THE multiplier effect is a term used by economists to measure the rate of change in national income resulting from a change in government spending. Higher spending is expected to see higher disposable incomes, which in turn can have an accelerator effect on the economy as a whole.

This is somewhat of an oversimplification of the process, but it does provide some indication of the economic and social impact of increased government spending on income levels and investment portfolios. Indeed, there is a dynamic relationship between spending, investment and income levels. The greater the spending, the greater the demand for goods and services and the higher the sensitivity of investors to meet market needs.

Take for example the award of billions of dollars’ worth of contracts to small contractors to build roads and streets in rural communities. This is a commendable move that will enhance the demand for goods and services in the local communities. This is not simply a case of putting millions of dollars in the pockets of contractors as is so often claimed by the political opposition. This is a case of giving a boost to local economies in terms of job creation and putting money in the pockets of workers and the business community by way of purchase of construction and building materials.

What is taking place in effect is the sharing of the contract award to a broader network of stakeholders. In the final analysis, it is the entire community that benefits from improved physical infrastructure and enhanced income levels for those directly or indirectly involved in the construction processes.

But at an even more fundamental level, from a developmental perspective, is the strengthening of construction capacity especially at the community level. It is an established fact that there is a paucity of construction capacity in the country at this time of phenomenal investments in the country due in large measure to the impact of foreign direct investments in the country.

One significant developmental is the number of women who have now entered the field of construction. At one time, the building and construction industry was dominated by male contractors. This is no longer the case as an increasing number of women are now engaged in the construction sector, including road construction.

Much of this development resulted from a deliberate policy of the PPP/C to empower women to contribute meaningfully in the exciting task of national development. Women already dominate the services sector, especially in the fields of teaching, nursing and public-sector employment and there are now strong indications that they are now in the process of, as it were, breaking the glass ceiling.

This is indeed a positive development which augurs well for the overall growth and development of our society, especially at this time when our economy is rapidly picking up momentum.