THE SHAKE-UP: Let the Jobs Summit become more than another talk shop

South Africa begins a national Jobs Summit in Johannesburg on Thursday. File Photo: IOL

South Africa begins a national Jobs Summit in Johannesburg on Thursday. File Photo: IOL

Published Oct 3, 2018


JOHANNESBURG – South Africa begins a national Jobs Summit in Johannesburg on Thursday. The summit, one of many that President Cyril Ramaphosa outlined during his maiden State of the Nation Address in February, comes against a backdrop of negative economic growth, runaway fuel price hikes, declining output in both the manufacturing and mining sectors as well as lack of investments from both domestic and foreign businesses.

There is also constrained consumer spending, depressed business confidence sentiment and a hostile international environment that is articulated aptly by the continuing trade spat between US President Donald Trump and the rest of the world. Trump has made the world to worry more about bigger things than South Africa’s economic woes. Therefore we need a new strategy to regain the attention of investors.

That is where the Jobs Summit comes in. It may not come out with immediate solutions to the country’s unemployment stage. But it can find ways in which the government, business and labour can work together to bring about a recovery model that would put South Africa’s economy on a new path.

That path would demand significant sacrifices by all involved. It would require structural reforms that are needed to arrest the spiralling expenditure in a constrained fiscal space. We can blame former president Jacob Zuma and suspended SA Revenue Service commissioner Tom Moyane all we want, but that will not fix our problems. At best, it will make us just feel a little better.

The Jobs Summit will have to forsake the short-term view that South Africa has become used to in fixing the post-apartheid economy.

It will have to discuss how the Reconstruction and Development Programme, which focused largely on rebuilding through broadened employment, and an extended welfare system for all, failed to extend its focus on fiscal discipline and revenue collections.

It would have to look at how the Growth, Employment and Redistribution strategy delivered tangible growth and expanded consumption through a reformed tax regime and an expanded middle class, but failed to deliver on employment.

It will have to interrogate how the Accelerated and Shared Growth Initiative for South Africa only targeted inequality and an inclusive economy, but failed to make any meaningful dent on unemployment.

And why Zuma’s National Development Plan (NDP) has not lived up to its own undertakings. These may be difficult but necessary questions if South Africa is to come out of its current economic conundrum.

Since its inception in 2013, the NDP has failed to meet many of its targets. Just recently, it flagged that it would not be able to lower unemployment to 6percent by 2030, as the country had failed to recover from the 2008/09 global financial meltdown. The authors of the report also said that the country had lost significant economic traction.

And so we are back to square one.

That is why the National Economic Development and Labour Council (Nedlac)-co-ordinated summit has to marshal all the social partners towards a common goal - dealing with the scourge of unemployment that is fast approaching the 30percent mark of the working population.

Nedlac was established through an act of law exactly to provide a platform for government, labour and organised business to map out a common strategy for the country’s social ills.

While it has succeeded in negotiating progressive legislation, such as the Employment Equity Act and Labour Relations Act, its relevance has since been reduced to nothingness because the social partners that are meant to drive it have retreated into a laager.

Each has placed its interests above the rest.

From being an enabling platform to discuss common problems it has become a place to display some force. The partners have been blindsighted to Nedlac’s most noble objective: facilitating sustainable economic growth, greater social equity and participation of all stakeholders in economic decision-making.

The laager mentality has made it impossible for Cosatu to accept realities such as that our economic structural reform programme must involve the interrogation of the size of the civil service and its wage bill.

It has made it difficult for organised business to see that the current investment strike that many of its members have embarked on would backfire one day.

It has made the government blind to a possibility that the macro-economic policy review may mean new practical measures to keep the World Bank and the International Monetary Fund at bay.

The service delivery protests and the #Fees Must Fall movement have shown us how those who feel excluded can derive their own ways to force our attention to their problems.

South Africa is far too small for the world to worry about its economic performance. The country is the smallest, even among the BRICS states of Brazil, Russia, India and China, to make any difference. We cannot rely on the world to help us fix our problems.

So while our economic problems are outside of our control, there are small fortunes that South Africa can change to attract the attention of the world.

President Ramaphosa’s stimulus package has given us the first real opportunity to discuss the economic ruins of the past 10 years.

It is far from perfect and has no new money to inject into the economy.

It is a far cry from what Japanese Prime Minister Shinzo Abe put to move his country away from austerity to a fiscal regime that emphasised monetary and fiscal stimulus to battle weak consumption two years ago.

Abe used his package to expand welfare spending, infrastructure, the development of small and medium-sized businesses hit by uncertainty due to Brexit, and reconstruction after an earthquake on the southern island of Kyushu earlier in the year.

Such would be a luxury for a country such as South Africa that is hobbled by a constrained economy and a dwindling tax base. There is hardly any money available to spend beyond priority areas of the government.

Ramaphosa’s package is therefore more of a reprioritisation of government spending than a stimulus.

But it is a good start to refocus South Africa.

Social partners at the summit will do us all a huge favour by coming out with strategies to lift the country out of the current economic slump by engaging honestly and beyond their narrow interests.

The extent of their openness would have far-reaching implications for millions who are unemployed and investors who have changed their views on South Africa since last December.

Failing which the Jobs Summit will just be another talk shop that Nedlac has become known for in the past few years.


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