Lets help South Africa, get back to work!

2015-05-11 12:36

The question of an inclusive economy and Job creation continue to be part of our everyday discourse. In fact there seem to be no practical way we can talk of moving this country forward without growing the economy. Our economy is anchored on a well-developed financial, legal, communications, energy, and transport sectors; a stock exchange that is the 18th largest in the world; and modern infrastructure supporting a relatively efficient distribution of goods to major urban centres throughout the region.

Unnerving economic problems remain from the apartheid era - especially poverty, lack of economic empowerment among the disadvantaged groups, and a shortage of public transportation. South Africa's monetary policy focuses on controlling inflation; however, the country has had significant budget deficits that hamper its ability to deal with pressing economic problems. The current government must contend with the impact of the global crisis and is facing growing pressure from special interest groups to use state-owned enterprises to deliver basic services to low-income areas and to increase job growth.

The South African economy has key structural problems, which include the inability of the economy to absorb labour, high input costs of production and a low skills base. In addition, growth has been driven by unsustainable high levels of credit by the banking sector, with consumption not being underpinned by productivity in the economy.  This has led to considerable structural imbalances through-out the economy, resulting in persistently high levels of unemployment and a large current account deficit.

Industrialization

Governments Industrial Policy Action Plan (IPAP) aims at shifting the economy from the current consumption-driven growth path towards industrialisation. I hold a view that our Job creation solution lies in the building blocks of industrialisation, and should result in an economy delivering the needed growth. Industrialisation initiatives are intended to improve the labour absorption of the economy through growth and targeting labour intensive industries, whilst also rectifying structural imbalances. Industrialisation is the period of social and economic change that transforms a human group from an agrarian society into an industrial one, involving the extensive re-organisation of an economy for the purpose of manufacturing.

An idea I am opposed to is the apartheid styled approach to create 100 black industrialists, with Government setting aside billions of rands to ensure it happens, as announced by the President in March. After many years of lamenting an empowerment programme that promoted the interested of a few and created cronyism, how do we brace ourselves once more to 100 sponsored billionaires. I sometimes feel that we take the most impractical route to attain what's easily achievable for the population of our country.

The building blocks of Industrialisation and what the focus of the South African economy should be is the following:

Close gaps in the current policy regiment to encourage effective industrial strategies and policies.

Design effective strategies for the mobilisation of critical masses of essential resources, and developing the necessary capacities (entrepreneurial, infrastructural, institutional, technological, skilled population and so forth).

Mobilise resources (financial, international networks, know how, scientific and tacit knowledge) from the both local and international sources, and strategically integrate them in the process.

Position the SMME and emerging sector as the primary deliver of Industrialisation by integrating them in the value chain of strategic procurements by government

Developing strategies for integrating into global value chains, taking note of the shift from specialisation in the production of (complete) products to task-based specialisation.

Have better access to (diverse) markets.

Developing strategic co-operation networks, for instance with newly emerging industrial powers, such as Nigeria, Singapore, Brazil, China and India.

Can we not put this country through another long journey of self-servicing concepts that seek to benefit a few at the expense of real problems we facing as a country?

Be Inspired SA!

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