Media Clipping — June 15, 2007, The Chronicle-Herald

Go global and lose control

By John Jacobs

PERHAPS THE MOST important thing that we've learned after years of grappling with the challenges of economic development is that there are no easy solutions.

We are now enjoying the lowest rate of unemployment in 30 years, yet manufacturing plants are closing and there is a steady flow of workers leaving rural Nova Scotia.

Much of the recent decline in the unemployment rate is accounted for by the robust economic growth in Halifax and by the exodus of workers from the province.

The booming Alberta economy is proving to be a challenge as workers leave Nova Scotia for greater employment opportunities and higher wages.

To some degree, the exodus of workers is the consequence of an economy that has relied on low wages. Too much of the employment growth in Nova Scotia over the past decade has been in low-wage sectors of the economy.

Nova Scotia's rural economy faces an even deeper challenge. A study by the Coastal Communities Network found the province's population remained stable between 1991 and 2001.

However, the population in the province's "central core," which includes Halifax Regional Municipality and Kings, Colchester and Hants counties, increased by more than seven per cent, while the decrease in population for the rest of the counties in the province ranged from 4.6 to 8.8 per cent. Recent research confirms that this trend continued over the past five years.

The shift in population from the rural to the more industrialized urban economy is part of a trend occurring in all parts of the world. In Nova Scotia, this has been accelerated by changes in parts of the natural resources sector, such as the fishery.

The closure of the coal mines and steel mills in industrial Cape Breton also contributed.

The loss of manufacturing jobs, as in the case of the TrentonWorks plant, is part of the continuing fallout from the North American Free Trade Agreement, implemented in the 1990s. Governments contribute to rural decline by taking an increasingly hands-off approach to the economy and leaving economic decision-making to the private sector and the global marketplace.

The reality is that the market, left to its own devices, is not conducive to sustainable economies, communities and the environment. It develops unevenly and unequally between communities and regions.

We rely on government to address the worst excesses of the market. And herein lies the contradiction: by increasingly turning to the global market as the solution to our economic difficulties, we decrease our capacity to nurture, support and shape our economy and the enterprises within it.

If we continue to focus local development on attracting foreign investment and integrating into the global economy, we will have to get used to instability and a lack of influence over our local economies. The challenge is to strike a balance between the global and local economies, between market and community interests.

For the most part, the solutions are not new. We need to shift to a more productive economy based on high-skilled, well-paid employment. Governments have a crucial role in facilitating this shift through training and education programs, through stimulating research and innovation, and through ensuring that investments are made in the machinery and technologies that allow workers and businesses to become more productive.

This is all pretty standard stuff, but the crucial point is that the federal and provincial governments need to be proactive in supporting rural communities, workers and businesses to adjust to — and influence — economic change.

Efficient transportation and communications infrastructures that connect communities, workers with their workplaces, and businesses with suppliers and markets are essential.

We also need public policy that encourages sustainable agricultural production and ensures that local products are on the shelves of the stores in our communities. We need innovative ways to supply services such as medical care and legal services to areas that are too small to support full-time professionals.

The current global economy is not environmentally sustainable. Rather than unquestioning integration of our communities into the global economy, we need to assess the impact of integration on the environment and on our communities.

The environmental crisis is an opportunity to develop goods and services that contribute to a more sustainable economy. The provincial government has taken an important first step in setting its sights on being the greenest jurisdiction by 2020. But now it needs to follow through with proactive policies.

We have homegrown examples of what can and should be done. The sustainability of rural economic initiatives should be assessed using the full-cost accounting methods being developed by Nova Scotia's GPI Atlantic.

Much could be learned about raising community capital and integrating into the global economy from the experience of Wolfville's Just Us! fair trade co-operative and that community's determination to make its local economy a fair trade economy, for example.

Rural communities will continue to be vulnerable, but we can strengthen and diversify their economies and increase their ability to make more decisions locally on how to weather their difficulties and develop their full potential.

(jjacobs@herald.ca)

John Jacobs is director of the Nova Scotia office of the Canadian Centre for Policy Alternatives (www.policyalternatives.ca), an independent public policy research institute.

Copyright © 2007, The Chronicle-Herald