South Africa: Job Creation

Businessday Published: 2010/07/09

For the past four weeks, SA has felt like a different country. Most citizens want to live together in peace and build a common nation. Unfortunately, we are being badly served by our rulers who, with a few exceptions, are so preoccupied with their personal agendas that they are failing to lead the country or see the potential of the goodwill that exists.

SA’s success in hosting this enormous event has put us on the radar screen of every person around the world who watches sport or news.

Most viewers would have been surprised at SA’s infrastructure, and that a country they thought was racially divided and crime- ridden could hold a successful global event.

If SA is to capitalise on what we have achieved, if we are to ride the wave of this success, the global attention and the enormous investment we have made in infrastructure (some of it essential and some less so), we need a post-World Cup strategy. We need to ensure that the world’s new image of, and interest in, SA translate into increased investment, business, trade and tourism.

At the end of this modern-day “bread and circus” spectacle, South Africans, more than half of whom are very poor, will return to their normal lives. It is crucial that they have a sense of hope and expectation about what will happen next.

There is worrying talk of an outbreak of xenophobic violence, which could be used as a tool for local leaders to ensure their dominance in particular communities over limited economic and political resources — SA has lost more than 1-million jobs in the past 16 months. The downside of the current world attention is that any negative developments will now receive a disproportionate amount of attention.

In the short term, key Cabinet members need to lead in their particular portfolios and provide vision for what they are doing and how they intend to rack up achievements — and soon.

Political leaders need to get out of their expensive cars and VIP-ticket boxes and go around the country talking about how the state and citizens together can start to fix the many local, regional and national challenges. Citizens should hold leaders to their promises by how they vote in next year’s local government elections.

In the medium term, the country needs a new vision.

SA’s most pressing national challenge is unemployment. With wage settlements far exceeding inflation, international experts visiting SA all repeat the same concern: in a country with one of the highest unemployment rates and lowest workforce participation rates in the world, above-inflation wage settlements for the employed result in higher costs for consumers and less chance of employment for the unemployed.

If we want inclusive growth that pulls millions of people out of poverty, we need to make SA a much better place in which to do business and create millions of new jobs — low-wage jobs for inexperienced, unemployed young people. It is time to make some tough choices. We cannot keep pretending that we can deal with unemployment by continuing with the status quo.

Most of the unemployed are young people with limited schooling. About 74% of people under the age of 24 cannot find work. About 80% of young women aged 18-30 in Limpopo, for example, are unemployed.

The first step on the ladder towards “decent work” is a job in the formal sector. It does not matter what you are paid or how many hours you work, if you get a formal job you are starting to benefit from all the assets that the formal economy can provide.

Employment provides discipline, earned income, work skills and additional new opportunities in time. We have to escape the paralysis in which the government is currently trapped.

What needs to be done to attract the private investment that will create millions of new jobs? The choices facing the country need to be made tangible and real.

If the choice facing the country was posed as 500000 low-wage jobs from an Asian investor in the Eastern Cape or five new factories in KwaZulu-Natal designed to compete with the rising cost of labour in China, then it is clear we need to have a new political reality and debate.

We need to get rid of legal, regulatory and, most importantly, political obstacles to moving towards an inclusive economy — and that means towards full employment.

For those who say that wages for professionals and executives must come down before there will be any other wage moderation, there are additional choices to be made. We must use all the skills we have in SA, irrespective of race or political connections. We must stop appointing people to jobs when they have neither the skills nor experience to do them properly.

The quickest and most effective way of reducing the price of our very limited supply of skilled people is to “flood” the country with expertise from elsewhere and break down some of the rules of the existing skills cartels to recognise their qualifications.

What better time than after a successful World Cup to start an aggressive drive to stop being a victim and start playing effectively in the global war for talent?

Let us go out and acquire the mathematics teachers, project managers, engineers, entrepreneurs, doctors and other skills from countries all over the world.

We cannot train South Africans, run local government or develop the country to its potential without them.

If we want a trebling of national income in 20 years, how are we going to get the 6%-a- year growth that we need? We need much more honest discussions about how to achieve employment-intensive and much higher economic growth.

This debate must involve all the interests in the country, not just those in big business, national government or the ruling alliance. We have to ensure — in the words of Finance Minister Pravin Gordhan — that we are not left behind by other developing countries, such as Brazil, India, Chile and Vietnam.

We have to confront reality, which is the lacklustre performance of the economy and the 6-million people (and growing by hundreds of thousands more every year) who are unemployed. It is time to make some difficult choices.

We need a national vision on how to capitalise on the spirit of nation-building so wonderfully demonstrated over the past few weeks. There are important lessons to be learned from this achievement — choose priorities, use the skills of all South Africans, and we can get things done.

We need to ask: if we can create safe public spaces for tourists, why can’t we do it all the time?

If we can use the capacity and efficiency of the private sector to build world-class stadiums and other infrastructure in record time, why can’t we do this for other challenges facing the country?

South Africans need to agree on the next difficult but potentially rewarding steps forward for the country. Let’s stop the “own goals” and start making SA a world-class country for all who live in it.

Ann Bernstein is Executive Director of the Centre for Development and Enterprise.

‘We need a national vision on how to capitalise on the spirit of nation-building of the past few weeks’