ENGINEERING FOR DEVELOPMENT

(First Draft)

E J Jefferies

March 1969

CONTENTS

PART 1 THE WORLD DEVELOPMENT PROGRAMME

Chapter 1 Introduction
Chapter 2 Closing the Gap
Chapter 3 Resistance to Change
Chapter 4 International Technical Assistance

PART II AN ENGINEERING APPROACH TO A PLAN FOR A COUNTRY

Chapter 5 Outline of the Approach
Chapter 6 Setting the Problem
Chapter 7 Basic, Concepts, Terms and Definitions
Chapter 8 Background Data Available
Chapter 9 The Starting Point for a Case Study
Chapter 10 Preliminary Calculations
Chapter 11 Patterns of Economic Growth
Chapter 12 Development Plan for Year 1
Chapter 13 Development Plan for Year 2
Chapter 14 Development Plan for Year 3
Chapter 15 Review of Changes During the Three Years
Chapter 16 The Control of Development
Chapter 17 Financing the Development

PART III THE IMPLICATIONS OF RAPID GROWTH

Chapter 18 Economic Growth and Technological Changes in Rural Communities
Chapter 19 The Influence of Agriculture on Industrial Development
Chapter 20 The Role of Manufacturing Industry
Chapter 21 The Contribution of Industrial Engineering to a Solution

PART IV DESIGNING FOR BALANCE IN DEVELOPMENT

Chapter 22 The Prediction of New Manufacturing Capacity Requirements by Product Group
Chapter 23 The Productivity of Labour
Chapter 24 The Growth of Productivity
Chapter 25 The Calculation of Appropriate Levels of Productivity in New Plants

CHAPTER 14

DEVELOPMENT PLAN FOR YEAR 3

6.1 We can now proceed to construct Table 24 allocating sectoral increases in YEAR 3 to different end uses on the same basis as in previous years.

TABLE 24 Trial Allocation of YEAR 3 Increases Between End Uses

Notes: Columns 1 and 2 are columns 3 and 4 of Table 7 rounded to whole numbers.

The Balance Between Production and Consumption

6.2 The total of column 5 Table 24 shows an increase in goods and services available for consumption of $154 m. This is about 58% of the increase in GDP, compared with 77% of the total for YEAR 0, 75% in YEAR 1 and 60% in YEAR 2. The allocation to Government consumption (7.6% of the increase) is slightly higher than last year but is still restricted. The allocation to productive investment continues at 34% of the increase (cf 4.3.2).

6.3 If the pattern for the disposal of value added in YEAR 2 shown in column 8 of Table 20 continues into YEAR 3, we can estimate the additional purchasing power generated by the increases required in each sector to meet the target growth and check this against the increased supplies shown in columns 5 and 6 of Table 23.

TABLE 25 Allocation of Increases Between Personal Incomes and Capital: YEAR 3

(pattern of productivity unchanged from YEAR 2)

Notes: Column 1 is column 3 of Table 24.

Column 2 is column 8 of Table 20.

6.4 The gross purchasing power shown in column 3 of Table 25 at $187.3 m is higher than the available supplies allocated in columns 5 and 6 of Table 24 at $174 m and it will be necessary again to restrict purchasing power so that capital formation remains high (cf paragraph 4.8). We will repeat the pattern of allocation of the $13.3 m excess as in YEARS 1 and 2 between sectors, viz:

$4 m to the return to capital in Agriculture.

$4 m in Services, Trade and Government.

$2 m in Manufacturing.

$1 m in Miscellaneous.

$1 m in Transport, Storage and Communications.

$1 m in Construction.

$0.3 m in Mining.

On this basis we can rewrite Table 25 as Table 26.

TABLE 26 Allocation of Value Added Between Personal Incomes and Capital: YEAR 3

Notes: Columns 1 and 2 are columns 1 and 2 of Table 24.

Column 7 is column 8 of Table 20.

Column 3 is column 1 times column 7.

Column 4 is column 1 minus column 3.

Column 6 is column 2 minus column 5.

Column 8 is column 5 divided by column 2.

Employment, Earnings and Productivity

6.5 As for YEAR 2 we will assume that the agricultural labour force is reduced again by a further 12,000 to 366,000; and that earnings in other sectors increase again by about 10%. This enables us to construct Table 27.

TABLE 27 Disposal of Sectoral Value Added; and Employment: YEAR 3

Notes: Column 1 is column 2 of Table 25.

Column 2 is column 8 of Table 25.

Column 3 is column 1 times column 2.

Column 6 is column 1 divided by column 5.

Comments:

•  
• Total employment has increased from 931,700 to 1,023,000, i.e. by 10% compared with 11.5% in YEAR 1 and 8.3% in YEAR 2.
•  
• Overall productivity of labour has increased from $1030 to $1200, i.e. by 16.5%.
•  
• Average earnings have increased by 14.2% in Agriculture and by 10% elsewhere. Total wages and salaries have increased by 25% due both to increased numbers employed and higher pay.

Capital in YEAR 3

6.6 From Table 13 we can expect $155 m of new investment to become productive during YEAR 3. This has to be made to produce an additional $264 m of Value Added and 91,300 new jobs.

6.7 Again, additional investment in Agriculture will be needed to raise the productivity of labour in a reduced labour force and to produce $29 m of extra net output. The additional allocation of net output to capital in Agriculture this year is $9.4 m (Tables 21 and 26) so we can allocate $29 m of investment on the basis of a gross yield of 33%.

6.8 This leaves $126 m of new investment becoming productive in all other sectors during YEAR 3 to generate $235 m of additional net product and 103,300 new jobs. We must therefore design and select new investments for this year to yield an average productivity of capital of 1.87 and an average investment per job for all sectors other than Agriculture of $1220 which is 22% higher than for YEAR 2.

Prices Rises: Increase of Physical Output

6.9 Conditions affecting the levels of prices especially the balance between production and final consumption will not have changed from YEAR 2 and we may assume that overall rises of 2.7% in agricultural prices and 1% in all others will apply. On this basis we can estimate the changes required in physical outputs, as shown in Table 28.

TABLE 28 Changes in Physical Outputs: YEAR 2 to YEAR 3

Notes: Column 1 is from Table 24, column 2 divided by column 1.

Column 3 is column 5 of Table 27 divided by column 5 of Table 22.

Column 4 is column 1 divided by column 2.

Column 5 is column 4 divided by column 3.