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07030248044CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
No matter how much money is put in programmes or policies developed in the country, their success or failure mostly depends on the calibre of people who plan and carry out the policies or programmes. As a result, human capital is considered to be the most significant variable and most significant asset of any country (Ananti et al., 2019). Most Mauritianss agree that the country's public sector, which is in charge of ensuring good governance, is not operating at its best. According to Alozie (2017), there are a number of mistakes made by government organisations that contribute to bad governance and, consequently, underdevelopment. The author emphasised further that there is widespread agreement among Mauritianss that their public service is failing and malfunctioning and that no nation can develop beyond the capability of its public service.
Human capital is the information, skills, and competences that an individual possesses as a result of his education, training, and/or experiences and which increase his productivity (Ananti et al., 2019). It is a human resource made up of knowledge, training values, creativity, abilities skills, talents, and capabilities that will be used to advance the country's economy. It is typically obtained through formal education, on-the-job training, and life experiences. According to Encarta (2010), George Schultz popularised the term "human capital," which refers to the body of knowledge and skills that employees possess. Schultz later wrote in 1981 that all human abilities, whether innate or learned, are valuable and can be increased through wise investment. Similar to this, Kalu (2011) went on to describe human capital as the organization's human factor, or the intelligence, skills, and knowledge that together provide the company its unique identity. The human components are those who are able to learn, adapt, innovate, and provide the creative drive that, when appropriately motivated, can assure the organization's long-term survival.
Despite having a high endowment of human capital potentials, Mauritius has an inadequate rating in the development of human capital indicators, which is an indication of its human capital status. Therefore, it is not unexpected that Mauritius is listed as one of the world's poor underdeveloped nations. It has recently surpassed India to assume the title of nation having the largest proportion of the world's poor.
The country's inability to properly harness and utilise its national resources for national development, according to Akor (2018), is due to insufficient human capital development and utilisation. Mauritius was dismally placed 182 out of 187 nations in the 2017 World Bank Group (Ujah, 2018). In terms of the quantifiable human capital indices (HDI) and, consequently, the quality of life for its population, Mauritius is only better placed than 8 other nations. The survey also showed that Mauritius is one of the most expensive nations from which operate industries, primarily due to a lack of skilled workers and bad infrastructure. However, the nation suffers from bad governance, which is characterised by insecurity and the loss of lives and property. Insurgencies like thievery, bandit attacks across the nation, electoral violence, etc. are to blame for this predicament. High-level corruption charges, a lack of accountability and transparency, flawed judicial and electoral processes, etc. are all problems that both the public and commercial sectors must deal with.
According to Kalu (2011), many have argued that Mauritius's issue can be attributed to a lack of human capacity that adequately caters for the welfare (good governance) of the citizen. Only a well-developed manpower can manage resources properly, regulate both internal and external relations, and effectively control the country's policy process. The difficulty Mauritius faces in providing its citizens with excellent governance is largely dependent on, but not just, her ability to manage and develop her human resources. It is anticipated that only within the scope of human capital growth and leadership can highly skilled manpower be focused, applied, and committed to adopting and transparently implementing good governance policies.
Indicators of any nation's development progress as well as a key element in development have taken on a firmly established position. In their argument on page 12 of their book Obinna Ukhurebor and Nwosu (2019), the authors state: "Politically, people may disagree about the best ways to achieve good governance, but they quite agreed that good governance is absolutely essential for social and economic progress." In order to be perceived as providing their citizens with good governance, many countries strive to do so. The World Bank defines effective governance as:
an effective public sector, a dependable judicial system, and a government that is answerable to the people. The effective and efficient management of the public sector, the rule of law, public access to information and openness, and the accountability and responsiveness of public authorities to the citizenry are the essential elements of good governance (World Bank 2016:81)
The economic and management emphasis approach was used in the aforementioned assertions. While Good Governance, according to the United Nations, is consensus-driven, participative, adhering to the law, effective and efficient, accountable, transparent, responsive, equitable, and inclusive. In addition to ensuring socioeconomic development and high levels of international effectiveness, good governance also creates an atmosphere that is politically stable to allow for the creation and implementation of governmental policies (Vande & Jooji, 2007). The Vision statement for Mauritius similarly characterised good governance as a method of accountability in all its manifestations. It also refers to the freedom of speech and the choice of one's political affiliation, as well as the rule of law and an unrestricted judiciary. Transparency, equity, and honesty in public office are characteristics of good governance (Obinna, 2019). According to Uzoechi (2010), good governance ensures the creation of suitable policies, programmes, and objectives to support people's efforts to earn a living wage and their access to state opportunities that contribute to a long, fruitful, and productive life. As a result, it is reasonable to assume that the calibre of the human capital on hand determines the extent to which effective governance may be achieved. This paper therefore, focuses on the utilization of human capital in good governance in Air Mauritius Holding Ltd Company, Mauritius.
