President Jacob Zuma must seize the moment and get a grip on the country’s “economic tiller”, Democratic Alliance (DA) leader Helen Zille said on Friday.
Writing in her weekly newsletter, the Western Cape premier said entrenched poverty was, without doubt, the greatest obstacle to becoming a successful and sustainable democracy, in which people could live lives they valued.
Sustained economic growth was an essential, if not sufficient, precondition to overcome poverty. This meant devising and implementing policies designed to make the economy more globally competitive, to attract more investment and create more jobs.
“Every country that has sustainably lifted its poorest citizens out of poverty has done so by becoming more competitive,” Zille said.
On Thursday it was revealed that South Africa had slipped nine places, from 45 to 54, in the World Economic Forum’s Global Competitiveness Index.
The index measures and compares the competitiveness of 139 countries using indicators such as infrastructure, macroeconomic environment, health, education, labour market efficiency and innovation.
The index revealed that the biggest brake on South Africa’s competitiveness was the state of education and health. The education system was ranked 130, while the quality of mathematics and science education was ranked third last, at 137.
For health, South Africa was ranked 127 for life expectancy — chiefly as a result of the widespread prevalence of HIV/Aids.
The crime rate, although on the decrease overall according to the latest crime statistics, also had an impact on South Africa’s global competitiveness, with the country ranked third last at 137, she said.
“It wasn’t all bad. In some areas we performed extremely well, scoring better than some of the world’s most developed economies.
“We were ranked number one in the world for the strength of our auditing and reporting standards, and number one for the regulations of securities exchanges.”
Unfortunately, it was far easier to maintain a good auditing system than to turn around a failing education system or stop the spread of HIV/Aids.
“But there are other things that can be done right away to increase our competitiveness, create jobs and reduce poverty.
Constraining SA’s global competitiveness
The report clearly showed South Africa’s current labour policies were constraining its global competitiveness, as evidenced by the ranking of 97 for overall labour market efficiency.
This low score was a result of the inflexible hiring and firing practices (135th), a lack of flexibility in wage determination by companies (131st), and poor labour-employer relations (132nd).
The findings supported the view that if South Africa was to become globally competitive, policies governing the overregulated labour environment had to be reviewed.
“Because what we are doing at the moment is destroying jobs, deterring investors and keeping the unemployed trapped in poverty.
“I think most people would agree that earning a low starting wage is better than remaining permanently unemployed.”
It was time for Zuma to revisit the proposal for a two-tier labour market he made when he was campaigning for the presidency — before the Congress of South African Trade Unions rebuked him and he reversed his position.
“Now that he no longer needs Cosatu’s support [which he seems to have lost anyway], he can afford to do something bold.
“President Zuma must seize the moment now, before it is too late. If he doesn’t get a grip on the economic tiller soon, we will continue to drift. And that will mean increasing poverty and inequality in our country,” Zille said. — Sapa