Howard Barrell: OVER A BARREL
If we do begin to make dramatic inroads into unemployment in South Africa in the near future, we can probably be sure of one thing: the presidential Jobs Summit this week will have had very little to do with it.
For, as one postponement of the get- together followed another and as the preparatory negotiations for it became ever more complicated, the reason for holding the summit changed substantially. It was no longer a meeting designed to come up with a workable strategy to create new and sustainable jobs. Instead, it came to have other uses.
The summit gives the government, business, labour and a few community representatives space in which to grandstand vacuous good intentions on job creation. It provides a stage on which the government can announce that vast amounts of money – very little of it “new” or additional funding – is being ploughed into projects that will result in new jobs. It gives the leadership of the African National Congress another piece of rope with which to tie the troublesome South African Communist Party and Congress of South African Trade Unions (Cosatu)into a common programme for the election campaign next year. It makes the ANC appear deeply exercised by the most pressing issue confronting our country. And it provides the less- than-sentient quarters of the South African media with a clutch of “good news” stories which the ANC hopes will echo down the months to election day.
As such, the Jobs Summit is a cruel deception – a view held by more than care to voice it publicly in the ANC, business, the government and elsewhere. It raises expectations that will not be met. And the result is likely to be greater frustration and despair among our millions of unemployed.
The government clearly intends that we – and the financial markets – should believe it when it says it intends sticking closely to its tough spending and lending regime. If so, then it is not going to be able to create – or pay for – many new jobs in coming years. Instead, most of the millions of jobs needed will have to be created within the private sector.
That being so, the question then becomes: how can the government get private businesses to employ more people? Or get more people to employ themselves?
The Jobs Summit is unlikely to deal with these crucial questions at all. The reason is that Minister of Trade and Industry Alec Erwin, the person charged with stage-managing the summit, has skilfully ensured that debate over government economic policy, particularly calls for greater flexibilty in the labour market, will be kept to a token minimum or, more likely, be absent altogether from the meeting. And the reason for this is that he and the government know that if economic policy is introduced, they will find themselves on the same side as business locked in battle with the SACP and Cosatu.
But the question will not go away: how does the government get business to create more jobs and more people to employ themselves?
Well, one way may be to organise more summits such as this week’s. These jamborees can be used to press businesses into making gestures with positive spin-offs, even if they are rather limited. For example, the business community might feel, as it does now, that it would look good if it were seen to give R1-billion towards increasing employment in, say, the tourism industry, where creating jobs can be relatively quick and cheap.
But this approach is not that helpful. You can hold only so many jobs summits before donor fatigue sets in among businesses. And you can have only so many curio-makers, waiters, porters, receptionists, rickshaws and hotel managers.
So you need a broader, longer-term strategy. This could involve your telling companies that they have to employ additional people – whether or not it is economic to do so. But companies would merely pass this additional cost on to others by raising their prices, so worsening inflation.
If you forbade those price increases, companies would merely go under, so worsening unemployment. And, if you subsidised companies’ employment of these additional workers, you would have to raise taxes to pay for that subsidy, and this would have a range of other unfavourable knock-on effects.
So you need a different approach. You, as the government, could try to create an environment in which businesses, small and big, can flourish, grow and easily take on new employees when there are additional things that need doing and when there is money, or the prospect of it, to pay additional people to do it. Just as important, it must be an environment in which businesses can quite easily shed employees in difficult times.
Moreover, you as the government could make it easier for an unemployed person, who will most often have little education and even less capital, to find a way of employing himself or herself. This may be by, say, an individual providing a telephone service for others in a township or rural area using a cellphone which has been begged, borrowed, stolen or (preferably) bought for the purpose.
These two less direct approaches are unlikely to satisfy those calling for immediate and visible job creation. If, however, you are a rational government in the closing years of the 20th century in which the judgment of the international financial markets can make or break your economy in a few minutes, these are the two options you choose. But, as easy as it can be made to sound, creating an economic climate in which people feel moved to get ahead is not easy. It is not fool’s work.
In the South African case, there are a number of people in the Cabinet and state administration (who are decidedly not foolish) looking for a way to create just such an economic environment. They are, however, desperately constrained by two old fallacies, held mainly within the ranks of the ANC’s allies, the SACP and Cosatu: that unemployment can be addressed effectively by increased state spending or by requiring companies and other concerns to operate uneconomically or uncompetitively.
It may be unrealistic to expect the battle between these two opposing viewpoints to be fought to a decisive outcome now, in the run-up to an election, when there are old battle songs to be sung and pretences of unity to be maintained. It may be that we will have to wait until at least this time next year for the crunch to come. But come it must.
In this sense, all the uphill to the Jobs Summit may prove not to have been a waste of energy after all.