“The constituencies aim to halve unemployment by 2014.” — Growth and Development Summit agreement, 2003.
This line from the pact of last week’s summit to stimulate growth and jobs lies at the core of the plan.
Scalded by the lofty social promises made in the Reconstruction and Development Programme and later by the growth and jobs numbers pledged in the growth, employment and redistribution (Gear) strategy, the government has been skittish about figures it can be held to.
But now, with its partners in labour and business, it has arguably set itself the most far-reaching target yet: to get about 2,5-million people into jobs in 11 years’ time. Can the pact do it?
The short answer is: not without a lot of goodwill and hard work, and with some notable trade-offs. It will depend on a sharpened civil service, a more committed and organised business sector and labour giving up shibboleths like minimum wages on public works programmes.
Leaders assembled at the signing of the pact in Midrand last weekend welcomed it as a “miracle” of South Africans doing what they are good at: talking about their problems.
But Congress of South African Trade Unions (Cosatu) general secretary Zwelinzima Vavi hit closer to the mark when he christened it an agreement of enlightened self-interest: “We are not seeking to build friendship among ourselves, but a genuine partnership based on accommodation of each others’ concerns, fears and aspirations.”
Getting unemployment to manageable levels is necessary for economic and political stability, not just the longevity of the union movement.
The big-ticket announcement at the summit was the pledge to divert a proportion — 5% — of public and private sector investment to development and job-creating projects.
The negotiators accepted early on that growth and employment on a large scale needs domestic fixed investment of 25% of gross domestic product (GDP). It currently stands at 15% of GDP.
The agreement is double-edged: on the one hand, it is the first time that the private sector has accepted targeted investment as a concept. Should it work, the investment of R10-billion to R20-billion is not to be sneezed at.
But the clause — which almost brought the negotiations to a standstill — shows the strains of hard-bargaining: it is woolly and imprecise. The social partners only agreed “to work towards” the goal.
“We are unable to answer more specifically today. This is not 5% per annum; it’s 5% at any point in time,” said Business SA representative Attie du Plessis.
Du Plessis told the summit that an audit of a “small number of sectors” showed capital investment projections of R145-billion in the medium-term. The audit was an attempt to ward off a more threatening debate on prescribed assets — legislated investments. “We would like prescribed investments on retirement funds,” said Vavi. “But this [agreement] is a product of negotiation. It’s not from a Cosatu congress.”
Most capital investment — R100-billion — is planned by the mining industry. The oil industry plans to invest R10-billion by 2006 and R2-billion a year thereafter; the chemical industry R10-billion over six years; and the car manufacturing industry R15-billion over six years.
The summit differed markedly from the 1998 jobs summit by linking the meeting to industrial strategy that will drive growth.
Other than the mining industry, growth sectors were identified. These include metals and engineering, chemicals, construction, clothing, agriculture and agro-processing, and tourism.
The public sector put up an exhibition of its limited job-creating projects, while the business sector used the summit to parade the Business Trust, capitalised to the tune of R1-billion. By creating a plan to grow these sectors, the summit holds out greater hope.
Other than the 5% investment target, no new money was put on the table at the summit, but the other big numerical target unveiled was a bid to register 72 000 learners (apprentices) by May 2004 and 80 000 by 2005.
The learnerships are part of a complicated skills training strategy that much of business has avoided because the sectoral education training authorities (Setas) that administer the scheme are not well run. Business has pledged to help them operate more efficiently, while Minister of Labour Membathisi Mdladlana used the occasion to secure more corporate support for employment equity.
It was revealed earlier this year that only a fraction of companies were reporting on the career progress of black and women employees.
Even with new capital investment, expanded public works and a more intense youth training programme, the slashing of unemployment to the extent pledged last week seems far off. The summit cannot yet be dubbed a formal social contract.
Business did not get its “regulatory impact assessment”. The sector says that the plethora of new laws — on labour, trade and tax — enacted in the 1990s have imposed costs and bureaucratic burdens that could be viewed as disincentives for investment.
It hoped for, but failed to secure an impact assessment. “International experience clearly shows that an appropriate regulatory and institutional environment is the single most important element in an economic growth strategy.”
HIV/Aids, or the failure to secure a national consensus on the pandemic, is another area of potential conflict. “No economic growth and job creation is sustainable in a situation where so many workers die from HIV/Aids,” said Vavi.
He added: “Labour has run out of patience and intends to place this matter [an agreement on HIV/Aids] uncompromisingly back on the agenda of Nedlac [National Economic and Development Labour Council].”
There was much the summit did not discuss: other policies on such issues as HIV/Aids and crime were also important for growth and for a social consensus, Du Plessis insisted.
A final agreement baulked at by business is the notion that retrenchments should become notifiable — the antithesis of the demand for a more flexible labour market.
Stated the summit declaration: “It is agreed that there is scope for government departments, parastatals and publicly listed companies to include information on total employment in their annual reports, and for the JSE [Johannesburg Securities Exchange] sustainability index to contain a section on employment.”
What was agreed
First step to social contract
Secured business buy-in for black economic empowerment policy
Halve unemployment to 15% by 2014
To direct 5% of investment income of public and private organisations to summit projects
Expanded public works — on infrastructure construction and social services
Register 72 000 learners (apprentices) by May 2004; 80 000 by 2005
A label of origin on clothing — to encourage consumers to Buy SA
Public and private sector to report on employment