SA can clear job creation hurdles

2012-02-11 08:41

Haffajee: The year 2011 was meant to be the year of job creation. It wasn’t. By the end of the year, what did you learn?
Patel: The first thing we learnt was how integrated we are in the global economy. Europe underperformed, the US had fiscal challenges. There was little political will to deal with the crisis. China’s growth
helped us.

Are we going to look East from now on to enhance exports that will fuel employment?
We will look East for new trade growth, but the West is still an important part of our trade profile.
There is low-hanging fruit to pick for job creation, but if we want to sustain it, we must lay the foundations for the longer term. Cabinet had an internal target to stop the job haemorrhage while creating 250 000 jobs. The latest Stats SA figures show we have created 1 000 new jobs per day – 365 000.

How does infrastructure-led employment growth work?

Infrastructure creates jobs. During the 2008 downturn, China invested heavily in infrastructure. Keynes said that in the middle of depression, even if people had to dig holes and fill them, that was justifiable economic activity. You don’t have to dig holes and fill them; you can stimulate the economy in useful ways.
The Northern mineral belt (in the Waterberg) is not being mined because of an absence of rail and water. When you supply water for commerce, it can also be diverted to agriculture to create a predictable economic life for the small farming sector.
One of the critical successes of Brazil, India and China has been small-scale farming and ­agroprocessing. If you take a snapshot of South African economic life, it principally runs from Gauteng to Durban and we have underinvested in that corridor. In South Africa, development is stimulated by that which is underground! So success lies in moving goods.
The infrastructure programme is not just a build programme; it is about ancillaries like reducing port charges and the economic activities that flow from it like new coal mines, farming communities, the products that flow and a new skills base.

The Jobs Fund had more than 2 500 applications and R1 billion has been allocated. Can you share some detail?
The very large buy-in from the private sector and local groups was exciting. Together with the IDC’s funding at prime less 3% for employment-generating investments and tax benefits that have assisted companies, we have moved beyond public works as the only significant job creator.

Can you tell us more about the applications and allocations?
We can’t until next week.

In light of the president’s reference to the structural nature of joblessness, have we shelved the 4 million jobs by 2014 plan and moved to a 20-year horizon?
Five million jobs by 2020 in the context of a fragile global economy is going to be tough. We will only achieve it with local and African investment. Africa must seize this moment to create a stronger industrial base.

Can the state take the lead in employment creation?
Private sector involvement will be critical. The sectors targeted for job growth are dominated by the private sector. State enterprises have a valuable role to play, but success depends on the participation of the private sector. The message from business people after the state of the nation speech was that there was a sense of “wow, we can do business here”.

Can we be both a net job creator and job protector? The Cosatu strike on March 7 is about promoting job protection against job creation.
Economies are dynamic. Not everything we do today, will we do tomorrow. No company is guaranteed success in the future. China and South Korea were agrarian societies. They have transformed into modern economies. We
need to save as many jobs as we can but grow new sectors. The green economy, which didn’t really exist, can create 300 000 jobs.
Still, we don’t have a cavalier attitude to job losses and want to incentivise companies to think about jobs.
We want to bring young people into the economy. We have thousands of young people who are qualified but who can’t get opportunities. (The 3 million young people who are underqualified and classified unemployable) are our greatest challenge, but also our opportunity if you view them as part of a future labour force. The real challenge is that if you don’t give young people a sense of hope and belonging, this can be a huge risk.

Why do we take so long to do things? Is it a problem? What worked during the World Cup building programme was an immovable deadline and centralised decision-making.
Delays are a huge problem. We have assessed the experiences of the World Cup, the Airports Company, and the Kusile and Medupi power stations to learn what worked and what didn’t.
China develops basic concepts and implements; learns and implements. We seek perfection in a plan before we implement and that means huge delays.

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