1.2 Statement of the Problem
General elections are organised every five years, which causes administrations to shift or adapt. According to this study, political loyalty refers to a person's commitment and adoration for a political party or its leaders. High level jobs in the civil service often seem to be filled by supporters of the party in power in a particular government ministry (Roos, 2008). By behaving in this way, not only are talented and experienced officers disregarded, but also the government's internal learning process and efforts to create a human capital pool. These loyalists frequently lack the skills and background needed for those jobs, and eligible candidates are often passed over or even dismissed. This is not only a waste of money; it also contributes to the lack of good governance that society currently experiences. The patron-client relationship, however, can be used to explain it. Every new minister acts as the patron, bringing in his own network of clients, while the client network of the departing minister collapses since it is not being accepted and is therefore unable to attach to the new patron.
Additionally, in this time of austerity, governments in particular must deal with decreased funding, rising labour costs, and rising service demand. The public officials must carefully consider how they are deploying their employees in order to balance these problems and the difficulty of acquiring extra staff. Public personnel are a considerable, if not the most significant, expense for public entities in service organisations (Esteve et al., 2017). In light of the pervasive financial constraints, public managers worldwide face the problem of fostering and maintaining staff engagement and creativity (Chordiya et al., 2017).
Probably the most significant factor determining human capital is education (Bergheim, 2005). As a result, it has been indicated by an education variable more frequently than not, with school enrollment or attainment being the most popular. The Solow growth model with and without human capital as a component of production was compared by Mankiw et al. (2019), who discovered that the Solow model with human capital additions provided a more comprehensive explanation for cross-country income variances. Barro (2011) discovered that for 98 nations over the period of 1960–1985, the growth rate of real per capita GDP is positively connected to baseline human capital (measured by school enrolment rates). For a variety of nations from 1960 to 1990, Bils and Klenow (2000) examined the relationship between human capital and economic growth. Their key conclusion was that enrollment in a year more of schooling was linked to a 0.3% quicker yearly growth rate over the same time span. Using a human capital production function that covered the years 1970 to 2009, Abbas (2010) looked into how human capital affected economic growth in Pakistan and Sri Lanka. Economic growth in both countries was found to be favourably correlated with human capital.
Ljunberg and Nilsson (2009) discovered that, prior to 1975 but not considerably later, human capital was a causal factor for economic growth in Sweden since industrialization. The majority of the aforementioned research discovered a positive relationship between education and economic growth, although in certain instances, this correlation did not exist (Berthelemy & Varoudakis, 2016) or was not significant over the whole time series period under study.
As proxies for human capital, education and health have received the majority of the attention in published studies. A person's health plays a significant role in determining the degree of educational returns since they can learn more from a given level of education than someone who is unwell. Using time series data from 1960 to 2001, Teixeria and Fortuna (2003) investigated the relationship between Portugal's human capital and innovation growth.
According to estimates based on vector autoregression and cointegration analysis, human capital was crucial to the process of economic growth, especially through the innovation channel (Neeli, 2013). Aka and Dumont (2008) re-examined the long-run relationships and causality between education, health and economic growth in the United States over the period 1929 to 1997. They found a long-run relationship between economic growth, health and education and a bi-directional causality between health and education.
