Stopping the ‘jobs bloodbath’

According to Stats SA, South Africa shed some 2.2 million jobs in the second quarter of the year.

That represents not just a sharp rise in the number of unemployed in the country, but that hundreds of thousands of households now face dire circumstances. Indeed, a poll by the University of Johannesburg and the Human Sciences Research Council found that over a third of respondents had experienced hunger during the lockdown, along with well over a fifth who reported that someone in their household had to do so. And many of those fortunate enough to have retained their jobs will have seen their incomes cut.

There are probably more than a few people reading this whose own experience is described here.

As the public health crisis recedes, South Africa will need to look towards rebuilding the decimated economy. And nothing will be more important than reversing the carnage in the job market.

It should not be forgotten that the economy was in crisis before the pandemic hit. This reminds us that to get South Africa’s economy onto a job-creating path, we need consciously to change course on what has held sway for many years. Fortunately, much of this is within our power – provided we are willing to choose a new course.

Without massively increased investment and growth, this will not be possible. Yet too much of the existing policy agenda makes investment risky and holds growth back. The policy drive towards expropriation without compensation (EWC) is a prime example of this. It raises massive insecurity about the future of any investment – local or foreign – and condemns South Africa to a slow-motion game of wait-and-see.

The existing Broad-Based Black Economic Empowerment framework is another. It adds to the complexity and cost of doing business. And while it may offer some lucrative opportunities to a small group of the politically connected (some of whom are not even necessarily black), it offers very little to ordinary South Africans.

These policies need to be fundamentally rethought. In so doing, not only could their damaging features be removed, but more productive and effective solutions could be sought to the problems they claim to be aimed at. EWC, for example, will do nothing for land reform, but will expand government power over property. We need a land reform programme that empowers prospective homeowners and farmers, and that supports their efforts.

B-BBEE should be reconceived as a policy focused unambiguously on addressing poverty and incentivising businesses to employ and to invest – in their operations, in their employees and in their communities. Its success would be measured in the improvement in the lives of the country’s poor and unemployed.

Also overdue for reform is the manner in which we are governed. The never-ending stream of scandals remind us of the need to build an accountable relationship between the government and the people.

But governance is not merely a matter of combating corruption. We need to establish a professional, skilled and meritocratic public service. Little is as important here as getting rid of the ANC’s counter-constitutional programme of cadre deployment. This has politicised and poisoned public administration. It needs to be abolished completely.

South Africa faces a difficult few years. The question is, will it be a period in which the employment bloodletting continues unabated, or one in which we heal the wounds and nurse our economy back to health. With policy change and improved administration, we have a chance of the latter.

• Terence Corrigan is a project manager at the Institute of Race Relations, a liberal think tank that promotes political and economic freedom. Go to https://irr.org.za/

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