to grow and become profitable. Many small and medium size businesses give up the ghost during the planning phase, some that managed to scale through to setup, soon give up as well after spending the start-up funds on rents, bills, employees and governmental fees.

To make things worse, banks have learned to take very limited and calculated risks these days. Summarily, business failure is in part due to the lack of institutional incentives, little or no accessible credit facilities and poor competitiveness.

If the old ways of doing things become less productive, it makes some sense to find an acceptable alternative. Snail speed bureaucratic system is a complete waste of time and resources. The power of the web at present can effectively override administrative bottle neck when correctly applied. It should be possible to speed up business registration processes, by conducting it entirely online. Another fact is, electronic processing is an environmentally friendly gesture as less paper will be needed, and that also means, many trees will continue to thrive alive.

Taxation is a very important source of revenue for the treasury. Difficult time calls for huge sacrifices from everyone, tax break for a reasonable period of time, suspending or reducing to the barest minimum corporate taxes, VAT and personal income tax can go a very long way in safeguarding businesses struggling to survive and to help propel the purchasing power of the consumers.

The effort of the government is well commendable in the area of training to empower the unemployed and make them prepared for skilled job opportunity in the nearest future. However, It is my view that some of the funds currently mapped out for the said program can be channelled towards the financing of social security contribution for every unskilled employee, hired to receive on the job training. This method can be very practical as many companies do conduct in house training for newly contracted workers.

Good news is the fortunate employee will transition from being unskilled to skilled after a designated period of time on the job. Indication is strong that he/she will be retained afterwards. The cost to the government will be the public funded social security fees for a limited time period. The employer only pays the minimum wage and the employee in question gets a temporal job whiles acquiring new skills during the process, everyone gets happy!

The government needs to do something quickly about credit facility, which is the lifeline of the economy; the continual lack of it will only spell more doom for the already ailing economy. The earlier fund becomes available through the financial institutions, guaranteed by the government, the better for all. When credit flows, money exchanges hands, and when it stalls the cycle is broken.