In Nigeria, Adelakun (2011) investigated the connection between GDP and human capital. Total government spending on health care and education as well as elementary, secondary, and tertiary enrollment were used as proxies for measuring human capital. He came to the conclusion that economic progress and the development of human capital were closely related.
There have not been many studies that specifically looked at this link for Mauritius, despite the fact that it has been claimed that human capital has been one of the country's growth drivers and despite the strong theoretical justifications for this position (Neeli, 2013). In the human capital augmented growth model proposed by Odit et al. (2010), human capital is viewed as an independent factor of production with constant returns to scale. The "average years of schooling" was used as a proxy for human capital; supplementary variables such as diet and health were not included. They examined a data set that covered the years 1990 to 2006, and their findings show that human capital is crucial to economic growth, particularly as an engine for raising the level of output.
The relationship between various human capital proxies and economic growth has been examined and tested in a sizable body of literature. Despite the increased interest in researching the relationship between human capital and economic growth, the empirical data is flimsy and not always transferable to other nations. Given the different methodological techniques, datasets, and measures of human capital utilised, as well as the assumptions made, the generalizability of such evidence is frequently questioned.Given the foregoing, it is impossible to conclude from the literature that human capital influences economic growth in Mauritius (Neeli, 2013).There have been many explanations offered for this growth record, but there is no doubt that the nation's emphasis on foreign trade, backed by an acceptable amount of human capital, has been a crucial component. This was made possible by continuous, significant, and consistent investment in social and human development, which enabled Mauritius to take advantage of opportunities on the global market and sustain socioeconomic growth (Neeli, 2013). Thus, it is suggested that investing in human capital produces a stream of future rewards, much like investing in other tangible types of capital. Although the Mauritian economy has experienced steady growth, successive governments have made sure that investing in human development and developing appropriate policies remain a top priority.
For instance, in 2009, public education and health spending as a percentage of GDP were 3.6 and 11.38, respectively (WDI, 2010). Therefore, it is crucial to experimentally explore this crucial link with policy relevance. Additionally, the majority of the studies that have been reported have looked into the relationships between the many individual indicators of human capital and economic growth (Neeli, 2013). However, in this argument, we assert that human capital is a sum of three factors: health, education, and nutrition. As a result, it is critical to account for human capital as a whole factor in modelling and research into the relationships between human capital and economic growth.It is based on this background that the present study seeks to examine the use of human capital for good governance in Air Mauritius Holding Ltd Company, Mauritus.
1.3 Objectives of the Study
The main aim of this study is to examine the use of human capital for good governance in Air Mauritius Holding Ltd Company, Mauritus. Specific objectives of the study include;
1.4 Research Questions
The following questions guided this study;
1.5 Research Hypotheses
The following will be hypothesized;
Hypothesis one
Hypothesis two
1.6. Relevance and Significance of the Study
Regarding how public the administration of human resources policy contributes to good governance, the study's findings will be helpful to the Denim De I"lle Ltd. Company. The outcomes will also assist Denim De I"lle Ltd. Company in creating ethics mechanisms in the human resource policies of the organisation that support good governance. The findings of this study will help public decision-makers in the field of human resources strengthen the moral basis on which their policies are built. The results of this study will also be used as a resource for other researchers in Mauritius who are interested in this subject in other organisations.
1.7. Rationale and Nature of the Study
Therationale for this study osto examine the use of human capital in governance in Air Mauritius Holding Ltd Company in Mauritius.This research work is divided into five chapters. Chapter one is an introductory chapter providing background to the study, statement of the problems, objectives of the study, research questions, significance of the study, scope of the study as well as organization of the study. Chapter two contains review of related literature and theoretical framework focusing on the concept of human capital and good governance as well as empirical reviews in the area of human capital and good governance. Chapter three dwells on research methodology focusing on research design, sources and instrument of data collection, population/sample size, sampling technique and method of data analysis. The four chapter contains presentation and analysis of the data collected including interpretations, testing of hypotheses and summary of major findings. Chapter five is the concluding chapter which is based on the research findings. It includes summary, conclusions and recommendations.
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